Financial Fair Play
Discussion
London424 said:
im said:
FFP will clearly be tested in the European courts the minute someone falls foul of it.
I'd have thought there are restraint-of-trade issues at the very least.
Interesting times ahead
I'm not an expert in the slightest but why would it be restraining trade? Isn't it just saying you cant spend what you cant afford. I'd have thought there are restraint-of-trade issues at the very least.
Interesting times ahead
So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?
Restraint Of Trade
"It is the privilege of a trader in a free country, in all matters not contrary to law, to regulate his own mode of carrying it on according to his own discretion and choice. If the law has regulated or restrained his mode of doing this, the law must be obeyed. But no power short of the general law ought to restrain his free discretion".
However, I'm sure there are so many caveats to the above.
But taking it on face value, I'd have thought, with FFP not being 'European Law' its ripe to be challenged by the affected clubs and or players denied the opportunity to play for the affected club.
I'm not really interested enough to debate this point as its gonna be a minefield for Barristers let alone me.
London424 said:
I'm not an expert in the slightest but why would it be restraining trade? Isn't it just saying you cant spend what you cant afford.
So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?
This isn't supply and demand, they are artifically restricting the supply of money for wages by stopping owners subsidising their businesses (which is legal and normal during periods of growth). That could be argued by the players as a group that they are interferring with their earning capacity which could in itself be argued to be a restraint of trade.So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?
If a company wants to make a loss whilst building it's business, see Facebook\Amazon etc for details, why should a governing body restrict them from doing so? FPP is good for the currently successful clubs and an artifical barrier to success for all the rest due to the vast sums of money generated by the champions league.
Bluequay said:
London424 said:
I'm not an expert in the slightest but why would it be restraining trade? Isn't it just saying you cant spend what you cant afford.
So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?
This isn't supply and demand, they are artifically restricting the supply of money for wages by stopping owners subsidising their businesses (which is legal and normal during periods of growth). That could be argued by the players as a group that they are interferring with their earning capacity which could in itself be argued to be a restraint of trade.So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?
If a company wants to make a loss whilst building it's business, see Facebook\Amazon etc for details, why should a governing body restrict them from doing so? FPP is good for the currently successful clubs and an artifical barrier to success for all the rest due to the vast sums of money generated by the champions league.
Restraint of trade doesn't apply methinks - entry to UEFA's competition is by invitation & according to UEFA's rules , whatever they may be
Wombat3 said:
Bluequay said:
London424 said:
I'm not an expert in the slightest but why would it be restraining trade? Isn't it just saying you cant spend what you cant afford.
So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?
This isn't supply and demand, they are artifically restricting the supply of money for wages by stopping owners subsidising their businesses (which is legal and normal during periods of growth). That could be argued by the players as a group that they are interferring with their earning capacity which could in itself be argued to be a restraint of trade.So instead of the player getting 250k a week the club can only afford 150k. It then just becomes about supply and demand right?
If a company wants to make a loss whilst building it's business, see Facebook\Amazon etc for details, why should a governing body restrict them from doing so? FPP is good for the currently successful clubs and an artifical barrier to success for all the rest due to the vast sums of money generated by the champions league.
Restraint of trade doesn't apply methinks - entry to UEFA's competition is by invitation & according to UEFA's rules , whatever they may be
there is no chance that man city after investing so much - and i'm not just pointin fingers at city - i like them for what they've done for manchester too not just the club
there is no way they will like FFP affect them.
there's too many clubs investing in too much money for this to be truely effective.
psg losing to montpellier - they will want to make sure that doesnt happen again.
there's alot of business models in football which are dubious and shrouded for this to be fair across the board
there is no way they will like FFP affect them.
there's too many clubs investing in too much money for this to be truely effective.
psg losing to montpellier - they will want to make sure that doesnt happen again.
there's alot of business models in football which are dubious and shrouded for this to be fair across the board
Bluequay said:
And so is the British Olympic team, so they can keep out convicted drug cheats, oh no they can't
Maybe true but not quite the same because there are conflicting rules on that issue as I understand it. Additionally, they may be "in" but they are forever labelled as drug cheats who couldn't perform without "assistance". Nobody is going to get terribly excited by them winning stuff - if indeed they do.Man City win the Champs league next year ? Probably not but "Meh, & so what" if they do?
The same will be true of clubs that don't comply with FFP - as I said, once FFP comes in, the court of public opinion will apply far more pressure than UEFA probably can and that will make itself felt in merchandise sales & off pitch revenues. The Germans et al are going to make a huge amount of noise about this & you can be sure that they will have no qualms whatsoever about pointing out who they think is playing by the spirit of the rules and who isn't - and then demanding action from UEFA. UEFA may not (or may not be able to) act but that's not the point, the perpetrators will thereafter be labelled as cheats who couldn't win by any other means other than spending silly money - and nobody likes a cheat
not being funny but this court of peoples opinion is crap.
people in usa/far east/middle east etc wont give a crap about ffp as long as thier team is winning thus by selling more merchandise.
as someone stated above - they'll show that they're trying to bring it all under control etc and fifa will comply.
people in usa/far east/middle east etc wont give a crap about ffp as long as thier team is winning thus by selling more merchandise.
as someone stated above - they'll show that they're trying to bring it all under control etc and fifa will comply.
MadMullah said:
not being funny but this court of peoples opinion is crap.
people in usa/far east/middle east etc wont give a crap about ffp as long as thier team is winning thus by selling more merchandise.
as someone stated above - they'll show that they're trying to bring it all under control etc and fifa will comply.
Ya might be right - and ya might not be - we'll only know in a couple of years.people in usa/far east/middle east etc wont give a crap about ffp as long as thier team is winning thus by selling more merchandise.
as someone stated above - they'll show that they're trying to bring it all under control etc and fifa will comply.
UEFA have already shelved the proposal to implement transfer bans on clubs after receiving legal advice suggesting that it would contravene the European Community’s Restraint of Trade regulations. This decision was made at their meeting on March 20th.
Clearly, all of the clubs who suspect they'll fall foul of FFP are beginning to curtail their spending - Chelsea, Milan etc but the problem will arise when one of those trying to adhere to the rules actually fails.
Another arument you're going to here more about in relation to FFP is Collective TV rights.
At the moment England, Italy etc share out the pot amongst all of the teams in the League...Spainish clubs do not. This gives Madrid, Barcelona etc a massive advantage over the rest of Europes clubs when it comes to spending power.
Should not some account of this be taken by UEFA when deciding who breaches the FFP rules? Should United, Chelsea, Spurs, Liverpool, Arsenal etc be penalised because they don't maximise their revenue stream but instead share out the income amoungst all of the teams in the EPL for the health of the game? I'm sure the Italians et all will likewise feel hard done by in relation to the 2 Spanish clubs.
Once FFP is up and running how are they all gonna feel when Madrid and Barca come knocking at the door with another £80m to spend on (say) RVP, Bale, Mata, Aguero, Suarez etc whilst they are all being frugal in order to keep within FFP?
But the way to level that particular playing field is for UEFA to insist that Spainish clubs also use negotiate collective TV rights.
Yeah...Anybody care to imagine Madrid and Barca's response to that???
As I said, this is gonna be a minefield for UEFA that WILL eventually be tested in the courts.
Its fine whilst its not being enforced but the the first time it is...with say a large fine, points deduction in the first rounds of the ECL or other measure that impacts a big club...then the fun will start I suspect.
I know, I know, I said I didn't want to debate this but yeah...I'm gobby
Right I'm ooot.
Oh, and all of the above is IMHO.
Clearly, all of the clubs who suspect they'll fall foul of FFP are beginning to curtail their spending - Chelsea, Milan etc but the problem will arise when one of those trying to adhere to the rules actually fails.
Another arument you're going to here more about in relation to FFP is Collective TV rights.
At the moment England, Italy etc share out the pot amongst all of the teams in the League...Spainish clubs do not. This gives Madrid, Barcelona etc a massive advantage over the rest of Europes clubs when it comes to spending power.
Should not some account of this be taken by UEFA when deciding who breaches the FFP rules? Should United, Chelsea, Spurs, Liverpool, Arsenal etc be penalised because they don't maximise their revenue stream but instead share out the income amoungst all of the teams in the EPL for the health of the game? I'm sure the Italians et all will likewise feel hard done by in relation to the 2 Spanish clubs.
Once FFP is up and running how are they all gonna feel when Madrid and Barca come knocking at the door with another £80m to spend on (say) RVP, Bale, Mata, Aguero, Suarez etc whilst they are all being frugal in order to keep within FFP?
But the way to level that particular playing field is for UEFA to insist that Spainish clubs also use negotiate collective TV rights.
Yeah...Anybody care to imagine Madrid and Barca's response to that???
As I said, this is gonna be a minefield for UEFA that WILL eventually be tested in the courts.
Its fine whilst its not being enforced but the the first time it is...with say a large fine, points deduction in the first rounds of the ECL or other measure that impacts a big club...then the fun will start I suspect.
I know, I know, I said I didn't want to debate this but yeah...I'm gobby
Right I'm ooot.
Oh, and all of the above is IMHO.
smj996c said:
Wombat3 said:
Said the Man City fan...
just adding a bit of balance and reality to the conversation- as the new bitters are clinging to the last hope that FFP will restore the status quo....And as to your earlier point about continued spending, I've got no doubt that they'd happily keep spending it like its going out of fashion. Chelsea got to the top in what 2004 or 2005...haven't seen any hint of balancing the books or tightening the purse strings
Are transfers included in the 'sustainable' model?
Ie
If a club can service it's running costs via the income, then surely if the owner decides to put in £X to purchase a player, then that's up to them. Is it not about the club being viable should there not be an owner to pay the overheads?
Not looked at it though, maybe I should..hang on..
Ie
If a club can service it's running costs via the income, then surely if the owner decides to put in £X to purchase a player, then that's up to them. Is it not about the club being viable should there not be an owner to pay the overheads?
Not looked at it though, maybe I should..hang on..
UEFA said:
Income transaction(s) with related party(ies) above fair value
For the purpose of the break-even result, the licensee must determine the
fair value of any related party transaction(s). If the estimated fair value is
different to the recorded value then the relevant income must be adjusted
accordingly, bearing in mind, however, that no upward adjustments can be
made to relevant income.
Examples of related party transactions that require a licensee to demonstrate
the estimated fair value of the transaction include:
• Sale of sponsorship rights by a club to a related party;
• Sale of corporate hospitality tickets, and/or use of an executive box, by a
club to a related party; and
• Any transaction with a related party whereby goods or services are
provided to a club.
Examples of related party transactions that must be adjusted because they
must always be excluded from relevant income are:
Who quantifies 'fair value' ?For the purpose of the break-even result, the licensee must determine the
fair value of any related party transaction(s). If the estimated fair value is
different to the recorded value then the relevant income must be adjusted
accordingly, bearing in mind, however, that no upward adjustments can be
made to relevant income.
Examples of related party transactions that require a licensee to demonstrate
the estimated fair value of the transaction include:
• Sale of sponsorship rights by a club to a related party;
• Sale of corporate hospitality tickets, and/or use of an executive box, by a
club to a related party; and
• Any transaction with a related party whereby goods or services are
provided to a club.
Examples of related party transactions that must be adjusted because they
must always be excluded from relevant income are:
Something that strikes me as being important, would be a club like Chelsea being able to argue that their 'fair value' has gone up immesurably since their CL win.
This stuff could be picked apart all day.
dirty boy said:
UEFA said:
Income transaction(s) with related party(ies) above fair value
For the purpose of the break-even result, the licensee must determine the
fair value of any related party transaction(s). If the estimated fair value is
different to the recorded value then the relevant income must be adjusted
accordingly, bearing in mind, however, that no upward adjustments can be
made to relevant income.
Examples of related party transactions that require a licensee to demonstrate
the estimated fair value of the transaction include:
• Sale of sponsorship rights by a club to a related party;
• Sale of corporate hospitality tickets, and/or use of an executive box, by a
club to a related party; and
• Any transaction with a related party whereby goods or services are
provided to a club.
Examples of related party transactions that must be adjusted because they
must always be excluded from relevant income are:
Who quantifies 'fair value' ?For the purpose of the break-even result, the licensee must determine the
fair value of any related party transaction(s). If the estimated fair value is
different to the recorded value then the relevant income must be adjusted
accordingly, bearing in mind, however, that no upward adjustments can be
made to relevant income.
Examples of related party transactions that require a licensee to demonstrate
the estimated fair value of the transaction include:
• Sale of sponsorship rights by a club to a related party;
• Sale of corporate hospitality tickets, and/or use of an executive box, by a
club to a related party; and
• Any transaction with a related party whereby goods or services are
provided to a club.
Examples of related party transactions that must be adjusted because they
must always be excluded from relevant income are:
Something that strikes me as being important, would be a club like Chelsea being able to argue that their 'fair value' has gone up immesurably since their CL win.
This stuff could be picked apart all day.
I would like this to have some teeth to it, but believe it will just be more of a nuisance that clubs will work around.
London424 said:
Yep, and that's the main problem. it's my understanding that UEFA will judge fair value e.g. the Etihad sponsorship thing has already been highlighted as way above "fair value".
I would like this to have some teeth to it, but believe it will just be more of a nuisance that clubs will work around.
It's crazy isn't it?I would like this to have some teeth to it, but believe it will just be more of a nuisance that clubs will work around.
You could look at HMRC as a prime example of releasing their interpretation of current tax law, and legislation surrounding it.
You then get people who simply interpet it in a different way and we all spend x number of hours and x number of pounds arguing about it until someone in a wig decides who's right.
These clubs have the best financial advisors in the land, and if UEFA think they'll stay one step ahead of them, they've got another thing coming. They'll be tearing their hair out in no time, wasting colossal amounts of licence payers money fighting the various cases.
Can't work, won't work. Lovely idea though.
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