Financial Fair Play

Financial Fair Play

Author
Discussion

im

34,302 posts

216 months

Thursday 7th June 2012
quotequote all
dirty boy said:
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?

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.
yes I refer you back to my 2nd paragraph in my last post on the previous page.

Wombat3

11,981 posts

205 months

Thursday 7th June 2012
quotequote all
dirty boy said:
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?

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.
I think UEFA are also counting on a huge amount of peer pressure. Only amatter of time before Bayern Munich et al to start labelling Manc city and Chelski etc as cheats.....

Cheib

23,114 posts

174 months

Thursday 7th June 2012
quotequote all
dirty boy said:
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..
Very few transfers are paid for as a lump sum up front so those ongoing payments are part of the running costs.....

London424

Original Poster:

12,826 posts

174 months

Thursday 7th June 2012
quotequote all
Cheib said:
dirty boy said:
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..
Very few transfers are paid for as a lump sum up front so those ongoing payments are part of the running costs.....
That's the second time I've heard that. Can you link to something about that as I can't understand why a club would want to do business that way.

Cheib

23,114 posts

174 months

Thursday 7th June 2012
quotequote all
London424 said:
Cheib said:
dirty boy said:
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..
Very few transfers are paid for as a lump sum up front so those ongoing payments are part of the running costs.....
That's the second time I've heard that. Can you link to something about that as I can't understand why a club would want to do business that way.
Only the second time ?!?! Not sure what you thought was market norm but staged payments are very,very common and almost the norm. When Portsmouth went into administration it was widely reported that they owed and were owed money by clubs because of outstanding transfer payments.

If ever you want to read about a club's finances this blog is excellent http://swissramble.blogspot.co.uk/2011/05/arsenals...
In that piece he mentions Arsenal owe £13mil in transfer fees to other clubs when looking at a particular year's accounts.




London424

Original Poster:

12,826 posts

174 months

Thursday 7th June 2012
quotequote all
Cheib said:
London424 said:
Cheib said:
dirty boy said:
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..
Very few transfers are paid for as a lump sum up front so those ongoing payments are part of the running costs.....
That's the second time I've heard that. Can you link to something about that as I can't understand why a club would want to do business that way.
Only the second time ?!?! Not sure what you thought was market norm but staged payments are very,very common and almost the norm. When Portsmouth went into administration it was widely reported that they owed and were owed money by clubs because of outstanding transfer payments.

If ever you want to read about a club's finances this blog is excellent http://swissramble.blogspot.co.uk/2011/05/arsenals...
In that piece he mentions Arsenal owe £13mil in transfer fees to other clubs when looking at a particular year's accounts.
I'm amazed at that. I know some transfers are dealt with in instalments and some have additional conditions attached but didn't think it was the norm. I'll have to look into some other club accounts to see if more is forthcoming.

I've seen that site before, very good reading!

Cheib

23,114 posts

174 months

Friday 8th June 2012
quotequote all
London424 said:
Cheib said:
London424 said:
Cheib said:
dirty boy said:
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..
Very few transfers are paid for as a lump sum up front so those ongoing payments are part of the running costs.....
That's the second time I've heard that. Can you link to something about that as I can't understand why a club would want to do business that way.
Only the second time ?!?! Not sure what you thought was market norm but staged payments are very,very common and almost the norm. When Portsmouth went into administration it was widely reported that they owed and were owed money by clubs because of outstanding transfer payments.

If ever you want to read about a club's finances this blog is excellent http://swissramble.blogspot.co.uk/2011/05/arsenals...
In that piece he mentions Arsenal owe £13mil in transfer fees to other clubs when looking at a particular year's accounts.
I'm amazed at that. I know some transfers are dealt with in instalments and some have additional conditions attached but didn't think it was the norm. I'll have to look into some other club accounts to see if more is forthcoming.

I've seen that site before, very good reading!
Pretty sure it was one of the issues Mike Ashley had when he bought Newcastle, outstanding transfer fees still due.

Obviously selling clubs want the money up front but I think especially when big clubs are buying from smaller clubs they impose these terms as they know that no one else is going to pay that kind of money.

dirty boy

14,688 posts

208 months

Friday 8th June 2012
quotequote all
Cheib said:
dirty boy said:
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..
Very few transfers are paid for as a lump sum up front so those ongoing payments are part of the running costs.....
You'll see afterwards i've sought out to read the UEFA rules on this, this post was purely speculative.

I was thinking along the lines of a director is more than entitled to invest their own money into a company to acquire 'assets' to enable the business to prosper, if the company doesn't have the facility to do so by itself.

With respect to players, the profit/loss on disposal of player contracts does form part of the trading position of the club, and therefore forms part of the break even model UEFA expect. Give or take the €5m discrepancy that they'll allow.

On player purchases, whether or not they pay up front or not is irrelevant on the financial statements, the only thing that may or may not be accrued for, but the relevant disclosure would be expected, would be for milestone clauses.

If a player costs £20m that appears on the financial statements, not £10m now, £10m later. That forms part of the balance sheet, not the trading position, and that's what UEFA are interested in at the moment.

London424

Original Poster:

12,826 posts

174 months

Monday 23rd December 2013
quotequote all
So a nice thread resurrection for an Xmas eve, eve day.

I saw this article and it appears that the FFP enforcement could be quite tough/strict.

http://www.danielgeey.com/will-clubs-be-banned-for...

There are some recent cases of exclusion from competition for what looks like pretty small sums of money. Spring 2014 is the first big measurement time. Will be interesting to see what happens.

ascayman

12,732 posts

215 months

Monday 23rd December 2013
quotequote all
London424 said:
So a nice thread resurrection for an Xmas eve, eve day.

Spring 2014 is the first big measurement time. Will be interesting to see what happens.
I'll hazard a guess that City and Chelsea will be fine, which make the whole thing a farce.

AFC1886

3,343 posts

149 months

Monday 23rd December 2013
quotequote all
I think you would have to be naive to think anything will be 'fair' when there are huge sums of money involved. Very little if any will change imo, teams like city and chelsea will find a solution and continue buying trophies at will.

Cheib

23,114 posts

174 months

Monday 23rd December 2013
quotequote all
Spain will be the test case for these regulations I think as well as the investigation of state subsidies to seven Spanish clubs which contrevene's EU law. The bank (Bankia) which has bankrolled RM went bust last year and had a government bailout so that pot of gold is not getting any bigger.

I think FFP will have some effect...you can already see it in how Chelsea have scaled back a bit(though that might be because the Russian crook no longer has the biggest cheque book). There are a lot of long established clubs that want it to work....the likes of Bayern and Man U will be lobbying hard to make sure it works as intended.

im

34,302 posts

216 months

Monday 23rd December 2013
quotequote all
I'm sure United are in favour of FFP after all - we can't have another Manchester City or Chelsea arising from nowhere and spoiling the status quo.

Cheib

23,114 posts

174 months

Tuesday 24th December 2013
quotequote all
im said:
I'm sure United are in favour of FFP after all - we can't have another Manchester City or Chelsea arising from nowhere and spoiling the status quo.
That's why a lot of the PL clubs voted against the PL version of it initially.

United are so far ahead of everyone else financially I don't think they really have to worry now. There revenues are probably £200 mil more than a mid table PL club maybe more.

ascayman

12,732 posts

215 months

Wednesday 29th January 2014
quotequote all

ellroy

7,006 posts

224 months

Wednesday 29th January 2014
quotequote all
Cheib, just seen this thread and you are spot on about Fat Cashley, Freddie Shepherd had been running a big o/d on players at the club for many years.

One of, if not the only, good thing he's done at Newcastle is to pay that dent off and only buy/or deal with cash for players up front.

London424

Original Poster:

12,826 posts

174 months

Friday 28th February 2014
quotequote all
Apologies for the link as the mainstream haven't started writing this up as far as I can see.

http://www.nzherald.co.nz/sport/news/article.cfm?c...

But 76 clubs playing in Europe this season are under investigation.

hornetrider

63,161 posts

204 months

Friday 28th February 2014
quotequote all
Good bump. Here's a Guardian link for the same.

http://www.theguardian.com/football/2014/feb/28/ue...

I wonder if UEFA have the stones?

London424

Original Poster:

12,826 posts

174 months

Tuesday 15th April 2014
quotequote all
Here we go boys and girls

http://www.telegraph.co.uk/sport/football/news/107...

Already posted by Hornetrider on the city thread.

Wombat3

11,981 posts

205 months

Tuesday 15th April 2014
quotequote all
Has Blue Moon self combusted yet?