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Excellent FFP Article & Analysis


Muzchap
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Hi,

This is a great read - really enjoyed it - and IMHO shows 'why' we have been busy loaning out players and letting players go...

I think the Board are aiming to try and get to 'break even' point and understanding how they can amortize the transfers reliably over period 'x' to ensure we meet the FFP (should they ever really be enforced)...

http://swissramble.blogspot.co.at/2012/09/uefas-ffp-regulations-play-to-win.html

It's really interesting to see that City are pretty screwed.

United + Arsenal are better off around 40 mill per season than us - due to their large ground capacity - this is something that NEEDS to be addressed - so hopefully the Pitch Owners will wake up and smell the coffee!

This is just a 3rd party article, with a couple of opinions - no need for flame wars, if you don't like it - don't read it - not forcing ya :D

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The Swiss Ramble is a top notch website. I don't think you'll find anyone not liking it.

FFP is a smokescreen. It will be selectively enforced. UEFA want the big clubs to stay at the top of the game, it brings in far more TV money for them. No one wants to watch a CL final between Anzhi Makachkala and Paris St Germain. Most will be interested in a Manchester United vs Real Madrid CL final. And that's what this regulation is essentially about, shutting the lid on anyone that won't be commercially viable for UEFA.

Even if I am being overly cynical and UEFA aren't obsessed with making as much money as possible off CL TV rights and they are genuinely concerned about the state of football's finances; it won't matter one iota. How hard would it be for an owner to pay transfer fees/player wages under the table? Everyone wins. The chairman from the other club can pocket that under-the-table transfer fee for himself and no one will be any the wiser. The player will have additional income that won't get taxed. The chairman of the buying club gets to fund his project without the nosey parkers at UEFA finding out. It will lead to an Omertà within the sport, no one will ever snitch as long as everyone's getting rich. And if something does go awry, and the accountants do find out something's going on, it'll be no skin off the nose of anyone involved to slip the official responsible a couple of hundred thousand to buy his silence. Other sports are littered with corruption at every level, we know for a fact that FIFA is corrupt, it is no stretch of the imagination to assume the same about UEFA.

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The Swiss Ramble is a top notch website. I don't think you'll find anyone not liking it.

FFP is a smokescreen. It will be selectively enforced. UEFA want the big clubs to stay at the top of the game, it brings in far more TV money for them. No one wants to watch a CL final between Anzhi Makachkala and Paris St Germain. Most will be interested in a Manchester United vs Real Madrid CL final. And that's what this regulation is essentially about, shutting the lid on anyone that won't be commercially viable for UEFA.

Even if I am being overly cynical and UEFA aren't obsessed with making as much money as possible off CL TV rights and they are genuinely concerned about the state of football's finances; it won't matter one iota. How hard would it be for an owner to pay transfer fees/player wages under the table? Everyone wins. The chairman from the other club can pocket that under-the-table transfer fee for himself and no one will be any the wiser. The player will have additional income that won't get taxed. The chairman of the buying club gets to fund his project without the nosey parkers at UEFA finding out. It will lead to an Omertà within the sport, no one will ever snitch as long as everyone's getting rich. And if something does go awry, and the accountants do find out something's going on, it'll be no skin off the nose of anyone involved to slip the official responsible a couple of hundred thousand to buy his silence. Other sports are littered with corruption at every level, we know for a fact that FIFA is corrupt, it is no stretch of the imagination to assume the same about UEFA.

I don't like fifa and uefa but ffp is important.

What happen to Malaga and too some degree Portsmouth is a big concern, what happen if mr abramovich suddenly said I want to leave Chelsea or I don't want to pump more money.

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I don't like fifa and uefa but ffp is important.

What happen to Malaga and too some degree Portsmouth is a big concern, what happen if mr abramovich suddenly said I want to leave Chelsea or I don't want to pump more money.

It doesn't matter if it's important or not, it won't be enforced.

I'm not saying the principle of stopping clubs from getting in to the point of collapse is wrong. What I am saying is that FFP will not work because of the levels of corruption in top level sport worldwide.

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I don't like fifa and uefa but ffp is important.

What happen to Malaga and too some degree Portsmouth is a big concern, what happen if mr abramovich suddenly said I want to leave Chelsea or I don't want to pump more money.

Absolutely nothing. People seem to forget we are in the top 6 earners in world football. When ever we buy a players it's all "Roman splashes his cash" reality is most of the money is generated by the club. Only money he gives us is those covering our losses which don't come close to the £1 billion spend people claim he has made.

Yeah we would have to slim down, but we have no debt, have world class facilities, squad, youth set up. I think we would be all right.

Our only problem is ground capacity, which is why I was so disappointed in our failed Battersea Power station bid.

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Absolutely nothing. People seem to forget we are in the top 6 earners in world football. When ever we buy a players it's all "Roman splashes his cash" reality is most of the money is generated by the club. Only money he gives us is those covering our losses which don't come close to the £1 billion spend people claim he has made.

Yeah we would have to slim down, but we have no debt, have world class facilities, squad, youth set up. I think we would be all right.

Our only problem is ground capacity, which is why I was so disappointed in our failed Battersea Power station bid.

Agree - I made that point in some other thread (Samsung sponsorship I think)... We REALLY need to increase our match-day revenue by having a bigger ground. That would really help us with hitting our targets.

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Is Financial Fair Play working?

By Gabriele Marcotti

I had the opportunity to spend a little bit of time with Michel Platini and the rest of the UEFA top brass in Monaco last week, and unsurprisingly, Financial Fair Play was one of the big talking points. It's pretty obvious that FFP will be one of the defining issues of Platini's tenure as president and may impact whether he goes on to head FIFA, as some say he hopes to do, or whether he disappears into the background when his mandate is up.

FFP basically limits the number of losses a club can sustain. If you're one of those wonkish types who enjoys reading legalese, you can get your kicks by checking out the full regulations here. The penalties for FFP noncompliance include a limit on squad size in UEFA competitions such as the Champions League and Europa League, fines and withholding of prize money and, ultimately, exclusion.

There is still plenty of confusion around FFP in some quarters. Some of it can be cleared up rather easily; some of it requires some conjecture and guesswork. Here's my attempt to shed some light.

Q: What's to stop a wealthy owner from simply doing a bogus deal between one of his other companies and his club to inflate revenue? For example, an owner could sign a $200 million sponsorship deal between his ball-bearing company and his club and they'd instantly have all this extra money to spend.

A: Many point to the very lucrative sponsorship deal that Manchester City signed with Etihad, an airline that happens to be owned, like City, by Sheikh Mansour as an example of this. UEFA is pretty vigliant here. The regulations say that sponsorship deals will be "benchmarked" against those struck by other clubs. So, for example, if Barcelona has a $50 million sponsorship agreement with someone and it's the highest in the world, then a smaller club with less reach than Barca can't very well claim a $200 million deal. Or, rather, UEFA will calculate only a proportion of that and assume the rest is bogus or a covert "gift" from the owner.

UEFA has made it very clear that it has closed all loopholes in terms of getting around the FFP regulations. This includes other types of transactions between a club and "related" companies. Again, using City as an example, the club can't sell a pen to one of Mansour's other companies or Mansour himself for $100 million. Or, rather, City could, but only the benchmarked value of the pen would count toward FFP.

Q: Do you really think UEFA can enforce those rules? What if there's a legal challenge?

A: UEFA seems pretty confident that it can. The way the rules are written, it has the ultimate discretion to determine who's compliant and who isn't. A club that's not satisfied can take the matter to the Court of Arbitration for Sport (CAS), but that's it. No more appeals.

I'm not a lawyer, but I can imagine the only possible legal challenge would be with the legality of FFP itself rather than a specific judgement. I guess anything is possible, but given that both the clubs and the European Commission are behind FFP, UEFA feels pretty confident that it can't be successfully challenged. And, even if it is, the case would likely take years.

Q: So if these rules are coming in and wealthy owners won't be able to rack up huge losses year after year, how do you explain the massive spending of Chelsea, Manchester City, Paris St. Germain and, most recently, Zenit, with its $100 million swoop for Hulk and Axel Witsel?

A: I don't know. I guess they have a plan to massively increase revenue down the road. Because that's another point that people are missing. If you read Annex XI of the FFP regulations (boring, I know), the suggestion is that as long as clubs are moving in the right direction and have some plan to reach break-even, they'll be OK. Ultimately, it's all at UEFA's discretion.

Q: A-ha! And the fact that Zenit is sponsored by the Russian conglomerate Gazprom, which also happens to be a major UEFA sponsor, or the fact that PSG is French, just like Platini, means it'll get an easier ride from UEFA?

A: Some make that argument. I don't buy it. First, Platini explicitly said the rules will apply to PSG exactly like they apply to every other club. His credibility is at stake, and remember, he has ambitions beyond UEFA. As for Gazprom, it's a big company and it sponsors plenty of things. But it's not as if it owns UEFA or, indeed, that its sponsorship is that crucial to the organization that it would do Gazprom's bidding. Unicredit has a similar sponsorship deal with UEFA, and it's actually a part-owner of Roma (mainly because of the debts piled up by the previous owners), yet nobody has suggested that Roma has been allowed to run roughshod over UEFA rules.

Q: OK, but surely Platini won't have the courage of telling huge clubs with huge fan bases like City or Chelsea or PSG they can't play in the Champions League, will he? I mean, the sponsors and broadcasters who paid good money for the rights would never stand for it, would they?

A: I think what everybody forgets is that these FFP rules were negotiated and agreed with the European Club Association, which represents clubs across Europe. Among the biggest proponents were big profitable clubs like Bayern and Manchester United. Now, they have their own reasons for backing FFP, namely they're already profitable, so if some of their competitors have to curb their spending, it's to their advantage.

But what will happen is that if Platini doesn't enforce FFP, some of Europe's biggest clubs -- which have got their financial house in order -- will be furious.

The bottom line is that FFP has the backing of most of the big clubs in Europe and, if they see the rules aren't being enforced, they won't stand for it. They might even threaten to walk out. And if you think not having City or PSG in the Champions League would hurt broadcasting and sponsorship revenue, well, that's nothing compared to not having Bayern and Manchester United.

So many have focused on exclusion from the Champions League as a punishment for violating FFP. And, sure enough, it's the ultimate sanction. Not participating in the Champions League means a huge loss of revenue and, just as important to some of the vainer owners, loss of prestige. But I think that will only come down the road, if at all. UEFA will give clubs every chance to comply. And, to be honest, if somebody insists on overspending year on year, I think there's another way it will be handled.

Q: Really? What's that?

A: Well, the next level down of punishment is fines. And I think that's the direction we're headed, mainly because it suits everyone. I could see it working a bit like the luxury tax they have in the NBA or Major League Baseball. Imagine you have losses of, say, $50 million when you're allowed losses of only $20 million. You might end up paying a fine of one dollar for every dollar that you go over the limit. So, in this case, you'd pay UEFA $30 million in luxury taxes. That money could be used in different ways. Some could go to grassroots initiatives or UEFA-backed charities. Some of it could be distributed to other Champions League clubs. And some could go into prize money.

That way, a guy like Sheikh Mansour or Roman Abramovich could still spend as much as he likes, but there would be a major disincentive to doing so. And his spending would end benefiting other clubs.

It's just one scenario. UEFA is extremely cagey when you bring this up and insist that it's confident that everyone will meet FFP so there's no need to even contemplate this. But I don't fully buy it. As I see it, if you're going to have FFP, this is the only viable compromise.

via soccernet

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I dont think clubs should be loosing that much money, but FFP only benefits the big clubs (Manurd, Arsenal, Bayern, RM and Barca). It is absurd, how a small club can win the EPL without investing big??

For instance, you own a company of taxi. How do you grow to have more revenue? You have to invest in taxis, drivers, etc. You clearly wont brake even, and it will take some time until your revenue is big enough to pay the drivers wages and taxis expenses....

FFP needs some serious changes, but the main idea is great!

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Guys, I will ask a stupid question, dont kill me.I live far from London, so I really dont know how big our fan base is....

A 68k stadium would be full for every game (even League Cup)?

EDIT: It would provide £20-25m more each year.

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I dont think clubs should be loosing that much money, but FFP only benefits the big clubs (Manurd, Arsenal, Bayern, RM and Barca). It is absurd, how a small club can win the EPL without investing big??

For instance, you own a company of taxi. How do you grow to have more revenue? You have to invest in taxis, drivers, etc. You clearly wont brake even, and it will take some time until your revenue is big enough to pay the drivers wages and taxis expenses....

FFP needs some serious changes, but the main idea is great!

Precisely. The idea is to make sure that big clubs dominate the CL and thus, maximise profit for UEFA.

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Guys, I will ask a stupid question, dont kill me.I live far from London, so I really dont know how big our fan base is....

A 68k stadium would be full for every game (even League Cup)?

EDIT: It would provide £20-25m more each year.

Depends, think they would have to make it more affordable for families to attend. Actually think they should reintroduce category "a,b,c" games again.

As for FFP, would it not be possible to restrict the percentage of revenue spent on wages? Strikes me that the wages are what's crippling teams. My main concern is that FFP is going to reduce the leagues to 1-2 horse races. Who wants the PL to turn into La Ligue?

I'm also hoping these American owners (and the rest) don't start bleeding the sport dry, sure they have seen the TV revenue streams for the next 10-20 years and have been licking thier lips! Because they sure aren't in the sport because of their love of the game.

FIFA should be introducing a RM / Barcelona style of club management back into the game.

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FIFA should be introducing a RM / Barcelona style of club management back into the game.

You mean the style of club management where the clubs are community owned and are basically funded by the government who give free money to the clubs and now they're in deep shit because they can't pay back their debts? Don't know about you but I for one wouldn't fancy something like that becoming more popular among football clubs.

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Depends, think they would have to make it more affordable for families to attend. Actually think they should reintroduce category "a,b,c" games again.

As for FFP, would it not be possible to restrict the percentage of revenue spent on wages? Strikes me that the wages are what's crippling teams. My main concern is that FFP is going to reduce the leagues to 1-2 horse races. Who wants the PL to turn into La Ligue?

I'm also hoping these American owners (and the rest) don't start bleeding the sport dry, sure they have seen the TV revenue streams for the next 10-20 years and have been licking thier lips! Because they sure aren't in the sport because of their love of the game.

FIFA should be introducing a RM / Barcelona style of club management back into the game.

The most amazing aspect about EPL is the top quality of intense competition. No one wants a La Liga form, so polarizied between RM and Braca.

What most people dont know is that Platini first option was to establish maximum wage for players. After a big research he realised it would be impossible (international work laws, players wouldnt accept it, possibility of "under the table" playment, etc). FFP was his second choice...

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You mean the style of club management where the clubs are community owned and are basically funded by the government who give free money to the clubs and now they're in deep shit because they can't pay back their debts? Don't know about you but I for one wouldn't fancy something like that becoming more popular among football clubs.

Minus the debt obviously. But I'd rather be owned by the fans than owned by a share holder.... a shareholder who wants a dividend at the end of the season.

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The most amazing aspect about EPL is the top quality of intense competition. No one wants a La Liga form, so polarizied between RM and Braca.

What most people dont know is that Platini first option was to establish maximum wage for players. After a big research he realised it would be impossible (international work laws, players wouldnt accept it, possibility of "under the table" playment, etc). FFP was his second choice...

No your right, EU law would prevent maximum wage being introduced. But I'm sure you could restrict a wage bill, to either a percentage of club earnings or a set monetary figure for all. Actually restricting every club to a maximum £50 million wage bill would enable a level playing field, with clubs deciding on bigger squads or better quality for the budget.

Tough call really.... just worry that most leagues in Europe are going to end up two horse races.

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Not leagues per se, but the Champions League will be only won by 10 different clubs for the rest of its history.

(in order of UEFA preference for marketing, brand value, and making money in general)

Man United

Real Madrid

Barcelona

AC Milan

Liverpool

Inter

Juventus

Arsenal

Chelsea

PSG/Man City/Anzhi/any other noveau riche club. With the first winner of that lot to take up 10th spot.

It will kill off the other great clubs of Europe. Porto, Benfica, Sporting, Athletic (Bilbao), Napoli, and so on... that don't have anywhere near as much marketing potential as those 10 or so I listed above.

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