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Football's financial frenzy

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David Bond | 09:50 UK time, Tuesday, 1 February 2011

With the rest of the country fretting over stagflation, interest rates and spluttering economic growth, English football's detachment from the rest of financial reality was confirmed in a frantic 24 hours of spending on Monday.

In total, clubs spent more than £210m in the January transfer window - more than half of that in one day - breaking the 2008 record of £175m.

Two British transfer records inside the space of an afternoon and a club previously committed to prudence and developing young (cheaper) talent spraying their money around like a banker at the height of the credit boom.

Only a Jekyll and Hyde club such as Chelsea could bring us the news that they had made a loss last year of nearly £70m on the same day they were getting ready to write out a cheque for £50m for one striker.

Now Torres is undoubtedly a good player - one of the best strikers in world football. At 26, he has his best years ahead of him and few could blame him for leaving Liverpool after so much instability at Anfield.

For Chelsea, a club which has spent a lot of money paying off managers rather than buying new players in recent times, it is a deal that makes perfect sense as they contemplate not only surrendering their Premier League title but also their cherished place in the Champions League.

But what are we to believe when clubs tell us their days of massive transfer spending are over?

The former Chelsea chief executive Peter Kenyon vowed to make the club break even by 2010. The losses revealed yesterday show that day remains some way off in the distance.

Pound coins

With the nation tightening its financial belt, football carries on spending

Despite that and with Uefa's financial fair play regulations just around the corner, the narrative was supposed to have changed.

The £30m spent last January was the first indicator, we were told, that the new age of austerity was here - an era when clubs would only spend what they could earn.

Failure to balance the books would lead to bans from European competition by 2015 and that's a price none of the top four in England are prepared to pay.

Only Arsenal and Tottenham would definitely comply out of our six biggest - and richest - clubs. Manchester City, Chelsea, Liverpool and Manchester United all made heavy losses last year.

In United's case they might be able to argue their loss was caused by big one-off costs incurred through an interest rate swap and foreign exchange rates.

Analysts argue this is the last chance for clubs to spend big. Manchester City's Abu Dhabi owners insist the £200m or so that has been spent in the last two years marks the end of an expensive recruitment drive. Once City arrive among the Champions League elite then they will be able to reduce their losses by cashing in on their new status in Europe. Big sponsorship deals will follow and with a bit of pruning here and there, the current substantial losses will vanish.

But for all of Europe's top clubs it won't be that simple. Any big transfer fees have to be written off over the course of the players' contracts. It is not just a case of writing down £50m in January 2011 and starting with a clean slate in August.

In the case of Torres, £10m a year will have to be accounted for, not to mention his salary, making it even harder to balance the books.

With no prospect of a new ground on the horizon and Chelsea's sponsorship revenues already well developed, where does owner Roman Abramovich suppose he will find the money to close the gap on such losses?

Do he and others like him simply think that when it comes to the crunch Uefa will blink? After all, without the big name players like Torres, the value of the Champions League brand is diminished and with it the amount Uefa can charge for television rights.

Such a view underestimates the determination of Michel Platini, the Uefa president, to force clubs to live within their means. In his view the financial doping of clubs bankrolled by debts and wealthy owners cannot continue.

Platini might have hoped English clubs were getting the message and that a confrontation could be avoided. But if there is one lesson from yesterday it is that for some clubs the here and now is more important than what might happen a couple of years down the line.

And in introducing their new regulations Uefa might have inadvertently fuelled the sort of frenzy of spending it was trying to eliminate.

Comments

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  • Comment number 1.

    The UEFA financial regulations are flawed.

    If UEFA want fair play, then they should distribute their money much more evenly.

    The UEFA regulations will just maintain the status quo rather than improve competiveness.

    What is to stop a rich owner buying a key ring for an amount equal to what would otherwise be that clubs loss?

  • Comment number 2.

    A champions League without Man U, Liverpool, Chelsea plus Barca and Real who are massivly in debt won't happen. UEFA would blink 1st as it would make a mokery of the competition and they also know if they try to implement it the clubs would try and force through their own European Super League and keep the revenue from that between themselves.

  • Comment number 3.

    Strangely find myself agreeing with #1.

    If UEFA want fair play please stop just rewarding and pandering to the teams from the Big 5 countries in the CL. Treat champions as champions irrespective of the league they play in and don't prioritise clubs like Liverpool who haven't seen a domestic championship for a couple of decades.

    The regulations are toothless David. A slap on the wrist and a tut tut from UEFA isn't going to scare anyone.

    And the first scapegoat club they ever impose some real sanction on won't be one of the big boys.

  • Comment number 4.

    Don't the "fair play" rules only affect football related business, such as the buying and selling of players, the wages and the incomes and any other outgoings that the clubs themselves pay? if this is the case then the structure at Manchester United would surely allow them to compete, as on a purely footballing basis they are still generating money. It is only the owners who, through their holding companies, are making losses due to the loans they took out to buy the club.

  • Comment number 5.

    I think UEFA will implement the rules but they will be a lot more diluted than they say and therefore easy for the large clubs to comply with. Also, of course the clubs are spending now as they want the good young players they will not be able to buy because of the cost in a couple of years.

  • Comment number 6.

    i feel that the money that involved in football is absolutely ludicrous. how is the average geezer meant to relate to football the working mans game with these ridiculous transfer fees. over a pint and a bag of crisps my mates and i had great antipathy towards what is happening. Whatever happened to kicking a ball, a pork pie, pint, and having a laugh.

  • Comment number 7.

    #1

    Read about the proposed rules before you post. Its thing like that which fuel the total contempt platini is held in in this country, despite having a sense of decency and fair play which most here lack.

    The rules state rates paid for items must be consistent with the market. So for example, ignoring your keyrings, Sheik monsour couldnt sign a sponsorship agreement with man city for emirates worth £50m per season, double what barca will earn with their new one.

  • Comment number 8.

    In total, clubs spent more than £210m in the January transfer window - more than half of that in one day - breaking the 2008 record of £175m.
    ------------------

    Yawn. What sensationalist rubbish.

    The real reality is that in total, clubs actually spent nothing more than whatever went out of the game in fees to agents, players and if your blackpool the manager in the way of finders/signing on fees.

    The amount that passed between one club and another is not spend, it is simply money being reapportioned aqround the clubs themselves in exchange for playing assets.

    Take just the deals involving Chelsea-Liverpool-Ajax/Newcastle today as an example. No doubt you would exclaim that these clubs between then spent a grand total of £108m on just 3 players. However reality says that while yes Chelsea did spend £50m on Torres, Liverpool actually only outlayed a net total of £8m and Newcastle/Ajax made a £58m profit between them.

  • Comment number 9.

    "English football's detachment from the rest of financial reality"

    You're not kidding. How any fan is supposed to relate to the players in the English Premier League is beyond me. The amount being spent on transfer fees and wages, often for very average players, is bordering on obscene.

    http://footballfutbolfitba.wordpress.com/

  • Comment number 10.

    In order to 'balance the books' Chelsea may have done this by signing Torres and Luiz to ensure qualification to Plaini's cherished Champions League and receive the vasts amount of money that come with it. This is not to mention the revenue that can be gained by a trip to Wembley at the CL final with the help of Torres

  • Comment number 11.

    No. 8 hackerjack.

    People keep forgetting about Liverpool also selling Babel. They effectively swapped Babel and Torres for Suarez and Carrol whilst gaining a few million in profit.

  • Comment number 12.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 13.

    good points no. 10 and 11. Liverpool will be happy, Torres was in a bad run of form and Babel never showed his worth, they've swapped him for two young strikers who can attract bigger names and success to the club.
    Although Chelsea spending now to guarantee a Champions League spot ironically reminds me of Leeds United...

  • Comment number 14.

    IMHO Liverpool did the right thing in the players that they have bought they should compliment each other however the figures just do not add up. Regardless of profit from Torres saleetc Carroll is never worth £35m.

    Forget the comparisons to world class players that have gone for huge sums. Try looking much closer to home. Carroll is 10m more than his strike partner. Suarez scored a ridiculous amount of goals for Ajax (didnt he break records?) and performed superbly in the world cup compared to Carroll who was 5th highest goalscorer in the CHAMPIONSHIP last year and has had 70mins of international football.

    Suarez: great value
    Carroll: incredibly overpriced
    Torres: a bargain if he replicates his form of 18 months ago

  • Comment number 15.

    You can't really expect football to reflect the real economy, well at the top level anyway.

    Most of the spending came from a billionaire, it didn't come from money made from football, who spent 50 million on Torres and that then allowed Liverpool to splash a lof of money on Carroll.

    The other thing is that Carroll would never have gone for that money in a normal transfer scenario. Liverpool suddenly had 50 million to spend and about 12 hours to spend it and force through a very quick tranfer for Carroll. Newcastle held the cards and could demand a lot of money in those circumstances.

  • Comment number 16.

    If clubs had been forced to live within their means ten years ago, Leeds United would probably still be competing at the top end of the premiership. Portsmouth would probably still be in the premiership, etc etc. I could list several other clubs who would not have gone into administration and almost disappeared altogether!! Some clubs will complain, but it makes sense in the long run, IF it can be enforced. Does anyone else have visions of a league consisting of: Barca, Real, Milan, Inter, Juve, Man Utd, Chelsea, Arsenal, Liverpool, Man City, Marseille, Lyon, Porto, and some Russians.....outwith the auspices of UEFA? Or is it just me?!

  • Comment number 17.

    I understand the sums of money are hard to understand for the man in the street but realise there are millions of men in the street paying lots of money to their football clubs generating profit and giving them financial clout.

    If you want to whinge about money you should complain about the price of petrol and housing in the UK, far more relevant to the man in the streets wallet isn't it??

    If Torres scores the goals required to compete in the CL for a couple extra games or assures them a top four finish is that not sensible spending bearing in mind it will earn them about £40m in TV rights alone and not counting extra games where the stadiums are filled to the rafters.

    Carroll is an obscene amount of money but then look at the factors surrounding the sale, Liverpool had to buy, Newcastle didn't have to sell.

    Its simple business, nothing extraordinary about it...

    You should see the sums of money people pay for commercial property in London or the amount tax payers have to pay to support the failing banks, makes football money look like peanuts.

  • Comment number 18.

    "Only a Jekyll and Hyde club such as Chelsea could bring us the news that they had made a loss last year of nearly £70m on the same day they were getting ready to write out a cheque for £50m for one striker"

    Well David, £70m loss does not mean the club is short £70m cash. You should study accounting. The loss is accounting loss. Accounting principles are on an 'accrued basis', not cash basis. To figure out whether Chelsea as a club are generating cash, you should look at their cash flow statement, not P/L. Their announcement clearly pointed out that they made a positive cash flow for the first time last year since Roman's takeover in 2003.

    The losses were more to do with a dip in 'players valuation'; in accounting this is called 'impairment charges' on assets. Players are assets, and they are subject to impairment tests every year; the value could go up or down. Impairment charge is a cost account, so it is charged against turnover/revenue --> affecting the profit/loss numbers.

    But in reality the club do not lose any money yet. They would if they sold these players on the latest decreased valuation. Since the club hold on to these players, it could be the case their value will go up again over time.

  • Comment number 19.

    'Well David, £70m loss does not mean the club is short £70m cash. You should study accounting. The loss is accounting loss. Accounting principles are on an 'accrued basis', not cash basis. To figure out whether Chelsea as a club are generating cash, you should look at their cash flow statement, not P/L. Their announcement clearly pointed out that they made a positive cash flow for the first time last year since Roman's takeover in 2003.'

    You can give all the accounting jargon you want but do you really believe Chelsea paid for Torres out of their own pocket? I would be more inclined to lean towards the idea that Roman put the cash up from his own bank account.

  • Comment number 20.

    Those posters who say that UEFA will end up bottling it when it comes
    to pulling the big clubs licenses and throwing them out of the Champions
    League or Europa League may have a point. We won't know until the crunch
    comes and a big club doesn't behave.

    Those posters who say that the regulations are flawed in that they
    merely enshrine the the current status quo are also right. However the
    first priority must be to stop the tsunami of red ink which threatens
    the game. Being Micawber and hoping that yet another rich sugar-daddy
    will show up isn't a finacial policy for grown-ups. We've seen where
    that leads us with the world financial crash precipitated by the big
    banks.

    As for the threat of a breakaway European Super League by the big clubs
    - make my day I say (and I say that as an Arsenal supporter). I detest
    FIFA but sporting breakaways just don't work. Remember the Packer cricket circus? The rugby league Murdoch breakaway?



    Whilst rugby league was having its civil war, two sides acting as Cold
    War style proxies for two uber-rich media moguls, Aussie Rules ate rugby
    league's lunch in Australia. League is just returning to where it was in
    terms of popularity at the gate and on TV fifteen years after the Super
    League civil war Down Under which also had blow-back here in Britain.

    As an Arsenal supporter I love European nights but there's no way I want
    to miss out on the League and the domestic cups. If I were Platini I'd
    say "bring it on" if the so-called big clubs like my own threatended a
    breakaway. UEFA dropped the second group stage in the Champions League
    because it wasn't popular with fans. I can't see any aptitite for a
    European Super League amongst fans either here or elsewhere in Europe,
    especially if its a self-selecting group of the so-called "elite".

    UEFA should be backed in its effort to bring some financial sanity into
    the game, not traduced. I'm cynical about whether they'll blink first
    too, but until they do they should be backed and given the benefit of
    the doubt.

  • Comment number 21.

    "With the rest of the country fretting over stagflation, interest rates and spluttering economic growth, English football's detachment from the rest of financial reality was confirmed in a frantic 24 hours of spending on Monday."

    Roman Abramovich spent £50m on Torres and spent £21m on David Luiz.

    This was not money floating around in English football, it was Russian money and may show Mr Abramovich's "detachment from reality" .... but is an inward investment into the UK economy, nonetheless.

    Liverpool for their part have taken the £50m and reinvested £35m on the purchase of Carroll, while offsetting the other £15m against their real expenditure of £23m on Suarez ... reducing their net outlay to just £8m.

    This is hardly an extravagant amount of money, and certainly not worthy of such wild headlines as have been produced today.

    On a strictly financial basis, which is where you started Mr Bond, the total real spend for January would be much less than your £210m, especially as Newcastle are still sitting on their £35m.

  • Comment number 22.

    19. At 2:14pm on 01 Feb 2011, U14628062 wrote:
    'Well David, £70m loss does not mean the club is short £70m cash. You should study accounting. The loss is accounting loss. Accounting principles are on an 'accrued basis', not cash basis. To figure out whether Chelsea as a club are generating cash, you should look at their cash flow statement, not P/L. Their announcement clearly pointed out that they made a positive cash flow for the first time last year since Roman's takeover in 2003.'

    You can give all the accounting jargon you want but do you really believe Chelsea paid for Torres out of their own pocket? I would be more inclined to lean towards the idea that Roman put the cash up from his own bank account.
    ====

    Well, that is altogether a different matter; which I was trying to say, the £50m paid for Torres has nothing to do with Chelsea's profit/loss accounts.

    Torres with the valuation of £50m will sit on Chelsea's balance sheet as asset. That means something at the other side of the book should be added £50m as well; that is why it is called Balance Sheet. FYI, assets = liabilities (debts) + equity

    That £50m comes from Roman indeed, but this money will go to the equity part of the book. So this is like a capital increase on Chelsea--> increasing shareholders' equity value.
    Roman does not want to burden the club with debt, so he does not regard the further investment as 'shareholders loan' instead it went straight to equity. Chelsea, as a club thus is debt-free; unlike the other big clubs.

  • Comment number 23.

    The spending of the English Premier League is unsustainable and probably a hinderance to the English game.

    It stops the progression of youth. An example is that Manchester City's youth team were the best in England a few seasons ago, however because of the club's financial capabilities a lot of those promising talents are off the radar.

    In addition the UEFA Champion's League is flawed anyway. It should only be the champions, irrespective of league. I would even settle for the top two, so we could have Real Madrid and Barcelona etc.

    When David Villa- a proven Champions League and World Cup goalscorer- is worth less than Andy Carroll- half a decent season in the Premiership- then it shows how overrated the English game is. And, it is this exaggeration of how good the Premiership is, which gives the English media a false sense of security and is a significant factor of the failings of the England national team.

  • Comment number 24.

    http://news.bbc.co.uk/sport1/hi/rugby_league/super_league/wakefield/9383611.stm

    Looks like its not just football clubs that go bust, notice the sums of money reflect the amount of interest your man in the street has towards rugby.

    Rugby - Not many fans, not much money. Football - Lots of fanatical fans, lots of money.

    Simples.

  • Comment number 25.

    I liked the blog but think more detail would help in particular regarding the "UEFA Financial Fair Play" regulations as we all probably know a "bit" of what this means but not the full impact.

    I disagree with the point "...without the big name players like Torres, the value of the Champions League brand is diminished..." as the Champions League has not been diminished so far this season with no Torres or Gerrard. Clubs with big name players do not have right to be in the CL every year they need to earn it.

    I do find it incredible that clubs can spend so much money that they simply do not have; and in the case of Chelsea report losses of nearly £70 million (having won the double) and then go and spend another £70 million. How can others compete?
    I believe there are two schools of thought here,
    1. Allow wealthy backers that bank roll clubs to live beyond their means,
    2. Clubs must be self financing.

    In my opinion ultimately clubs must be self financing as the present system makes it incredibly difficult for a self financing club to be successfull and by this I mean win silverware.

    I hope the new regulations are enforced and when a big club misses out in participating in Europe then reality will strike and I bet it would only need to happen once. We need to remember that regulations were implemented for the first time this season regarding squad size and "home grown" players so where there is the will it can happen.

    I agree with some of the points above regarding the Champions League being for Champions and the number of teams that can enter from each country. I believe the Premiership should not have 4 places as this allows teams to be content with finishing 4th and 25 points from winning and also aids the big clubs becomming bigger and breaking away from the rest of the Premier League.

    In summary obscene money being spent by clubs that has come from outside of the game, we only need to look at the spending of the other major leagues to put this into perspective. It is just a matter of time before this all comes tumbling down on clubs that live beyong their means.

  • Comment number 26.

    The events of the last day or two make me very worried about the intelligence of the men running our football clubs. The transfer window doesn't move. It's the same time every year. Yet on every deadline day these men run around like kids in a sweet shop, buying anything they can lay their hands on with complete disregard for the value of their money. Surely people responsible for managing such massive resources should be capable of some forward planning? Tottenham suddenly went in for Charlie Adam. Why? They have Modric, Van Der Vaart, Pienaar, Kranjcar... They have shown no sign of wanting him before, and I'm willing to bet they won't make a move for him again in the summer.

  • Comment number 27.

    Do he and others like him simply think that when it comes to the crunch Uefa will blink? After all, without the big name players like Torres, the value of the Champions League brand is diminished and with it the amount Uefa can charge for television rights.

    Well the Champions League has managed quite well without him this year.

  • Comment number 28.

    David, I think it is unfair to claim Liverpool and Man United made substantial losses last year without putting it into context. Both clubs made large operating profits but incurred losses on paying interest on fixed charge loans. In Man United's case the debt is a lot more complicated and substantial than that also. But now Liverpool aren't debt-leveraged anymore so talk of their losses going forward are misleading. Their current debt exists in the form of overdrafts and operating short term cash loans. Even after the signings of Carroll and Suarez, they still only spent £2m in the transfer window with probably a slight reduction in their wage bill.

    In reality it is Chelsea that is the most unbelievable. Set in the context of UEFA's Financial Fair Play, yesterday was commercial suicide. They incurred genuine losses in the last year even after Roman has written off the debt the club owed to him. These transfer fees will have to be amortised like you say over the course of the contracts so yesterday's spending inhibits their future spending if they want to stay in the game. Liverpool, however, have not jeopordised their future spending by trading Babel and Torres for Carroll and Suarez.

    I seriously cannot think how Chelsea and Man City will possibly get around these new rules. Chelsea are still making colossal losses well into 'Roman's project' and it is quite clear that as a business they don't work, at producing a conveyorbelt of players, they don't work, so they spend big just to keep up. They're not even going to win the Premiership this season, nor the Champions League in all likelihood.

    Footballing wise both clubs have benefitted from yesterday's deals. Chelsea get the big name they wanted who will guarantee them goals. Liverpool get two hungry, young, highly rated and hard working replacements to replace the one that left.

    But like you allude to, financially, from Chelsea's part it is truly baffling.

  • Comment number 29.

    Re #1 & #7

    This is a point I was discussing the other day. The point was raised that Man City are sponsored by Etihad, who are in turn owned by Skeik Mansour. What is to stop Etihad agreeing a huge sponsorship deal with Man City that enables them to continue to operate in the manner they do, albeit slightly more realisticly perhaps?

    #7 - I confess that I haven't read the regulations so am unaware as to whether they would stop the above from happening but surely there's a grey area relating to the definition of 'market consistency'? I just think that the clubs lawyers could muddy those waters for their own benefit.

    I am all for these regulations and hope that they do actually have some teeth as yesterday's shenanigans took the biscuit!

  • Comment number 30.

    #26 - That's a good point. I think Harry just can't resist, I think he may have some kind of an addiction to 11th hour transfer day deals, whether or not they are necessary!

  • Comment number 31.

    'Now Torres is undoubtedly a good player - one of the best strikers in world football. At 26, he has his best years ahead of him and few could blame him for leaving Liverpool after so much instability at Anfield.'

    Really? With his reliance on pace and injury record I would say his best years, like Michael Owen, were 20-25.

  • Comment number 32.

    Those who think clubs are against the FFP regulation's need to do their homework. The FFP regulation's were instigated by the big european football clubs in the wake of spiralling wage demands.
    The FFP regulations don't actually come into effect until 2013/14, but accountability starts from the end of this season.

  • Comment number 33.

    "The amount being spent on transfer fees and wages, often for very average players, is bordering on obscene." footballfutbolfitba

    Thats putting it mildly and being kind. In my opinion the obscenity line was crossed some time ago. All we've seen lately is the line being ramped up at a time when most people are having to ramp their spending down.

    I am fast losing faith in football and footballers. I have followed football seemingly all my life, and now for the first time I find myself developing an unhealthy dislike for the game. And it's surprising even to me.

  • Comment number 34.

    #26 "The events of the last day or two make me very worried about the intelligence of the men running our football clubs."

    Good grief really? Do you still have some belief that intelligence lurks inside the heads of the people running football?

    At what stage does intelligence come into the running of most football clubs? A manager is hired, allowed to buy the players he wants at a considerable outlay, then 1.4 years later (the average length of life of a manager according to the LMA)the manager leaves and the new man in starts the rebuilding process all over again, with new players being shipped in at a premium and the old ones leaving, usually at a loss.

    What intelligent person allows this to happen every 1.4 years? Take out what are commonly acknowledged as two intelligently run football clubs (Man U and Arsenal)and you get a much shorter period than 1.4 years that this ridiculous money losing roundabout starts up again.

  • Comment number 35.

    7. At 12:40pm on 01 Feb 2011, weezer316 wrote:

    The rules state rates paid for items must be consistent with the market. So for example, ignoring your keyrings, Sheik monsour couldnt sign a sponsorship agreement with man city for emirates worth £50m per season, double what barca will earn with their new one.

    -------------------------------------------------------------------------

    This sums it up in a nutshell. Does this mean Barcelona won't be allowed to earn twice what Blackpool get from a sponsorship agreement? I don't think so. It sounds to me like your idea of market consistency is going to be regulated by the performance of the current elite. Why should the bar be where Barcelona put it, and not City? What about the London weighting effect on the market? It's going to be a minefield.

  • Comment number 36.

    If Platini really is against financial doping he'd do something about the situation in Spain. Barca and R Madrid gain huge amounts of money from being able to negotiate their own TV rights deals, creating a huge gap between them and the rest of the league. Hardly competitive is it?

  • Comment number 37.

    I think of the last 16 in the CL only two are not from the usual big countries and they are only there because there was only one team from these former countries in their qualifying group.

    Snoredom of a tournament amidst the occasional good game.

    Financial fair play rules won't make any substantive difference to this trend as ways will be found to circumvent the regulations. I'd be more impressed if they had a broader concept of competitive fair play and gave ALL domestic Champions their rightful place in the CL.

    These regulations only cement the status quo.

  • Comment number 38.

    Not strictly on the main topic but I'mnot entirely sure what the main topic is other than to report that EPL clubs spent mountains of cash on players in the transfer window, which is hardly man bites dog stuff...

    Anyway...

    "20. At 2:17pm on 01 Feb 2011, Steven Powell wrote:

    ...sporting breakaways just don't work. Remember the Packer cricket circus? The rugby league Murdoch breakaway?"

    I don't know much about rugby league, but I'm pretty sure the Packer Cricket Circus achieved exactly what it was supposed to, which was to force the Australian Cricket Board to negotiate with Kerry Packer about the television rights for Australian cricket

    Along the way it helped modernise the game as well as providing some tough and entertaining cricket, and it helped to increase the earning power of international cricketers- but those were by products- Packer's prime aim was to secure TV rights which he did.

  • Comment number 39.

    No way Torres is worth 50

  • Comment number 40.

    I'm not sure why people say sporting break-aways don't work.

    The Premier League is a break-away league, and that seems to be working.

  • Comment number 41.

    Of course people are not going to agree with the fees being payed for players, especially those who havnt near enough justified the price tag ie andy carroll, also the wages are ridiculous, i mean come on, $250,000 a week for rooney, and on his current form does he really deserve it, i think that clubs shud b able to reduce the wages by a certain amount depending on how the player is playing and that can b discussed by the club on things such as how much money can be deducted and how low they are allowed to reduce their wages, also it cud work the other way, a player cud b played more by a club if their form has risen, i post this idea with regret as it seems to highlight the idea that players ar driven by money now, but come on wen rooney is being payed that amount and carroll's wages have risen from £30.000 to £80,ooo due to his move, how can we say that players ar not run by money now. What many people also have to understand tho is that football is a worldwide sport ad possibly the most popular sport in the world with lots of money etc riding on each game etc so in that sense the wages for players cud b seen as justified, actually no it's still not, im just trying to mediate the situation but football players are over priced in both their fee and their wages and something should be done to stop this, and yes im looking at u fifa but i dont expect u to do anything about it judging by the absurdity of ur previous decisions ie giv the world cup 2 qatar so the whole world will hav to re schedule wen they playe football matches, and not im not and angry englishman, im actually scottish and watched in fits of laughter as england miserably failed with their bid, but yes it was their media's fault, but i feel that holland's bid and spain's bid shud hav been looked at more in depth, they did reach the final of the world cup, fifa shud b loyal to the nations that provided us with entertainment during the summer and leave the countries who are in the cold for a later period when the competition is not as strong.

  • Comment number 42.

    Could someone explain to me how this financial fair play regulations are ment to work?
    what is to stop clubs for e.g starting to sell branded pens for a million quid a pop and the sheikh and abramovich etc buying a hundred of them every year.
    all perfectly legal and normal profits?

  • Comment number 43.

    I don't particularly want to comment on this subject but on the quality of your article by Mandeep Sanghera on the Utd - Villa game. I know he may have written it at speed but it's riddled with mistakes and poor sentence construction. While you're at it get your headline writers to check their spelling ' VICTORYS ?????' I'm in this blog because I can't find another space to comment. Lots of invitations to comment and provide feedback around this website but I was given a ten-minute runaround looking for the right place to place these views. Make a bit simpler, please.

  • Comment number 44.

    By the way Torres is not worth 50m but he's got every right to leave. Football's like any other job - you see a chance to improve your position and you take it. It's just more conspicuous. But what's anything worth ? Some junk art is worth what someone's prepared to pay for it; same with Torres. We'll see if Chelsea have bought a pup or not.

  • Comment number 45.

    Without any need to justify it by detail, every football fan knows that this kind of spending on footballers, especially in a generally struggling economy, is both lunacy and an insult to all the people losing their jobs, ability to fund education, and businesses, in this recession.

    If we examine all the EUFA rules - and I think Platini's motives are correct, whether or not his methods will work - and start analysing all the business facts and figures involved, we'll all give ourselves a very good headache, and probably not even then reach any satisfactory conclusion.

    Whereas if instead we just say - football has gone money mad, and it has to stop, then the solution is easy.

    Why do we need transfer fees, why is there such a thing as a transfer fee in the first place?

    If you or I change job, we don't get bought or sold for a transfer fee, so why do footballers?

    And the answer to that one is that footballers are viewed as financial and business assets by clubs and their owners, rather than as human beings, which in itself ought to make people think.

    Though technically of course, it's not the player that the club owns, but the player's contract.

    So there lies the real problem. Most ordinary employees are on contracts terminable usually by one month's notice from either side, or in some cases 3 months at most.

    There's no reason for footballers' contracts to be any different, except that the owners and managers of clubs want to control the player's destinies in their own interests, not necessarily those of the player.

    Because if a player is performing well, his club will want him to stay, and so that's the security for a player, he doesn't need a 2, 3 or 4 year contract to provide security unless he doesn't believe in his own ability at that level.

    So all that needs to be done is put players on maximum one year contracts, preferably I'd suggest with the option to leave or be let go at either of the annual two transfer windows, mid season and pre-season/post season.

    Then there's no need for transfer fees at all, and then all this wild and extravagant financial madness comes to an end.

    Then players would choose to go where they liked and were wanted.

    But why won't those in football see sense and run things in this sane, rational way?

    It's the control freakery of the managers and owners, who want to hook players up into long service like if they joined the army.

    Football is a short career in comparison to most others, especially at the top, which for many will only be a few years, no more than 10 in most cases.

    Whereas rich owners and wealthy and successful managers like Alex Ferguson can be in football for several decades, in many cases, even until they die.

    So in my view, it's time we had more player power, with the players having more control over their destinies, and probably in many cases, showing more loyalty to their clubs or home towns than most currently do.

    Why is it right or fair for example, that Newcastle gives birth to a star like Carroll only to see him taken away by the richer clubs?

    If Newcastle had kept all its homegrown talent in recent years it might well be top of the premier league.

    But of course, none of the above is likely to happen - i.e. abolishing transfer fees - while we are in this unrestrained capitalist model of society, even in sport.

    I think quite frankly, and from some of the comments here, it appears some agree, that it's a pretty disgusting spectacle, to see all these clubs hurling tens of millions around to try to grab all the best players for themselves, and it's got little to do with football from the fans' point of view.

    And not only by this means are rich owners stealing home grown talent from one town to another, they are even letting down British talent badly, failing to bring them through, by importing loads of already established foreign players in the pursuit of instant success.

    Just as our politicians have sold off most of our home grown British industry to be replaced by foreign imports and owners, so the rich owners of football clubs have done the same, ignored the home grown British talent in favour of importing the finished article from abroad.

  • Comment number 46.

    "7. At 12:40pm on 01 Feb 2011, weezer316 wrote:

    #1

    Read about the proposed rules before you post. Its thing like that which fuel the total contempt platini is held in in this country, despite having a sense of decency and fair play which most here lack."

    Really?

    So declaring that he wants to reduce the number of Italian, Spanish and English teams in the Champion's League is a sign of fair play - given that the places are given on the basis of the coefficient of performance in previous European competitions.

    And finding himself unable to impose his will on the basis of sporting performance, he has resorted to financial methods.

    Platini is not bothered about decency or fairness, he is playing politics and seeking to pander for votes from the Eastern European nations - possibly excluding Russia - and the French and Germans.

  • Comment number 47.

    Only Arsenal and Tottenham would definitely comply out of our six biggest - and richest - clubs.
    ========================
    What's wrong with journalism nowdays? Tottenham's financial statements showing positive result, have a footnote that transfers and player wages are not part of the result - a clear message that with those Tottenham are in a big loss!

    As for Platini's populistic UEFA Financial Fair Play rule, can a journo asnwer my question "If Roman buys 50M keyring in Chelsea store every day before transfer window or his company signs a shoelaces sponsorship deal - that would still be considered as revenue according to Platini's FFP, no?"

  • Comment number 48.

    As Harry says, there is an awful lot of backhanders and sweeteners involved in some of these transfers, but being realistic, it is a necessary evil.

  • Comment number 49.

    Simple answers

    1. Stop going to the games
    2. Stop subscribing to pay TV
    3. Stop buying club merchandise


    Football has lost its way as a sport and the bubble WILL burst but as long as we the punters keep paying then............stop complaining

  • Comment number 50.

    45. At 10:37pm on 01 Feb 2011, World Cup Wally wrote:

    So your suggesting a way to stopping the big transfers is to abolish transfer fees?? Marvelous solution for the top clubs, disaster and meltdown for smaller clubs.

    My own football team sold a home grown player to Man City a couple of years ago - Joe Hart - the relatively massive money received for him has really helped the club. Large amount of other clubs have also sold players in the past which in some cases has actually helped them survive. But if players can just walk out with one months notice what's the point in developing young players? It wouldn't be worth it. And a lot of clubs would go to the wall, which is hardly good for the majority of players either (the lower level ones).

  • Comment number 51.

    What makes me sick about all this is firstly, Torres after saying he would never go to Real, he went to the real of the premiership, Liverpol a working mans club like Athletico.

    I will say, If Rafa never left\got sacked Torres would still be at Liverpool, I thought last year Reina would be gone by this summer too, but when Rafa left, I knew the now known Mercenary Torres would go but I thought it would be the summer and not to a prem team.

    Barca can easily increase their revenue, best brand in football right now, maybe not the highest earners but definately the most marketable team in the world right now, they should have takenb a sponsor years ago and I reckon they have also missed out on at this point billions of revenue by not floggin the teams brand as they should have for the last 20 years

    Chelsea are 4th and not guarenteed CL footie, but Torres knows RA will spend huge amounts of money, meaning high wages for him and a stream of big buys to play alongside him, money is the primary reason Torres went to Chelsea.

    If UEFA just simple as firstly implement, homegrown rule, cap transfers, cap wages and cap what clubs can spend, if you are capped at 40m a season if not in europe and say 60m if you are, a small advantage but not what we have now if you play at the top. What we now have is the top teams pretty much taking anyone they want regardless of the wish of hte club they are buying from, all a manager form a top half team has to do is express interest in a player from the bottom half of the table or lower league and the player wants to leave to go to the bigger club, this is a real problem.

  • Comment number 52.

    49. At 07:56am on 02 Feb 2011, lordfootiefan wrote:
    Simple answers

    1. Stop going to the games
    2. Stop subscribing to pay TV
    3. Stop buying club merchandise


    Football has lost its way as a sport and the bubble WILL burst but as long as we the punters keep paying then............stop complaining
    _______________________________________________________

    This is very true
    Caned my sky subscription a year ago, when webb ignored Flectcher kick Kuyt and failed ot even book him at OT a year ago.
    Aint bought a kit for 3 years
    As with Credit card companies and Banks we are fuelling this mess, I watch every game FREE as I will not pay the extortional prices to see a game, here in ireland €80 for a decent seat in the Aviva stadium. ow much and Wembley? for gods sake Ireland international games are shown on Sky Sports only, the national game cant be seen by kids from families that cannot afford sky and now were in recession less and less Irish kids will see Ireland play, great for grass roots footie as well as club mess

  • Comment number 53.

    Why now pay aplayer 10K a week and charge £15 for a jersey, £15 for a ticket to see a game.
    Someone please tell me why a PPV match or fight costs more than a cinema ticket where they provide a building screens shops ect?? Makes no sense except we are being completely ripped off. Chelsea are fuelling this big time. Liverpool have not helped either, 24m record transfer for a CL winning team was impressive compaired to MU, quite a few over that amount, even a centrback they bought cost more than Torres, they cannot slam Chelsea either, but now LFC pay 35m for a player. It has really got out of hand in England more so than the continent, Torres caost Chelsea more than Zidane cost Madrid, Ronaldo 80m, now come one, he was never even fit to tie Zindanes boot laces and he cost twice as much. Messi I can only imagine what he would cost in todays market, 100m? 120m?

  • Comment number 54.

    Listen to Barry Silkman on this subject where he states that the UEFA fair play is a total waste of time as it stands. Chelsea have just proved it - they are just going to swerve round the rules - easy peasy!

  • Comment number 55.

    The only way forward, and I really believe in this, is for actual fans to own the clubs, do you think Barca fans will decide to sell Messi, if the fans owned Liverpool, do we really think he would have been allowed to go to Chelsea, no he wouldn't. Barca fans own the club and just look at their players, I can see Messi never leaving that club tbh.

    Clubs have gone corporate, where poilitic and piles of cash rule. Fan ownership will at least give those who fund the club some say

  • Comment number 56.

    EUFA fair play, makes me laugh. The top teams from the top legues have EUFA over a barrel, as EUFA is nothing without those clubs and if the clubs dont get their way, they start their own league.

    Reaaly, just look at the investigations of corruption in europe with european matches, look at who is being investigated, none of the top teams form the top leagues. As with the FA, top teams have influence with the governing body, sure the FA failed for so long to employ independent directors and instead had them from the top clubs in the prem. Hmmmmm

  • Comment number 57.

    Football isn't bucking any trend. The rich have never been richer.

  • Comment number 58.

    Bore ur you clowns

  • Comment number 59.

    Bore off you clowns*

  • Comment number 60.

    I too noted the points made by Arsenne Wenger. Chelsea in debt by £70 million and then immediately go out and spend another £70 million?
    Who's running this business? A comedian?

    The only way they can compete in the Champions league is by capital injection from the owner....Is he likely to do this?

    Another way is to increase the entrance fees...Are the supporters going to take this 'hit'?

    Or cook the books to show they have 'break even' accounts. Isn't that illegal?

    Chelsea are going to have to win the 'whole show' Champions league, Premiership, FA cup to cover this expenditure...

  • Comment number 61.

    It's hardly going to be fair if UEFA say you have to live within your means when our TV money is divided equally between all clubs but Real and Barca recieve a massive percentage of the TV money in Spain. Of course they are going to have an advantage over any english teams when that happens. Also what if a team wants to build a new stadium? Clubs usually go into debt when that happens so any club that builds a new stadium will almost certainly be banned from europe.

  • Comment number 62.

    But if there is one lesson from yesterday it is that for some clubs the here and now is more important than what might happen a couple of years down the line.
    ===========================================================================

    I agree with you on this David. Sadly, it is not just some clubs that have this sentiment; most fans, and even the print and electronic news media espouse this trend of thought. It would help greatly when a majority of people who follow the beautiful game realise that financial security in the long and short term is far more important than winning trophies.

  • Comment number 63.

    UEFA will not buckle over the FFP rules. Plantini and his cronies dislike the English game and have done everything possible to maintain the status quo of clubs which Chelsea gatecrashed with RA's money not through their own hard work. Now City are trying to do the same as Chelsea.

    Platini will not duck and run. He will take great pleasure in telling clubs like Chelsea and City that they are not wanted or needed with their mega rich owners.

  • Comment number 64.

    "If Roman buys 50M keyring in Chelsea store every day before transfer window or his company signs a shoelaces sponsorship deal - that would still be considered as revenue according to Platini's FFP, no?"

    Considering no club has ever sold 50m keyrings I suspect they would not get away with this based on what the football market is doing.

    "Also what if a team wants to build a new stadium? Clubs usually go into debt when that happens so any club that builds a new stadium will almost certainly be banned from europe."

    It is my understanding that provided the club can meet the annual loan repayments for the stadium and still break even they would be ok.

  • Comment number 65.

    First of all I think UEFA under Michel Platini should be applauded for what he is trying to achieve. The rules introduced are a great first step.

    The challenge as mentioned is how they handle the clubs that breach the rules and how quickly they close the loopholes as they find ways to get round them. It has to be a long term strategy to avoid losing revenue received from the richest clubs and close the loop slowly to regulate the game.

    If they just ban a club from the Champions League for breeching the regulations then the ramifications could split the game in Europe and I'm sure they want to avoid that if possible at least initially although that should remain a punishment they can bring to bear.

    Ultimately I'm happy they have started this process though and I hope they achieve their aims.

  • Comment number 66.

    In response to the people who are asking what is to stop an owner from purchasing a £50m keyring, or suchlike...

    It is relatively easy to draft laws which prevent this type of thing from happening. In UK tax law for example, there are the "connected persons" provisions which are designed to prevent a business owner from extracting funds from a business to themselves or to their families at the lower charging rates that apply to disconnected investors.

    If similar rules are not employed when it comes to the FFP rules, then it will be quite obvious why.

  • Comment number 67.

    People are convinced there are loopholes in the Financial Fair Play Regulations, but there aren't, because there are laws to protect against this.

  • Comment number 68.

    16. At 2:08pm on 01 Feb 2011, GH103 wrote:

    If clubs had been forced to live within their means ten years ago, Leeds United would probably still be competing at the top end of the premiership. Portsmouth would probably still be in the premiership, etc etc.

    -----

    If clubs had to stay within their means, would Portsmouth have become a Premiership side in the first place?

    The financial rules are designed to allow the likes of Wigan and Fulham to have the opportunity to build up through good management to being a Champions League side. But aren't these the same clubs who effectively purchased a Premiership Franchise by investing millions of pounds from their owners pocket which other, well-managed league clubs couldn't afford. Indeed, haven't Blackburn, Blackpool and others purchased, to different degrees, a place in the Premiership by greatly investing in their clubs to remove themselves from the lower leagues.

    This strategy is seeing sides like Plymouth try, fail and end up slipping into an abyss, at the expense of other clubs and the small business and charities they can't repay and effectively are the victims of their failed attempt at the Premiership.

    The Financial rules will only make sense if there are not massive riches available at the top of the game. Teams like Chelsea will gamble on massive investments knowing they can break even if they reach the Champions League, the same as the likes of Hull, Reading and Wigan will spend millions knowing if they succeed they will have been justified in their pursuit of wealth.

    Until the fairness of football finances works at all levels, rather than focusing on the small elite of Premiership clubs, the sooner we'll have financial responsibility in football. The money available to those who succeed seems to promote irresponsible spending.

  • Comment number 69.

    I think I remember Chelsea claiming they were in dire financial trouble in the 70's and literally the begging bowls were out at an away ground, some clubs were forgoing their share of gate receipts to save allegedly Chelsea. Next thing you knew Chelsea spent over 100,000 (a fortune then) on a player! I hope they know what they are doing and being honest this time.

  • Comment number 70.

    Just a few observations...

    Firstly, UEFA and Platini are no mugs. The financial fair play rules are water tight and agreement with all European clubs was made prior to publishing. There are no loop holes.

    You can also bet your house on UEFA banning a 'big' club if they fall foul of the regulations which, I believe, will take into account a clubs finances of this season and the next with enforcement commencing after 2012/13 season.

    A couple of reasons why, firstly, Platini needs the votes of more than just England and Spain to stay in power. Secondly, only Spain (and then only Barcelona and Madrid) no other clubs in Europe can compete financially with the Premier League (unless they have a rich benefactor!). Do you think the big clubs in the other leagues would care less if Madrid or Chelsea were excluded from the Champions Leauge for a season or two? Not in a month of Sunday's. As for effecting TV revenue for the CL - not in another month of sunday's! Actually, the clubs themselves have far more to lose. Especially a club like Chelsea who, lets be honest, do not have anywhere near the stature of the Madrid's and Man Utd's of this world and would find the revenue loss much harder to over come.

    In my opinion the financial fair play rules should be extended to include the Premier League too. As in you cant come in or you get kicked out if you dont adhear.

  • Comment number 71.

    Martin, I well remember the 70's, (although it was in the 80's that Chelsea were really in financial trouble) and I doubt very much that any club gave us handouts!

    Your memory must be playing tricks on you!

  • Comment number 72.

    Can you imagine UEFA barring Chelsea, Barcelona, and potentially Real Madrid, Man Utd, Man City, Inter etc from the Champions League because they don't meet the regulations?!

    Why are people taking this seriously? UEFA is not going to shoot the goose laying the golden egg for them. This is the organisation that allowed non-Champions into the Champions League in the first place, giving 3 or 4 places to the wealthy nations rather than making it a 1 per nation trophy.

    UEFA follows the money. TV has the money. TV follows the big clubs with the exciting players and huge fanbases.

    It's not rocket science.

  • Comment number 73.

    It looks pretty simple

    Chelsea tried cutting their spending and investing more in youth and it failed miserably

    Players for the future like Sturridge / Kakuta / Bruma / Van Arnholt were supposed to step up this season but they havent been good enough

    so in order to challenge for honours again they spend big - exactly what they did to get to the top

    its pretty sad and embarrasing for them really - at least they attempted to change their spending habbits

  • Comment number 74.

    You will find that the owners of Man City and Chelsea will start sponsoring the shirts of the clubs with huge contracts as a way round the new law.

  • Comment number 75.

    As a football fan (if you can call a Crystal Palace supporter a fan of football...), I find the dealings in the current transfer window fascinating.

    There have been a lot of comments here about the amount of money spent, the operating loss, etc, to companies. I hope I don't offend any of the posters to this thread who have economics degrees, or who work in finance, etc. But to me, the money spent is irrelevant. We are in the most privileged position, as football fans, to know how much our heros cost and how our clubs do. Add to that the fact that (apologies to those who don't), I imagine that the majority of posters to this thread also play Football Manager and so have a 'perspective' on transfer fees, wages, etc.

    But in reality, when a large corporation signs a new CEO, do we know how much has tempted that person across? If Company X spends a certain amount of money to bring in someone who has the potential to make them more money, do the laymen know about it? No. We all have a vested interest in our football clubs - we support them because we want them to do well, but sadly, because everything financially is transparent nowadays, we confuse on-pitch performance with our need to take an interest in economics. Especially since the majority of us are not qualified to comment.

    I have shares in a number of companies. I am a simple English Literature graduate who works for the RAF - I know nothing about business. If a company does well, I am told. If it doesn't I am also told. I am not qualified to predict ups and downs. Similarly as football fans, we are not qualified. We should just enjoy the successes of our team. The finances are irrelevant. DO you all care if the tea lady/man gets a raise? No. But what if their provision of tea inspires the manager, inspires the players, etc? As fans we should all just get behind our teams on the pitch; who cares how our favourite 11 plus subs are paid for?

  • Comment number 76.

    I can understand Wenger is feeling dizzy, trying to identify ways to win the Carling Cup but, surely, he's capable enough of realising that his club is called Arsenal and he should mind his own business.

    On a second note, I can understand him. How does he tell his supporters of who's next in line to have been fully developed, ready to win the premiership. Slowly but steadily, fans start forgetting when it was the last time, as they say.

  • Comment number 77.

    @ 74,

    Spot on.
    We could also see the team t-shirts becoming something like formula-1 costumes. Full of printed brands, sponsoring the A or the B company.

    The UEFA guys remind me of the F.A. and the Premier League guys distributing £25k fines around.

    How difficult is it to comprehend that teams like Man City, Chelsea, Liverpool, before spending the money have surely checked how they will shape up finances to look in accordance with the new rules?

    The books to look good will require for a few clubs to find additional sponsors. And I am sure they will. Of course, it's totally legal: the purpose is clubs not to be placed under danger, anyway. Just that.

    The Milan chairman and Wenger may wolf-cry with crocodile tears for as long as they like. Solutions are always found.

  • Comment number 78.

    The big clubs in Europe are more powerful than FIFA. If FIFA threatens to ban the big clubs from European competition they'll just leave FIFA create their own league and keep all the television money, sponsorship etc for themselves. FIFA couldn't afford to let this happen and will give in or create a loophole so that these clubs can get away with the huge losses they run under. The structure of the champions league was changed because of the threat of the big clubs starting their own league.

    Football needs to be a level playing field. If FIFA were able to control all the teams (which they can't) what they should do is distribute the same amount of money for each team so everyteam would receive eg £50m a season. All ticket sales, sponsorship etc will be given to FIFA. This way we will have a level playing field, a reason for clubs to nurture their youth and highly competitive leagues.

  • Comment number 79.

    @77 If clubs can raise extra funds from advertising and sponsorship that increases their income fairly. If they could do that at present, they would.

    But they have to declare the money at market rates. If Man City claimed their shirt sponsor paid 10 times Man Utd's, the figure would be corrected down to the market rate. So it's not as simple as investing money through a new channel.

    The reality is clubs will be encouraged to spend money building new markets outside of Europe in order to raise revenue, and by virtue of this raise the amount they can spend. That's UEFA's real goal - ensuring European club football is the best in the world and ensuring new money comes from more people watching worldwide is what they want.

    Which clubs can benefit from a greater market- a small number of Champions League sides, who can further increase their distance from the rest, and ensure the same sides qualify each season.

    If one season a favoured side don't qualify using the letter of the rules, I'm sure that UEFA will find a similar clause to that used to let Liverpool in the 2005/06 competition - namely that rules can be changed if it makes commercial sense.

    This isn't about making the bigger clubs miss out, but getting them to account for themselves in a different way.

  • Comment number 80.

    @ 79,

    I can understand the logic behind this. It raises issues itself. What is the purpose of the rules?

    a) Is it to protect clubs from owners who might bankrupt them?
    b) (or) is it to have a more equal competition?

    If it's (b), that, by default, will never happen:
    a) one club has a 70,000 seats stadium and another club has a 20,000 seats stadium
    b) one club sells 1.5m shirts per year and another sells a few thousands
    c) one club participates in Champions League and another club doesn't
    (the list goes a long way)

    If it's (a):

    a) there is no reason for policing the money given to a club by its owner, directly or indirectly. And this is because when it's given in the form of sponsorship, it's not borrowed but given - huge difference
    b) a club can always perform multiple deals in its commercial activities To give some examples:
    i) many corporations to be advertised on the t-shirt, etc.
    ii) stadia to change names temporarily, for a few years, depending on the sponsor
    iii) to create functions - like roomes, stands, you name it, with a corporation name, advertising it for a give period.

    I could write a book for innocent looking loopholes and
    a) I am not a lawyer
    b) I am not a club owner having a team behind me, advicing me.

    Can you imagine how easy it is to bypass such rules?

    In the mean time, we read farcical examples of managers (Wenger) and chairmen (Milan team chairman) crying for the sake of the rules to come, just because it happens to be suiting them.

    Who is kidding who? :)

  • Comment number 81.

    @80

    Grenta show how investments from owners, even at no cost to the club, can ruin a side. Gretna were backrolled by an owner who spent millions to have a small side in the Scottish Premier, and eventually Europe I'm guessing. He was happy to fund the massive debts they built up to get to the top, without demanding the cash back.

    When he became ill and his family took over his finances, they decided against continuing to throw money at the club for no actual return. Hence, the club couldn't afford it's bills and went out of business.

    With Chelski announcing £70m losses this week, we could imagine that if Roman pulled out tomorrow, a club would be left with absolutely massive wages they were contracted to pay and without the cash to make those payments. If they had an extra £70m in a year in sponsorship than they could usually expect from their owner, the removal of that extra cash could be enough to bankrupt them, even if there was no loan involved in the cash being given previously.

    The desire of UEFA is evidenced by the details of what counts as income and expenditure. Spending on youth development doesn't count as expenditure. Therefore, clubs with an income of £100m can spend £100m on their other expenses and then £100m on developing young players, and still be seen as financially sound. Therefore, the aim isn't to avoid bankruptcy, or to increase competitiveness. Clubs can continue to have owners chuck money at clubs to buy the best young players.

    This will increase the scope of where top clubs look for players, ensuring the top Americas, Asian and African talent is tapped up by European clubs at an early age. UEFA is interested in keeping itself as the most prestigious FIFA region. Encouraging clubs to market themselves globally, and increase the numbers of non-European 15 year olds they sign, they can undermine other areas whilst strengthening themselves.

    The fact that Arsenal are described as the model clubs should adopt speaks volumes about the policies UEFA want to encourage. I don't see Arsenal's strategy as helping to develop young players in their neighbours given how few players have come through their youth system.

  • Comment number 82.

    David - whilst the Premier League (in the UK)and other top flight leagues across Europe continue to be 'Big Box-Office TV' then clubs involved in these leagues will have a degree of financial 'comfort, despite what the new UEFA rules stipulate. The sheer size of markets ensures that monies will always be available for 'boosting viewing figures' by displaying the top footballing talent. It is even possible that the traditional 'season ticket' that today buys you only a seat in the ground of your choice, will in future cover a range of viewing options, from the real thing, to 'pay per view' TV including 'virtual seating' arrangements, seat swops, pick-n-mix viewing,etc its only just begun ... thats why so many rich owners (businesses or individuals) want to buy into 'the beautiful game'!

  • Comment number 83.

    @ 81,

    nice example.
    I understand where you're coming from.

    I have a basic objection, though: football clubs are in stock exchange. Take any business you like and tell 'em "you will run under my strict set of rules".
    I will politely omit the response you would get.

    There is history in football, in terms of clubs being companies in the stock exchange run as multinational businesses. And you can't tell businesses how much they should invest in commercial activities, research, advertising, etc.
    In other words, UEFA want the pan full with the pie and people's stomachs full: impossible.

    The small Scottish club example doesn't suffice. Scottish football has poor teams, in financial terms, by nature (no offense meant). The biggest clubs in Scotland are both in a financial mess, without spending fortunes for players, never mind the rest.

    Also, issues like the occasion where salaries have to keep being paid if a chairman sells the club, dies or whatever, a solution is simple: make the chairmen allocate cash for the salaries of players as long as the contract runs. I'm more than certain that sheik Mansour, Abramovich, Real Madrid, Barcelona, would not object.

    The noise by the UEFA official has a reason: have just one-two English clubs fail the rule, and you have no problem - you exclude them from european tournaments and that's it.
    However, have Chelsea, Man City, Man Utd, Real Madrid, Barcelona, Inter Milan failing the rule, try to ignore them and have a break away european league and you're ruined.
    Simple.

  • Comment number 84.

    Didn't Sep Blatter applaud Real Madrid's record signing of Cristiano Ronaldo for 80 million as being great news for European football? So Chelsea havnt spent any big money in 3 years so they can become debt free and decide to splash out the interest on Romans billions on 2 much needed world class players for less than Madrid paid for one?? Problem? No i dont think so! Unfair? Only if you have a weaker side but then that is football!
    Why does Arsene Wenger feel he is the voice of the EPL? I get sick and tired of him constantly wining on about the business affairs of rival top 4 teams. A manager who has his hands financially tied by his club so hasn't won a major trophy in 6 years is hardly the measuring stick of club management. If Arsenal football club backed him with a bigger transfer budget he would take it and the reason he is still at Arsenal is because he would just get found out if he had to manage a big club like Real Madrid or Chelsea, he couldn't. His constant excuse of "re-building" for no success wore thin 3 seasons ago. He really should mind his own boring unsuccessful business before criticising the successful business of others.

  • Comment number 85.

    #14: interesting analysis. I agree completely about Suarez. No matter how you slice it, Carroll's earned a big price tag based on a few games' work. But in an inflationary environment, the thing which may inflate most is an English rising star.

    And Torres is a big risk/big reward signing. If he gets back to his best, he could very well mean silverware for Chelsea they wouldn't get without him. But being more familiar with US sports, I tend to see more starkly the vulnerability of stars to long-term injury in football. (In every American game (not counting ice hockey, which is Canadian) players can be very effective even while half lame. But football is nothing but running, the seasons are very long, and the result is that in my opinion, saying the best years are ahead at age 26 isn't true. I'd think the best years on average might be from 22 or 23 to, well, the first major chronic problem, which Torres already has had. Not to say he can't get back to his best form and stay there for years. Just that he may be nearly as likely not to.

  • Comment number 86.

    @ 85,

    have you heard down there in the States of Giggs and Scholes?

    Buy the Arsene Wenger bible - you'll lovr it.
    Note: don't compare it with "how to win a trophy" books, as it would lead to psychological problems, perhaps.

  • Comment number 87.

    As to the idea that "this can't go on..."

    Well, of course in instances where clubs crash and burn, no it can't, of course. But in general, entertainment is a growing, perhaps the growing segment of the economy, sports remains a centerpiece, perhaps the centerpiece of entertainment, and football is the most popular sport. So for the forseeable future, we can expect to see more and more money spent.

    Tens of millions spent on players doesn't go down very well with most fans, and while I think I understand, to me it's absolutely the same thing as movie stars making tens of millions. They both do things that millions of people enjoy watching. No surprise they both become really rich.

    Also, I love the idea of fans owning their teams. Green Bay fans own their gridiron team, which just made it to the superbowl. It just makes sense. Besides, I think it's a good investment (see above).

  • Comment number 88.

    @ 87,

    now you're talking :)

  • Comment number 89.

    The big question is how are Chelsea going to make enough money to satisfy the UEFA rules on profit/loss? (Man City too for that matter)
    These rules were brought in to try and stem unreasonable spending by rich owners. and exclusion from Europe is the penalty for not fulfilling the financila conditions.
    Abram's spending is clearly to try and win the CL this year, because in a couple of years Chelsea wont even be allowed to compete...

  • Comment number 90.

    @83 you posted "I have a basic objection, though: football clubs are in stock exchange. Take any business you like and tell 'em "you will run under my strict set of rules".
    I will politely omit the response you would get."

    Actually publicly traded companies DO have a specific set of rules which they have to follow or they are expelled from the stock exchange.
    For the most part football clubs are run like good businesses but there are a few, most notably Chelsea and Man City who have NO financial accountability and new UEFA rules are trying to do something about it.

  • Comment number 91.

    @81 you poosted
    "The fact that Arsenal are described as the model clubs should adopt speaks volumes about the policies UEFA want to encourage. I don't see Arsenal's strategy as helping to develop young players in their neighbours given how few players have come through their youth system."

    I give up! posters on here dont know WHAT they are talking about!

  • Comment number 92.

    "For the most part football clubs are run like good businesses but there are a few, most notably Chelsea and Man City who have NO financial accountability and new UEFA rules are trying to do something about it..."

    Chelsea PLC are debt free through 3 years of non spending and clever debt management. Last year the loans from the holding company to Chelsea PLC were converted into shares. However Abramovich’s loan to Chelsea Limited, the holding company which owns Chelsea PLC was not. That means the loan still remains but it does not loom within the club but in Chelsea Limited. Therefore Chelsea as a football club is more or less DEBT-FREE unlike its holding company.

    Since Manchester United was bought by the Glazers in 2005 the club has been slumped into severe financial woe. They bought the club by loaning money from banks which now sits on their balance sheets which is bringing interest payments up.
    The debt of the Manchester United is actually far greater than all thirty-six clubs in Germany’s top two divisions! Frightening! They have the largest and the most unstable debt in the football world.

    Man City are not in the top 10 debt list of European clubs surprisingly but Arsenal are, coming in at 203 million in July 2010 (just a shade less than Barcelona who owe 273 million but are 10 times bigger as a club and financial force)

    So i would give up cliveeta because it would appear you are right, posters dont know what they are talking about.

  • Comment number 93.

    The premier league is immune to the recession and the spending cuts in this current economic climate. Even in these tough times, the big clubs got loads of money to spend and was shown on transfer deadline day. Those clubs who spent loads of money will probably feel to consequences of their massive spending in the near future.

    Football is all about money these days and that is the fact.

  • Comment number 94.

    Question:
    What's the difference between Roman Abramovic and Fernando Torres?

    Answer:
    Nothing - the meek will not inherit the earth
    http://news.bbc.co.uk/1/hi/programmes/newsnight/9382745.stm

  • Comment number 95.

    Well done Blueflame66 - nice to see someone talking some sense.
    Two points:
    1. Whinging Wenger - He should keep his nose out of the business of other Premier League clubs - he hasn't got £70m plus available to spend - wonder what criticisms he would be throwing around at others if he had?
    2. UEFA: Platini is nothing more than a mouth piece for Sepp Blatter, and we all know how much he likes English football - or anything English for that matter!

  • Comment number 96.

    In response to the people who are asking what is to stop an owner from purchasing a £50m keyring, or suchlike...

    It is relatively easy to draft laws which prevent this type of thing from happening. In UK tax law for example, there are the "connected persons" provisions which are designed to prevent a business owner from extracting funds from a business to themselves or to their families at the lower charging rates that apply to disconnected investors.
    =============================

    Thanks to all who have contributed to argument about 50M keyrings. Above UK tax provision is well known. However, it regulates OUTFLOW of money FROM company, not INFLOW of money INTO company. UK tax authorities are just happy if company's income goes up, which means more taxes to be paid. So, sorry, but your argument just doesn't fly.

    Infusion of cash does not have to be so obvios as buying 50M keyring or paying for naming rights for ManCity restroom to be named Sheikh Mansour. Certainly, highly paid accountants and financial consultants will come up with more elaborate ways for cash infusion into club. But you get the point!

    Platini's FFP is populistic, and he knows it! Why do you think Roman has happily signed it, and was laughing all the way home???

  • Comment number 97.

    Below are ideas for rich owners to infuse cash into a club in full compliance with FFP rules. Just funny ones:

    - Chelsea sells naming rights for Stamford Bridge, and from 2012 it's called Roman Coliseum. Abramovic to pay 100M per year.
    - ManCity to sell naming rights for cafeteria and restrooms to be called Sheikh-your-A***s
    - Arsenal shop has replicas of empty trophy cabinet offered for 100M each
    - Blackburn cafeteria sells chicken wings in curry for 100M per wing
    - All teams have posters of Platini and FFP book offered for 10M each and FFP rules printed on toilet paper - for FREE!!!

  • Comment number 98.

    Chelsea did what anyone with any sense would do; they worked within the existing rules to get a brilliant player, before the terrain changes and they might not find it so easy.

    In this way, when the rules are enforced in 2012-13 (OVER TWO YEARS AWAY), they will already have Torres and whoever else they sign on their books. They'll then spend within their limits, with a good squad already at their disposal, and fall within the new rules over the 3 year period detailed. ie Nobody can be touched until 2016. That's 5 years to fudge figures, use Bosmans and whatever else it takes to get a squad that can challenge for the Champions League consistently.

    Wenger's only greeting cos this new rule reflects his "don't spend big (and don't win trophies)" philosophy. But clubs with money will doubtless find a way.

  • Comment number 99.

    You are all having a laugh aren't you? How is that any different to some poor guy on the street saying:

    "Why spend £X on coffee when you can go to bed earlier?"

    The issue is not whether people are earning too much or what the transfer fee is. If 3 billion people watch football and gave 1p each, then you will have your multi-million cash flow. It's a simple equation of economic scaling, which has escaped people trapped in their 1900s vision of the world.

    Wake up.

  • Comment number 100.

    If Arsenal football club backed him with a bigger transfer budget he would take it and the reason he is still at Arsenal is because he would just get found out if he had to manage a big club like Real Madrid or Chelsea, he couldn't.
    =========================================================================
    #84
    I read your piece and I feel I should share my tupence.

    If I'm a football manager and a pressman asks my opinion on a matter then I have a right to express my opinion. I'm sure Wenger did not go about moaning but was approached for his opinion and he shared it which is the opinion of most football followers in this country, I reckon.

    But the biggest farce is to you putting Chelsea and Real Madrid in the same category of 'big clubs'.

    Chelsea is not a big club, they are simply a form club. Real Madrid haven't won anything in years and they are called a big club because of their trophy cabinet.

    If you want to know what a big club is then I reckon you visit Old Trafford, Anfield and The Emirates and check outr their trophy cabinets to understand why tohse 3 are called the biggest clubs in England in that order.

    4 league wins in your history does not make you a big club, if City wins the league 3 times in the next 6 years, they won't be seen as big club.


    Arsenal is not an unsuccesful business if with something significant as a move to a new ground we still maintain top 4 status without a lot of money to play with that's brilliant management.

    The Arsenal team that started the game against Everton cost about £40million and you paid £50 million for one player, we're 2nd on the table and you are 4th.

    I'd love to win the league again, I must admit it has been a while however my question to you is what has any Chelsea manager achieved that Wenger hasn't?

 

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