BBC BLOGS - David Bond
« Previous | Main | Next »

Will English clubs get their finances in order in time to satisfy Uefa?

Post categories:

David Bond | 06:30 UK time, Friday, 8 April 2011

Having made gigantic losses last year, it's no surprise Chelsea and Manchester City would fail Uefa's new Financial Fair Play regulations were they being applied today.

But Uefa's devilishly complicated rules do not simply measure profit or loss. They have been written to assess the financial performance of the pure football side of each club.

So, in the simplest of terms; transfers, players' wages and the costs of staging games are subtracted from gate revenue, media and sponsorship income. Any club consistently living beyond their means face expulsion from lucrative European competition, the Champions and Europa Leagues.

So, to try and get a clearer picture of how Premier League clubs might measure up against Uefa's criteria, the BBC commissioned the financial analyst and blogger Andy Green to examine the most recent club accounts for 2009/2010.

In order to see this content you need to have both Javascript enabled and Flash installed. Visit BBC Webwise for full instructions. If you're reading via RSS, you'll need to visit the blog to access this content.

Dan Roan examines the Financial Fair Play rules for Football Focus

The end result makes interesting reading and suggests a number of leading English clubs are going to find it a challenge to comply.

Even though the regulations allow teams to record cumulative losses of £39m from 2013 to 2015 and a further £26m from 2015 to 2018, the deficits being run up now won't be easy to turn around.

The solution should be straightforward - slash your football costs or grow your football revenue. That's much harder in reality.

Take Chelsea, for example. They made a £70m pre-tax loss, but by Uefa's measures they recorded a slightly better break-even result of -£52m in 2010. That figure does not include the January transfer splurge of £71m on Fernando Torres and David Luiz. Nor the inflationary effect they will have on the club's wage bill.

The rules state wages of Premier League players signed before June 2010 will not need to be taken into account but those from the August 2010 and January 2011 transfer windows will.

To prevent clubs simply splashing out before the rules bite, Uefa requires clubs to spread the cost of a transfer over the life of the player's contract. So Torres will cost Chelsea £10m a year until 2015. To put that into context, that's 5% of the Chelsea income Uefa recognises.

The catch-22 is that clubs like Chelsea can't afford not to be in the Champions League.
So, do they risk failing Uefa's regulations by strengthening their team or do they ensure they comply but risk sliding down the table and failing to qualify in a top four position?

It's the same for Manchester City. The club might insist that, having spent more than £350m on players since Sheikh Mansour took over in 2008, the costs of those deals will still be felt for many years to come.

To make things even harder for teams, only certain types of revenue will be permitted by Uefa. Increasing ground capacity or naming rights deals are fine but a huge injection of cash from a new sponsor with links to a club's owner or parent company will be ruled out unless it can be proved they are paying the going market rate.

After all the ultimate aim of Financial Fair Play is to stop super rich benefactors from simply writing off massive losses which Uefa believes distorts the integrity of the game.

Both Chelsea and Manchester City say they are comfortable they will comply with the rules when they come into force.

In order to see this content you need to have both Javascript enabled and Flash installed. Visit BBC Webwise for full instructions. If you're reading via RSS, you'll need to visit the blog to access this content.

Gianni Infantino feels English clubs have an advantage

And Uefa's general secretary Gianni Infantino told me in an interview last month he believed English clubs had the best chance of meeting the standard because they made more money than clubs in other parts of Europe.

But unless Chelsea move to a new ground or sell off a large number of players it's hard to see how they can ever reach that elusive break-even target.

As for City, the strategy is based on growing sponsorship, marketing and media revenues once they join the elite of the Champions League.

One of the criticisms of the new rules is that they don't take parent company debts into account. Instead they only measure annual interest payments. It means Uefa's rules would not stop another Glazer style takeover of an English club.

That's why Manchester United would comfortably comply with Uefa's regulations were they in force today. Despite making a £79m pre tax loss in 2010, that was mainly down to one off debt charges relating to the £500m bond refinancing and currency exchange rate swaps.

And the vast sums of money United generate as a football club (£300m according to Uefa's criteria and far more than any rival club) ensures that the regular debt repayments - totalling about £45m - are easily met.

The other criticism, aired by Premier League chief executive Richard Scudamore during his grilling by MPs on the Culture Select Committee earlier this week, is that the rules will lock in the natural order, making it harder for smaller clubs backed by wealthy owners to spend their way to a higher level.

"Football is aspirational," he argued. "And there's nothing wrong with that."

Maybe so, but it would still be possible, as it used to be, for clubs with smaller grounds and less income to move up the table and even into Europe by developing young talent and growing naturally.

Those in favour of Uefa Financial Fair Play believe that is better than the 'get big quick' approach which has landed teams like Liverpool, Portsmouth and Leeds in such deep trouble.

Clearly all clubs have time to comply and it will be years until these rules really bite. And this study is nothing more than a hypothetical exercise to show where English clubs are ahead of the first monitoring period which kicks in on 1 June.

The true test will only come when a big club like Chelsea or Manchester City fail to comply many years from now. The big question then will be: Is Uefa really prepared to risk the appeal of its own competition by throwing them out?


But with pressure coming from politicians here for football to tighten up its governance and regulation, it does feel like the Uefa rules could mark a step change in the way clubs operate.

Comments

Page 1 of 2

  • Comment number 1.

    Looking outside of the Premier League, I would be keen to know if the likes of Barcelona, Real Madrid, Milan etc. are currently in a position to comply with the regulations.

  • Comment number 2.

    Surely Chelsea's problems would be resolved instantly by moving to a new ground - Man City's problems are far greater.

  • Comment number 3.

    What an utter waste of time this article is.

    Given new rules are coming in the year XXXX.
    Doesn't it make sense to do your spending before that year ?

    What a colossal non-story.

  • Comment number 4.

    From a Chelsea perspective, I have a recollection that Abramovich had talks with UEFA on the implementation of the rules.

    If that's the case, it seems likely that Chelsea will know what it takes to comply, when the time comes.

  • Comment number 5.

    You could bet your bottom dollar that, if Man City or Chelsea, were threatened with expulsion from European competition, there would be a possee of lawyers descending on the UEFA headquarters that would send Platini and Co scurrying into a dark hiding place and withdrawing the legislation.

  • Comment number 6.

    @ Back To Back Champs in 06

    Perhaps you should learn a bit more about the rules before you dismiss the article as a 'colossal non-story'.

    The rules require a three-year monitoring period to function and this period will take effect from the first of June this year, so it's very much an issue now.

    Good story Mr Bond. A step in the direction of educating us fans, I do feel some football fans need a bit more info on the rules (as Mr back to back champs has shown). Would welcome more articles on this issue

  • Comment number 7.

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

  • Comment number 8.

    Couldn't the owners set up a ghost company i.e Roman Empire so Abramovich transfers any amount of money he wants through this ghost company and call it a sponsorship?

  • Comment number 9.

    It would at first lock in the current structure of the leagues in terms of teams' strength, there's no doubting that, but I think that's a necessary sacrifice to allow the smaller clubs a fairer chance to break into the european spots in the long-run. Of course for the first decade or so the pecking order would remain largely the same I assume, but many of the top clubs can and will slip up under the new rules which would certainly allow the Sunderlands and Stokes of today a real chance to make something of their seasons, granted they are run exceptionally well at the time.

    There would still be an almost insurmountable mountain to climb for the smaller clubs to catch up to the Champions League regulars, however the new rules at least somewhat take away the top clubs' ability to make all of their problems go away simply by having super wealthy owners to back the club financially.

    However, clubs like Real Madrid, Barcelona and Man U wouldn't be affected by the rules because 1. they turn over too much money to realistically be affected by their debts, and 2. they are run by some of the most shrewd businessmen around so you can bank on them tip-toeing their way around the intricacies of the regulations with relative ease.

  • Comment number 10.

    "Those in favour of Uefa Financial Fair Play believe that is better than the 'get big quick' approach which has landed teams like Liverpool, Portsmouth and Leeds in such deep trouble."

    Erm, what 'get big quick' approach was that from Liverpool, again? Ah, the one where we were consistently in the Champions League year after year, and before that were consistently among the top few clubs in England for years, or before that, when we were winning the league and European cup year after year? What broke Liverpool was hardly a 'get big quick' approach. It was ownership by two men who were only in it for financial return, loaded debt onto the club to avoid using their own money, and had made such a complete mess of their various financial ventures that no one would even lend to them anymore. If anything, it was a 'get small quick' approach, with Hicks and Gillette using several successive transfer windows to make a net profit to cover the interest payments on the debt that had loaded onto the club in order to complete their leveraged buy-out. It was absolutely nothing like a Leeds or a Portsmouth, in any way. Those clubs spent money they didn't have on players, in order to grab a shot at short-term glory, Liverpool was a debt-free club until H&G were allowed to complete a leveraged buy-out. From there, it was already all downhill, with the owners hoping only to make a profit and get out. In the end, making a profit meant selling players, not buying them for a 'get big quick approach', and even that failed miserably. We were already big. They diminished us, and as we are seeing, it will take some time to recover.

  • Comment number 11.

    @ 3.
    The deadline was in place in August 2010, as stated in the article. Not really a non-article.

    @ 5. Entry into European competitions is "By Invitation"
    UEFA are not obliged to let anybody in. No number of expensive lawyers can change that.

  • Comment number 12.

    #9 Ibra

    Even if you accept that there is some nugget of a good idea here, any initiative is fundamentally undermined by UEFA themselves.

    If their aim is for competition for all, then they should simply distribute their money much, much fairer than they do now.

  • Comment number 13.

    philgrayswaistline

    'Couldn't the owners set up a ghost company i.e Roman Empire so Abramovich transfers any amount of money he wants through this ghost company and call it a sponsorship? '

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

    Apparently not. No company with links to your owner or directors can provide sponsorship to your team unless it is proved to be at the current market rate. This will prevent the above from happening.

    I for one like it, I'm fed up with financial doping, it doesn't encourage clubs to nurture their own talent and has an adverse impact on the production of national players. It'll have flaws and take a while to get used to but hopefully in a few years it will discourage teams in having sugar daddies and insure they try and build a football club from the youth team.

    This may be slightly niave and knowing the lovely people that run football clubs and football in general, i'm sure they'll find a way around it somehow!

  • Comment number 14.

    First positive move UEFA have made. Shows a bit of balls and doesn't seem to be fuelled by self interest though I may proved be wrong on that. Hopefully get rid of the Man City types. Nothing against them personally but buying success is always ugly! See Rangers 86 onwards, Blackburn 95 and Chelsea Abramovich era, though it can also be quite amusing when it goes wrong: eg. Newcastle!


  • Comment number 15.

    @ #12

    I agree, definitely. But that is what I was referring to when I mentioned the "insurmountable mountain" clubs will continue to be faced with in regards to competition for CL places.

    This new 'financial fair-play' scheme does nothing to vindicate UEFA in any meaningful way, however from the smaller clubs' perspectives it gives them a bit of hope for actually achieving something in the long-run for running their clubs well - rather than being content with survival and a decent Cup-run alone.

  • Comment number 16.

    Will believe it when I see it

  • Comment number 17.

    #13 greavesisgod

    Apparently not. No company with links to your owner or directors can provide sponsorship to your team unless it is proved to be at the current market rate. This will prevent the above from happening.
    -------------------------------------------------------------------------
    And this is precisely the type of area that will be very much up for debate. What is 'market rate'?

    Sheik Mansour decides that a member of his family sponsors Man City for an amount equal to what the highest known sponsorship deal is.

    What is to stop that?

  • Comment number 18.

    All this user's posts have been removed.Why?

  • Comment number 19.

    #15 Ibra

    Stoke, for example, are a very well run club financially. In my opinion they are exactly the sort of club that would be better off nuturing young players rather than paying millions for a journeyman like Tuncay.

  • Comment number 20.

    8. At 11:33am 8th Apr 2011, philgrayswaistline wrote:

    Couldn't the owners set up a ghost company i.e Roman Empire so Abramovich transfers any amount of money he wants through this ghost company and call it a sponsorship?

    ------

    quote from the article...

    "To make things even harder for teams, only certain types of revenue will be permitted by Uefa. Increasing ground capacity or naming rights deals are fine but a huge injection of cash from a new sponsor with links to a club's owner or parent company will be ruled out unless it can be proved they are paying the going market rate."

    thank god for that... because city and chelsea fans were saying their owners would just sponsor them for ridiculous amounts and the rules wouldn't make a difference to them.

    :)

  • Comment number 21.

    Can't the sheik or Abramovich instead of writing off the debts just make up ridiculus sponsorship deals with the club? so one of there smaller companies sponsers the team for say 350 million or however much they need to comply?

  • Comment number 22.

    I find the use of the term "Fair Play" in UEFA's latest initiative ironic and laughable. Could somebody at UEFA please explain to me what is "fair" about moving the goalposts and punishing clubs who have built up their squads, admittedly making big losses in the process, under the previous policies that were allowed by the authority? Do not forget that the traditional big European clubs like Milan, Real and United have often used their ability to outspend everybody else to their advantage during the last sixty years which is why they now have the huge fan bases and turnover required to continue spending big without going into the red (although courtesy of the Glazers United are redder than a tomato!)

  • Comment number 23.

    #17 MrBlueBurns

    I guess they will take into consideration all the current sponsorship deals for other clubs around Europe and compare. If Chelsea have ROMAN on the front of their shirts in a £200M deal and the second highest is United with £100M for LEPRICORN BUSINESS ADVENTURES, then the Chelsea offer is well above the Market rate. If the deal for ROMAN or MANSOUR shirt sponsors are the same as United then I guess you will have to prove you can match United in the market place (i.e. revenue, shirt sales, tv viewing figues), if you can't then again you may have a problem prooving that your deal is the market rate for your club.

  • Comment number 24.

    Why are people saying 'what about Barcelona' ?
    Barcelona don't spend much at all compared to Chelsea and City, for example last summer they bought David Villa for £23m but sold Yaya Toure for £25 and let go of Henry.
    Now they are refusing to pay the 'crazy' prices that get fired at them for Fabregas
    therefore Barcelona don't spend more than they make! Chelsea and City knew this was going to happen they deal with the consequences. As along as Man united keep winning things I don't see City sponserships doing well because the rest of the world will just see them as the second best team in Manchester who wants to buy into that?

  • Comment number 25.

    no.22

    come off it, the level of spending in the past has been nowhere near as ridiculous as it is now. do you just want to do nothing and let it get even more farcical? 250m transfers, 500k a week wages.

    yes i understand that initially this will benefit big clubs... but it could also be dangerous to them if they fail to make the champions league etc. also, clubs who run themselves intelligently, sensibly and develop youth will progress... not just clubs who got lucky and have a rich owner.

  • Comment number 26.

    Mansour can't get his family to sponsor Man City at a rate that Man Utd or Real Madrid have as they wouldn't be expected to get the same value.

    No one can buy a keyring for £50 million as that would be deemed wrong was well so would not be counted. Chelsea have a big problem because they couldn't even sell their stadiums naming rights for £100 million for 10 years!!

  • Comment number 27.

    I think this is quality, as soon as Man City get into the Champs League they will be kicked out! Surely their wage bill is too large and their stadium and fan base too small...

    I don't think this does only make the big clubs bigger as when certain teams do get kicked out there is space for others to come in.

  • Comment number 28.

    Mard, no. 21. do you not read the article?! read my comment just above yours...!

  • Comment number 29.

    No24. Barcelona have a huge debt problem at the moment. They couldn't even afford to pay their players wages at the end of last season until they got a loan. That's why people are mentioning them. Barca and Real Madrid don't own their stadium and are heavily in debt.

  • Comment number 30.

    All this user's posts have been removed.Why?

  • Comment number 31.

    #23 greavesisgod

    Oh, I'm well aware of the issues with valuation having spent this morning drafting a letter to HMRC shares valuation division!

    But ultimately, the 'market rate' is what someone wants to pay. Sure, there are indices to reference but this particular issue is one that I imagine will be exploited keenly.

    #24 heather

    The 'problem', if you will, with Barcelona is highlighted by them having to take a bank loan last summer to cover wages, for example.

  • Comment number 32.

    #30 Mr Chelsea

    They develop players that are good enough to get them into the top four. Simples.

  • Comment number 33.

    24. At 12:15pm 8th Apr 2011, Heather wrote:

    its because barcelona took out a massive loan just to pay the players wages and plus they were in talks over buying fabregas for 35 plus million

  • Comment number 34.

    #30, dont they take the accounts over a 3 year period? so teams that go for a push will presumably have to live well within their means after they do it, which if they secure europe is actually not that diffcult.

  • Comment number 35.

    30. At 12:22pm 8th Apr 2011, Mr Chelsea wrote:

    Ok quick question.

    Say for example Aston Villa wanted to push on from 6th place finished and try and get into CL Spots. How do they go about doing it taking into account the new rules where you can only spend what you earn.

    ------

    erm... you use your scouting team to it's full potential. run the club intelligently. invest in young talent that you can develop into more valuable assets. all these are SKILLS, not spending unlimited amounts of money and then winning. or are you so brainwashed by your methods that you reckon you have to spend 30m to get a decent player.

  • Comment number 36.

    All this user's posts have been removed.Why?

  • Comment number 37.

    #36 Mr Chelsea

    I think the regulations are very flawed.

    The answer I gave re the Villa question is right. Today, I can't be bothered to list just how that happens but it is possible and it is this possibility that UEFA are relying on really.

  • Comment number 38.

    Whilst I have no particular love of Liverpool, being a Spurs fan, I have to wholeheartedly agree with "redtide's" comment earlier on.
    Liverpool were consistently in the CL and rightly so if their league position warranted it.
    H&G were the biggest mistake the club made, and apart from not giving Roy Hodgson a chance in the job in my view, I do think he was dealing with the after effect of H&G, and that it has taken Dalglsh (again) to stabilise Liverpool.
    Whilst I would personally like Liverpool to be out of the limelight for a while purely for my own reasons, you cannot deny that to have Liverpool as a "get big quick" club is not right.

    Portsmouth on the other hand (whom I can't stand because of the fan with the flippin bell) got what they deserved. Them and Leeds tried to get big too quick and had no plan for when performances on the pitch started to deteriorate and affect revenue (even though in Portsmouths case they won the FA Cup due to all the bigger teams getting knocked out in one remarkable cup year)

    I do not want to see any club go out of business, but the Uefa has to do something.

    Even though Spurs are in the CL this year, I am not a fan of the competition. Since it's introduction, in the bigger footballing countries there has been very little change int he teams involved each year. Some of that is down to fan base and quality of the League, but I think it restricts the Spurs, Villa, and this year arguably Bolton and Sunderland, from taking that next step.

    The incumbent clubs stay there, and the aspiring sides hit a glass ceiling. You get the odd change (Leeds in the semis a few years ago and Spurs this year) but basically, I think that it should be a pure knockout competition with a larger inclusion of teams. That way revenue would be related to how well you play on the pitch in each game, and not have the assured revenue of the group stage.

    That in conjunction with the new rules, would be a step forward. But it will never happen because the fans are always the losers when the footballing authorities make these types of changes.

    That's my two'penneth for this week !!

  • Comment number 39.

    All this user's posts have been removed.Why?

  • Comment number 40.

    Isn't it likely that clubs will continue to exponentially raise ticket prices as a quick fix solution? Just like bank bailouts Joe Bloggs will have to dig into his own pocket to compensate for the overspending/mismanagement of the big boys.

  • Comment number 41.

    I agree and understand the reason for the new rules.
    But what's stopping the billionaires from sponsoring there own teams

  • Comment number 42.

    Are TV revenues included in the regulations? If they are won't that benefit those clubs in countries where there is no collective bargaining agreement ie La Liga as opposed to the Premier League?

  • Comment number 43.

    I think Barcelona are a unique case when it comes down to it.

    Despite the scare-mongering involved in them not being able to pay their wages was down to the fact that they only pay their players once a year, and were simply looking to re-finance this so they weren't paying money they had not yet earnt.

    Considering the fact that themselves and Real Madrid thrash out a TV deal that would make your eyes water, and the fact they win (or at least qualify) for every competition they want to enter I do not think they will have trouble complying to the new rules.

  • Comment number 44.

    I think there is a lot of hot air about these proposals. I mean using the Man utd model couldn't Chelsea just transfer their debts to a parent company in a different name and then pay interest back to it ala the Glazer model at Man Utd? It's shifting the problem rather than solving it and doesn't help the game in any way. The big teams with money will still have the money and will still buy the better players from all the smaller teams. Until we have a salary cap or a central roster from which players are paid and allocated we will still have this virtual monopoly the big teams have on the leagues and Champions League which hinders every other team.

    Lets face it although we can laugh at the name "Champions League" when you only have to finish fourth to enter it, it would become even more of a laughing stock if the actual Champions weren't allowed to enter for financial reasons!

  • Comment number 45.

    Would the people who keep saying things along the lines of

    “But what's stopping the billionaires from sponsoring there own teams”

    Please READ THE ARTICLE!

  • Comment number 46.

    Glad to see some fairplay rules coming in to make sure clubs don't drive themselves bust trying to get to the prizes, but I do think it will lock the clubs into the positions they are in more or less. To make it even across the board the FA needs to bring in the same rules for all clubs (with adjustments for the league they are in) or tighter rules.
    However I do think a "sugar-daddy" should be allowed to invest freely in things that increase the clubs football income (stadium and youth development), provided that he takes on full responsibility for the capital costs. ie any debt related to it is not a liability of the club and cannot be transferred to the club - also the debt must be structured so that if he defaults the club becomes the property of the owner of the debt, but cannot be stripped and can only be sold as a going concern.
    The operating costs for these investments would come under the fair play rules though so he needs to structure the investment sensibly
    I would also like to see a rule brought in to prevent/mitigate the effects of further over-leveraged buyouts (Manchester United and Liverpool). They would be allowed but the debt cannot be transferred to the clubs and all other payments in a financial year must be made before interest can be paid with club money. Also it would not be allowed to make a loss in any financial year due to paying interests (ie most they can take out of the club is the net profit)

    Another idea I have which, I admit is a very out of the box (and may not be workable), is this:
    If the owners/directors of the club break the financial fairplay rules they lose the club (while still be financially liable for losses incurred by their actions). The club is auctioned as a going concern with the money being given to the club to spend as it wishes. This would also make it harder for leveraged buy outs to get the money together as the lenders would recognise that the risk of not receiving any money at all would be increased

  • Comment number 47.

    nurturing youth... blah, blah, blah.

    If every club went down the nurturing youth path, then no club would gain an advantage. Just as if every club were bought by a billionaire, all competitive advantage of being owned by one is lost.

    While the principle of encouraging reinvestment of turnover into youth is to be applauded, setting an artificial minimum limit will distort incentives. As the value of youth at all levels sky rockets, transfer prices will do so in accordance.

    Moreover, restricting investment choice limits liquidity in the transfer market, thus putting an additional premium on player prices and wages. These forces will counteract any downwards pressure brought about through having a spend limit.

    This policy will ulimately achieve the polar opposite of what was intended, cementing the position of those lucky enough to already possess large and established revenues (ironically from previously having 'spent beyond their means') and those unlucky enough to be at the bottom.

  • Comment number 48.

    Personally i hope Chelsea and Man City go out under these rules. Would suggest that buying your way into football doesnt work, and using talent and promoting the use of players at the club, rather than buying a new squad every transfer window to suit.

    Also, am i on the understanding that Real M are funded/have support from the Spanish goverment or have i just made that up :S

  • Comment number 49.

    Royalty in the Championship (#44),

    Chelsea transferring their debts to a parent company won't change the financial situation that there football losses are bigger than their football income. Manchester united has a larger footballing income than their footballing losses and only makes a loss on the interest payments.
    If Chelsea did what you suggest then they would technically be in a worse situation as they would still lose money on the football side and also have interest payments.

    One thing the sugar daddies might be able to do is the following (if it is not covered in the rules).
    Release a shares issue in the club on the public stock exchange (go PLC again). The bigger clubs especially could raise a significant amount of money. The owner then buys back the public shares (takeover bid to take it private again). In this way the club has made money but it has not directly come from the owner. Everyone who bought in would also make a profit as the owner would have to buy back at a higher price to be able to secure all the shares again. This could be repeated several times unless there are financial rules to prevent this? Maybe David could comment?

  • Comment number 50.

    Just out of interest, why hasn't anyone mentioned Tottenham? The Villa example is an interesting one, and i don't know the financial details at Spurs, but surely that's what Harry had managed to do; building a good squad without massive transfer fees (with some exceptions) and slowly and quietly climbing the table?

  • Comment number 51.

    You say: "That's why Manchester United would comfortably comply with Uefa's regulations were they in force today. Despite making a £79m pre tax loss in 2010, that was mainly down to one off debt charges relating to the £500m bond refinancing and currency exchange rate swaps."


    Then go on to say:

    "Those in favour of Uefa Financial Fair Play believe that is better than the 'get big quick' approach which has landed teams like Liverpool, Portsmouth and Leeds in such deep trouble."

    Liverpool were taken over in the same style as UTD and had a comparable spend on players during that ownership period, and for all but 1 season were in the Champions league.

    I fail to see how or why that would classify them as using a "get big quick" approach. A poor statement in an otherwise interesting read.

  • Comment number 52.

    What I know for sure is the first nickname for this rule: Financial Unfair Play.

    Being a Man Utd supporter, I was always certain that a formula would be found for Man Utd to be incorporated. The answer was "parent company debt" is not included in calculations. Given that a parent company can always make a club bankrupt, I would like to innocently ask "why not included?".

    The first thing I noticed on this article is that it mentions that clubs will be able to add as earnings commercial activities "which will be within range of current market value". There it is: the first gray area and the first occasion for some glossy lawyers and accountants increasing their profits. What the article doesn't mention is that nothing stops a club from having 100 sponsors at current market value sponsoring instead of 1-2.

    Fans will always be bias when it comes to FFP, depending on how it affects their respective clubs. Viewing this ruling as impartially as I can, all I can say is it is a ruling against strengthening of teams, therefore against strengthening of leagues, therefore against the interest of football fans. I'm a football fan.

    Overall, it is a silly idea that doesn't have ground to stand. Leeds and Portsmouth cases are nothing relating to Man City and Chelsea and this doesn't need any sort of proof. There are easier ways to ensure chairmen leaving clubs will leave them in a healthy state, like "underwriting players' salaries until the end of their contracts" and the issue would stop there. That's why it's a silly idea altogether.

    Last but not least, we read again that these jewels of politicians we have, after they have saved the NHS, education, etc., they want to get their hands in football. All I have to say is English schools are closing, university fees are a fact because the government makes cuts. Still, this doesn't stop the Prime Minister of paying for building schools in another country that also happens to be a nuclear power, therefore they should be able to build schools themselves, had they put it as a priority for their nation. Please, politicians, save anyone else, but leave football alone. It might survive.

  • Comment number 53.

    @ 50,

    I think Spurs have made a profit this season (in fact I'm certain) from their success in the Champions League. There was an article somewhere on the BBC about it, recently.

  • Comment number 54.

    Though Abramovich, Mansour and co cannot "sponsor" their clubs with silly amounts of money above the market rate but is there surely not a way they can fiddle wages?

    For instance- could Abramovich pay Lampard, Terry & co a nominal wage e.g. £100 a week; on the basis that he will supplement this wage by giving them 'endorsement deals' e.g. Terry could be the face of Abramovich Washing Powder or some other product he could invent. As wages are by far a clubs biggest expenditure, finding a way to make them all but disappear from the club's accounts would allow the money 'saved' to be used for transfers etc.

    For the record, I think the new rules are ridiculous- like it or not football is a business. If Shiek Mansour bought say a supermarket chain and subsidised it with his own money so it could recruit and pay top level executives, it would be allowed. Why then are restrictions being placed on how much football clubs can spend? How on earth does it not fall foul of EU laws? It is a form of artificial interference, contrary to the free-market principles the EU stands for (within it's own borders).

    I do however disagree with the 'closed-shop' argument. If anything this will make it easier for smaller clubs to attract sugar daddies as, for a few years at least, they will not have to comply with UEFA regulations. They can amass a good squad, increasing their revenue as they grow ever more successful and can use it to break into the elite.

  • Comment number 55.

    ...and of course, the other thing that I noticed rather quickly by reading this article was that United can quite nicely spend up to £100m for transfer (laughing).
    Profits about £40m + debt allowance about £65m and there we have it: fair play :)

  • Comment number 56.

    I think current market value, is pretty common sense, clubs must put out to tender (either proper or UEFA does), the amount that 5+ seperate companies on how much they would spend up to on sponsorship and then settle on that. If companies bid 50m, 45m, 55m, and 50m for sponsorship, then a company comes in and says 500m, then you know its not market value.

  • Comment number 57.

    @ 54 RicinhoCFC,

    "Why then are restrictions being placed on how much football clubs can spend? How on earth does it not fall foul of EU laws?"

    You're spot on!
    Like it or not, football clubs are businesses. They're in the Stock Exchange and therefore business laws should apply. It may be football, but it is also a commercial activity in entertainment within EU.

    This is exactly so many people have stated, so many times, that FFP is a golden reason for lawyer firms to have regular future added income.

    We don't need to go far to find another football related case that reached the European Courts. It's that pub landlady from Portsmouth who won a case against, guess, Murdoch and SKY :)

  • Comment number 58.

    Always enjoy your blogs and this one was no different, good stuff!

    As the first post states, I would also like to find out how other clubs around Europe are shaping up to meet the requirements.

    Also, how do you see this affecting teams in the lower leagues?

  • Comment number 59.

    What would stop the wealth owners setting up their own sports channel in their own contries and then purchasing the rights to air the clubs matches on their sports channel?? "Channel Roman Empire has just bought the rights for the whole of Russia to watch Chelski for £840 trillion".... erg getting around it?

    Or even more wasteful, surely, Sheik could simply order 1 trillion Man $ity replica shirts, ergo pumping half of that money into the club via "sporting income" and just sink them off the coast of russia, shuting down romans empire....

    Not that I am synical you understand...

  • Comment number 60.

    @ 56, Viewfromverve,

    current market value is a very complex definition, differing substantially, in relation to:
    a) what market the sponsoring company operates on;
    b) what locale the sponsoring company operates on;
    c) what disposable revenue/income have members of that market
    (and so on)

    Which means, you can't take a company from Stockport, a company from Aachen and a company from Lille (random examples) to define this "average market value".

    Why not ask Arsenal F.C. how much The U.A.E. paid for the name in their ground and how much it goes further from average, similar cases? I'm sure there is a successful difference (and congratulations to Arsenal for that).

    How do you put a "current market value" in markets located in nations that pay huge money to have grass in deserts, build islands and skyscrapers in the sea and have some significant plans to make their small countries worldwide holiday destinations?

    Also, how do you put a "current market value" in Russia and ex-Russian republics where, a few years back, everything looked so different and now you see so many things changing?

    That's where lawyers and accountants come in.
    And, that's why this rule is like trying to fill with water a basket full of holes.

    The denominator is: Real Madrid, Barcelona, Man Utd are all protected (and I'm sure this includes Bayern Munich and a few other clubs. It looks more of a case of "let's keep the strong ones happy and struggle the rest".

  • Comment number 61.

    I agree with the closed shop comments. These rules have been brought in so that the older established rich champions league clubs can dominate the champions league forever.

    Anyway, I thought that Chelsea are already banned from winning the Champions League, by the refs that UEFA gives them year after year!

  • Comment number 62.

    I like these new rules.

    Yes in theory they might help maintain the status quo & make it harder for new clubs to break into the top four/six.

    But the key thing for me is that they introduce some kind of penalty for failure. Right now if City or Chelsea - or any other club with a wealthy backer for that matter - spend badly then it doesn't really affect them as they just write off the loss and have another go the following season.

    Now of they are forced to spend millions paying off a coach they no longer want, or take a loss on a player bought for £30M but sold for half that it will affect their future spending ability & make it tougher for them to stay at the top.

    So yes - if all the richest clubs are run brilliantly & their money is spent wisely they should stay at the top. But this doesn't always happen & wont in the future & at least in the future it should matter more when they mess up.

    I too agree regarding the interest in knowing the situation for clubs from other countries. I know the likes of Roma & Valencia both had/have huge debt problems but I'm not sure if these debts are due to a badly run business (paying higher transfer fees & wages than their incomes allow) or some other reason (Liverpool, Manchester United style). Zenit would - I assume - be another club with similar problems to Manchester City & Chelsea.

  • Comment number 63.

    The bottom line on this is that UEFA, in conjunction with their chief cash-cow the Champions League would not have issued these rules without certain clubs with extremely wealthy benefactors being able to circumvent any legal action. Within all fiscal rules all Treasury Departments in Europe in their infite wisdom have continually allowed a scandalous level of tax avoidance thus allowing wealthy individuals or corporate organisations to legally avoid paying tax. This principle will clearly apply when the new UEFA rules come in and teams like Manchester City and Chelsea will miraculously comply. I am more than happy to take a bet with you David that no team from England, Spain, Italy, Germany or Russia that qualifies for the Champions League will be kicked-out. The same of course cannot be said for the “lesser” nations as they probably cannot afford the same lawyers as Sheik Mansour or Roman Abrovomic.

  • Comment number 64.

    61. At 14:18pm 8th Apr 2011, colsky wrote:

    How sour is that comment? Given the ref was pretty lenient which a number of harsh challenges from Chelsea (namely Ramires and Essien), i believe you go away with alot considering.. Not to mention the over dramtics of Torres, didn't realise he studied ballet..

    Anyways.. :)

  • Comment number 65.

    64... Torres doesn't study ballet, he studies Barcelona!!!

  • Comment number 66.

    @65 - Aye, he could of made something more of his life, like Villa.. Rather than his hugely impressive form at Chelsea.. Oh wait..

  • Comment number 67.

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

  • Comment number 68.

    This whole debate is completely pointless. At the end of the day the likes of Chelsea, Man Utd, Real Madrid will never be omitted from Europe's elite competition as their £1m an hour lawyers will always find a loop hole in the system to make sure they are ok.

    All this rule does is make sure that the rich clubs stop any 'smaller' clubs getting above their station. Due to this rule you will never see a random club come from nowhere and challenge for the top prizes and champs league spots.

    Only the naive will believe that this isn't anything but making sure the elite football cartel stays as it is.

  • Comment number 69.

    There cannot be 'fair play' as all teams do not start from the same point. United aparently don't have a £700m debt, it belongs to a holding company and therefore isn't taken into consideration. What about the fact that they will have to pay back £500m when the bonds redeems in 8 years time, does that not get taken into consideration either?
    Barcelona and Real negotiate their own TV deals, no club in England can do that so how is that 'fair'?
    Italian clubs do not have the costs of building, developing, or maintaining their grounds as they don't own them, English clubs do not have that luxury. So how is that 'fair'. It's absolutely and completely unworkable, and if you believe that Chelsea, City and others haven't made sure that their spending etc won't affect their eligibility to be included in the Champions League then you must be a fool.

  • Comment number 70.

    As a Chelsea fan, I am not surprizingly in favour of these new rules.

    Contrary to what people in this thread seem to think, we will have no problem complying with the rules, it's complex, but essentially because a lot of our spending has been infrastructure (the new youth setup etc.) and because we have the third largest turnover in the PL (it would be second apart from a lot of one-off property sales turnover for Arsenal that pushed them above us in last years figures). Plus we have no interest bearing debt.

    However, as a football fan these rules are just insane. They lock in the rich clubs, and no naive "smaller clubs may become better run" rubbish will stop that. On top of that, it's a barrier to money coming into the game. Investors can't invest.
    I can't see anything good coming of this at all.

    ==========================================
    6. At 11:27am 8th Apr 2011, J_Ro wrote:

    @ Back To Back Champs in 06

    Perhaps you should learn a bit more about the rules before you dismiss the article as a 'colossal non-story'.

    The rules require a three-year monitoring period to function and this period will take effect from the first of June this year, so it's very much an issue now.
    ----------
    Duh. I believe June this year is still in the future ? It's not hard to understand, any money spent now will not count, so it's a colossal non-story. Summer transfers, that's when this story becomes interesting.


  • Comment number 71.

    A very weak article and some of the comments are just laughable. The FFPR are complicated to say the least and looking at transfers and wages is like looking at an iceberg from a ship.

    As a City fan this FFPR has intrigued me greatly. Whilst I feel it was brought in to protect the elite and keep the poor down I think City have sneaked in by the skin of their teeth.

    I don't have time to comment too much but lets look at one factor of income: Revenue generated by club operations adjacent to the stadium, and those trading under the club name. If you are not aware MCFC have purchased land surrounding Eastlands that would make Real Madrids whole set up look like a postage stamp - close to 300 acres. With a rumoured investment of up to £1 billion going in (remember investment into infrastructure is not counted), stadium naming rights, potential CL income the revenue City will generate is on an unimaginable scale right now.

    The noisy neighbours will get a lot louder!

  • Comment number 72.

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

  • Comment number 73.

    There would be nothing stopping Abramovich charging £80 for a replica shirt and then buying one for each fan to find on their seat before every game.

  • Comment number 74.

    "I agree with the closed shop comments. These rules have been brought in so that the older established rich champions league clubs can dominate the champions league forever."

    Absolutely right, its a scam. The bigger name more established clubs can spend more than everyone else and set themselves apart creating less competitive leagues across europe. The only place to see the best v the best is champions league.

    The big famous clubs set up a uefa euro league taking all the power from all the national leagues and delivering it to our chums at Uefa. A cunning plan!

  • Comment number 75.

    It is to my understanding that Real Madrid and Barcelona revenues were the highest in the Europe at the moment. They dictate all the T.V. rights in Spain and have done massive golbal marketing. Barcelona has more problems than Real Madrid due the amount of debt, having the highest wage bill and their inability to pay for it. They couldn't offer more than £30 mil for Fabregas because they couldn't afford it.

    Majority of owners at football clubs are smart businessman, I doubt any of them aren't prepared or have a plan. To suggest otherwise is naive. Abramovich wouldn't have spent £70 mil if he knew Chelsea wouldn't be allowed entrance to the champions league. Mabye players will be sold, mabye moving to a new statium or some other business strategy.

    Are you honestly telling me though that UEFA are going to deny Madrid, Barca, Man Utd, Milan, Inter, Bayern, Chelsea, Man City from the champions league? They would lose millions in advertising etc. The champions league would lose its charm and status and just become another europa league which nobody cares about. I wouldn't be suprised if nearer the deadline these rules become more flexible or disappear entirely.

  • Comment number 76.

    I have a question about Liverpool and what these rules will mean to Anfield. John Henry and Tom Werner have said that they will not sell the naming rights to Anfield. That the only way that would happen is if they move to a new stadium. The Fair Play Rules seem to place a much greater reliance on such deals. It seems likely they are trying to position themselves out of Anfield but doing so with some nuance to the future. Or, at least, they'll have to leave if they want to play in Europe and not sully Anfield with naming rights.

  • Comment number 77.

    "You're spot on!
    Like it or not, football clubs are businesses. They're in the Stock Exchange and therefore business laws should apply. It may be football, but it is also a commercial activity in entertainment within EU."

    Not at all. The clubs can still spend what ever they like, they just can't enter Europe, which is a private competition. UEFA can choose to let in, or not let in who ever they like.

  • Comment number 78.

    As Mr.BlueBurns says, "What is the market rate?" It sounds like it's assumed the money the current elite attract will set the bar, and too bad if the also rans can't compete with it. And what if someone comes along from outside the elite and raises the bar beyond their reach? "You have got to be joking!"

  • Comment number 79.

    @ 77 ,

    I understand a Spurs fan's interest in seeing City and Liverpool having difficulties to compete in the Champions League, by any means, but the Union of European Football Association is not so private by any means. You're bound to be disappointed I'm afraid when this whole story comes into effect.

  • Comment number 80.

    Interesting, informative article--though if UEFA does cave in, which it very well might, it does amount to a waste of brain waves.

    It's interesting to me that the rules are designed entirely to eliminate exactly one of the problems football has: rich owners buying championships with money not provided by fans. A better solution, as someone pointed out, would be revenue sharing. The only US sport that has this rigorously enforced (the NFL--at least until the next settlement) is the only one that has competition the way I and many others like it: with every team having a nearly equal chance, the lower teams tending to rise and the higher teams tending to sink because the lower ones get the higher draft picks. In the long run, the teams that win more are those with better management.

    Rules like these which only target rich owners buying championships actually make competition more stratifed, and its hierarchy more rigid, so I have trouble seeing why anyone is bothering. The Man Us and Barcas are getting big brother's helping hand, since they're so clearly unable to fend for themselves.

    Don't get me wrong: the teams that generate the most revenue deserve credit. But I think they'd be even stronger if by whatever means their advantages were decreased so their leagues became less predictable.

  • Comment number 81.

    "Don't get me wrong: the teams that generate the most revenue deserve credit. But I think they'd be even stronger if by whatever means their advantages were decreased so their leagues became less predictable. "

    I'm sincerely trying to find logic in this paragraph.

  • Comment number 82.

    To Football_UK (#57)

    Not all the Clubs are listed on the Stock Exchange - Manchester United, Liverpool, Arsenal and Chelsea to name but a few are not listed on the stock exchange.

    Yes the clubs all have to follow the business rules but there is nothing to stop UEFA (provided they do not require the clubs to behave in an illegal manner) introducing whatever entry requirements it wants to its competitions provided they are applied fairly.
    If any club wants to challenge the rules then now is the time because if they do not challenge them now then they have accepted these to be the rules of entry into the competition and would find it very difficult to challenge them at a later date.

  • Comment number 83.

    I want the PL clubs to go bankrupt, they have been guilty of financial doping. They have cheated and at the last count were £3.8bn in debt. Nobody should live beyond their means, but the EPL has been out of control for years. It has to be punished for its excesses. All hail Platini.

  • Comment number 84.

    To Back to Bach Champs in 06 (#70)

    I suggest you read the blog a little bit more closely as it clearly states that the transfers from the last 2 transfer windows (Does £70M in January ring a bell?) are counted in the UEFA calculations.

  • Comment number 85.

    @ 82, ManchesterUnited4Ever,

    Besides I am supporting Manchester United and the twist of the FFP is suiting our club just fine, I still find it irresponsible from UEFA to exclude parent companies debts, thus, allowing United to have no problem whatsoever with restrictions. What I know is if the parent company goes bust, all child companies go bust too. Or isn't it so?

    All I understand is that issues have been cooked and cooking could continue until the smell is to the liking of everyone concerned.

    Common sense says that UEFA wouldn't like to end up like Boxing associations and competitions where when events arise, everybody is talking about unifying trophies.

    There are policies here and attempt for policing but no matter how hard I try to look at it positively, all I understand is that it is against the sport of football and the protection of the establishment.

    Putting Leeds, Chelsea and Crystal Palace in the same basket as Liverpool, Manchester City and Chelsea is ludicrous.

  • Comment number 86.

    "There are policies here and attempt for policing but no matter how hard I try to look at it positively, all I understand is that it is against the sport of football and the protection of the establishment."

    There are policies here and attempt for policing but no matter how hard I try to look at it positively, all I understand is that it is against the sport of football and it about the protection of the establishment. (correction)

  • Comment number 87.

    Nav Sandu (83),

    The premier league clubs totalled have a total debt of 3.8bn Euros.
    However they have assets (from the same UEFA report as your debt figure) of 4.3bn euros. This means if they sell everything there is still 0.5bn Euros profit. This is not financial doping.

    All the other European clubs have a debt in the report you have taken one number from. Admittedly the ratio of assets to debt is a lot better than the premier league.

    Most of the debt is to do with financing and is long-term debt. Some of these debts are also unlikely to ever be paid off. The shares of clubs that are on the public stock-exchanges are classed as a debt in the balance sheet. However they only have to be paid back if a company is wound-up (closed down). And even then these shares are paid off only after all other business debts are paid off.

  • Comment number 88.

    One thought that puzzles me really is that FFP is advertised as the means so that, if wealthy chairmen decide to pack it in, clubs will not be in danger of bankruptcy, due to heavy salary bills. Yet, restrictions are placed so that wealthy owners are not allowed to throw money to the club in the form of commercial deals, if they are not in line with average commercial deals of the sort.

    What I understand is that hidden agendas are in existence. What do the rest of you understand? As far as I am concerned, commercial deals means money is given to the club to ensure stability.

    In the mean time, last time we saw FFP being mentioned, a few months back, Galliani was testing the waters for a silly offer for a top Premiership player (was it Bale?). Today, gossip in BBC mentions Bayern Munich are seriously considering paying the hefty amount of £12m for Cyan, the main star attraction in Ghana's attack and main striker in Sunderland.

    Is anyone trying to take the mickey? or is it just my idea?

  • Comment number 89.

    Football_UK (#84 and 85)

    If the debt's are incurred in the operation of the football club then I agree they should be counted. However if they are incurred to purchase the club (mortgage type thing) then I don't believe they should count (as I posted earlier I believe there should be limits on how a purchase of club debt can be paid off using club money). During the Liverpool ownership saga I would have found it unfair if they had been docked points because they had to be forced into administration because the owners refused to sell to pay off a bank debt that they incurred buying the club

    I also agree that Liverpool/Manchester United and Leeds/Portsmouth are not comparable. I would currently put Chelsea/Manchester City in a third case as they currently have the money and would only have trouble if the money was taken away, but even then they should be able to deal with it by selling the current squad and buying cheaper players on lower wages. For me they would only fall into the Leeds/Portsmouth basket if they refused to trim the wage bill enough so that they could breakeven at the end of the year.
    Have just reread your post checking some details and noticed you included Chelsea on both sides of the list! Out of curiosity which side did you mean to put them on?

    The major area I disagreed with you in my post was the ability/right of UEFA to put in place and enforce these rules.

    I assume from the boxing analogy you are refering to the possibility of breakaway competitions. For me, this is highly unlikely to happen unless nearly all or all of the big clubs in the big European leagues decide to breakaway and form a separate competition/league. This is harder than it sounds as the clubs would have to find a way to schedule the matches around their domestic competitions. There is also the problem with the players. UEFA and FIFA would probably respond by banning any player who plays in the breakaway competition from playing in their competitions (ie international matches). I think the ban might also be able to cover the domestic leagues of the clubs. This would make it difficult to attract players and if they lose the domestic league gate and TV incomes that is a huge hit on their incomes.

  • Comment number 90.

    Football_UK (#88)

    I've seen FFP more as a way of preventing a rich owner coming in and suddenly distorting the transfer markets and also in-effect buying some titles by paying silly money to purchase a huge squad of world-class players.
    Stopping them going bust is more of a bonus. Also a club owner that gives a silly amount of sponsorship money is probably going to have left a get out clause. If he did then ditch the club suddenly (or at the end of the "sponsorship" deal) the club suddenly would have a huge hole in it's budget that it has no realistic way of filling. If the sponsorship is at market rates (for a similar size club in similar competitions) then they at least stand a chance of replacing most if not all of the money that would be missing from their budget.

    PS my last should have referred to comments 85 and 86 (84 was mine) Whoops!

  • Comment number 91.

    @ 89, ManchesterUnited4Ever,

    Of course I had placed Chelsea in with City and Liverpool. :)
    Just noticed it - I was reading some more crazy news that occurred today and lost concentration :)

    I have to say though, I never believed this FFP thing would affect Manchester United in any way. And reading that parent companies' debt is not counted just justifies that belief.

    Financial Fair Play is like a coin with two sides:
    a) clubs competing in UEFA competitions to have a fair balance sheet (perhaps)
    b) ticket costs that UEFA imposes in UEFA competitions to also fall in the same umbrella of fairness.

    Now, remember the ticket prices set for the Wembley final and tell me where you see fairness by UEFA on the issue. All they said is that ticket cost has to be in line with other elite pricing policies, throwing the ball to FIFA.

    Which makes me think the simplest of thoughts the average person would: if you're a rich man, you can buy whatever car or house you like. It doesn't need to have to be just up to requirements with speed limits or housing requirements. If you have a company and want to strive it forward, you do have to pay for marketing and advertising more heavily in the early years. What difference does football have?

    If you want to protect clubs, you demand that wealthy chairmen underwrite players' salaries for the duration of their contracts. And the issues finishes there.

    However, if you want to ensure no billionaire can buy Getafe and become a headache to Real Madrid, or Espanyol and become a headache to Barcelona, or Man City and become a headache to Man Utd, then you definitely need to introduce restrictions, to ensure such dangers will never occur. Of course, you colour the measures any way you wish, you add as much sugar you wish, but the fact is the same: you restrict football change.

    No matter how much someone analyses this so called FFP, this is the only logical conclusion.

  • Comment number 92.

    "'Don't get me wrong: the teams that generate the most revenue deserve credit. But I think they'd be even stronger if by whatever means their advantages were decreased so their leagues became less predictable. '

    I'm sincerely trying to find logic in this paragraph."

    I was trying to throw a bone in the direction of the big clubs before suggesting that their selfishness may be hurting themselves as well as others--but you're right, on review, the conjunction implies a topic connection which isn't there.

    Better to say: taking steps to share revenues and make leagues more competitive may benefit all clubs, including the big ones.

  • Comment number 93.

    Would love to see Chelsea and City kicked out, funny as ****! They tried to buy their way there to see them kicked out because of that would be amazing!

  • Comment number 94.

    @ 92 RedWhiteandermblue,

    It is a fact of life that we all have rich people living amongst us. They will never share their earnings with us and, at the same time, we would should never want that, too.

    If you think about it, successful English clubs share revenues with poorer clubs, via the way TV money is shared around. Had those clubs not been so successful, people around the globe wouldn't be so much interesting in viewing live English football and, therefore, cash wouldn't be shared around.

    Would you ever ask your neighbour to share his earnings with you? :)
    If not, why the A' club should share earnings with the B' club?
    That's where I was referring to when I was trying to find logic in that paragraph.

    Success has hurt no football club. And that's it.

  • Comment number 95.

    tbh, although this article sums up the main points quite well, it doesnt go into detail or give an amazing insight into finance. if u want to get the lowdown search for a website called the swiss ramble. this blog, written by a former banker, talks about the champions league clubs as well as smaller ones, in huge depth

  • Comment number 96.

    Football_UK (#91)

    Don't worry it took the 2nd or 3rd read through for me to notice it.
    In my first post (#46) I did express a concern that it would fix some clubs in position, but I do think the FFP is a good start.

    I also agree that forcing the chairman to pay up-front (or put into a holding account) the full value of the contract of the player (including bonuses etc) would prevent nearly all of the players.
    However if you allow this then you effectively tie in a different set of teams into the European competitions - the ones with rich owners. How can the small teams get in now? Once the rich chairmen have control of the European positions then very few others will buy-in as they will have to spend even biggr amounts to catch-up and overtake their rivals.
    In fact by restricting spending to what football income clubs have, then other than Manchester Utd, Barcalona, Real Madrid and maybe a couple of other giant clubs the clubs are on a more level playing field which opens it up in terms of long-term spending. The champions league spots are probably a little bit more fixed as there is more money there but Fulham gained around 10MEuros from UEFA (gate receipts would have increased this but I don't know to what) for getting to the UEFA league final (the club that beat them got less from the UEFA league than Fulham as they had come from the ). This is probably 1 player difference (compared to a premier league club which in terms of qualifying for europe is all they have to compete against) by the time you account for transfer fee and wages over the contract so that should level it out somewhat. It also assumes the club stays in European competition.

  • Comment number 97.

    If you actually have the time, follow this link. It explains the true position for chelsea . . . http://swissramble.blogspot.com/2011/02/chelseas-financial-fair-play-challenge.html unlike the lightweight article above or the uninformed musing of random posters. . .

  • Comment number 98.

    @ 96, ManchesterUnited4Ever,

    you have to look at FFP suspiciously in order to see sense in it.
    To me it's a well hidden mechanism for stability of strong clubs.
    In a parallel is something like SKY showing for 48 hours the Rooney incident, in the name of children - joke.

    I don't know if you noticed the previous time it came around, Galliani was rumoured to want to buy a big Premiership name for a relatively modest amount. Today, in gossip pages, Bayern appear to want Cyan for a little more than what United pay Fulham for Smalling.

    There will be much more damage to smaller leagues' clubs with such a ruling coming into place. The fees for big players will decrease and, at the same time, the fees for talent from lower leagues will become next to nothing.
    Tell me: Bruce gambled on Bent, being a Spurs reject, believing in him and, eventually, when he wanted to move on, Sunderland got £23m-24m for him. Wouldn't it be a punishment for gambling on his value in football, had they received half of it? Countless examples.

    Players don't move only for money. Robinho, Adebayor haven't stayed where the money was more, but moved on. Kaka and Berbatov didn't even consider joining City, besides the hefty offers. Players place more values than money when it comes to where they choose to play.

    Furthermore, using examples of Pompey, Leeds, Crystal Palace as clubs that couldn't cope with the existing structure is a joke. Those clubs were lead to bankruptsy. Many club names are mentioned in danger of bankruptsy but in England the taxman demands the cash, in contrast to other countries like Spain.

    Platini, at the time just before Ronaldo's transfer to Real Madrid, supported Madrid's move for Ronaldo, implying United's debts, caused by the parent company. Yet, we see now that such debt doesn't count anyway while, at the same time, Real Madrid are a club permanently in debt too. Don't you feel there is manipulation and existence of hidden agendas?

    Last but not least, both the sheikh Mansour and Abramovich have held talks with Platini over FFP. Knowing Abramovich's passion for Chelsea to win the Champions League eventually and sheikh Mansour's not stopping investing, what is this that makes you believe there is nothing else that they know and we don't, just like the omission of parent company's debt?

    The more you think about FFP, the more it stinks.
    Plus, UEFA has two different sets of rules - one for clubs and one for themselves.
    What's a polite word for thieving when it comes to ticket prices in the Wembley Champions League final?

  • Comment number 99.

    surely the owners could just buy a season ticket to make up for losses..... so, for instance, if any club was going to make a loss, they could predict the loss the season before and the owners could but a season ticket for the £150m they would need to make up for losses and transfers in a particularly bad season, causing them to break even? @philgrayswaistline or do as he says and start ghost company's and use them to sponsor the club.

  • Comment number 100.

    So, Abramovich will just buy every chelsea supporter a shirt next season if he needs to inject some money into the club.....win/win, I like this new legislation....

 

Page 1 of 2

BBC iD

Sign in

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.