Financial Fair Play

[geysir]

Dupont says “Under Uefa rules, each national football association must organise its competitions within its boundaries. By maintaining those rules, Uefa denies top club football to places like Dublin, Brussels [and] Vienna. Consequently, Uefa cannot use the “integrity argument” regarding FFP since it has itself produced a structural playing field that’s uneven to begin with.”
Uefa didn't produce the structure, that's the way the structure developed and Uefa was formed to administer it. The argument then is, UEFA already has an uneven structure and protects it, therefore it cannot protest at other unevenness developing. That the gap between the big clubs from the top leagues and the big clubs from the small leagues, should be allowed to increase, no holds barred.
However, there are degrees of unevenness. It's just in the last decade in an era of little regulation, that the gap has widened so much between top clubs from the leagues of Holland/Belgium/Portugal/Scotland and the top clubs from the large leagues of Spain/England/Germany/Italy. The clubs from the big leagues have always generally been dominant in the CL, but < 2004, clubs from the small leagues have won the CL/European Cup on 13 occasions and runner up 9 times. Unevenness has always existed but it was only post 2004 that inequality widened to such an extent that it's 99% inconceivable at present that a small league club can compete for the CL. Uefa through FFP are trying to put limits on the ever widening gap and at least allow for some possibility that a Porto or an Ajax could climb the ladder with regular CL income to help their competitiveness. The place where a club from a small league can try and compete with the the big league teams, is in the CL and EL structure.


Dupont says: “If tomorrow, Scotland and Ireland would decide to have a common Premier League, would it improve (even slightly) the level of football in both territories? I think it would. This example is just to show that even small changes would make a difference.”
Just because he speculates that a common league would improve that situation, does not make it a worthwhile argument to support his case. A halfwit lawyer on the other side could render that argument totally worthless inside 10 seconds and nuke its value as a support to the main argument.
Maybe he believes in the drip down theory of benefits, who knows what his beliefs are, but do they have any relation to the factors that would contribute to improving the levels of football from infancy onwards in Ireland. A belief needs a foundation in order to regarded as an argument.

It's an attack on the football structure by financial interests, who, if it's required, will trample on the most treasured values of football clubs in order to be allowed to do what they want.

[Stuttgart88]

I think UEFA would argue that the traditional structure allows for the "European model" to prevail and with the related benefits of funding grassroots etc. I think if there was a way that big clubs could breakaway and form a big-city franchise league it would have got closer to fruition than it ever has, but I think scrutiny of the legal and economic realities have meant that it would be unlikely to find favour at EU level.

[geysir]

Uefa can argue that re related benefits, but the reality is that most of the income from the CL goes towards competing clubs, right down to participation in qualification rounds. Pretty much a club has to participate in the CL/EL to receive any funding and they would have to get kind draws to make any money if they don't make into a group stage of the CL or EL. If a club from a small league has a few coppers in the till after going out in the 3rd round, then it wasn't a bad campaign.
Approx 15% of Uefa CL income goes to European football in general, I think much of that 15% is spread out to the clubs in the premier leagues according to participation of that league's clubs in the CL. The system as it stands now has a definite bias of income distribution towards the the clubs that succeed in the CL.
I'd say Uefa are in conflict with hostile interests and are attempting to spread the crumbs out more, FFP is part of that.

I'd say the income Uefa and Fifa gets from the Euro and WC qualification groups/Finals etc, is more used for funding the development of grassroots.

[Stuttgart88]

It seems like UEFA has made some minor tweaks to the rules in the new 2014 version.

Along similar lines to EU competition law cases UEFA is allowing for a form of plea bargaining, where clubs can admit they are not in compliance (rather than creating dodgy intellectual property sale deals or backdating sponsorship deals in order to fake compliance) in return for a light sanction.

In addition, other clubs affected by such a plea bargain can appeal the deal. For example, the 5th placed club in EPL could appeal the outcome claiming that they, by being compliant with FFP, have been disadvantaged if a non compliant club is allowed UCL entry.

Some papers today are saying that Arsenal, United and Liverpool are thinking of using this route to ask for City to be denied entry, forcing them to comply cleanly with FFP.

http://www.independent.co.uk/sport/football/premier-league/exclusive-manchester-city-facing-new-threat-of-champions-league-expulsion-9101725.html

http://www.dailymail.co.uk/sport/football/article-2550222/Rivals-ganging-ban-City-Liverpool-Chelsea-Arsenal-test-Champions-League-ruling-Financial-Fair-Play.html

I really look forward to seeing how all this pans out. Despite some criticisms by people like Martin Samuel, I'm fully behind UEFA on this issue.

[Stuttgart88]

I've attached a link below to an interesting blog dealing with the lengths Man City are going to to comply with FFP, including payments received from Man City women's team and their NYC franchise for use of the brand.

It also appears that UEFA has snuck in some changes to the list of possible sanctions. A new sanction has been added, something along the lines of if a club has failed FFP by, say, 20 million, then it can still be allowed to enter the UCL but fielding a squad whose annual wage bill is reduced by 20 million.

http://www.financialfairplay.co.uk/latest-news/man-city-release-controversial-accounts

See the bit at the bottom listing the possible sanctions.

The rest of the blog dealing with related party transactions etc. has been dealt with here before. This could all get very interesting!

[BonnieShels]

An interesting read as always Stutts.

[Charlie Darwin]

Manchester City and Paris St Germain are among a number of clubs who have been offered settlements for breaching financial fair play rules.

UEFA's club financial control board has made offers to all the clubs deemed to have breached the rules ahead of its meeting on Thursday.

The clubs – understood to be fewer than 20 in total and including Manchester City and PSG – can either accept the offer of the sanctions, which could range from a reprimand to a fine up to restrictions on the squad for European competition next season, or try to negotiate a lesser punishment.

If no agreement is reached, then the outstanding cases will go to an adjudicatory panel for a final decision.

It is not known what settlements each individual club has been offered but UEFA could reveal the outcomes as early as Friday.

The most powerful sanction, that of being excluded from European competition, is not expected to be used against any of the clubs.

...

http://www.rte.ie/sport/soccer/english-league/2014/0428/612946-city-financial-rules/

Platini has already pretty much stated no club will be excluded this year anyway, so it looks like fines and slaps on the wrist all around.

[Stuttgart88]

Yes, but I also think that clubs may be forced to remove players whose wages exceed a certain level from CL squads.

I think this is fair enough. The idea of FFP isn't to take a punitive stance for the sake of it. The idea is to make clubs live within their means but the harsh reality is that getting from "here" to "there" is going to take a bit of time given how underwater some clubs are starting from.

I think the rules will take European football to a better place but there are going to be a few years where a fudge of some sorts will be required. I think that by and large it is already working. The key for UEFA and the club financial control panel is to make sure that obvious p1ss takes are not tolerated. Removing City and PSG may be a step too far but disallowing X million quid's worth of wages from the playing roster will send the right message. I hope they do it right.

[SkStu]

Bohs are appealing it.

[geysir]

http://www.rte.ie/sport/soccer/english-league/2014/0428/612946-city-financial-rules/

Platini has already pretty much stated no club will be excluded this year anyway, so it looks like fines and slaps on the wrist all around.
Strange that, because if Platini said that, it would be a breach of his job ethics and an insult to the 'independent' panel who decide on those matters.
Of course that would be in an ideal world where there is a panel that would adjudicate these matters 'independently', according to the FFP rules.

FFP will be proven spineless against financial doping, even outrageous obvious doping, but possibly it will be effective against other competing clubs who may try a reckless stunt or two, to keep pace with the inflation caused by the financial doping.

[Stuttgart88]

Maybe Platini had been told by the independent panel that they didn't recommend expulsion?

Let's see what fate awaits PSG and City. I suspect it'll be a fudge but just enough to be deemed a punishment /deterrent.

[Charlie Darwin]

Platini has a personal conflict of interest with PSG that will make things very difficult for the independent panel to be truly independent, as if it wasn't a political minefield to begin with.

[geysir]

Maybe Platini had been told by the independent panel that they didn't recommend expulsion?

Let's see what fate awaits PSG and City. I suspect it'll be a fudge but just enough to be deemed a punishment /deterrent.
The panel is UEFA finances something or another, Platini is not on it, they don't answer to Platinin and they have only made some proposals to the clubs, they haven't yet concluded the negotiations with the clubs and any unresolved issue would go to an adjudicatory panel.It would bean astonishing height of blatant cronyism to rule out expulsion at this early stage. Such a statement by Platini beggars belief.
Could be similar to a hypothetical example of the Taoiseach stating that no member of the old Anglo board would see jail time, while the court proceedings are in process.

[geysir]

But of course, no one seriously expects that there would be any expulsions, because the offers the UEFA panel are making to the clubs amount to a gift horse.
The offending clubs will get away with it and get away with blatant cynical accounting excuses, the equivalent of the dog ate my homework type of stuff.
Accountants really have no imagination or can UEFA be that gullible?
What I gather from what Platini has been hinting at, is that those clubs won't be allowed to keep using these blatantly transparent FFP avoidance strategies and they will be flirting with expulsion should they persist with strokes like selling player's image rights on ebay to raise a quick Eur50m to balance the books for FFP purposes. Or how about, we won that Eur 10m on the horses?

[Stuttgart88]

It looks like City and PSG will be limited to 21 man squads for next season's UCL, and of this 8 must be domestically trained.

http://www.independent.co.uk/sport/football/european/manchester-city-face-21man-squad-restriction-in-champions-league-over-ffp-9325888.html

The Times (subscription only so no link) are also saying that City are a long way from agreeing this sanction so it'll be interesting where it ends up.

Edit: BBC sayinga £50mm fine is also a prospect.

http://www.bbc.co.uk/sport/0/football/27290532

I love it: we want you to stop making losses so we're going to slap a £50mm fine on you, increasing your losses.

Will that fine show up in the FFP loss calculations in the next review period?!

[geysir]

Eur60m fine? well that was a tad unexpected.
Where will MC get the money from? via an injection of financial dope on the sly?
Or more probably means that they can compete in the CL but they have to hand back all their winnings:)
Chelsea earned that last season in the CL.
So, it is a big hit. UEFA are saying, we are not banning you from the CL but we want all our CL money back.
Next question is where will that money go to? to the CL competing clubs or to Football Associations' grassroots?

[Charlie Darwin]

I love it: we want you to stop making losses so we're going to slap a £50mm fine on you, increasing your losses.
To be fair, I'd say the punishment is going to be case specific. Teams like City and PSG aren't failing FFP because they're struggling to balance the books - they're failing because they have the money and are choosing to spend it all on their budget. In those circumstances, a hefty fine isn't going to send the club into a decline spiral but it will hurt them financially.

[Stuttgart88]

I know, I just think it's funny.

[BonnieShels]

I know, I just think it's funny.
Same thing applies to when you miss a payment on your credit card here; they up your rate.

[Stuttgart88]

Eur60m fine? well that was a tad unexpected.
Where will MC get the money from? via an injection of financial dope on the sly?
Or more probably means that they can compete in the CL but they have to hand back all their winnings:)
Chelsea earned that last season in the CL.
So, it is a big hit. UEFA are saying, we are not banning you from the CL but we want all our CL money back.
Next question is where will that money go to? to the CL competing clubs or to Football Associations' grassroots?good question about where he money will go.

It looks like the recent rule changes were clever, giving UEFA teeth without having to risk the ultimate sanctions.

This was a good piece on the topic

http://www.theguardian.com/football/blog/2014/may/06/manchestercity-uefa

What I think is interesting is how City's owners will perceive City's senior executives, given that the latter seemed pretty sure they'd sneak in through creative jiggery pokery. Off with their heads possibly.

Cone on UEFA, do the right thing and see this through.

[Stuttgart88]

Same thing applies to when you miss a payment on your credit card here; they up your rate.
George Osborne had the same idea over here: Economy tanking? Let's make drastic cuts to improve things.

[BonnieShels]

George Osborne had the same idea over here: Economy tanking? Let's make drastic cuts to improve things.

Always reminds me of a visit from the Danish finance minister during the boom in Ireland. He wondered why we reduced taxes in a boom. When logic says raise them and reduce them during a recession.

[Charlie Darwin]

Always reminds me of a visit from the Danish finance minister during the boom in Ireland. He wondered why we reduced taxes in a boom. When logic says raise them and reduce them during a recession.
There was a number of sensible people who questioned this 15 years ago but the orthodoxy of all the main parties and the expectations of voters meant it was never properly challenged. I'd be interested to see what problems the Danes had in maintaining their policies.

[Stuttgart88]

There’s quite a bit of press coverage in the UK levelling criticism at UEFA and qualified support to Man City. Paul Hayward in The Telegraph, for example, is broadly supportive of the principle of curtailing gulf sugar daddies but argues that the Glazers’ mismanagement of Man United is a worse crime, as is the fiasco at Birmingham. UEFA should focus on this first. This misses the point though: these are issues for domestic regulators and the UK parliament is in the process of approving a Football Governance Bill dealing with club ownership. This Bill is being put forward because it is felt that the EPL hasn’t reacted appropriately to the DCMS Football Governance Report’s recommendations on this issue.

Others, such as Oliver Kay in The Times, claim UEFA is punishing City for its spending on infrastructure and academies etc. Sky Sports News even had a pundit saying UEFA are punishing Sheikh Mansour for his generosity. Nonsense. Everyone surely knows by now that proper CAPITAL expenditure is exempt from the FFP calculations. It’s really only excessive CURRENT expenditure on player acquisition and wages that impacts the expenditure side of the FFP break-even figure.

Furthermore, UEFA consulted with the major clubs (via the European Club Association) in devising these rules. The rules were flagged over 5 years ago and UEFA offered clubs a decent concession: if you fail the first breakeven test but only because of high wages already committed to before FFP was agreed AND if at the time of the first assessment you are overall trending in the right direction AND if these wages exceed the 2012 FFP deficit (these are all linked, not separate) then you’ll be treated leniently. Yet City CHOSE to add players on high wages after this point and are only trending in the right direction because of wildly creative accounting. Let’s be clear here: City knew the rules and deliberately broke them, expecting that UEFA won’t be tough. UEFA has called City’s bluff here.

The 6th May and 30th April entries in Ed Thompson’s brilliant blog are interesting and I almost fully agree (I have one or two minor gripes).

http://www.financialfairplay.co.uk/latest-news/reports-of-record-%E2%82%AC60m-%C2%A349m-fine-for-psg-and-man-city


http://www.financialfairplay.co.uk/latest-news/man-city-failure-of-ffp-test-a-matter-of-choice


Also, in relation to Geysir’s earlier point about Platini’s prejudicial remarks saying no club would be excluded, the blog expands on this:

“Finally, It is worth pointing out that although Platini was recently quoted as saying that no clubs would be banned this season, UEFA quickly confirmed that this was a misquote and that Platini had only said that he didn't think any clubs would be banned. UEFA were also quick to point out that Platini does not have any say in the CFCB process and any decision is in no way up to him. However it is inconceivable that he is not aware of the 'plea-bargains' being discussed and their likely acceptance by the clubs - clearly he expects all impacted clubs to accept their plea-bargains.”

[geysir]

As far as I can make out, PSG have admitted their sponsorship deals were inflated and are agreeable to pay their fine on the HP, spread out over 3 seasons.
And Man City are whinging, amongst the whinges that Platini only went after them to make UEFA look better to Platini's mates in Qatari, that it looks better if UEFA also target Man City with similar sanctions as PSG.

That inappropriate controversial statement from Platini could now be seen in a different light, the one where he implied/stated that no clubs would be barred over their FFP infringements. The UEFA committee then impose a harsh penalty, creaming off the clubs' prospective CL prize money. Then the choice of participation in the CL is with the clubs, the choice is accept the harsh financial penalty or you will be dicing with expulsion. If the clubs don't comply with the UEFA sanctions, they will be forcing the expulsion decision upon themselves. Platini can then conclude his Pontius Pilate stunt, "well, I did try".

[Stuttgart88]

Richard Scudamore was on TV last night saying it's hard to say that City have done anything morally wrong, as the feature was showing the massive amounts invested in infrastructure and what has been built.

This is pure sophistry and outright misleading though. UEFA has not counted a single penny of this investment in calculating City's losses. These amounts are completely exempt from the break even calculation. It's the continuous overspending on players and paying huge wages and the wildly fanciful creative accounting to inflate the revenue side of the equation that they are being punished for.

Anyway, it seems like City have been presented a final settlement offer which the club is discussing with Sheikh Mansour over the weekend. All will be revealed on Monday. If not accepted, the case will go to the "adjudicary chamber" for final sanction, which I think can then only be appealed to CAS.

[BonnieShels]

And in a World Cup year.

Calciopoli broke in 2006 didn't it... We all know what happened there.

England are certs now... You know... To have an excuse for their second round exit.

[Stuttgart88]

Are there no lengths City will go to to avoid punishment?

http://www.theguardian.com/football/2014/may/15/death-uefa-financial-fair-play-investigator-manchester-city

[ArdeeBhoy]

Citeh fined.
http://www.bbc.co.uk/sport/0/football/27445475

[geysir]

Are there no lengths City will go to to avoid punishment?

http://www.theguardian.com/football/2014/may/15/death-uefa-financial-fair-play-investigator-manchester-city
Did he fall or was he pushed or....... did he just topple over?

Disappointing that MC slipped away almost unpunished considering that UEFA had them by the throat and the balls.......... no one expected the uefa probation.

[NeverFeltBetter]

Six years on, and it seems Man City have got away with it, with a fairly pointless 10 million euro fine (why even bother with that?) and a slap on the wrist for obstructing an investigation. I'm not sure if FFP is dead and buried, but it does not appear to have had a significant impact on the runaway financials of certain clubs: now there appears to be a blueprint along the lines of "deny, delay, appeal and eventually you'll get your way".

[Stuttgart88]

I think we need to see the full CAS written verdict before we can draw any firm conclusions.

[OwlsFan]

Financial fair play - Sheffield Wednesday got relegated because of it :( Bit of a joke really. They signed a lot of dross at over inflated prices, most of whom languished on the bench, and down they go.

And someone explain how it is financially fair to the other teams in the Championship that the relegated teams get loads of dosh in parachute payments when they are relegated. Aren't they supposed to make £130 million by being promoted etc etc No wonder by and large it is the relegated teams who usually bounce back and then get relegated again. Not that I am bitter or anything.

[Charlie Darwin]

Financial fair play - Sheffield Wednesday got relegated because of it :( Bit of a joke really. They signed a lot of dross at over inflated prices, most of whom languished on the bench, and down they go.

And someone explain how it is financially fair to the other teams in the Championship that the relegated teams get loads of dosh in parachute payments when they are relegated. Aren't they supposed to make £130 million by being promoted etc etc No wonder by and large it is the relegated teams who usually bounce back and then get relegated again. Not that I am bitter or anything.
Parachute payment incentivise clubs to spend when they go up, which is good for the transfer market. I'd say that's the entire equation.