QuoteThere must be a few others surely, or they're the most obvious?
PSG 5 up tonight and with no chance of complying with FFP. What chance of PSG going out due to a highly controversial ref decision later on?
There must be a few others surely, or they're the most obvious?
Most of the others will scrape in I think. PSG have no chance I think.
Really? On both counts.
Why do you think PSG have no chance, Stutts?
Surely it should touch the hearts of Uefa that PSG were able to find such a generous sponsor at the 12th hour, who has offered unlimited cash every year, until infinity?
If you look at a lot of Platini's statements about his FFP project, there have always been get-outs. He's consistently said stuff like "banning clubs is a last resort", that if clubs are "seen to be heading in the right direction" they might avoid bans. Which is probably very handy if your son is on the board of the company that sponsor PSG.
I'm not sure FFP will stand up in any court of law. The accounting and taxation regiemes are very different across Europe and if you dont have every club on a level playing field then FFP could be open to a challenge. For instance say Spanish and English clubs are subject to 50% tax but Russian and Ukrainian ones are subject to 13% then the former are already at a disadvantage - a better example is Platini's own league. Monaco are tax exempt, but other French clubs (like PSG or Marseilles) are subject to a tax rate of around 75% - how can PSG, Marseilles, Lyons etc be held to the same standard as Monaco given such a disparity. For example if PSG and Monaco both want to sign a promising player on a salary of €150,000 per week, Monaco's total annual expense on that player will be approx €7.8m, PSG's will be €13.7m. Pad that out over a squad of 25 and and you're looking at €145m a year. I appreciate that not every player in a 25 man squad will earn €150k per week, but say 11 do then you are still looking at €64m. Once you establish that clubs are working in different environments (due to different taxation and acccounting situations) then the legal side of it falls down. One option would be to try and look at figures before taxation (so essentially tax is deductable from any FFP calcuations) but that doesnt solve the disparity all it does is conveniently shunt it outside of FFP's remit.
What has tax got to do with anything? FFP isn't about fairness and UEFA have been very careful to ensure it has not been presented that way, for the very good reason that it would then likely be seen as incompatible with competition law. It's about linking clubs spending with their current income, nothing more, nothing less.
AFAIU from the UEFA document , a club is mandated to pay all employer related social taxes etc. And in the tax expenses in the accounts, that does not include VAT or tax and social security contributions in respect of employees.
There's no reference to differing tax systems.
But the language used in that document is just plain hostile in places. No wonder, legal accountants don't write bestsellers.
The question UEFA will have to deal with is PSG and the blatant sponsorship stroke they pulled off in order to provide income for their expenditures. There doesn't appear to be any criteria by which Uefa measure the value of the friendly sponsorship other than what they claim is "fair" - Is the value of the sponsorship, a fair value? Then there are a number of sanction options, from mild to wild, that Uefa can choose from if they decide it's not fair. You'd wonder if the flakey 'fair' clause Uefa have inserted to deal with this situation have been left deliberately vague, so vague that PSG can drive a JCB right through them.
I think PSG will escape with a warning or maybe a fine at worst.
In PSG's case they have actually recorded the sponsorship deal in the financial accounts of the year preceding the one it was struck in!
I've written before here that I do think FFP will stand up to a legal challenge.
Just for info, it's a mistaken belief that there is a 'heading in the right direction' get out.
Ed Thompson's blog below contains a bit of stuff on Monaco and a lot on PSG and the possible sanctions, and timing of the sanctions. You have to scroll down to find the articles.
http://www.financialfairplay.co.uk
I guess someone should tell Platini. This is a quote from him 1-2 months ago:Originally Posted by Stuttgart88
"Do not think we are going to take five to 10 clubs out of the European competition. Definitely that would be the very, very last straw. If we have repeat offenders okay, yes, they will have to be punished severely — possibly."
http://www.standard.co.uk/sport/foot...w-8795782.html
A take on it in the Manchester Guardian seems to suggest something similar.
"But there are crucial caveats. If clubs can show that they are travelling in the right direction, that their losses are reducing year on year and can point to them being a result of contracts signed before June 2010 when the rules were enshrined in Uefa's rulebook, that may reduce the sanction. An outright European ban is being described as a last resort – but an eminently plausible one."
http://www.theguardian.com/football/...air-play-rules
I'm still not convinced, the concept of FFP is legally water-tight. It seems, perhaps by accident rather than design, to propigate the cabal or oligopoly of elite clubs and this would put it at odds with most EU (and a lot of domestic) anti-competition law. I can't think of many other sectors where you can legally restrict external investment in companies (private or publically listed) in the way FFP will. There is talk of football trying to get some form of "special status" where standard EU laws are relaxed, but is this possible? And how would it apply to non-EU countries? Even if the concept of FFP is given a legal all-clear, I would be surprised if some of the big threatend clubs arent able to circumvent it. Man Utd have reportedly agreed a £60m/season with Nike for shirt sponsorship, they are also supposedly getting £45m/season from Chevrolet. In normal conditions you wouldnt expect clubs like Man City, PSG or Chelsea to be able to acheive these numbers, Nike and Adidas are unlikely to match that figure for them. But they could go down the MiFit route and create a proxy company to make their own kit, doing this if they declare £100m per season sponsorship deals can they be challenged given a precident (of that figure) has been set?
Edmundo, I haven't got time today but I've written at length on foot.ie about the so-called specificity of sport as it relates to EU law. I reckon I've already written about it at length in this thread but if not I have definitely written about it in a recent thread I started in 'Other Sports', a thread beginning with 'For Sports Law buffs...".
Basically sport is not exempt from EU labour law or EU competition law. However, it is recognised that sport differs from normal industries in certain respects and therefore if a sports body imposes a rule that in ordinary circumstances would be in breach of EU law but this rule can be objectively justified on sporting grounds and shown to be a proportionate measure, then the rule is likely to be tolerated.
UEFA has stated that its objective is to restore financial rationality to European football, to encourage infrastructure development and community roots. Furthermore, clubs must be up to date with tax liabilities. These are legitimate objectives in most people's eyes and FFP is probably a proportionate response. It could go even further in my opinion.
UEFA did not cite competitive balance as an objective because there probably are several less 'intrusive' methods of achieving this, so it would fall foul of EU law on proportionality grounds.
Oh, that Guardian article quoting the direction of travel: was that Platini or the journalist?
You need to go to article XI of the UEFA licensing manual (which contains FFP) to see that direction of travel is not a carve out.
As for crystallising the cabal of leading clubs, I'd say yes, it probably does. But I think it's better that these big clubs are kept on a self sustaining financial path to both eliminate the 'arms race' between them and also to place less pressure on clubs below to spend money they can't afford merely to try and keep up.
It's funny, but one of FFP's biggest critics, the author and academic Stefan Szymanski, is arguing exactly that it'll keep the rich clubs in their place in the pecking order. But equally, before FFP he used to argue that it doesn't matter if big clubs are big, dynasties have always been the case in European football. Fans get their context from other ways than seeing their team win titles.
Last edited by Stuttgart88; 25/10/2013 at 3:13 PM.
Edmundo, this is a bit technical but tells you all you need to know about sport and EU law.
http://www.pravst.hr/dokumenti/zborn...201204_697.pdf
It doesn't matter about non EU countries. If an Israeli club wants to enter a UEFA competition it must comply with the competition rules, set by UEFA.
I agree that sponsorship from a related party is a thorny issue. I am told UEFA will stand firm on this but we'll see.
I think the key thing is that the European Club Association, a lobby group of close to 200 clubs, are in favour of FFP. Big clubs and small clubs are in favour, by and large.
I think under FFP we'll see more Swanseas and fewer Portsmouths.
I know this is a rather dry topic but Daniel Geey, a London lawyer specialising in football, has written the following which I think is worth reading:
http://www2.warwick.ac.uk/fac/soc/la...lume9/geey/#a6
He specifically explains why FFP are unlikely to be inconsistent with EU competition law. He also says it is unlikely that any club will take action on basis of EU law because at every step in the formulation of these rules, the ECA was consulted.
He also clarifies the perceived 'direction of travel' carve out. The improving direction of travel is only taken into consideration if the reason for the club being in breach of the break even rule is due to wages negotiated in contracts signed before FFP was announced.
So, less of your silly stuff about football trying to exempt itself from EU law. That's just nonsense
Last edited by Stuttgart88; 25/10/2013 at 3:48 PM.
The validity of that stroke by PSG has yet to be assessed by UEFA, isn't it so?
You'd wonder who is behind the legal challenge to FPP, can it really be financed by an agent?
A football club like PSG does not have to comply with the rules of the national assoc or Uefa, does it? They can choose not to participate in the competitions. But if they do choose to participate, then they have to sign up and follow the rules. It would be quite ridiculous for a club to be allowed function as a bona fide corporation in the world of football, eg, PSG take over Marseilles, then buy out Fulham fc. Decide that Marseilles is no longer feasible, sell the players and ground. I can see where the rights of players are protected by EU law, but for the life of me I can't see how a club can be allowed decide for itself that it wants to function like a freelance corporation in a football environment.
Yes, I think there's a unit within UEFA called the club financial control panel whose task it is to assess whether clubs comply with FFP.
It's apparently independent of UEFA bigwigs so is supposed to be objective. The first compliance assessment is next spring and compliance with break-even and any dodgy means of achieving break-even will be judged upon then by this panel. Ironically it is made up of European businessmen with a track record of spectacular insolvencies!
Daniel Geey has written about this and how potentially awkward it'll be for UEFA to have to sanction a club that is already in the CL semi final.
Edit: here it is http://www.danielgeey.com/uefa-finan...ory-situation/
I'm not sure I understand Geysir's last paragraph fully. UEFA had already got rules in place about clubs owned by the same party not being allowed to compete in UEFA competition. Spurs' largest shareholder Joe Lewis, via an investment company ENIC, had stakes in a few clubs ( including Rangers?) and was told only one club could compete in any one competition, to protect the integrity of the competition. Spurs drew Slavia Prague, both ENIC controlled, and UEFA kicked up a fuss via CAS.
National associations' rules on multiple club ownership differ. England is quite tight, which is interesting given any crook or charlatan can own a club there(!) but Spain is very lax.
Placing a restriction on a club's takeover activity might be a breach of competition law but mergers are blocked in all industries by antitrust regulators all the time and in football's (and other sports') case you could easily argue that protecting integrity of sporting competition is a reasonable reason to restrict multiple club ownership. A google search just now revealed a David Conn article saying UEFA had to comply with the EU definition of majority control (50.1%) even though UEFA wanted the bar set lower to determine effective control.
There was talk recently of EPL clubs buying lower division clubs as feeder clubs but Im not sure where that led to. Obviously clubs like City are said to want to buy a MLS franchise.
Our friend Daniel Geey is yet again the best source of info on where this issue stands from a legal perspective
http://www.danielgeey.com/multiple-f...between-rules/
To some extent FFP places restrictions on clubs' corporate activity. In calculating income, only football related income is allowed to be counted. Given that clubs like Arsenal also make material income from redeveloping property on the site of the Emirates this is a bit of a grey area but I think the proximity of the properties to the stadium allowed it to be interpreted as football related. Also, clubs using their grounds for concerts etc. is allowed to be counted as football income.
Last edited by Stuttgart88; 26/10/2013 at 10:05 AM.
I thought the point was clear, if a club wants to compete in a league, it has to sign up to follow the rules. If the rules say one club can't buy another, then a club can't go running to a court claiming restrictive business practices are being imposed upon them where there's no danger of a monopoly.
Same would go for a club trying to bypass FFP by pouring money in via a friendly sponsor, and then go running to the court to challenge the restriction on their right to do that after running foul of FFP rules. The disputes about interpretation of FFP should be left to CAS.
UEFA should be able to set the entry requirements for clubs to compete in their CL.
From my layman's interpretation of FFP, the word "fair value" is a wooly, airy fairy, concept in relationship to sponsorship value. Can it have been that difficult to come with some other method, such as sponsorship deals need a pre approval from the association, deal with it before the club goes on a transfer/ player contract splurge.
I think it's pretty clear that UEFA will benchmark commercial deals against comparable transactions that genuinely struck at arms length. If a commercial deal from a related party dwarfs the most obvious benchmark then it's a flagrant breach of the rules. If the value of the deal is close to the benchmark then UEFA wil leave it stand. Theres probably a bit of leeway for clubs to game the rule.
As I understand it he "sponsor" can pay as much as it wants but UEFA will only allow so much of it to count as income.
It will all come to light soon what Uefa understands by 'fair value' and what 'fair value' standard they can impose on the clubs according to Uefa FFP rules.
If Uefa do what you understand then PSG will face the heaviest of sanctions, if Uefa act as I think they will act, then PSG will get a warning of sorts.
A good point made by yer man Daniel Geey is that if UEFA are seen as being soft on an offender then they are open to litigation by an affected club. So, for example, if 4th placed team qualifies for the UCL but with dodgy accounting at the expense of 5th placed team who had complied fully with all the rules, 5th placed team can take legal action either for damage or to be awarded with qualification.
As you say though, I wouldn't expect a drastic sanction by UEFA on PSG. I suspect that PSG will start to tow the line quite soon, much like Chelsea are doing now. They went on a once off binge to get to the top table and that's where they'll remain. Although the French taxation issue is an interesting one...
Interesting article on the Striani / Dupont challenge to FFP in the European Courts.
http://www.irishexaminer.com/sport/s...rs-250794.html
Dupont, the lawyer who represented Bosman in the 90s, believes that UEFA's model of territoriality undermines smaller countries (probably fair) but also throws in the usual bomb of a joint Scots / Irish league. He doesn't go as far as endorsing it, simply saying it's feasible it would - even if only to a small degree - improve quality in both leagues. Not overly fanciful.
“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.”
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.”
Dupont also feels that a city like Dublin could stir things up by challenging the inability of a club to have access to a bigger market by virtue of UEFA's territorial system.
Striani is not challenging Uefa’s existing territorial pattern as part of his case but Dupont feels a club would stand a reasonable chance in the EU courts if they decided to pursue a legal route. “If a Dublin club agrees with the English Premier League to play with them, from the perspective of EU law, it is their absolute right to do so. Therefore, any entity (FAI, Uefa, etc) that would try to stop it from happening would face an uphill battle. They would bear the burden of proof and would need to justify why such a violation of EU law would be absolutely necessary. I have my doubts that they would succeed.”
Interestingly, UEFA stated its objection to a joint Russian-Ukrainian league very recently.
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