UEFA Financial Fairplay Regulations Released

[Rag_hater]

Article 3 refers to trade and income can be generated and counted in the club finances from areas seperate from the stadia.Therefore we can have external income.

[Socrates]

As football clubs are now part of the entertainment industry, stopping us from recieving sponsorship which allows us to compete with our competitors in the entertainment industry (ie buying/paying players that bring people into our ground or help sell our product,s whilst other areas of the entertainment industry eg Sky TV are allowed to go into debt for scores of years) will open up a whole can of worms on it's own.

I don't think we will be stopped from investing at all. How does someone decide how much our brand is worth per year to the country of Abu Dhabi or 20 of their companies?

it doesn't stop us doing any of those things, it just strips those transactions from the calculations when seeing if we meet the FIFA registration requirements.

[Socrates]

I still dont see any reason why the owner couldnt deposit a couple of bn into city's accounts, convert the debt to equity and city then get it on money market or invest wisely and cream the interest/growth off as income.

That would be completely within the rules, and would cover the wage bill quite easily.

It might be worth testing but while the purchase of shares over and above the asset base is allowed to cover deficits but any purchase of shares beyond that value would be seen as not being made at "fair value" and the investment income from that equity would surely then be discounted in the calculations?

[Ted Hughes]

As football clubs are now part of the entertainment industry, stopping us from recieving sponsorship which allows us to compete with our competitors in the entertainment industry (ie buying/paying players that bring people into our ground or help sell our product,s whilst other areas of the entertainment industry eg Sky TV are allowed to go into debt for scores of years) will open up a whole can of worms on it's own.

I don't think we will be stopped from investing at all. How does someone decide how much our brand is worth per year to the country of Abu Dhabi or 20 of their companies?

it doesn't stop us doing any of those things, it just strips those transactions from the calculations when seeing if we meet the FIFA registration requirements.

That would then be denying us income by unfair means. I don't see how they can do that to us & not do it to everyone else.

However Platini & his chums try to protect their other chums, the Sheikh's long term plan would be for City to do exactly what they say they want ie; become largely self sufficient. That will involve heavy investment for a period of time & then using the brand name to secure heavy sponsorship deals & merchandise/tv rights/ sales etc etc. I don't see how they can possibly stop us or not count such things as part of our income, either in the future or if the sheikh was to set up deals for next year. It's exactly what the rags & Real Madrid will be doing to bring in a lot of their income.

[Slim]

The last paragraph of the last page of the Financial Fair Play Regs was put in just for us - all will be well!!

"Players under contract before 1 June 2010
If a licensee reports an aggregate break-even deficit that exceeds the
acceptable deviation and it fulfils both conditions described below then this
would be taken into account in a favourable way.
i) It reports a positive trend in the annual break-even results (proving it has
implemented a concrete strategy for future compliance); and
ii) It proves that the aggregate break-even deficit is only due to the annual
break-even deficit of the reporting period ending in 2012 which in turn is
due to contracts with players undertaken prior to 1 June 2010 (for the
avoidance of doubt, all renegotiations on contracts undertaken after such
date would not be taken into account).
This means that a licensee that reports an aggregate break-even deficit that
exceeds the acceptable deviation but that satisfies both conditions described
under i) and ii) above should in principle not be sanctioned."

[/quote]

So every contract we currently have at the club isn't counted towards the deficit?

[Mark (Blue Army)]

The last paragraph of the last page of the Financial Fair Play Regs was put in just for us - all will be well!!

"Players under contract before 1 June 2010
If a licensee reports an aggregate break-even deficit that exceeds the
acceptable deviation and it fulfils both conditions described below then this
would be taken into account in a favourable way.
i) It reports a positive trend in the annual break-even results (proving it has
implemented a concrete strategy for future compliance); and
ii) It proves that the aggregate break-even deficit is only due to the annual
break-even deficit of the reporting period ending in 2012 which in turn is
due to contracts with players undertaken prior to 1 June 2010 (for the
avoidance of doubt, all renegotiations on contracts undertaken after such
date would not be taken into account).
This means that a licensee that reports an aggregate break-even deficit that
exceeds the acceptable deviation but that satisfies both conditions described
under i) and ii) above should in principle not be sanctioned."

So every contract we currently have at the club isn't counted towards the deficit?[/quote]

That's how i read it but could be wrong.

[Slim]

And as long as we continue to close the gap on a yearly basis, we are also excluded.

Socs, is that how it reads or am I misinterpreting it?

[BobKowalski]

surely it wouldnt stop a 'presidential box' being built which could then be sold for a significant sum.

wouldn't stop it being sold for a significant sum but only part of that significant sum would be allowed for UEFA's turnover calculation and the recalculated turnover must be more than total spending. An amount decided by the former Prime Minister of Belgium!

Well that is one chap who is going to be a busy boy. You would need an army of accountants to keep track of Real Madrid's dubious dealings let alone all clubs in Europe

"...The club ceded part of its training grounds to the city of Madrid in 2001, and sold the rest to four corporations: Repsol YPF, Mutua Automovilística de Madrid, Sacyr Vallehermoso and OHL. The sale eradicated the club's debts, paving the way for it to buy the world's most expensive players such as Zinédine Zidane, Luís Figo, Ronaldo and David Beckham. The city had previously rezoned the training grounds for development, a move which in turn increased their value, and then bought the site. The EU-commission started an investigation into whether the city overpaid for the property, to be considered a form of state subsidy.

The sale of the training ground for office buildings cleared Real Madrid's debts of €270m and enabled the club to embark upon an unprecedented spending spree which brought big-name players to the club. In addition, profit from the sale was spent on a state-of-the-art training complex on the city's outskirts..."

Trying to close all loopholes that you can forsee is fine but its the loopholes that they don't forsee that will be the exploited and does anyone seriously think that a club like Real Madrid will be excluded from European qualification because they are in technical breach of the rulings? Fat chance. Some minor club from Slovenia yes. Real Madrid. No.

[irblinx]

Academy spending is excluded so I expect to see a massive investment in players and facilities over the next 4 years.
!

Does that include academy transfer fees, ie the Arsenal model of paying for lots of young kids at one or two million each?

[Ted Hughes]

Academy spending is excluded so I expect to see a massive investment in players and facilities over the next 4 years.
!

Does that include academy transfer fees, ie the Arsenal model of paying for lots of young kids at one or two million each?

Call it 'transfer fees' or whatever, it's going to lead to large scale poaching. How can that be 'fair play'? Surely if they gave a shit about fair play or genuinely protecting the game, they'd regulate that area strongly rather than exempting it. They'd also welcome owners like the Sheikh, who put money into football & regulate against owners like the Glazers who take money out.

It's blatant lies & corruption to favour some clubs over others & try to stop clubs like Villa & the Russians from improving & taking their places on the gravy train, nothing more.

[Im_Spartacus]

I still dont see any reason why the owner couldnt deposit a couple of bn into city's accounts, convert the debt to equity and city then get it on money market or invest wisely and cream the interest/growth off as income.

That would be completely within the rules, and would cover the wage bill quite easily.

It might be worth testing but while the purchase of shares over and above the asset base is allowed to cover deficits but any purchase of shares beyond that value would be seen as not being made at "fair value" and the investment income from that equity would surely then be discounted in the calculations?

I know its very simplistic but if I was the sole owner, and the value of the business assets was increased by £2bn by a cash injection and debt to equity swap, then as sole shareholder my shareholding would reflect 100% of the increased value of the business. By choosing not to pay yourself a dividend or defering dividends, then the club's income would cover its expenditure, and I would not have to dip my hand in my pocket again if ever.

Once the club's natural income from trading is at an appropriate level say 10 years down the line, I can take my investment out a nd once the club is on a stable footing, i'd have a money machine making a healthy annual profit and no other club would be able to come close.

Like I said, simplistic but it is an investment which would buy the club time to increase its own income - and its that "buying time" that we need rather than an instant solution, as I dont think there is one, unless.......

It could perhaps also be done by a variation of a gift & loan trust, where the club is given an interest free loan and has absolute right to invest and recieve income by investing the money, but the capital repayments can be deferred for as long as it takes for the club's trading income to increase. The capital sum is repayable on demand, but if it is only being used to create income, and we are not dipping into the capital, that would never be an issue. Whilst Uefa probably wouldnt like it, I see little legal way they could stop the club doing it.

Of course all this assumes our owner has a couple of bn down the back of his sofa, and wants to plough it all in - but its by no means throwing money away, its a solid investment for the future.

[Ted Hughes]

I still dont see any reason why the owner couldnt deposit a couple of bn into city's accounts, convert the debt to equity and city then get it on money market or invest wisely and cream the interest/growth off as income.

That would be completely within the rules, and would cover the wage bill quite easily.

It might be worth testing but while the purchase of shares over and above the asset base is allowed to cover deficits but any purchase of shares beyond that value would be seen as not being made at "fair value" and the investment income from that equity would surely then be discounted in the calculations?

I know its very simplistic but if I was the sole owner, and the value of the business assets was increased by £2bn by a cash injection and debt to equity swap, then as sole shareholder my shareholding would reflect 100% of the increased value of the business. By choosing not to pay yourself a dividend or defering dividends, then the club's income would cover its expenditure, and I would not have to dip my hand in my pocket again if ever.

Once the club's natural income from trading is at an appropriate level say 10 years down the line, I can take my investment out a nd once the club is on a stable footing, i'd have a money machine making a healthy annual profit and no other club would be able to come close.

Like I said, simplistic but it is an investment which would buy the club time to increase its own income - and its that "buying time" that we need rather than an instant solution, as I dont think there is one, unless.......

It could perhaps also be done by a variation of a gift & loan trust, where the club is given an interest free loan and has absolute right to invest and recieve income by investing the money, but the capital repayments can be deferred for as long as it takes for the club's trading income to increase. The capital sum is repayable on demand, but if it is only being used to create income, and we are not dipping into the capital, that would never be an issue. Whilst Uefa probably wouldnt like it, I see little legal way they could stop the club doing it.

Of course all this assumes our owner has a couple of bn down the back of his sofa, and wants to plough it all in - but its by no means throwing money away, its a solid investment for the future.

If he's in it for the long term, which seems to be the case, I can't see any reason why it won't eventually make money, especially if individual tv rights come into it in the future, which I think will happen to some extent. In the short term though, we're going to need more money than we can generate & we can't get that without at least bending these rules or challenging them.

[Blue Since 76]

The principles of some of the ideas of FIFA/Platini are correct - stopping dubious business men buying clubs and milking them for all they are worth, by loading lots of debt on the club. However, all they are managing to do is stop rich owners coming in again and creating interest in the league. For the likes of a West Ham or Sunderland say, the only real hope they had of sustained success was finding a sugar daddy. These regulations mean that that will never happen and they will therefore have to face a life of mediocrity. I'm not worried about City, as we're already with the big boys, but it's depressing reading for anyone else.

I see legal challenges coming up and hopefully the European parliament and courts will prove useful for once

[Blue Since 76]

can't see a thread on this?

anyway, here they are at last

http://www.bluedays.co.uk/wp-content/uploads/2010/06/uefa_financial_fair_play_reg.pdf

seems they have thought of all the loopholes people on here have been insisting will be possible for us to cheat them - any deals, sales or sponsorships with related parties will be revalued on an arm's length basis, the person deciding what they are really worth having been appointed by Platini. So if, for example, the Sheikh was to buy an executive box for £100 million, it would be revalued at the same as the other executive boxes that had been sold for the purposes of UEFA's calculations.

We need to hire that 'Mr Loophole' lawyer who gets the celebs off when they've been speeding whilst pissed, just because the copper hadn't sharpened his pencil to the regulation angle.

Thing is, how does any PL club make money - shirt sales, ticket sales, corporate and TV, plus prize money. We will be in the top 6 for shirt sales and number of tickets, although we might struggle due to relative price of tickets. If we're top 4, our TV money will be the same as others and therefore sponsorship deals should be similar. The only thing missing (initially) is CL prize money. I can't believe our wage bill is bigger than the rags wage bill plus interest charges, so I'm still struggling to see how they can pick on us without hurting most teams.

What this sort of thing will lead to though is an increase in the price of tickets and merchandise, plus the end of the block TV rights. If you look at how much Barca and Real make from TV compared to any PL team, there's a huge difference. So FIFA will ultimately damage the smaller teams and enshrine the existing cartel of big teams to be there for ever. If another team is lucky enough to find a Sheikh, there will be no point, as you won't be able to show you can afford a CL player without winning it first.

rags income is way way more than ours don't forget, what good is a fancy lawyer if the final decision rests with a Platini appointee? I agree with the effect but that doesn't mean it won't happen - in fact it has already been happening on a regional basis thanks to the change in ECL qualification seedings that has ensured the gap between the top club and the rest has grown in many smaller countries.

Rags have a higher turnover partly due to more games (CL), more prize money (higher up league), more TV exposure (CL & PL contenders) and more sponsorship due to the successes. We will close that gap in the next year or two. My only concern is that ticket prices may follow theirs - a friend recently bought 3 season tickets in the good seats (not padded, but half way line) and the cost was over £2,700. 50% extra fans at 50% extra for 50% more games equals a lot of additional revenue. Perhaps that explains the need to expand the stadium and the move towards higher prices in the Colin Bell.

[Patrick]

We just get twitching harry in - simples

[johnny crossan]

The last paragraph of the last page of the Financial Fair Play Regs was put in just for us - all will be well!!

"Players under contract before 1 June 2010
If a licensee reports an aggregate break-even deficit that exceeds the
acceptable deviation and it fulfils both conditions described below then this
would be taken into account in a favourable way.
i) It reports a positive trend in the annual break-even results (proving it has
implemented a concrete strategy for future compliance); and
ii) It proves that the aggregate break-even deficit is only due to the annual
break-even deficit of the reporting period ending in 2012 which in turn is
due to contracts with players undertaken prior to 1 June 2010 (for the
avoidance of doubt, all renegotiations on contracts undertaken after such
date would not be taken into account).
This means that a licensee that reports an aggregate break-even deficit that
exceeds the acceptable deviation but that satisfies both conditions described
under i) and ii) above should in principle not be sanctioned."

So every contract we currently have at the club isn't counted towards the deficit?

That's how i read it but could be wrong.[/quote]

me too

[Im_Spartacus]

I still dont see any reason why the owner couldnt deposit a couple of bn into city's accounts, convert the debt to equity and city then get it on money market or invest wisely and cream the interest/growth off as income.

That would be completely within the rules, and would cover the wage bill quite easily.

It might be worth testing but while the purchase of shares over and above the asset base is allowed to cover deficits but any purchase of shares beyond that value would be seen as not being made at "fair value" and the investment income from that equity would surely then be discounted in the calculations?

I know its very simplistic but if I was the sole owner, and the value of the business assets was increased by £2bn by a cash injection and debt to equity swap, then as sole shareholder my shareholding would reflect 100% of the increased value of the business. By choosing not to pay yourself a dividend or defering dividends, then the club's income would cover its expenditure, and I would not have to dip my hand in my pocket again if ever.

Once the club's natural income from trading is at an appropriate level say 10 years down the line, I can take my investment out a nd once the club is on a stable footing, i'd have a money machine making a healthy annual profit and no other club would be able to come close.

Like I said, simplistic but it is an investment which would buy the club time to increase its own income - and its that "buying time" that we need rather than an instant solution, as I dont think there is one, unless.......

It could perhaps also be done by a variation of a gift & loan trust, where the club is given an interest free loan and has absolute right to invest and recieve income by investing the money, but the capital repayments can be deferred for as long as it takes for the club's trading income to increase. The capital sum is repayable on demand, but if it is only being used to create income, and we are not dipping into the capital, that would never be an issue. Whilst Uefa probably wouldnt like it, I see little legal way they could stop the club doing it.

Of course all this assumes our owner has a couple of bn down the back of his sofa, and wants to plough it all in - but its by no means throwing money away, its a solid investment for the future.

If he's in it for the long term, which seems to be the case, I can't see any reason why it won't eventually make money, especially if individual tv rights come into it in the future, which I think will happen to some extent. In the short term though, we're going to need more money than we can generate & we can't get that without at least bending these rules or challenging them.

What i'm trying to say is that if it is a case of waiting till our income gets up naturally, there are many ways of boosting it via a cash balance until such time as we are capable of standing on our own two feet.

If we wanted to take the piss we would take the gift & loan trust route, as there is fuck all legally that can be done about that. It is 100% legal in European law, but requires someone to not want the interest back right away, which we have. There is no better and more legal route for us

[Blue in the face]

Why dont we just buy the swamp and rent it out for mad money and when we need more then raise the rent.

Let them pay for our players.

Am I a friggin guru or what?

[Wooders]

we buy an abu dhabi player, let him score a goal and then sell him for 100 million to an abu dhabi team - easy

[irblinx]

The principles of some of the ideas of FIFA/Platini are correct - stopping dubious business men buying clubs and milking them for all they are worth, by loading lots of debt on the club. However, all they are managing to do is stop rich owners coming in again and creating interest in the league. For the likes of a West Ham or Sunderland say, the only real hope they had of sustained success was finding a sugar daddy. These regulations mean that that will never happen and they will therefore have to face a life of mediocrity. I'm not worried about City, as we're already with the big boys, but it's depressing reading for anyone else.

I see legal challenges coming up and hopefully the European parliament and courts will prove useful for once

Doesn't the their competition, their rules point negate that though? I suppose it could be argued that they hold a monopoly in Europe but it would likely drag on for years.

Ignoring the implications for us for a second (I'm sure we'll find ways to make it work, we've been involved in the discussions all along) it really does massively enforce the current status quo. UEFA are basically telling smaller clubs to feck off and forget about European competition, any new sugar daddy investors will need a 20 yr plan of gradual growth which I just don't see happening. If anything this new rule could be great for us as we'll be that last ones to be able to crash the party