Financial results

[Ted Hughes]

I can't see us getting anywhere near that for a decade as we'll probably spend a fortune in the summer & would need about 3 times as many supporters to buy shirts etc just to generate the wage bill. I recon they're just going to pay lip service to the regulations to allow Platini to save face but continue to invest & see what he does to stop them. Will have already taken legal advice.

Which will have told them there is nothing they can do if it comes in, which is why they spent so much last summer, why they are redirected half a billion pounds in spending to the Academy and why they sacked Hughes when they did.

I think it may have told them there's nothing Platini can do about it.

Do you know exactly what powers Platini's little committee will have to stop clubs revenue streams, how they will distinguish between which clubs are allowed to recieve revenue from companies/individuals with connections to said clubs through sponsorship, share deals etc, or which FIFA rules they will be applying to enforce it & whether such rules can be challenged or are you just assuming they'll have it all watertight based on their previous watertight legislation such as the offside rule or the 4 linesmen?

The evidence is in the Sheikh's actions, you just prefer to believe otherwise because of the position you took supporting an inexperienced out-of-his-depth manager.

What a fucking pathetic limp dicked comment. So you're basing it on fuck all then? Just guesswork? Brilliant.

[Socrates]

just published...

Uefa warns Chelsea and Manchester City over huge losses

• Chelsea and City could be barred from Champions League
• Uefa wants pair to scale down losses in next four seasons



* Matt Scott
* The Guardian, Thursday 7 January 2010


Manchester City and Chelsea face being excluded from the Champions League unless they can work the huge losses both have announced over the past seven days down to break-even levels within four seasons. Uefa is working up formal regulations that will entrench Michel Platini's plan to ensure that clubs operate without making significant long-term losses. "If a club gets a lot of money or subsidies from a big backer and is still in deficit in two years then it is a problem and we don't want that," Platini said in August.

Two days after those comments, the European Club Association (ECA) approved Platini's proposals and Uefa privately confirmed yesterday that it is adding the "financial fair play" rules to its statutes in time for the 2013-14 season. The delay in the implementation was yesterday described as an effort to provide clubs a "soft landing", but Uefa firmly envisages that clubs who fail to meet the regulations will be prevented from taking part in its competitions.

Since the biggest clubs generate interest and revenue for the Champions League, the suspension of those such as Chelsea and City would be a test of resolve. But Uefa has been emboldened by the broad ECA support, and insiders at Uefa are bullish.

"There needs to be a business model for breaking even within three and a half years," a source said. "The deadline is what it is and we will stick to it; we have tremendous support from the clubs."

Between them City and Chelsea have declared losses in the year to June 2009 of more than £130m. Chelsea's chief executive, Ron Gourlay, has abandoned a specific target date for break-even, reassessing it as an aspiration.
City playing catch-up
Profits, and so a sustainable place in the Champions League, seem a long way off for Manchester City, even though – as revealed in this column last July – Sheikh Mansour's £305m of loans have been converted into equity.

Turning Chelsea into regular title challengers has cost Roman Abramovich £500m in cumulative losses. City have not shrunk from that target, spending £117.5m on transfer fees last summer and an estimated £30m a year in wages for Emmanuel Adebayor, Carlos Tevez, Kolo Touré, Roque Santa Cruz and Joleon Lescott. But, crucially, Sheikh Mansour's club start from a weaker base.

When Abramovich bought Chelsea they were already in the Champions League and had a turnover of £153.6m, £66m – or 73% – more than City have. And City's prospects for raising extra revenues from ticket sales do not look great. Their attendances have risen more than 3,000 from their season average to 46,000, but, right up until its postponement, there were about 400 seats available on general sale for the Carling Cup semi-final against Manchester United: City's first last-four place since the 1981 FA Cup.

[Socrates]

If the Guardian have their facts right then we have an extra year from the worst case scenario, that means we really need the Champs League money from the 2011/12 season onwards as they will be scrutinising the 2012 accounts ahead of the 2013/14 licensing. That means qualification is essential next season rather than this. But still very desirable this season as being able to show progress towards breaking even over a couple of years would be very helpful.

[irblinx]

just published...

Uefa warns Chelsea and Manchester City over huge losses

• Chelsea and City could be barred from Champions League
• Uefa wants pair to scale down losses in next four seasons



* Matt Scott
* The Guardian, Thursday 7 January 2010


Manchester City and Chelsea face being excluded from the Champions League unless they can work the huge losses both have announced over the past seven days down to break-even levels within four seasons. Uefa is working up formal regulations that will entrench Michel Platini's plan to ensure that clubs operate without making significant long-term losses. "If a club gets a lot of money or subsidies from a big backer and is still in deficit in two years then it is a problem and we don't want that," Platini said in August.

Two days after those comments, the European Club Association (ECA) approved Platini's proposals and Uefa privately confirmed yesterday that it is adding the "financial fair play" rules to its statutes in time for the 2013-14 season. The delay in the implementation was yesterday described as an effort to provide clubs a "soft landing", but Uefa firmly envisages that clubs who fail to meet the regulations will be prevented from taking part in its competitions.

Since the biggest clubs generate interest and revenue for the Champions League, the suspension of those such as Chelsea and City would be a test of resolve. But Uefa has been emboldened by the broad ECA support, and insiders at Uefa are bullish.

"There needs to be a business model for breaking even within three and a half years," a source said. "The deadline is what it is and we will stick to it; we have tremendous support from the clubs."

Between them City and Chelsea have declared losses in the year to June 2009 of more than £130m. Chelsea's chief executive, Ron Gourlay, has abandoned a specific target date for break-even, reassessing it as an aspiration.
City playing catch-up
Profits, and so a sustainable place in the Champions League, seem a long way off for Manchester City, even though – as revealed in this column last July – Sheikh Mansour's £305m of loans have been converted into equity.

Turning Chelsea into regular title challengers has cost Roman Abramovich £500m in cumulative losses. City have not shrunk from that target, spending £117.5m on transfer fees last summer and an estimated £30m a year in wages for Emmanuel Adebayor, Carlos Tevez, Kolo Touré, Roque Santa Cruz and Joleon Lescott. But, crucially, Sheikh Mansour's club start from a weaker base.

When Abramovich bought Chelsea they were already in the Champions League and had a turnover of £153.6m, £66m – or 73% – more than City have. And City's prospects for raising extra revenues from ticket sales do not look great. Their attendances have risen more than 3,000 from their season average to 46,000, but, right up until its postponement, there were about 400 seats available on general sale for the Carling Cup semi-final against Manchester U***d: City's first last-four place since the 1981 FA Cup.

And Real Madrid will be ok how? And why couldn't we take them to the European court to ask why they have deemed a team owned and operated by an individual well within his personal wealth should be against the rules and yet a club operating with £800m of debt is apparently not?

I just don't understand why everyone seems to be willing to lie down for Platini's current rich stay rich scheme, it is anti competitive in the extreme and the European courts ship rip UEFA a new rear hole over this.

[Socrates]

How many times does this have to be explained? There is no basis in law for this to be challenged in the European courts. It's in effect a beefing up of an established principle - UEFA already have a licensing system and it cannot be challenged. Anti-competition laws don't apply to UEFA as a body, only the businesses that operate in the markets that they regulate. It doesn't constitute an anti-competitive agreement nor does it constitute abuse of a dominant market position.

[john68]

Socrates,
The sideswipe regarding your opinion of Hughes was wholly unecessary in this thread mate. It detracted from what is a high quality discussion on a very important subject that threatens our club. I happen to agree with almost all of your points on this very real threat.

Ted,
There is enough evidence already in the public domain to make an informed opinion on this.
Statements made by Real Madrid, statements made by Platini and UeFA, the statements made by our own chairman regarding the changes of the schedule of incoming tranfers and why this change took place, the actions of the club regarding this and the statements made regarding the change of policy for our academy going worldwide and the necessity to bring youngsters in to sustain our progress in the future.
Add to this, the knowledge we already have of the perilous financial state of many of the most powerful clubs and putting two and two together is not so hit and miss.

[The Man In Blue]

so we have four seasons.

i'm reasonably confident we will ok; well i'm not going to start panicking and stocking up on tinned food anyways.

[Alex Sapphire]

just published...

Uefa warns Chelsea and Manchester City over huge losses

• Chelsea and City could be barred from Champions League
• Uefa wants pair to scale down losses in next four seasons



* Matt Scott
* The Guardian, Thursday 7 January 2010


Uefa privately confirmed yesterday that it is adding the "financial fair play" rules to its statutes in time for the 2013-14 season.
...
"There needs to be a business model for breaking even within three and a half years," a source said. "The deadline is what it is and we will stick to it; we have tremendous support from the clubs."

So Q for Mr S: if a club applies for a licence in 2013/14 does this mean that they have to be in the black or do they have to show that they will be within 3.5 years?

If you're interpretation is that the 3.5 years starts now but that would mean the rules being in place now and they're not. Not by a long way.
It also means that there is no obstacle to qualification in 2009/10, 10/11, 11/12 other than the exisiting Licensing rqt which is that the club has lodged accounts.
So the "scare" that we gotta qualify this year or we never will is really bnot, and nevcer was a reality

[OliverHardy]

Is it my blue tinted specs or do the scum never seem to get mentioned when it comes to finances by UEFA?
I am no financial expert but surely its better for us (the Premier league and UEFA) to not make a profit but have a wealth owner who is not putting the club in any debt or asking anyone else for any money, rather than the Scum who are making obvious profit but are in massive debt and serious risk of issue should they fail to qualify for the Champs League.

[avoidconfusion]

I love that "Uefa warns Chelsea and Manchester City over huge losses" article... because this is basically just a rehash of quotes of what was said back in August when they "announced" these plans. Nothing new. And sorry where exactly in the article is there any statement from the UEFA which is a warning to Chelsea and City regarding the losses they announced this week?

Also, I love how that Sky TV presenter in the Video above constantly tried to stir shit by insinuating that Mansour and Abramovich will leave and it's just a toy for them yadda yadda. Loved the answers from the old bloke though who just brushed it off and instead said that these payments made and the transfer of debts into equity shows nothing but huge commitment by the owners.

And yea what about fucking Real Madrid? I don't believe for a second that they are not making losses every year!

[OliverHardy]

Platini seems to be actively encouraging clubs to go into massive amounts of debt, as anyone outside of the champs league cannot afford to compete with the big boys unless they spend a lot of money. Now unless a club has a wealthy owner who is willing to bankroll transfers, there is no way a club can compete without taking out massive loans to fund spending. Is this what Platini et al are endorsing, or are they basically saying "just let the established BIG clubs stay big and the smaller clubs stay small"?

I cant think of any another ruling bodies anywhere in the world that can just make up shit as they go along and have doddering old men at the helm employing their mates without any care in the world of being overturned.

IF football is in such a bad state, whos fucking fault is it?! Surely the buck stops with the ruling bodies, so why dont they stop critising the likes of City and Chelsea and take a long hard look in the mirror and see their own failings!

Rant over :-)

[Alex Sapphire]

Is it my blue tinted specs or do the scum never seem to get mentioned when it comes to finances by UEFA?
I am no financial expert but surely its better for us (the Premier league and UEFA) to not make a profit but have a wealth owner who is not putting the club in any debt or asking anyone else for any money, rather than the Scum who are making obvious profit but are in massive debt and serious risk of issue should they fail to qualify for the Champs League.

it's maybe worse even than that as the Scum not only have massive debt, but they are not fulfilling their obligations to make the minimum (interest) payments on them. They got c 50mill bigger last year as they redirected interest payments into spending (incluuding players).
Now should I tell my Building Society I'm going to skip a payment becasue I want to buy a hat?

[Socrates]

Alex. This is now coming in for the 2013/14 seaon, previously it was mooted they could come in 2012/13. Means we have an extra year. What you are not comprehending is that the rules will not then start to be applied to future sets of figures but to the most recent published accounts at that point. In Spring 2013 the accounts they will be scrutinising will be for year ended 31 May 2012. These will be scrutinised alongside projections for 31 May 2013 and a business plan going forward. We really need ECLmoney in those 2012 accounts if we are to be bulletproof. Better still if we were close to breaking even in the 2011 accounts that would make our position even stronger, given the fact that the 2010 accounts will look horrendous with a 9 figure loss inevitable.

Oliver Hardy - you are talking about how the world should be not how it is. I agree entirely that the proposals are wrong, but they are nontheless real and we have to recognise that.

[Alex Sapphire]

Alex. This is now coming in for the 2013/14 seaon, previously it was mooted they could come in 2012/13. Means we have an extra year. What you are not comprehending is that the rules will not then start to be applied to future sets of figures but to the most recent published accounts at that point. In Spring 2013 the accounts they will be scrutinising will be for year ended 31 May 2012. These will be scrutinised alongside projections for 31 May 2013 and a business plan going forward. We really need ECLmoney in those 2012 accounts if we are to be bulletproof. Better still if we were close to breaking even in the 2011 accounts that would make our position even stronger, given the fact that the 2010 accounts will look horrendous with a 9 figure loss inevitable.

Oliver Hardy - you are talking about how the world should be not how it is. I agree entirely that the proposals are wrong, but they are nontheless real and we have to recognise that.

Soc my old friend
you'd be surprised by what I comprehend :)
So you're assuming that at the end of the season in 2013 if we qualify, they will scrutinise our most recently submitted accounts (you are assuming some dates) and if they don't balance they will then need to see plans/projections which show they will. What planning period are you assuming, 3.5 years, or 1, and why?).
If we fail on both these scores then they have the right to refuse us a licence in 2013/14. But then again whatever our books look like in 2011/12 any leadership team that then submits a plan which doesn't show a profit within 2 or 3 years should be shot, no?

So you must agree that the position that if we don't qualify this season we never will because of these new rules is not, never was, right. And are you now saying that we MUST qualify next year or we never will?

[Wonderwall]

How many people are UEFA going to have to employ to carry out this mission in every league in Europe? /how long will they have to scrutinise each teams accounts? What happens if a team fails, does the next one in the league position take the CL place and go under the same microscope? How many times does this happen until they find a team who meets their criteria?

[Socrates]

Alex. This is now coming in for the 2013/14 seaon, previously it was mooted they could come in 2012/13. Means we have an extra year. What you are not comprehending is that the rules will not then start to be applied to future sets of figures but to the most recent published accounts at that point. In Spring 2013 the accounts they will be scrutinising will be for year ended 31 May 2012. These will be scrutinised alongside projections for 31 May 2013 and a business plan going forward. We really need ECLmoney in those 2012 accounts if we are to be bulletproof. Better still if we were close to breaking even in the 2011 accounts that would make our position even stronger, given the fact that the 2010 accounts will look horrendous with a 9 figure loss inevitable.

Oliver Hardy - you are talking about how the world should be not how it is. I agree entirely that the proposals are wrong, but they are nontheless real and we have to recognise that.

Soc my old friend
you'd be surprised by what I comprehend :)
So you're assuming that at the end of the season in 2013 if we qualify, they will scrutinise our most recently submitted accounts (you are assuming some dates) and if they don't balance they will then need to see plans/projections which show they will. What planning period are you assuming, 3.5 years, or 1, and why?).
If we fail on both these scores then they have the right to refuse us a licence in 2013/14. But then again whatever our books look like in 2011/12 any leadership team that then submits a plan which doesn't show a profit within 2 or 3 years should be shot, no?

So you must agree that the position that if we don't qualify this season we never will because of these new rules is not, never was, right. And are you now saying that we MUST qualify next year or we never will?

They won't wait to see who qualifies, they will already be examining each club's accounts AS THEY DO NOW. Club's showing a loss will then invite further scrutiny. The panel will then judge whether the business plan is realistic, if it isn't then that club loses it's license for the next season. No, I'm saying that we must qualify to be bulletproof. If we aren't in by then then qualifying without unbalancing the books will be very, very difficult as our spending will be limited and therefore our further progress will be limited. We will have to rely on success from the Academy, which could take a long time.

[13021J]

To be honest do we really expect to be self sufficient? If we consistently qualify for the CL (massive asssumption) that is only worth an extra £20m a season which would only just about cover Tevez, Robinho and Adebayor's wages, never mind all the other overheads and wages we will accumulate.

This is the problem Chelsea have had, despite winning the league and doing well every year in the CL they cannot increase their turnover sufficiently. The only way to do this is by having crowds of around 65,000 every week. I'm not sure we are in a position to attract that yet, but given a few trophies and CL qualification maybe that will change. Sad truth is that to break even we need the prawn sandwich brigade. EIther way we are not going to see a new stadium and the necessary turnover by the time these regulations come in.

Hopefully the Sheihk can come up with accounting wizardry to stall UEFA.

Makes me so angry they just want to protect the status quo without actually enforcing it on clubs like U****d, Madrid and the Milan teams who also have insufficient turnover for their outgoings.

[avoidconfusion]

To be honest do we really expect to be self sufficient? If we consistently qualify for the CL (massive asssumption) that is only worth an extra £20m a season which would only just about cover Tevez, Robinho and Adebayor's wages, never mind all the other overheads and wages we will accumulate.

This is the problem Chelsea have had, despite winning the league and doing well every year in the CL they cannot increase their turnover sufficiently. The only way to do this is by having crowds of around 65,000 every week. I'm not sure we are in a position to attract that yet, but given a few trophies and CL qualification maybe that will change. Sad truth is that to break even we need the prawn sandwich brigade. EIther way we are not going to see a new stadium and the necessary turnover by the time these regulations come in.

Hopefully the Sheihk can come up with accounting wizardry to stall UEFA.

Makes me so angry they just want to protect the status quo without actually enforcing it on clubs like U****d, Madrid and the Milan teams who also have insufficient turnover for their outgoings.

I think with the Championss League the rest will follow. Especially hordes of Asian, African and American fans who will buy shirts (hopefully) ... sure Shirt sales are counted as income right? And I am sure we will get a couple of more sponsors in as well. How about some nice BMW or Mercedes or Porsche seats for the benches, similar to the AUDI seats at Old Trafford?

[Alex Sapphire]

How many people are UEFA going to have to employ to carry out this mission in every league in Europe? /how long will they have to scrutinise each teams accounts? What happens if a team fails, does the next one in the league position take the CL place and go under the same microscope? How many times does this happen until they find a team who meets their criteria?

they already have a pretty onerous licensing system in place:

RULES

SPEEL

so they're nno strangers to picking over clubs finances and other stuff.
In 2008 (it says here) they audited 620 clubs (86%) and refused licences to 43 clubs from 20 countries (including Glenavon and Newry in the Irish League) and llaneli and Rhyl in Wales 9potential qualifiers).

[Alex Sapphire]

The only way to do this is by having crowds of around 65,000 every week.

our arrangement with MCC is we only keep 50% ticket sales at that level so if you're right, we'd actually need crowds of 95,000 for the same revenue.
We will need to increase all revenue sources