New “UEFA Financial Sustainability” rules

bobbyowenquiff said:
That makes sense but Swiss Ramble (usually reliable) said differently. If they only included the annual debt interest payments for FFP purposes that would be sensible. That said suppose a club wanted to build a hotel and leisure complex attached to their stadium what business would that be of UEFA's?
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I agree that SR is a solid source, and I'd definitely trust him more than me. I read his words as saying that infrastructure wasn't exempt (as it has been), but that as long as debt payment was kept maintained, that was fine. There's no focus on debt, just that it has to be properly paid for. They'd prefer equity to loans as that's a lot tidier, but they're not against loans/debts.

I don't see any other way that a ground could be extended if owned. It would make something like the San Siro better as that's not owned by the clubs, which can't be the intention.

I'd not thought of the hotel complex concept, no idea on that one.
 
bobbyowenquiff said:
I think it will make it harder to sell clubs in general because new owners will never be able to develop their new assets properly. It will be impossible to build new infrastructure without an exemption from FFP rules. I wonder if this new UEFA proposal has been misreported. It sounds too crazy to be true. It will lead to more clubs going out of business. I am sure the PL will fight it. It is commercial suicide.
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You could build a stadium as you capitalise the cost. As an example if you spend £100m on a stadium you add £100m to the asset on the balance sheet so there is no loss on the P&L.

But it is a massive risk, as if you have a big cost overrun or worse still you fail to complete you will at some point have to right off the cost, (or make a fair value adjustment in accounting terms).
 
Article 89

Relevant investments The following costs are considered relevant investments for the long-term benefit of football as defined in Annex J:

a. Expenditure directly attributable to youth development activities;
b. Expenditure directly attributable to community development activities;
c. Expenditure directly attributable to women’s football activities;
d. Expenditure directly attributable to non-football operations related to the club net of the corresponding income;
e. Finance costs directly attributable to the construction and/or substantial modification of tangible assets;
f. Costs of leasehold improvements.

Aggregate football earnings may be adjusted upwards if relevant expenses include relevant investments and only if the aggregate amount of any such adjustment is covered either by contributions in the reporting period T or equity at the end of reporting period T that have not already been used to cover the acceptable deviation.
 
Corky said:
Article 89

Relevant investments The following costs are considered relevant investments for the long-term benefit of football as defined in Annex J:

a. Expenditure directly attributable to youth development activities;
b. Expenditure directly attributable to community development activities;
c. Expenditure directly attributable to women’s football activities;
d. Expenditure directly attributable to non-football operations related to the club net of the corresponding income;
e. Finance costs directly attributable to the construction and/or substantial modification of tangible assets;
f. Costs of leasehold improvements.

Aggregate football earnings may be adjusted upwards if relevant expenses include relevant investments and only if the aggregate amount of any such adjustment is covered either by contributions in the reporting period T or equity at the end of reporting period T that have not already been used to cover the acceptable deviation.
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Can anybody explain?
 
jrb said:
A bit of a spanner in the NS expansion. Arrrgh!

Won't stop it.

United are f*cked for a new stadium.

Back to a sticking plaster on OT.

Real Madrid have timed the redevelopment of the Bernabéu perfectly.
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or were heavily involved in formulating the new rules to give themselves an advantage
 
thank fcuk for our finance wizards on BM, translating legalese into English; still not sure of impact this is going to have on the club...and wont waste time speculating because as Manuel said, "I know nothing"
 
If I want to sponsor a football club to the tune of a few million to show of my company. Who has the right to say I am paying to much ?

If I think it's a fair price and the club think it's fair what's the problem. Is it to protect the sponsors from paying to much ?

I just dont see how someone employed by UEFA can tell me how much I should sponsor a club for.
 
give it to gordon said:
If I want to sponsor a football club to the tune of a few million to show of my company. Who has the right to say I am paying to much ?

If I think it's a fair price and the club think it's fair what's the problem. Is it to protect the sponsors from paying to much ?

I just dont see how someone employed by UEFA can tell me how much I should sponsor a club for.
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Exactly.

Did anyone pull Newcastle and tel them that £15m for Shearer was way above market valuation? No as it was the agreed valuation between the two businesses and he went on to score a fuck load of goals for them.

If I see someone driving a Ford Mustang that is worth 'X' as is, 'Y' in parts but I secretly know that Steve McQueen has driven it and etched his and Ali McGraw's initials in the glove compartment so now worth 'Z', who on earth is going to tell me what the correct valuation for that is?

Surely it is too subjective to define a 'fair' price............?
 
give it to gordon said:
If I want to sponsor a football club to the tune of a few million to show of my company. Who has the right to say I am paying to much ?

If I think it's a fair price and the club think it's fair what's the problem. Is it to protect the sponsors from paying to much ?

I just dont see how someone employed by UEFA can tell me how much I should sponsor a club for.
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Completely correct. What if you have 3 bidders in to get their name up in lights and the deal sky rockets past what is classed as a fair price. Surely that then sets market value and fair value is just an arbitrary figure plucked out of the cartels arse?
 
Corky said:
Article 89

Relevant investments The following costs are considered relevant investments for the long-term benefit of football as defined in Annex J:

a. Expenditure directly attributable to youth development activities;
b. Expenditure directly attributable to community development activities;
c. Expenditure directly attributable to women’s football activities;
d. Expenditure directly attributable to non-football operations related to the club net of the corresponding income;
e. Finance costs directly attributable to the construction and/or substantial modification of tangible assets;
f. Costs of leasehold improvements.

Aggregate football earnings may be adjusted upwards if relevant expenses include relevant investments and only if the aggregate amount of any such adjustment is covered either by contributions in the reporting period T or equity at the end of reporting period T that have not already been used to cover the acceptable deviation.
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It's not clear what the bit in bold actually means. There's an explanatory note from UEFA, that Swiss Ramble used, which accompanies the regulations.

This suggests that money has to be put in to cover these "relevant investments" but it can't be on top of any contribution to cover a deficit.
 
give it to gordon said:
If I want to sponsor a football club to the tune of a few million to show of my company. Who has the right to say I am paying to much ?

If I think it's a fair price and the club think it's fair what's the problem. Is it to protect the sponsors from paying to much ?

I just dont see how someone employed by UEFA can tell me how much I should sponsor a club for.
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You can, just don’t call yourself Franny Lee’s Bogroll PLC
 
Corky said:
Spending on such things shouldn't matter as we should have the money, owner investment counts as 'contributions' if the club has no liability to pay it back.

The regulations are all about promoting better quality infrastructure and not intended to stop spending on it.
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So, you are saying that my original take on this, (about the 4th post in the thread), is wrong, because I went off what SwissRamble stated, but that is infact incorrect as regards to Infrastructure costs not now being included in 'FFP' deductables?

oops - Though I did imply, I was just interpreting and had no idea from an accounting expert point of view.

Clearly if you've read the UEFA guff to the nth degree a month or so back, you've got miles more expert knowledge.

I've got a lot of Likes to hand back!

... or maybe not, now that PB has also looked up the regs to a far higher degree than moi.
 
JASR said:
So, you are saying that my original take on this, (about the 4th post in the thread), is wrong, because I went off what SwissRamble stated, but that is infact incorrect as regards to Infrastructure costs not now being included in 'FFP' deductables?

oops - Though I did imply, I was just interpreting and had no idea from an accounting expert point of view.

Clearly if you've read the UEFA guff to the nth degree a month or so back, you've got miles more expert knowledge.

I've got a lot of Likes to hand back!

... or maybe not, now that PB has also looked up the regs to a far higher degree than moi.
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It's not crystal clear as written but it could mean that if a development is fully funded by an equity contribution, you can't claim any associated costs as a relevant expense. But the only item you can claim is the depreciation on the capital cost of infrastructure, not the cost itself.
 
As knowledgeable as he is, it is just one persons interpretation and the devil will be in the detail. I’m sure the club with have financial experts looking all over it. I also think we are in a completely different place with UEFA now.

I find it hard to believe investment in infrastructure has really been discouraged (as this will have been wrote by the clubs and makes little to no sense). The full wording might make it clearer, especially understanding the accounting method.

On the face of it seems an easier one to pass
 
Betterdeedthan red said:
Is it still OK to be 600 million in debt
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If your income in the last 2 years is a total 400m then there is no downside, if it is less they reduce the acceptable overspend by 10m euros. The sustainable debt rule. If you pass that one you won't fail the other tests unless you are actually bankrupt.
 
The Future’s Blue! said:
Completely correct. What if you have 3 bidders in to get their name up in lights and the deal sky rockets past what is classed as a fair price. Surely that then sets market value and fair value is just an arbitrary figure plucked out of the cartels arse?
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Fair value is whatever is less than what the cartel get.
 
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