A Reply from Matt Scott

[Ricster]

Here is the original article <a class="postlink" href="http://www.guardian.co.uk/sport/2010/aug/24/manchester-city-uefa-spending-rules" onclick="window.open(this.href);return false;">http://www.guardian.co.uk/sport/2010/au ... ding-rules</a>

Manchester City risk Champions League ban by spending big

• Clubs must not have aggregate losses of more than €45m
• City recorded £87m turnover and spent £126m on players

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* Matt Scott
* The Guardian, Tuesday 24 August 2010
* Article history

Manchester City fans Manchester City fans have embraced Sheikh Mansour's takeover but may regret the club's huge spending if Uefa enforces rules on aggregate losses. Photograph: Tom Jenkins

Digger's repeated requests over the past month for Manchester City to explain how they will meet Uefa's new financial fair-play rules have gone ignored. A quick look at their transfer spending might indicate why.

Uefa rules state that in order to play in European competition clubs must not have aggregate losses of more than €45m over the three seasons from 2011‑12. Bear in mind that City recorded a turnover of £87m in the 12 months to May last year and that this summer they have spent £126m on new players. Under normal accounting procedures, the cost of those players will be spread out, or "amortised", over the terms of their contracts.

As Arsène Wenger has said, City will not sell many players "because nobody can pay the salaries". If he is right the policy of loaning out players while maintaining their registrations, as with Craig Bellamy's move to Cardiff, will endure.

So even if City sign no more players, most of the 38 current players will remain on the club's books, costing City upwards of £75m in amortisation fees alone in the 2011-12 season. Admittedly, that number is imprecise, having been calculated from figures and contract lengths widely reported at the time of signings but if it is close then City's transfer activity is a time bomb that, even if it buys domestic success, could lead to them being banned from the Champions League.

My email to Matt

Manchester City risk Champions League ban by spending big

FAO Matt Scott

Good Morning Matt,

I read your article this morning after writing a piece for a football forum i go on. I'd like to share this post, by myself, with you so you can see it from another point of view.

Yes i am a City fan, but i am not here to moan, just to give you a view of how your story can be seen from a different slant on things. I hope you can maybe do an article on this as i see it as a catch 22 situation that no other journolist has brought up as of yet.

<a class="postlink-local" href="http://www.bluemoon-mcfc.co.uk/forum/viewtopic.php?f=1&t=187348" onclick="window.open(this.href);return false;">viewtopic.php?f=1&t=187348</a>

Thank you for your time and i look forward to reading your next piece.

Yours faithfully

Ric Ireland
(Ricster)

And Matt's reply

Hi Ric,

Thank you for your message this morning. Please see attached a copy of Uefa's financial fair play rules, which are aimed at reducing the instances of financial profligacy that have so damaged football to this point. These focus on all aspects of overspending, whether that be through current transfer-market activity or through the servicing of overly expensive historical debts: both are deleterious to the health of the game and Uefa has rightly attempted a single solution.

You are quite right to state that Liverpool's attempts to ramp up the price of Mascherano is likely to be an attempt to improve their financial situation, however I would dispute that it is the financially weak who have set the market prices. In any negotiation it is counterintuitive to assume that a distressed seller is capable of dictating terms.

Real Madrid set the world transfer record with their £80m purchase of Cristiano Ronaldo last summer. This recalibrated market rates, and at the same time Manchester City were bidding in excess of £100m for Kaka from Milan, who are ostensibly solvent - in any case, they could not be accused of being a selling club. And when finally Kaka did leave Milan it was to Madrid, for €68.5m (about £56m) - about half what City had offered.

I believe it is difficult to argue that City's transfer outlay so far is purely because they are forced to overspend by sellers: the Kaka negotiations, both as they relate to City and to Madrid, would suggest otherwise.

Thanks again for your message.

Best regards,

Matt Scott

I just want to say thank you to Matt Scott for replying. Alot of Journo's would be quite happy to let this slip but the fact he has taken time to reply, albeit not what i was hoping shows the guy can be portryed as a decent enough fellow.

 

[denislawsbackheel]

what that cock doesn't realise is thet clubs don't have to amortise their spending at all. City can just write it all off this year, before the rules come in.

 

[i8rags]

what that cock doesn't realise is thet clubs don't have to amortise their spending at all. City can just write it all off this year, before the rules come in.

or the sheik can simply be a match ball sponsor for 100 mill. no limits on sponsorship. get what you can. if someone wants to pay vast amounts to sponsor a stand etc, this too will be viable.

 

[Prestwich_Blue]

Don't know Matt but he did some great stuff on the recent Notts County fiasco.

 

[Bilboblue]

what that cock doesn't realise is thet clubs don't have to amortise their spending at all. City can just write it all off this year, before the rules come in.

or the sheik can simply be a match ball sponsor for 100 mill. no limits on sponsorship. get what you can. if someone wants to pay vast amounts to sponsor a stand etc, this too will be viable.

Unfortunately UEFA will not allow that.
They will count sponsorships etc. only if they are paid at market rates, any huge sponsorship will have be fully explained.

 

[twinkletoes]

what that cock doesn't realise is thet clubs don't have to amortise their spending at all. City can just write it all off this year, before the rules come in.

This

I think the OP should make the lazy journo aware of this and that his article is complete bollocks.

-- Tue Aug 24, 2010 1:30 pm --

or the sheik can simply be a match ball sponsor for 100 mill. no limits on sponsorship. get what you can. if someone wants to pay vast amounts to sponsor a stand etc, this too will be viable.

Unfortunately UEFA will not allow that.
They will count sponsorships etc. only if they are paid at market rates, any huge sponsorship will have be fully explained.

I think the owners are a little more sophisticated to get away with it. After all a lot of sponsors are our owners' companies.

 

[BrianW]

The Sheikh is no fool in business and will already have highly paid accountants and lawyers working on this 'problem' if indeed it is a problem. I'm pretty sure something will be worked out.

Failing that, we'll just have to focus on winning the domestic treble every year and being clearly the best team in England, thereby making the 'Champions League' a nonsense. Sooner or later one of us will crack, and it will not be Manchester City.

 

[bluenova]

I think the OP should make the lazy journo aware of this and that his article is complete bollocks.

The poor lad will read the OP and feel good about his job...till he gets called a 'cock' who writes 'complete bollocks'. That'll teach him.

The thread on here about amortisation is pretty recent, and I don't know for a fact that it's true we can write off our spnding. If it is, then is it not better to point this out and hope that Matt Scott's article will be updated (after all he's writing an investigative column about football so may be able to 'dig' a little deeper).

We're not in the playground any more, kids.

 

[Citizen Green]

So is there anyway City can get around these rules?.

 

[woz09]

Fuck me! did anyone else see 2011 -2012 we are only in 2010 citys turnover will double by then with all the marketing and investment in different income streams that are being generated or persued.

So i wish the media with "their concerns" for our club would fuck off and shut up