City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

Re: City & FFP (continued)

BluessinceHydeRoad said:
I listened to our chairman's end-of-season interview again over the week end to refresh my memory of his views of FFPR. He was unconcerned, to say the least, and echoed the club's statement of May of this year, which stressed that the agreement with UEFA would have no impact on City at all. In fact, he went considerably further, and put FFP into context. He described the sanctions as "a pinch" and, if doing what is best for the club "means sometimes taking a pinch, we'll take a pinch and we'll move on."

His argument is that the owner and board had a clear strategy in 2008 which they began to implement then and which they are continuing to implement now and in the future. The club is now exactly where they wanted it to be when they began implementing the strategy and "FFP will not compromise the model" which they will continue to establish and he promised continued and continuous improvement, saying "some years you're going to win (trophies), some years you're not - but we're going to get better." The keynote of the interview was optimism; he explained that "our friends at UEFA" were trying to impose a business model which is very different to City's,but that "history will judge what was best for football and that, when he's interviewed again, in six years time we will all "see that our model is better than UEFA's.

What interests me is the differences between the two models and why our model is so superior. Firstly, football clubs, in economic terms, are small businesses, many of them very small. Even the "biggest" clubs have a turnover which is surpassed by a number of German family owned firms. Football is a world game but the clubs are small businesses, and still overwhelmingly local. They "import" foreign players but rely on sponsorship and ticket sales to keep the club afloat. The owner guarantees the debt. Clubs like Real, Bayern and United have done what they can to develop this 80s small business model by venturing further afield for sponsors, but the model is essentially the same: debt and sponsorship. By 2005 United found that for all the "prudence" of the plc, a successful small business was ripe for a hostile, predatory takeover. Enter the Glazers. Arsenal are the classic expression of the UEFA model: balanced books, break even so the shareholders get a dividend, charge high prices and cut labour costs. Arsenal pride themselves on their profit to turnover ratio, or, as martin Samuel puts it, not on the trophies they win but the on the purity of their bank statement. Their accountant should win their player of the year award every season. They're in trouble if other clubs start investing. United safeguard the Glazers pension pot, but invest from much bigger sponsorship deals. They win more trophies than Arsenal and have greater "brand awareness and value". City invest more than both... Hence, FFP limits shareholder investment to virtually nothing!

Khaldoon al-Mubarak is adamant that this will have no effect on City. City's model is based on heavy investment and globalisation. Sheik Mansour has invested heavily as owner, but the investment from his own pocket in players is now largely at an end and investment is in those things Platini cannot ban. Increasingly the funds will come from elsewhere anyway. This is where globalisation becomes important. It does not mean flogging tatty shirts to kids in Shanghai. It is most noticeable how unsuccessful United, Arsenal even Real and barca have been in penetrating South East Asia, Africa, the USA. This is because they try to do it as some foreign intrusion trying to bump up the profits and treating the peasants to a friendly every few years. The natives prefer their own teams. So that's what City give them. The City group and associates. Nissan announced a global advertising campaign yesterday, which is the first fruit of our deal with them. What their chief planning officer, Andy Palmer, said is interesting, "Campaigns will be more focused on promoting the “innovation and excitement” of Nissan rather than specific cars, although this could change as the strategy matures.

The car manufacturer expects the mix of City’s teams and Champions League to avoid alienating fans in the same way it would have done had it opted to back several high profile clubs.

Palmer adds: “Our philosophy has normally been to sponsor leagues or cups rather than teams because when you get into teams you normally get into [fan] allegiances usually. With the City Football Network of teams it’s almost like we’re sponsoring a league.

“We have the advantage of being able to work with blooming players that will move around the clubs. It’s like our GT academy [drivers] having a seat in a GT car and then eventually working their way up to Formula One. If Formula One is akin to the Manchester City first team, then there’s an opportunity to tell great stories around how players develop their skills and play for different teams in the network.” Nissan also plans advertising campaigns, involving City players at CL matches! Add to Nissan Indonesian soft drins cans, Vietnamese bank cards etc and an ever growing list of partners and shirts etc become a bye product of a much grander strategy. City's income will continue to outgrow that of the "small business" clubs even without the development of the collar site.

City will not challenge FFP in court - it's not our problem.
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A good post. As good as any that has appeared over the topic's 1000 pages. If anything FFP has probably helped us over the summer transfer window as we now cannot buy for buying's sake, thus avoiding all the turmoil generated by the transfer market revolving doors.
 
Re: City & FFP (continued)

As the financial year was up in May. Does anyone have an idea of how we faired turnover and profit wise for 13/14?
 
Re: City & FFP (continued)

mancity dan said:
As the financial year was up in May. Does anyone have an idea of how we faired turnover and profit wise for 13/14?
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Accounts won't be compiled until near xmas, but should be somewhere around. 410m and we broke even/made a small profit.
 
Re: City & FFP (continued)

I am certainly reassured by the statement of our chairman that compliance is not an issue (thanks BluesSinceHydeRoad for your detail on his statement and your take on the strategy implementation).

It is unlikely he would be so positive if there was any doubt about that outcome. I would not risk Sheik M.'s wrath with such a public statement if there was the slightest doubt regarding the accountancy exercise.

The chairman's note about taking a 'pinch' in our stride is also comforting because it seems our manager will now have the chance to show us how he achieved so much in ECL when in charge of his previous club with a meagre budget to spend.
 
Re: City & FFP (continued)

All this strategising We should just tell the Twattini Cabal to fuck right off.
 
Re: City & FFP (continued)

chesterguy

The Premiership FFP rules do allow for significant investment, I think it's 105 million losses over 3 years. The point I maybe didn't get across properly is that these days 'significant investment' in Aston Villa will only achieve 'reasonable success'. It will not bring you to the top table, if that's where you want to be. To reach the top table the investment has to be far in excess of 'significant', a staggering amount of money is required. I believe that it is more about the level of money that you need to spend, rather than the restrictions FFP place on the amount you are allowed to spend, that is the main reason Lerner can't sell Villa.
 
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