Re: City & FFP (continued)
Point you back in the direction of this:
<a class="postlink" href="http://www.palatinate.org.uk/?p=47890" onclick="window.open(this.href);return false;">http://www.palatinate.org.uk/?p=47890</a>
Article 101, of the Treaty on the functioning of the EU, prohibits decisions or practices that prevent or restrict competition, which can be achieved through a variety of measures, including the control or restriction on investment, market share or any other conditions that would place a party at a competitive disadvantage.
UEFA Financial Fair Play was set up in September 2009 with the stated aim of ensuring that clubs would break-even. Clubs are not allowed to lose more than 45m Euros over a three season period; however certain costs such as infrastructure projects and academy development are excluded from calculations.
The fact is FFP prevents clubs spending more than they earn; an admirable idea in itself, if its purpose was to regulate debt and ensure clubs were being run responsibly and possess the capability to repay that debt, thus preventing situations such as Portsmouth and Leeds.
However the reality is that FFP does not prevent those cases. In fact, in October 2009 Portsmouth began to fail to pay players wages on time, however if they had been subject to FFPR regulations at that time they would have passed, with a loss of £20.9m for that monitoring period.
Barcelona and Real Madrid have spent more than the other eighteen La Liga clubs combined in the past six seasons
Similarly, pre-ADUG Manchester City were days away from administration before their takeover, however they would have passed FFP for that monitoring period with an adjusted loss of £11.7m.
In fact, FFP does not regulate debt, it instead regulates investment. Owner or shareholder investment is excluded from FFP calculations as it is deemed a “related party transaction”. Thus the rules take on an altogether different dynamic.
A club cannot spend more than it earns. What it earns is determined by UEFA, not strictly by business practice, and viable sources of income are excluded by UEFA. Therefore a club can only boost its income by increasing gate receipts, sponsorship or TV revenues, or by other similar footballing practices.
To do this the club must be more successful, to do this in modern football to any discernible degree requires investment, investment that is then prohibited by UEFA (which could be seen to contravene EU competition rules), and therefore the club fails FFPR.
Thus, in reality, rules with the stated aim of protecting clubs from liquidation are in fact protecting the elite clubs, clubs that have been pushing for exactly these regulations.
These clubs want to protect their position at the top of the game, enabling them to dominate the transfer market, service debts and make substantial profits.
The reality of the inequality of wealth distribution across football is startling, considering the profits/losses made from transfer dealings.
With clubs needing to pass FFPR regulations, any losses they make on transfer dealings can only be covered by increased commercial and other footballing revenues.
This is reflected in the transfer dealings of nine clubs. In Germany the purchases of Bayern Munich made up a fifth of the total money spent on transfers in the Bundesliga in the past 6 seasons.
In Spain, the 2 giants Barcelona and Real Madrid have spent more than the other 18 La Liga clubs combined in the past 6 seasons, whilst in England, in the same period, the signings of the top 6 spenders (Arsenal, Manchester City & United, Chelsea, Liverpool and Spurs) made up 60% of the total money spent on transfers in the Premier League.
It can only be hoped that FFPR is soon consigned to the history books
In total, the transfer spending of those 9 elite clubs comes to a total of £3.6 billion since the summer of 2008. That makes up 50% of the total transfer money spent by all the clubs in the Premier League, Bundesliga and La Liga combined.
In simple terms, the spending of 9 clubs equals the spending of the other 49 clubs. These 9 clubs also make up 82% of the total losses on transfers made by the 58 clubs combined.
These figures clearly demonstrate the uneven wealth distribution within the top European leagues, as without it those elite clubs would fail FFPR. As it is only one of those clubs is in danger of doing so, and that is because of the exclusion of investment from UEFA’s calculations.
Michel Platini, the President of UEFA, has admitted himself that the elite clubs seek to have control of their own competition and the money involved within it, in an interview with Daily Mail Sportswriter of the year, Martin Samuel.
Thus the compromises Platini and UEFA have made, including the implementation of the elitist FFPR, is the equivalent of dressing the wolf (the elite clubs) in Grandma’s (UEFA) clothes in the Little Red Riding Hood.
The reality is that Manchester City, and PSG amongst others, will now have to either comply with regulations that, as far as EU competition law goes, are on thin ice, otherwise there will be a fearsome court battle ahead this summer.
Furthermore, the Premier League season has barely finished and the big clubs are set to poach talent from smaller teams.
It seems inevitable that the likes of Adam Lallana and Luke Shaw will move on, as even if Southampton wanted to invest in top quality players and build a core around their home-grown talent to challenge for the top 4 next season, they aren’t allowed to because they would fail the Premier League version of FFPR.
It is also worth considering Aston Villa, who have been put up for sale by owner Randy Lerner. They are a distinctly less attractive proposition to potential suitors when they are not able to invest their own money into their own club, their own business.
Whilst attempts to restrict the placement of unsustainable levels of debt upon clubs, risking their financial future, would be an admirable cause, FFPR do not set out to achieve this.
Instead they are in place to protect the revenues of the elite clubs, and deny the football fans and players, who support and play for the vast majority of the other clubs, the chance to dream, achieve success and win trophies.
Wyn Grant, Professor of Politics at the University of Warwick, wrote that if Manchester City took UEFA to court, they could be “the test case that begins to pull financial fair play apart”.
The removal of FFPR, and a union between the vast majority of European clubs that are starved of money and the opportunity for success by the elite clubs, could help push European football back towards a trajectory that allowed, for example, Steaua Bucharest to make the European Cup final 25 years ago this month.
For the future of football, and for every fan, player and owner who dreams, it can only be hoped that FFPR is soon consigned to the history books.
