Re: City & FFP (continued)
Basically the same report as the Telegraph was carried in Worldsoccertalk but their headline was:-
UEFA To Consider Rules Change Targeting Manchester United and Real Madrid’s Debt
and it carried the following paragraphs as well:-
Another club which would be effected by this new regulation would be Real Madrid.
It was reported in September that the Spanish club’s total debt had risen to £474 million. Of that money, £59 million is due to the banks and £190 million is long-term debt; the remaining money (roughly £225 million) is short-term debt.
Should UEFA make debt reduction part of its new FFP regulations, United and Real Madrid will remain unpunished for the debt accumulated to this point. But the governing body will likely propose regulations which would force the European giants to ‘balance their books’ in a more timely fashion or face heavy sanctions and/or competitive bans.
The sentences in bold type make the whole initiative much less exciting, and Bluemooners are right to be somewhat cynical about the motives which underlie this possible rule change, and the invitation to City and PSG to the UEFA meeting on Monday. I'd like to know who was invited as well, and when.
I suspect that M> Dupont has quite a lot to do with this. This proposal doesn't, however, affect his legal challenge to FFP in the slightest, at all, one shred etc etc. His challenge is to the break even rule. His contention is that such a rule is quite simply an unacceptable limitation on the right of investors to invest. On Talksport, however, he introduced some language which will not only have offended UEFA but also alarmed them when he introduced the 'C' word. By saying that FFP was, in fact, no more than a cartel in action he may have sent out a message that he was going to prove that FFP is not misguided but rather dishonest and that UEFA is colluding with certain, easily identifiable clubs to commit the most serious crime known to commercial law. The penalties are draconian. One of the questions that will be asked is why, if UEFA is concerned about the stability of football clubs, no attempt is made to deal with the debt of clubs like Manchester United (still as high as annual turnover) and Real Madrid (now nearly twice as high as annual turnover). Is it credible to argue that the revenues of these clubs makes it easy to support such debt, but City's and PSG's owners are too poor to cover any overspend? Can UEFA possibly guarantee that the Glazers will be able to maintain such revenues, or will they walk away? Will Real find themselves in some financial scandal which makes their debt impossible to pay back? What makes it so certain that Sheikh Mansour or the Qataris will lose interest before the Glazers!!! In assuring us that they are concerned to avoid "another Leeds" UEFA neglect to inform us that Leeds had borrowed heavily in anticipation of future revenues - exactly what Manchester United and Real Madrid have done! Manchester United and Real Madrid have levels of debt far higher than Leeds ever had in relation to their turnover. In this light the fines and other sanctions imposed on PSG and Manchester City appear to be nothing more or less than commercial malpractice (cheating!) to allow heavily indebted businesses enjoy a massively advantageous position in the marketplace (the transfer window). How much did they spend again.
On Tuesday evening I posted saying that Platini and UEFA may consider it in their interests to draw closer to City, PSG and Monaco in particular. I shall be interested to see what comes of the meeting on Monday. If I am right at all there will be some measures to deal with debt and some measure to allow investors to put as much as they like into a club as long as it is not financed by debt.
