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

[BluessinceHydeRoad]

Re: City & FFP (continued)

The reason that demands for financial regulation were made after Abramovitch arrived appears to be because he was held to be "inflating the transfer market". This seems to be not so much that he spent a great deal (though he did) but more that he paid far more for individual players than they were worth. The classic example was Essien who was on the verge of signing for Juventus for €15 million, but then went to Chelsea for €36 million! The reason was simple - Abramovitch wanted the best team in the world!

This was not, however, the first time the transfer market had been subjected to such turbulence, and it was not Chelsea who were responsible. In 2000 Real Madrid completed the infamous deal to sell their old training ground for some €480 million, at a time when their revenue was some €135 million for the year. With this money they bought Figo (€60 million) then Zidane (€76 million) and others - without protest, though the effects on the prices of other players were more "inflationary" than the purchase of Essien: Juventus spent the fee for Zidane on a world record fee for a 'keeper, Buffon and another 30 odd million on Thuram. Real were at it again in 2009 with a world record fee for Kaka and then another for Ronaldo. These did not have inflationary effects, but only because Manchester United and Milan (Berlusconi appears to have had no scruples about receiving big fees!) were too broke to be able to spend what they received! The Bale deal did, however, inflate the price of players when who Spurs bought and how much for, is taken into account. The Suarez deal may have had similar consequences, especially in what it has done to the price of English players.

In conclusion, the rising cost of players and wages are by no means down to Chelsea. The massive rise in club income from the 90s onwards began the process and the activities of Real Madrid in particular have contributed. The heavy spending of Real, Barcelona and Manchester United in 2014 may well give the trend a push onwards. What is certain is that neither Manchester City nor Sheikh Mansour nor owner-investors have had anything to do with it.

 

[Petrovs left peg]

Re: City & FFP (continued)

The reason that demands for financial regulation were made after Abramovitch arrived appears to be because he was held to be "inflating the transfer market". This seems to be not so much that he spent a great deal (though he did) but more that he paid far more for individual players than they were worth. The classic example was Essien who was on the verge of signing for Juventus for €15 million, but then went to Chelsea for €36 million! The reason was simple - Abramovitch wanted the best team in the world!

This was not, however, the first time the transfer market had been subjected to such turbulence, and it was not Chelsea who were responsible. In 2000 Real Madrid completed the infamous deal to sell their old training ground for some €480 million, at a time when their revenue was some €135 million for the year. With this money they bought Figo (€60 million) then Zidane (€76 million) and others - without protest, though the effects on the prices of other players were more "inflationary" than the purchase of Essien: Juventus spent the fee for Zidane on a world record fee for a 'keeper, Buffon and another 30 odd million on Thuram. Real were at it again in 2009 with a world record fee for Kaka and then another for Ronaldo. These did not have inflationary effects, but only because Manchester United and Milan (Berlusconi appears to have had no scruples about receiving big fees!) were too broke to be able to spend what they received! The Bale deal did, however, inflate the price of players when who Spurs bought and how much for, is taken into account. The Suarez deal may have had similar consequences, especially in what it has done to the price of English players.

In conclusion, the rising cost of players and wages are by no means down to Chelsea. The massive rise in club income from the 90s onwards began the process and the activities of Real Madrid in particular have contributed. The heavy spending of Real, Barcelona and Manchester United in 2014 may well give the trend a push onwards. What is certain is that neither Manchester City nor Sheikh Mansour nor owner-investors have had anything to do with it.

Firstly BSHR, your contributions to this thread are not only insightful but a damn good read. Thank you

Secondly, I think the average fan out there blames Chelsea and City for the inflationary effect, because most players that United, Madrid etc bought were players that other clubs could never dream about signing.
Players such as Barry, Adebayor, Lescott, Bridge etc were not in a superstar league, and thus we were "the cause" of the hyper-inflation in the market of "affordable" players deemed to be in reach of most of the premiership - A fact that the press and (others fuelled by jealousy) were quick to jump on and bleat about.
I don't necessarily disagree with that point, but what still irks me most is that no-one links it back to the bad smell called FFP which determined that period of accelerated spending to get in before the door closed.

 

[moomba]

Re: City & FFP (continued)

I'd bet wage inflation is around the same level as the increase in TV money. And its the inequity in TV money that is causing problems.

 

[BluessinceHydeRoad]

Re: City & FFP (continued)

Further points that emerge from an analysis of transfer fee "inflation" is that it keeps the big money in the hands of the magic circle: Figo from Barcelona to Real, Zidane from Juventus to Real, Kaka from AC Milan to Real, Ronaldo from Manchester United to Real. When smaller clubs (in this case Spurs and Liverpool) sell a player for a record busting fee it invariably weakens them because players of the quality of the departing one won't join them and so the magic circle are comparatively stronger and the other non-elite club is weaker.

The other most obvious point is that there is nothing in FFP to stop this inflationary spending. Real are quite entitled to sell their training ground (only the EU might question the propriety of the deal) and spend the proceeds, and Real, Barcelona, Manchester United are entitled to thwart FFP's aims because they are apparently doing it with their own money (courtesy of an American car company).

 

[mat]

Re: City & FFP (continued)

as an aside.....
<a class="postlink" href="http://whatculture.com/sport/gazprom-and-financial-fair-play-a-russian-affair.php" onclick="window.open(this.href);return false;">http://whatculture.com/sport/gazprom-an ... affair.php</a>

You may have noticed the name Gazprom making more appearances during European football matches. They currently sponsor the UEFA Champions League and the Super Cup, Chelsea and the German team Schalke 04. On top of that they own Zenit St Petersburg, the team which recently spent over £60 million on the purchases of Axel Witsel and Hulk. On the face of it there’s absolutely nothing strange; Bwin have sponsored many major European teams and competitions at one time.
Last year the first blow was dealt to Michel Platini’s Financial Fair Play proposals. Under the aforementioned rules, clubs have to disclose their annual finances to UEFA and if the guidelines – which eventually hope to make every club self-sustainable – haven’t been met, they can be stricken from any European competition. Part of the scheme stops rich owners pouring money into their clubs; although none of the new rules affect sponsorship from sources that don’t have significant links to the clubs.
Last season Manchester City, owned by a member of the Abu Dhabi royal family, announced a deal worth an estimated £400 million over ten years with Etihad Airways, a company owned by the United Arab Emirates government. The deal is the most lucrative in any sport and the sum should help the club deal with their heavy financial losses, which have surpassed the £100 million mark in recent years.
That deal managed to avoid FFP regulations, so it came as no surprise when another major European team which regularly makes operating losses formed a new partnership. Gazprom, the largest extractor of natural gas in the world, shares links with the Chelsea owner, Roman Abramovich. The oligarch earned his billions as an owner of Sibneft and when the company was sold in 2005 it was the biggest corporate takeover in Russian history. 73% of the shares were sold for an estimated $13 billion; a majority of them Abramovich’s. The buyer: Gazprom.
Neither Gazprom nor Chelsea have revealed the details involved, which has led many to believe this is their way around FFP. With the estimated £48 million prize they were awarded for winning the Champions League and the plethora of new deals which have subsequently been sealed the Stamford Bridge side should avoid any queries over how their financial security.
Whether other major European teams will strike similar deals has yet to be seen; although it wouldn’t be surprising if Qatari owned PSG soon formed a new business partnership. On paper it would appear that the sale of Abramovich’s assets to Gazprom should count as a substantial link. Luckily for Chelsea, Gazprom also announced a sponsorship deal with UEFA, which should halt any investigations into the deal.
Financial Fair Play once showed potential to be a game-changer. Perhaps clubs would be self-sufficient, salary-caps would be introduced and ticket prices may be lowered to coincide with the massive new TV deals. At the end of the day, all it proves is that football is still governed by money.

 

[Chippy_boy]

Re: City & FFP (continued)

as an aside.....
<a class="postlink" href="http://whatculture.com/sport/gazprom-and-financial-fair-play-a-russian-affair.php" onclick="window.open(this.href);return false;">http://whatculture.com/sport/gazprom-an ... affair.php</a>

You may have noticed the name Gazprom making more appearances during European football matches. They currently sponsor the UEFA Champions League and the Super Cup, Chelsea and the German team Schalke 04. On top of that they own Zenit St Petersburg, the team which recently spent over £60 million on the purchases of Axel Witsel and Hulk. On the face of it there’s absolutely nothing strange; Bwin have sponsored many major European teams and competitions at one time.
Last year the first blow was dealt to Michel Platini’s Financial Fair Play proposals. Under the aforementioned rules, clubs have to disclose their annual finances to UEFA and if the guidelines – which eventually hope to make every club self-sustainable – haven’t been met, they can be stricken from any European competition. Part of the scheme stops rich owners pouring money into their clubs; although none of the new rules affect sponsorship from sources that don’t have significant links to the clubs.
Last season Manchester City, owned by a member of the Abu Dhabi royal family, announced a deal worth an estimated £400 million over ten years with Etihad Airways, a company owned by the United Arab Emirates government. The deal is the most lucrative in any sport and the sum should help the club deal with their heavy financial losses, which have surpassed the £100 million mark in recent years.
That deal managed to avoid FFP regulations, so it came as no surprise when another major European team which regularly makes operating losses formed a new partnership. Gazprom, the largest extractor of natural gas in the world, shares links with the Chelsea owner, Roman Abramovich. The oligarch earned his billions as an owner of Sibneft and when the company was sold in 2005 it was the biggest corporate takeover in Russian history. 73% of the shares were sold for an estimated $13 billion; a majority of them Abramovich’s. The buyer: Gazprom.
Neither Gazprom nor Chelsea have revealed the details involved, which has led many to believe this is their way around FFP. With the estimated £48 million prize they were awarded for winning the Champions League and the plethora of new deals which have subsequently been sealed the Stamford Bridge side should avoid any queries over how their financial security.
Whether other major European teams will strike similar deals has yet to be seen; although it wouldn’t be surprising if Qatari owned PSG soon formed a new business partnership. On paper it would appear that the sale of Abramovich’s assets to Gazprom should count as a substantial link. Luckily for Chelsea, Gazprom also announced a sponsorship deal with UEFA, which should halt any investigations into the deal.
Financial Fair Play once showed potential to be a game-changer. Perhaps clubs would be self-sufficient, salary-caps would be introduced and ticket prices may be lowered to coincide with the massive new TV deals. At the end of the day, all it proves is that football is still governed by money.

Slightly interesting but clearly written by someone who really knows very little about it. For example, he makes no mention (nor demonstrates any understanding) of the concept of related parties and what is/is not a related party and how that is determined. It comes across as fairly uninformed opinion, in my view.

I wonder also how old it is, since our Etihad deal is described as "the most lucrative in any sport" and today this is clearly nonsense.

 

[waspish]

Re: City & FFP (continued)

as an aside.....
<a class="postlink" href="http://whatculture.com/sport/gazprom-and-financial-fair-play-a-russian-affair.php" onclick="window.open(this.href);return false;">http://whatculture.com/sport/gazprom-an ... affair.php</a>

You may have noticed the name Gazprom making more appearances during European football matches. They currently sponsor the UEFA Champions League and the Super Cup, Chelsea and the German team Schalke 04. On top of that they own Zenit St Petersburg, the team which recently spent over £60 million on the purchases of Axel Witsel and Hulk. On the face of it there’s absolutely nothing strange; Bwin have sponsored many major European teams and competitions at one time.
Last year the first blow was dealt to Michel Platini’s Financial Fair Play proposals. Under the aforementioned rules, clubs have to disclose their annual finances to UEFA and if the guidelines – which eventually hope to make every club self-sustainable – haven’t been met, they can be stricken from any European competition. Part of the scheme stops rich owners pouring money into their clubs; although none of the new rules affect sponsorship from sources that don’t have significant links to the clubs.
Last season Manchester City, owned by a member of the Abu Dhabi royal family, announced a deal worth an estimated £400 million over ten years with Etihad Airways, a company owned by the United Arab Emirates government. The deal is the most lucrative in any sport and the sum should help the club deal with their heavy financial losses, which have surpassed the £100 million mark in recent years.
That deal managed to avoid FFP regulations, so it came as no surprise when another major European team which regularly makes operating losses formed a new partnership. Gazprom, the largest extractor of natural gas in the world, shares links with the Chelsea owner, Roman Abramovich. The oligarch earned his billions as an owner of Sibneft and when the company was sold in 2005 it was the biggest corporate takeover in Russian history. 73% of the shares were sold for an estimated $13 billion; a majority of them Abramovich’s. The buyer: Gazprom.
Neither Gazprom nor Chelsea have revealed the details involved, which has led many to believe this is their way around FFP. With the estimated £48 million prize they were awarded for winning the Champions League and the plethora of new deals which have subsequently been sealed the Stamford Bridge side should avoid any queries over how their financial security.
Whether other major European teams will strike similar deals has yet to be seen; although it wouldn’t be surprising if Qatari owned PSG soon formed a new business partnership. On paper it would appear that the sale of Abramovich’s assets to Gazprom should count as a substantial link. Luckily for Chelsea, Gazprom also announced a sponsorship deal with UEFA, which should halt any investigations into the deal.
Financial Fair Play once showed potential to be a game-changer. Perhaps clubs would be self-sufficient, salary-caps would be introduced and ticket prices may be lowered to coincide with the massive new TV deals. At the end of the day, all it proves is that football is still governed by money.

Slightly interesting but clearly written by someone who really knows very little about it. For example, he makes no mention (nor demonstrates any understanding) of the concept of related parties and what is/is not a related party and how that is determined. It comes across as fairly uninformed opinion, in my view.

I wonder also how old it is, since our Etihad deal is described as "the most lucrative in any sport" and today this is clearly nonsense.

Clearly nonsense because we didn't announce how much the deal was...

 

[keith's curle]

Re: City & FFP (continued)

All the discussion on transfer fees over the last few pages, while interesting, has been somewhat irrelevant to the arguement in my opinion.

The question is about inflating the market and the price of the superstars is something of a red herring. It might be in some way relevant as it alters perception of players value, but it probably does this more for fans than for clubs who need to actually find the money. More significantly, these top end fees contribute to the average transfer fee, and that is perhaps their biggest contribution. But more than that, it is their distortion of the average which makes them almost meaningless.

The fee for Bale from Spurs to Real Madrid isn't going to have any real effect on the fee for McCarthy from Wigan to Everton.

Any meaningful arguement about transfer fees would only mention the record breaking fees as some kind of 'also worth noting' kind of point. The real assessment of issues around transfer fees would be looking at averages or more likely mean figures in order to leave the distorting records out of the equation altogether.

In some ways this makes nonesense (maybe that's more nonesense) of Platini's claim that 'all clubs' were panicing about rising fees. Were Wigan or Everton even interested in what Chelsea paid for Essien or that we were after Kaka for a reported £100M.

If anybody knows where to find average fees, or better still some kind of figures ignoring the 'silly money' transfers then they might be worth a look.

 

[Chippy_boy]

Re: City & FFP (continued)

Honestly I think all of this endless debate about matters such as wage inflation is really a bit of a waste of time.

There's a million and one made up reasons UEFA can come up with to try to justify FFP and it's pointless debating any of them. We ALL know that the real reason for it, the ONLY reason for it, was the G14 didn't like the idea of City, PSG and potentially future clubs too coming along, buying the best players, knocking them out of their cosy CL spots and taking their CL money off them. That's it, the start, beginning and end of it. Everything else is an irrelevant attempt at a cover up. Everything else.

 

[dom]

Re: City & FFP (continued)

Honestly I think all of this endless debate about matters such as wage inflation is really a bit of a waste of time.

There's a million and one made up reasons UEFA can come up with to try to justify FFP and it's pointless debating any of them. We ALL know that the real reason for it, the ONLY reason for it, was the G14 didn't like the idea of City, PSG and potentially future clubs too coming along, buying the best players, knocking them out of their cosy CL spots and taking their CL money off them. That's it, the start, beginning and end of it. Everything else is an irrelevant attempt at a cover up. Everything else.

This , all day long... which is why I worry that Twatini , egged on by te likes of Gill etc may be looking to keep moving the goalposts