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

[LoveCity]

Re: City & FFP (continued)

Is this the person who will make the decision on Dupont's challenge?

<a class="postlink" href="http://europa.eu/rapid/press-release_SPEECH-14-706_en.htm" onclick="window.open(this.href);return false;">http://europa.eu/rapid/press-release_SP ... 706_en.htm</a>

If so, I fear Mr. Dupont is doomed to fail.

 

[I'm no cynic but...]

Re: City & FFP (continued)

I just wish there was some simple way of sidestepping UEFA's FFP sanctions in the same way that CSKA are to avoid further UEFA sanctions for allowing supporters into their supposedly closed ground this week!

 

[Rösler von Stretfordbömber]

Re: City & FFP (continued)

Is this the person who will make the decision on Dupont's challenge?

<a class="postlink" href="http://europa.eu/rapid/press-release_SPEECH-14-706_en.htm" onclick="window.open(this.href);return false;">http://europa.eu/rapid/press-release_SP ... 706_en.htm</a>

If so, I fear Mr. Dupont is doomed to fail.

This guy is with the European Commission (which is already on record as favouring FFP.)

There is a parallel court case going forward as well. He would not be involved with that as a decision-maker as far as that goes. A final ruling from the European Court of Justice would trump anything the EC has to say, I believe. Court could always throw this out on antitrust grounds - violation of the Treaty articles, etc.

Further, I find this quote to be interesting (emphasis added):

"Last week I signed together with President Platini an arrangement for cooperation recognizing the validity of the objectives of Financial Fair Play."

That could play out in an interesting way. More focus on debt, etc. More leeway for "sustainable" investment by owners.

I think there is an implicit recognition by virtually 100% of people involved in this process that some tweaks will have to be made. And with the relevant dynamics in play (antitrust, etc) the tweaks would in my opinion be more likely to help us than hinder us going forward.

 

[BluessinceHydeRoad]

Re: City & FFP (continued)

Of all the people in football for Platini to reach for as an endorsement/ instigator of FFP, Berlusconi seems to my mind, to be the most bizarre.
Isn't he a busted flush, politically, these days? Certainly, his international reputation is in tatters after the bunga bunga revelations (for starters).
The question is why did Platini quote Berlusconi and not say, Rumminege, Gill or Dein, whose international standing is still good (rightly or wrongly)?
Freudian slip, serious boob or subtle attempt to prepare an ecaspe hatch (I was only following orders, yer honour)?
My money is on the latter.

(Apologies for the gammy name spelling, by the way).

Platini said that he had been asked by "all the clubs and all the investors" to "make a rule" to stop overspending, and then mentioned Berlusconi and Morazzi because they seemed to the ones losing more than the others - 100 million euros a year. What he didn't explain was why "a new rule" was necessary to stop either of them spending too much of their own money - unless they didn't want anyone else to enjoy the benefits they had enjoyed!

As for the Europa press release it is from a commissioner, not a judge, and while it agrees with "living within your means" an breaking even" it makes no mention of owner investment and maintains a strict impartiality on the question of the consistency of FFP with competition law, which is for the court to decide. Any club intends to live within its means - after the owner has put money in to cover the overspend!

 

[FanchesterCity]

Re: City & FFP (continued)

That's precisely it... the key phrase 'living within your means'.

- If you're a startup business, and you want to become a major car manufacturer but have no money, just a head full of big ideas. You don't have the means to fund your ideas. It's a shame, but you don't. You can't make your cars.

- If you're the same startup who manages to convince a bunch of venture capitalists to back your 'ideas', then you effectively borrow the money from them, and put you and them at risk if it doesn't work out. But you can start making your cars.

- If you're the same startup business and manage to sell your fledgling startup to a wealthy businessman and he stumps up his own cash to get you started, then you can start making your cars, but UEFA will ban you.

That's the cruelest irony. You HAVE the means. They just don't like how you came by the means, which as an entirely different issue / prejudice.

Even if you have a business that is failing year after year, providing you can keep putting funds in, you'll never go bust, and the business it entirely legitimate. Sooner or later your business WILL take off, or the owner will run out of funds, or he'll tire of losing money and invest elsewhere. In a sense, it's Natural Selection in the business world.

UEFA shouldn't mess with nature.

 

[FanchesterCity]

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.

Very true, but the question is whether the way UEFA have gone about it is legal. Is it legal for a sports governing body to effectively stop a business man investing in his business in order to make it grow? Yes or No. My money is on no.

It's a tricky one. On the face of it, yours would seem like a sensible view.

But playing devil's advocate for a moment, (a) UEFA took extensive legal advice in drawing up the rules and have stated throughout that they are confident, no, certain of its legality. And (b) you could argue that they aren't stopping anyone from investing, merely suggesting that in order to play in their competition, you have to abide by certain rules. Those rules allow for investment up to certain levels and if you want to go beyond that you can, but you can't play in the competition.

That they have consulted legally doesn't mean it can't be challenged, but I think it does mean that it's not a straightforward case. If it was obviously and undeniably illegal they would have known about it and made changes when it was being drafted. There must be some qualified lawyers who think it is legal as it stands.

Purely based on my personal judgement, I think it will "probably" end up being deemed illegal, but I will only be very slightly surprised if that proves incorrect and it survives legal challenge.

Absolutely correct. It's managed to get to this point because it's not so clear cut.
I've also said a few times, that taking it to court COULD make matters far worse on two counts:

1) FFP is given the green light and an endorsement, thus putting one horrific feather in the cap of UEFA which might well end up with even harsher sanctions

2) UEFA are told FFP needs to be modified because aspects of it are deemed illegal. If this happens, it can have the knock on effect of spelling out to UEFA which parts are ok, and which aren't. So then they can correct the erroneous parts, and extend the legal parts, and no longer feel any fear over the 'threat' of being taken to court. Right now, the 'threat' works both ways and helps to create compromise. Once that threat is removed... it could get worse.

Imaging if someone trespassed on your property and you didn't know the law. You assumed it would be ok to give the trespasser a good hiding.
The trespasser took you to court believing you were entirely out of order. The judge says 'yes, he was wrong to punch and kick you, but I see no problem with him throwing a bucket of water over you'. Now you've had it spelled out to you what you CAN do. In that instance, UEFA would then attempt to drown you with one giant bucket of water.

Of course, if it transpired that FFP was massively wrong, then it would ruin UEFA's credibility and might be abandoned, but I can't see that happening.

 

[FanchesterCity]

Re: City & FFP (continued)

Is this the person who will make the decision on Dupont's challenge?

<a class="postlink" href="http://europa.eu/rapid/press-release_SPEECH-14-706_en.htm" onclick="window.open(this.href);return false;">http://europa.eu/rapid/press-release_SP ... 706_en.htm</a>

If so, I fear Mr. Dupont is doomed to fail.

This guy is with the European Commission (which is already on record as favouring FFP.)

There is a parallel court case going forward as well. He would not be involved with that as a decision-maker as far as that goes. A final ruling from the European Court of Justice would trump anything the EC has to say, I believe. Court could always throw this out on antitrust grounds - violation of the Treaty articles, etc.

Further, I find this quote to be interesting (emphasis added):

"Last week I signed together with President Platini an arrangement for cooperation recognizing the validity of the objectives of Financial Fair Play."

That could play out in an interesting way. More focus on debt, etc. More leeway for "sustainable" investment by owners.

I think there is an implicit recognition by virtually 100% of people involved in this process that some tweaks will have to be made. And with the relevant dynamics in play (antitrust, etc) the tweaks would in my opinion be more likely to help us than hinder us going forward.

You can read an awful lot into that 'validity of the objectives'. Depends on your mindset, but to me that's a backhanded compliment. The objective are OK... (but the way you've gone about it isn't). Otherwise, why just say 'the validity of the regulations'?
Of course, I could be reading far too much into a single phrase, but still looks carefully worded to me.

 

[BluessinceHydeRoad]

Re: City & FFP (continued)

I think it fair to remind Mr Platini of the experience of Real Madrid. The "greatest club in the world" did not win the European cup at all between 1966 and 1998. The won it again in that year and twice more in 2000 and 2002, but that was that until 2014.

In 2000 Real sold their old training ground in the centre of Madrid for the amazing sum of €480 million because the land had been reclassified and could now be used to build office blocks on. This sum was actually more than 3.5 times Real's annual revenue, and represented an enormous injection of cash from outside football ie it was an astronomical sum from outside which was available for investment. The decision was taken to pay off the debt, build a new training facility but also to spend most of it on players - Figo, Zidane, Ronaldo, Beckham and Owen over the coming years. This was the policy of the galacticos and it is important to acknowledge that in Platini's eyes they were players Real could not afford and should not have been allowed to buy.

Now, many point out that the galacticos strategy (which Real have not abandoned since) was a failure. In football terms that may be true - Real took 12 years to win la decima, so they may have only managed to buy mercenaries with a sugar daddy's money, but what no-one can question is the business success of the strategy. The policy of heavy investment paid off handsomely. Real did not become a Leeds or a Portsmouth. Throughout the 1990s the richest club in the world (ie the one with the biggest income) was Manchester United) with Real lagging some way behind. Two years after the beginning of the policy of heavy investment in players in 2000, Real had overtaken United and have had a bigger income by far than any other club - now well over €100 million a year bigger than United's!

Now, Real's approach was exactly the one City have followed. Heavy initial investment is the only way yet known to grow an enterprise quickly, even if the capital for the initial investment has to be borrowed. Indeed the only difference between City and Real is thar Real is heavily in debt because of subsequent borrowing. When asked about this Platini described Real's debt as"just another item on the balance sheet" which was no problem because they could easily make the interest payments. He also thought he was being perfectly fair giving City 4 years to reach break even point. From now on he doesn't intend to give any club the chance.

 

[I'm no cynic but...]

Re: City & FFP (continued)

Is this the person who will make the decision on Dupont's challenge?

<a class="postlink" href="http://europa.eu/rapid/press-release_SPEECH-14-706_en.htm" onclick="window.open(this.href);return false;">http://europa.eu/rapid/press-release_SP ... 706_en.htm</a>

If so, I fear Mr. Dupont is doomed to fail.

This guy is with the European Commission (which is already on record as favouring FFP.)

There is a parallel court case going forward as well. He would not be involved with that as a decision-maker as far as that goes. A final ruling from the European Court of Justice would trump anything the EC has to say, I believe. Court could always throw this out on antitrust grounds - violation of the Treaty articles, etc.

Further, I find this quote to be interesting (emphasis added):

"Last week I signed together with President Platini an arrangement for cooperation recognizing the validity of the objectives of Financial Fair Play."

That could play out in an interesting way. More focus on debt, etc. More leeway for "sustainable" investment by owners.

I think there is an implicit recognition by virtually 100% of people involved in this process that some tweaks will have to be made. And with the relevant dynamics in play (antitrust, etc) the tweaks would in my opinion be more likely to help us than hinder us going forward.

You can read an awful lot into that 'validity of the objectives'. Depends on your mindset, but to me that's a backhanded compliment. The objective are OK... (but the way you've gone about it isn't). Otherwise, why just say 'the validity of the regulations'?
Of course, I could be reading far too much into a single phrase, but still looks carefully worded to me.

Well at least he is using the word 'validity' rather than the word 'legality' which suggests that all is not as clear cut as UEFA would like.

 

[Chippy_boy]

Re: City & FFP (continued)

That's precisely it... the key phrase 'living within your means'.

- If you're a startup business, and you want to become a major car manufacturer but have no money, just a head full of big ideas. You don't have the means to fund your ideas. It's a shame, but you don't. You can't make your cars.

- If you're the same startup who manages to convince a bunch of venture capitalists to back your 'ideas', then you effectively borrow the money from them, and put you and them at risk if it doesn't work out. But you can start making your cars.

- If you're the same startup business and manage to sell your fledgling startup to a wealthy businessman and he stumps up his own cash to get you started, then you can start making your cars, but UEFA will ban you.

That's the cruelest irony. You HAVE the means. They just don't like how you came by the means, which as an entirely different issue / prejudice.

Even if you have a business that is failing year after year, providing you can keep putting funds in, you'll never go bust, and the business it entirely legitimate. Sooner or later your business WILL take off, or the owner will run out of funds, or he'll tire of losing money and invest elsewhere. In a sense, it's Natural Selection in the business world.

UEFA shouldn't mess with nature.

One of the failings of British industry in particular is its huge reluctance to invest in long term projects. Directors on short tenures are incentivised by short term profits and are typically not interested in investments which might take 10, 15 or 20 years to start generating profit. But sometimes huge investment and continual losses over that sort of period is entirely reasonable if backed with a solid business plan.

So I agree with you that it is ridiculous that UEFA should think it appropriate or that it is its responsibility to meddle and curtail investment. Of course they will argue that sport is a special case and that they have a responsibility to the fans to try to ensure the long term viability of clubs and to prevent clubs from over stretching themselves and going bust.

This is imho bollocks. First, with appropriate backing and a solid plan, who's to say they will go bust? Second, why should protecting the interest of fans - if that's the lame excuse - be a greater imperative than protecting the interest of employees? Common law allows employers to spend recklessly and jeopardise the entire company and the livelihood of all the employees. This is perfectly acceptable (although unwise of course). But it is not the place of external agents to interfere.

How are we to believe it is worse for a football club to go bust than it is for a car manufacturer? It's just nonsense.