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

[Prestwich_Blue]

Re: City & FFP (continued)

City have been set our own individual target for 2013/14 which we are said to be confident of meeting

So going forwards, are there any English clubs at risk of failing UEFA's FFP?

Chelsea were in a little trouble but I imagine the sale of Mata helped balance their books during that season's accounts. Liverpool perhaps depending on how their revenue gets broken down. Arsenal, United, and Spurs should be alright.

Chelsea passed FFP because of their freak win in the CL two seasons back.

The sale of Mata will not have been reflected in any accounts yet but should see them Ok for the reckoning before the 2015-2016 season.

Liverpool's financial position will not dramatically improve for the coming assessment next Spring. They were not involved in European football last season and did not have any significant runs in either domestic cup competition. They will have improved TV revenue and PL prize money but little else. If they would have failed this time around then they will fail next time.

Liverpool would certainly have failed this assessment. Their losses were just under £50m in 2013 and £40.5m the year before, making an aggregate loss of £90.5m. Allowing £30m for youth development etc gives a break-even deficit of around £60m. They'd look to use the pre-2010 players wage exemption but the trend of their losses isn't improving, having gone up from 2012 to 2013. 2012 was only a 10-month accounting period and I'm not sure about the exact impact of that. It either makes no difference, as long as the accounting period ends in the right calendar year, or their maximum allowable deficit is reduced pro-rata. So it only makes things worse for them if the latter applies. Also, there is no indication in their accounts that the owners took out new shares in 2012 or 2013 so, in theory, their maximum allowable deficit would have been €5m this summer.

What happens now is that they have to submit their FFP assessment next month and, if they fail (as they presumably will) have to submit the 2014 accounts by October. Let's assume they break even in those accounts and have allowable expenses of £15m again. That makes their aggregate deficit around £45m, or €55m which is still too high. Then they'll have to rely on the pre-2010 contracts wages paid in 2011/12, which might or might not be enough, depending on whether their maximum allowable deficit is €45m or €5m. If the owners have converted some of their loans to equity in the 2014 accounts then it should be the higher figure. The only issue is then whether they can demonstrate an improving trend in their financial results. If they have to show that consistently over all three years then they obviously can't do that. But if they only have to show that 2014 is better than either 2013 (or 2012) then they should be OK.

 

[stony]

Re: City & FFP (continued)

Chelsea were in a little trouble but I imagine the sale of Mata helped balance their books during that season's accounts. Liverpool perhaps depending on how their revenue gets broken down. Arsenal, United, and Spurs should be alright.

Chelsea passed FFP because of their freak win in the CL two seasons back.

The sale of Mata will not have been reflected in any accounts yet but should see them Ok for the reckoning before the 2015-2016 season.

Liverpool's financial position will not dramatically improve for the coming assessment next Spring. They were not involved in European football last season and did not have any significant runs in either domestic cup competition. They will have improved TV revenue and PL prize money but little else. If they would have failed this time around then they will fail next time.

Liverpool would certainly have failed this assessment. Their losses were just under £50m in 2013 and £40.5m the year before, making an aggregate loss of £90.5m. Allowing £30m for youth development etc gives a break-even deficit of around £60m. They'd look to use the pre-2010 players wage exemption but the trend of their losses isn't improving, having gone up from 2012 to 2013. 2012 was only a 10-month accounting period and I'm not sure about the exact impact of that. It either makes no difference, as long as the accounting period ends in the right calendar year, or their maximum allowable deficit is reduced pro-rata. So it only makes things worse for them if the latter applies. Also, there is no indication in their accounts that the owners took out new shares in 2012 or 2013 so, in theory, their maximum allowable deficit would have been €5m this summer.

What happens now is that they have to submit their FFP assessment next month and, if they fail (as they presumably will) have to submit the 2014 accounts by October. Let's assume they break even in those accounts and have allowable expenses of £15m again. That makes their aggregate deficit around £45m, or €55m which is still too high. Then they'll have to rely on the pre-2010 contracts wages paid in 2011/12, which might or might not be enough, depending on whether their maximum allowable deficit is €45m or €5m. If the owners have converted some of their loans to equity in the 2014 accounts then it should be the higher figure. The only issue is then whether they can demonstrate an improving trend in their financial results. If they have to show that consistently over all three years then they obviously can't do that. But if they only have to show that 2014 is better than either 2013 (or 2012) then they should be OK.

Do you trust uefa to treat them the same as us ? I don't. Whatever Liverpools financial results say, uefa will put a positive spin on them and they will get away with little or no punishment.

 

[Matty]

Re: City & FFP (continued)

Chelsea passed FFP because of their freak win in the CL two seasons back.

The sale of Mata will not have been reflected in any accounts yet but should see them Ok for the reckoning before the 2015-2016 season.

Liverpool's financial position will not dramatically improve for the coming assessment next Spring. They were not involved in European football last season and did not have any significant runs in either domestic cup competition. They will have improved TV revenue and PL prize money but little else. If they would have failed this time around then they will fail next time.

Liverpool would certainly have failed this assessment. Their losses were just under £50m in 2013 and £40.5m the year before, making an aggregate loss of £90.5m. Allowing £30m for youth development etc gives a break-even deficit of around £60m. They'd look to use the pre-2010 players wage exemption but the trend of their losses isn't improving, having gone up from 2012 to 2013. 2012 was only a 10-month accounting period and I'm not sure about the exact impact of that. It either makes no difference, as long as the accounting period ends in the right calendar year, or their maximum allowable deficit is reduced pro-rata. So it only makes things worse for them if the latter applies. Also, there is no indication in their accounts that the owners took out new shares in 2012 or 2013 so, in theory, their maximum allowable deficit would have been €5m this summer.

What happens now is that they have to submit their FFP assessment next month and, if they fail (as they presumably will) have to submit the 2014 accounts by October. Let's assume they break even in those accounts and have allowable expenses of £15m again. That makes their aggregate deficit around £45m, or €55m which is still too high. Then they'll have to rely on the pre-2010 contracts wages paid in 2011/12, which might or might not be enough, depending on whether their maximum allowable deficit is €45m or €5m. If the owners have converted some of their loans to equity in the 2014 accounts then it should be the higher figure. The only issue is then whether they can demonstrate an improving trend in their financial results. If they have to show that consistently over all three years then they obviously can't do that. But if they only have to show that 2014 is better than either 2013 (or 2012) then they should be OK.

Do you trust uefa to treat them the same as us ? I don't. Whatever Liverpools financial results say, uefa will put a positive spin on them and they will get away with little or no punishment.

Yeah, In the same way that UEFA screwed us over and forced us to fail when we'd originally passed, I remain convinced UEFA will massage and manipulate what they do and don't allow, and quite how they define certain allowances and ensure Liverpool don't fall foul of FFP. Lets face it, FFP was always designed to help the likes of Liverpool, not hinder them.

 

[Centurions]

Re: City & FFP (continued)

Christ! Can you imagine the wailing and gnashing of teeth in the media if the bin dippers fail FFP?

Since UEFA have now been seen to punish heavily FFP transgressors and will presumably consider the sanctions imposed a warning to all clubs (not just the failing clubs from last season) should they not ban any failing clubs for 2015/16? After all the dippers, tarquins and all the rest were "disgusted" that we weren't banned this season coming.

 

[Impeccable One]

Re: City & FFP (continued)

Does anyone know if we buy a player for 10m and in the agreement it says a further 10m should we avoid relegation, does this count as 20m against FFP or 10m now & 10m next year, or just 10m now ?

You can see where I'm going with this.

Do you really think UEFA would let us (or anyone) get away with that?

The fact is variable fee transfers based on league position, trophy wins and appearances already exist, so I'm just wondering how they are treated by FFP. Pushing the clause so that it's a no brainer can't be ruled to be illegal, it just means the fee can be declared lower with other 'potential' ... Wink wink nudge nudge ... Add-ons.

Either way, would like to know how FFP addresses normal fee add-ons.

 

[Prestwich_Blue]

Re: City & FFP (continued)

Does anyone know if we buy a player for 10m and in the agreement it says a further 10m should we avoid relegation, does this count as 20m against FFP or 10m now & 10m next year, or just 10m now ?

You can see where I'm going with this.

Do you really think UEFA would let us (or anyone) get away with that?

The fact is variable fee transfers based on league position, trophy wins and appearances already exist, so I'm just wondering how they are treated by FFP. Pushing the clause so that it's a no brainer can't be ruled to be illegal, it just means the fee can be declared lower with other 'potential' ... Wink wink nudge nudge ... Add-ons.

Either way, would like to know how FFP addresses normal fee add-ons.

From an accounting point of view you'd normally take a prudent or worst case view. So I'd guess that if we agreed a transfer with a flat fee of £15m and £5m potential add-ons, we'd show it as £20m with a contingent liability fir the £5m. We would then write off any part of that liability we didn't need to pay.

 

[I'm no cynic but...]

Re: City & FFP (continued)

Do you really think UEFA would let us (or anyone) get away with that?

The fact is variable fee transfers based on league position, trophy wins and appearances already exist, so I'm just wondering how they are treated by FFP. Pushing the clause so that it's a no brainer can't be ruled to be illegal, it just means the fee can be declared lower with other 'potential' ... Wink wink nudge nudge ... Add-ons.

Either way, would like to know how FFP addresses normal fee add-ons.

From an accounting point of view you'd normally take a prudent or worst case view. So I'd guess that if we agreed a transfer with a flat fee of £15m and £5m potential add-ons, we'd show it as £20m with a contingent liability fir the £5m. We would then write off any part of that liability we didn't need to pay.

But when? Suppose such a transfer was to occur and the 'headline' figure was to take us beyond our £49m limit and we were penalised for this but the add-ons never actually materialised, could we claim retrospective recompense if the lack of an add-on meant we actually remained within our transfer limit?

 

[Impeccable One]

Re: City & FFP (continued)

Do you really think UEFA would let us (or anyone) get away with that?

The fact is variable fee transfers based on league position, trophy wins and appearances already exist, so I'm just wondering how they are treated by FFP. Pushing the clause so that it's a no brainer can't be ruled to be illegal, it just means the fee can be declared lower with other 'potential' ... Wink wink nudge nudge ... Add-ons.

Either way, would like to know how FFP addresses normal fee add-ons.

From an accounting point of view you'd normally take a prudent or worst case view. So I'd guess that if we agreed a transfer with a flat fee of £15m and £5m potential add-ons, we'd show it as £20m with a contingent liability fir the £5m. We would then write off any part of that liability we didn't need to pay.

Thanks, but as we know, what the figures are in the OFFICIAL accounts is of no importance to what UEFA feel should apply to FFP !

 

[petrusha]

Re: City & FFP (continued)

We failed because our losses were higher than those allowed. I don't believe sponsorships were a problem but the use of revenue from within the group for the sale of IP clearly gave UEFA some concerns, as we agreed not to include those in any future FFP calculations. But the key problem seems to have been our inability to use the wages paid in 2011/12 to players signed prior to June 2010 to offset our losses. I posted on this a while back but it now appears it might be more complicated than that. We might have tried to be a bit too clever and I'm not sure we were ever really in a position to pass FFP this summer. That's why I believe that the sanctions which effectively took out the losses in FY2012 & 2013 and allow us to start with a clean slate in FY2014 are probably the best thing to come out of this.

I agree with you that, given our failure this time, it's a fantastic result to have a settlement that removes the 2011/12 financial year from the equation for future monitoring. In effect, we've been admitted to the top table as long as we can make pretty minimal losses from now on.

I'm also very interested in your comments that I've bolded. The word that seemed to be coming from the club over a long period up to this April seemed to be that we were confident of being able to use the wage exemption relating to pre-June 2010 signings and thus of passing FFP. In the light of this, the narrative that the goalposts had been changed seemed plausible. You now seem to be suggesting that all along the club was following a dubious and probably doomed strategy for FFP.

Are you able to add more detail on this? Did our top brass really miscalculate their tactics only to see us get lucky with the settlement agreement?

 

[Marvin]

Re: City & FFP (continued)

I'm not sure how fines, squad restrictions, and transfer cap equals "got lucky" for a club who were breaking even at the time of the sentence and for what was a first offence.

The monitoring periods would have moved anyway, they just brought that forward which helps hugely in the short term.

 

[Mr Ed (The Stables)]

Re: City & FFP (continued)

Hopefully this sham will be challenged in court by someone, and that it gets kicked out.

I can't wait for us to get our brass back and maybe a touch of compensation.

Come on Monsieur Du Pont sort these cheating, bent, thieving scumbags out!!!

 

[M18CTID]

Re: City & FFP (continued)

We failed because our losses were higher than those allowed. I don't believe sponsorships were a problem but the use of revenue from within the group for the sale of IP clearly gave UEFA some concerns, as we agreed not to include those in any future FFP calculations. But the key problem seems to have been our inability to use the wages paid in 2011/12 to players signed prior to June 2010 to offset our losses. I posted on this a while back but it now appears it might be more complicated than that. We might have tried to be a bit too clever and I'm not sure we were ever really in a position to pass FFP this summer. That's why I believe that the sanctions which effectively took out the losses in FY2012 & 2013 and allow us to start with a clean slate in FY2014 are probably the best thing to come out of this.

I agree with you that, given our failure this time, it's a fantastic result to have a settlement that removes the 2011/12 financial year from the equation for future monitoring. In effect, we've been admitted to the top table as long as we can make pretty minimal losses from now on.

I'm also very interested in your comments that I've bolded. The word that seemed to be coming from the club over a long period up to this April seemed to be that we were confident of being able to use the wage exemption relating to pre-June 2010 signings and thus of passing FFP. In the light of this, the narrative that the goalposts had been changed seemed plausible. You now seem to be suggesting that all along the club was following a dubious and probably doomed strategy for FFP.

Are you able to add more detail on this? Did our top brass really miscalculate their tactics only to see us get lucky with the settlement agreement?

Put simply, after all that's been said have we tried to wing it? I shouldn't laugh but I'd find it amusing if that was the case. Or is that a bit harsh on the hierarchy at the club and, as you suggest, maybe they've miscalculated.

 

[Gordyola]

Re: City & FFP (continued)

Just for a bit of mischief I mailed the European Commision asking them if I could register a complaint about the effect of FFP on me as a fan I got this email in reply

Dear ....

Thank you for your email of 22 May 2014 whereby you raised concerns about the effects of UEFA Financial Fair Play (FFP) regulations on yourself as a supporter of a club competing in UEFA competitions. In your view due to the FFP, clubs need to maximize their income and this leads to high prices for supporters.

EU competition law prohibits, among others, collusion between market operators (Article 101 of the Treaty on the Functioning of the European Union; "TFEU") and abuses of a dominant position (Article 102 of the TFEU) where trade between EU Member States may be appreciably affected.

On the basis of the information provided in your e-mail, the issue you raised does not seem to fall under EU competition laws but it rather seems to be a consumer protection issue. Therefore you might want to contact the consumer protection agency in your country.

For the avoidance of doubt, it should be stated that we regard your information as market information rather than as a formal complaint which would have to comply with certain legal requirements as set out in Article 5 of Commission Regulation No. 773/2004.

We appreciate that you have chosen to inform us of this issue and we have taken note of your concerns.

Yours sincerely,
Ágnes Szarka
Case Handler


European Commission
DG COMPETITION
Unit C-2

MADO 28/08
B-1049 Brussels/Belgium
+32 2 29 53 164
agnes.szarka@ec.europa.eu
Competition websites: <a class="postlink" href="http://ec.europa.eu/competition" onclick="window.open(this.href);return false;">http://ec.europa.eu/competition</a>
DISCLAIMER
"The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official position of the European Commission."

 

[Centurions]

Re: City & FFP (continued)

Just for a bit of mischief I mailed the European Commision asking them if I could register a complaint about the effect of FFP on me as a fan I got this email in reply

Yours sincerely,
Ágnes Szarka
Case Handler


European Commission
DG COMPETITION
Unit C-2

MADO 28/08
B-1049 Brussels/Belgium
+32 2 29 53 164
agnes.szarka@ec.europa.eu
Competition websites: <a class="postlink" href="http://ec.europa.eu/competition" onclick="window.open(this.href);return false;">http://ec.europa.eu/competition</a>
DISCLAIMER
"The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official position of the European Commission."

Don't you just love the last bit. You send an email to the official address of a European body, get a reply from an official of that body from his official address and yet they cover themselves by saying it's nothing to do with us.

 

[petrusha]

Re: City & FFP (continued)

... the key problem seems to have been our inability to use the wages paid in 2011/12 to players signed prior to June 2010 to offset our losses. I posted on this a while back but it now appears it might be more complicated than that. We might have tried to be a bit too clever and I'm not sure we were ever really in a position to pass FFP this summer ...

...

Are you able to add more detail on this? Did our top brass really miscalculate their tactics only to see us get lucky with the settlement agreement?

Put simply, after all that's been said have we tried to wing it? I shouldn't laugh but I'd find it amusing if that was the case. Or is that a bit harsh on the hierarchy at the club and, as you suggest, maybe they've miscalculated.

It's interesting. There seems to be a complete volte-face in the quote above, compared to the noises we were hearing for months if not years beforehand. I'm just wondering why that is.

 

[Nascent Blues]

Re: City & FFP (continued)

Moving forward, what will we be able to realistically spend each season? For instance, say we are in the black by a pound after the next financial year, what would we actually be allowed to spend before getting fucked over ffp again?

 

[ndjsleftnipple]

Re: City & FFP (continued)

Should we be worried about FFP at all?

Now we are eating at the top table surely FFP will protect us from any new money which comes in to football and we will be able to maintain our place among the elite?

Bring it on I say....








Unless the bastards suddenly change the rules !!

 

[Centurions]

Re: City & FFP (continued)

Moving forward, what will we be able to realistically spend each season? For instance, say we are in the black by a pound after the next financial year, what would we actually be allowed to spend before getting fucked over ffp again?

If you believe the UEFA statement then it's £49 million NET still, City say there's no sanction. If sanctions don't apply then it depends entirely on income which is on the up.

 

[Pablo ZZZ Peroni]

Re: City & FFP (continued)

...

Are you able to add more detail on this? Did our top brass really miscalculate their tactics only to see us get lucky with the settlement agreement?

Put simply, after all that's been said have we tried to wing it? I shouldn't laugh but I'd find it amusing if that was the case. Or is that a bit harsh on the hierarchy at the club and, as you suggest, maybe they've miscalculated.

It's interesting. There seems to be a complete volte-face in the quote above, compared to the noises we were hearing for months if not years beforehand. I'm just wondering why that is.

Likewise. Looking forward to PB's response to your earlier question

 

[Marvin]

Re: City & FFP (continued)

Moving forward, what will we be able to realistically spend each season? For instance, say we are in the black by a pound after the next financial year, what would we actually be allowed to spend before getting fucked over ffp again?

In future years the acceptable loss will be 30m Euros over 3 seasons, about £25m over 3 seasons

We have not yet declared our financial results for 2013/14 but in the reports and accounts for 2012/13 we stated

Since the year-end the football registrations of Fernandinho (from
Shakhtar Donetsk), Jesus Navas (from Seville), Alvaro Negredo (from
Seville), Stevan Jovetic (from Fiorentina) and Martin DeMichelis
(from Atletico Madrid) have been acquired. The registration of
Carlos Tevez (to Juventus) was sold. The net expenditure on these
transactions was approximately £84.1m

And we expect to break-even for the 2013/14 season.

Therefore City can break-even and spend £85m per season at the moment - but I am not sure if that could be sustained season after season