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

[Chippy_boy]

Re: City & FFP (continued)

Manchester City are really only the vehicle to showcase the ability of Abu Dhabi to represent and deliver commercial success. It could just have easily been dominance in Formula One for instance, but of course football is particularly popular and arguably better suited to rapid investment with almost immediate results (or so the theory goes).

I would expect our owners don't want to be seen as continuously throwing money at 'the problem' in order to gain success. I believe they accept it will be an accusation in the early years, but given time, and clearly visible improvements (like the infrastructure we're building), people will soon overlook the initial spending sprees. In time, people will (hopefully) interpret it as genuine investment that paid off, rather than Abramovich's image which is that he's propping up Chelsea.

With that in mind, I think the owners do want us to be a genuinely profitable business and operate well within any FFP rules. Our objection (as I see it) is we're hindered in our attempts to get to that position.

Despite all that, no matter how well run we eventually become, or how 'efficient' or 'profitable' a business we are, we will still be judged by our on field success, which ironically is the one aspect of the 'business' that's not very business like. There's no spreadsheet for winning football games, or mitigation for a dodgy penalty.

Imagine building a wonderful Manchester City brand (much like the Apple brand). Everything is right, all the business is logical and sustainable, all the marketing is in place, but there's just one catch.... your product design is partly based on the roll of the dice.

If Manchester City the team aren't successful, all the hard work behind the scenes will be overlooked. The image will be of a failed project. It must be very frustrating for the owners that a relatively minimal but hugely influential aspect of the business lies in part, to chance, and in part a clique called UEFA.
The whole brand rests on 11 players kicking a ball.

That academy we've built? it's beautiful, spectacular, impressive... but will only be deemed great business if we succeed domestically, and more importantly in CL.

Interesting to consider whether indeed success (long term success, as opposed to winning the odd match) is indeed based partly on luck. I would argue that it is not. Yes you get duff refereeing decisions and injuries and fluky goals against you and all sorts of adversities. Or the opposite, and your might have a run of good luck. This doubtless affects the outcome of games and even of seasons. But I don't think it affects the long term.

Over the long term, the better equipped you are, the better you will do. Better management, better coaching, better facilities, better players over the long term will reliably deliver better results. Look at British Cycling as an example of how meticulous attention to detail combined with excellent facilities, equipment and coaching, effectively took luck completely out of the equation. Over the long term football is also not a business about luck, it's a business like any other.

 

[SilverFox2]

Re: City & FFP (continued)

ADUG are attracting sponsorship and advertising revenue as a result of the exposure football gives via TV etc..
Other revenue comes via success on the field.
Obviously the two are linked but possibly ADUG will be happy to just maximise revenue and not necessarily win all trophies and may be restrained in their player purchases in future.
We as supporters of City want the reverse, we want success on the field at all costs so see Falcao type players as an opportunity lost.

Incidentally, I note in todays news that the UK must now pay an extra amount to the EU (some £1.7 Billion or thereabouts) as a result of doing better in recovery. This money to go to Germany and France who will get a rebate.
The fact that there is a black hole (fraud) of gigantic proportions in the EU accounting system is irrelevant apparently.
A little like FFP fines going to our G14 friends.

 

[Chippy_boy]

Re: City & FFP (continued)

Incidentally, I note in todays news that the UK must now pay an extra amount to the EU (some £1.7 Billion or thereabouts) as a result of doing better in recovery. This money to go to Germany and France who will get a rebate.
The fact that there is a black hole (fraud) of gigantic proportions in the EU accounting system is irrelevant apparently.
A little like FFP fines going to our G14 friends.

OT, I know, but you can why UKIP are gaining in popularity, can't you. Completely unelectable of course, but you can see why some people are turning to them.

 

[patrickblue]

Re: City & FFP (continued)

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.

I can see what you're getting at, but it's not a set of rules and regulations that are being challenged, it's the basic premise that a club cannot spend more than it earns that is under challenge as that is what on the face of it is in breach of EU law.
I would imagine the argument DuPont will be putting forward is (and he's hinted at this) that he doesn't disagree with UEFA's stated objective (to stop clubs overspending and ending up with unsustainable debt) but he does disagree with the way it's been implemented, and will argue that this is a restriction of competition.
I believe he will argue for a system in which any money spent needs to be guaranteed, probably by being paid up front.

 

[FanchesterCity]

Re: City & FFP (continued)

It's not 'on the face of it' in breach of European Law though.

The average punter in the street has been mislead into believing you can't put restrictions on how a business sector operates, but you can.
It's not 'wrong' per se to put financial restrictions on businesses, and certainly not teams. The law allows for it.

The question is more is it appropriate to be applying it, and if so, is the application a good implementation of it. UEFA have to demonstrate that there was a problem that needed fixing, and that any restrictions it imposes are truly for the benefit of the industry, including the consumer. That's the bit that's highly subjective.

In fact, it's more the other way around. On the face of it, what UEFA are doing is perfectly fine. That's how it's got this far. DuPont is trying to illustrate that below the surface, all is NOT fine at all, and the motives are questionable and the implementation is a poor one, and particularly punitive for some clubs.

I agree that one aspect of stopping clubs getting into financial trouble could be eased by paying up front, or putting the money in escrow to effectively guarantee all contracts can be honoured, but the very nature of debt usually means you can't honour it right now, nor can you put the money in escrow. Borrowing is a 'risk' that the lender and the borrower are both prepared to take - on account of the potential rewards for taking that risk.
So whilst City don't need to borrow, some clubs do, and if UEFA tried to impose rules that demanded up front payments, football would grind to a halt.

There's an argument too, to suggest that more clubs should go to the wall. Nobody's forcing them to overspend. In fact the sense of protected status that some clubs have is encouraging them to take excessive risk and overspend. The courts may well say that each club is a business in it's own right, but operate in a very specific market that is distinct from general businesses. But because 'sport' is a special sort of business, it doesn't make a sport related business immune from having to apply some self-control and must accept that some businesses are more successful than others, and some my find investment in some quite remarkable and innovative ways, and some might be fortunate enough to merely have a wealthy benefactor. These things happen in business, why shouldn't they happen in sport?

I would not be surprised is the courts made mention of UEFA choosing to operate on a very commercial and business like basis when it suits them (sponsorship, media rights, brand licensing etc), but adopting a more 'sporting' approach when that suits. Ergo, if you're going to act and operate as a business (as you do), you must accept that clubs are likely to do the same.... so tough luck Mr Platini, live by the business sword, die by the business sword.

But who knows the mind of a court, especially a European one. They could well say "well done Mr Platini, and for your efforts, we find all French clubs to be exempt from any punishments"

 

[patrickblue]

Re: City & FFP (continued)

It's not 'on the face of it' in breach of European Law though.

The average punter in the street has been mislead into believing you can't put restrictions on how a business sector operates, but you can.
It's not 'wrong' per se to put financial restrictions on businesses, and certainly not teams. The law allows for it.

The question is more is it appropriate to be applying it, and if so, is the application a good implementation of it. UEFA have to demonstrate that there was a problem that needed fixing, and that any restrictions it imposes are truly for the benefit of the industry, including the consumer. That's the bit that's highly subjective.

In fact, it's more the other way around. On the face of it, what UEFA are doing is perfectly fine. That's how it's got this far. DuPont is trying to illustrate that below the surface, all is NOT fine at all, and the motives are questionable and the implementation is a poor one, and particularly punitive for some clubs.

Financial restrictions on buisness of any sort do not say you cannot invest in your business. Unless it's a business governed by UEFA

 

[FanchesterCity]

Re: City & FFP (continued)

It's not 'on the face of it' in breach of European Law though.

The average punter in the street has been mislead into believing you can't put restrictions on how a business sector operates, but you can.
It's not 'wrong' per se to put financial restrictions on businesses, and certainly not teams. The law allows for it.

The question is more is it appropriate to be applying it, and if so, is the application a good implementation of it. UEFA have to demonstrate that there was a problem that needed fixing, and that any restrictions it imposes are truly for the benefit of the industry, including the consumer. That's the bit that's highly subjective.

In fact, it's more the other way around. On the face of it, what UEFA are doing is perfectly fine. That's how it's got this far. DuPont is trying to illustrate that below the surface, all is NOT fine at all, and the motives are questionable and the implementation is a poor one, and particularly punitive for some clubs.

Financial restrictions on buisness of any sort do not say you cannot invest in your business. Unless it's a business governed by UEFA

Neither do UEFA.
UEFA do not say you cannot invest. They put no restriction on the amount of investment you can make. It's unlimited.
Nor do they place any restriction on the amount you can spend, or on what you spend it on.

They do place SOME restrictions on what you can spend on players (and associated expenses) if you want to play in their competition (which you're not obliged to partake in). But again, even then, there's no restrictions on the amount of investment.
It's not without precedent either. There are various capping limits in multiple sports, be it player salaries, or in the case of formula one, technology spending. Although working against UEFA is the fact they've not implemented a flat figure. It's proportional, giving rise to the criticism it favours bigger clubs.

I'm playing devil's advocate a little here, but essentially the above is true. Already the picture becomes a lot more complex doesn't it?
They aren't stopping you doing anything except taking part in their competition. They aren't dictating any business practices to you whatsoever.
Of course, you can argue that taking part in their competition is virtually a necessity to succeed as a business, but already, you're into a different argument now.

 

[niall'sdiscoshorts]

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.
[Yes, they sold off land that was RENTED from the council but which was re classified and then sold off in cahoots with said very obliging council allegedly]
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!
[but RM are not spending big on the team only. When Perez won back the presidency it all started again only this time they WANT to pay huge fees. The amount they spend is irrelevant as long as it more than anyone else. The bigger the fee the more the aura around the brand. It's partly for the footballer but mostly for shock and awe marketing to keep the hordes that consume anything and everything form this particular circus slack jawed at their massiveness. And it has worked (so far) if you see the constant stream of people who traipse through the stadium EVERY DAY, never mind the pot noodle partners. Ronaldo, Bale, James were cheap all things considered]
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.

It's not the only thing that has resumed since Perez returned either. The building work that the .. ahem Building Magnet started should have been nearly finished now. Once they'd got the council to re-classify the council's prime forecourt on the prestigious thoroughfare passing right by the stadium in exchange for the small corner RM owned on the worthless side they should have cracked on with the hote... stadium.
Only it stalled as amongst other things the economic crisis has given voice to an otherwise passive opposition which means they may even considering moving out of the Bernabeu altogether. Now with the rising associated costs even RM could do with a hand building a new stadium right? And this is where the erstwhile stinking petrodollars from Abu Dhabi come in for naming rights. Oh, the beautiful irony!
And finally to get a measure of the current regime let's not forget the new rule Perez passed on re-election which now require any challenger to his presidency must have been a club member for more than twenty years - irrespective of how deep their pockets may be. And the members voted for it!
I bet it's Platini in shock and awe at these cheeky scamps.

I hope you live up to the original nijinsky of here......Could be loads of fun but somehow I doubt it.

 

[Chippy_boy]

Re: City & FFP (continued)

It's not 'on the face of it' in breach of European Law though.

The average punter in the street has been mislead into believing you can't put restrictions on how a business sector operates, but you can.
It's not 'wrong' per se to put financial restrictions on businesses, and certainly not teams. The law allows for it.

The question is more is it appropriate to be applying it, and if so, is the application a good implementation of it. UEFA have to demonstrate that there was a problem that needed fixing, and that any restrictions it imposes are truly for the benefit of the industry, including the consumer. That's the bit that's highly subjective.

In fact, it's more the other way around. On the face of it, what UEFA are doing is perfectly fine. That's how it's got this far. DuPont is trying to illustrate that below the surface, all is NOT fine at all, and the motives are questionable and the implementation is a poor one, and particularly punitive for some clubs.

I agree that one aspect of stopping clubs getting into financial trouble could be eased by paying up front, or putting the money in escrow to effectively guarantee all contracts can be honoured, but the very nature of debt usually means you can't honour it right now, nor can you put the money in escrow. Borrowing is a 'risk' that the lender and the borrower are both prepared to take - on account of the potential rewards for taking that risk.
So whilst City don't need to borrow, some clubs do, and if UEFA tried to impose rules that demanded up front payments, football would grind to a halt.

There's an argument too, to suggest that more clubs should go to the wall. Nobody's forcing them to overspend. In fact the sense of protected status that some clubs have is encouraging them to take excessive risk and overspend. The courts may well say that each club is a business in it's own right, but operate in a very specific market that is distinct from general businesses. But because 'sport' is a special sort of business, it doesn't make a sport related business immune from having to apply some self-control and must accept that some businesses are more successful than others, and some my find investment in some quite remarkable and innovative ways, and some might be fortunate enough to merely have a wealthy benefactor. These things happen in business, why shouldn't they happen in sport?

I would not be surprised is the courts made mention of UEFA choosing to operate on a very commercial and business like basis when it suits them (sponsorship, media rights, brand licensing etc), but adopting a more 'sporting' approach when that suits. Ergo, if you're going to act and operate as a business (as you do), you must accept that clubs are likely to do the same.... so tough luck Mr Platini, live by the business sword, die by the business sword.

But who knows the mind of a court, especially a European one. They could well say "well done Mr Platini, and for your efforts, we find all French clubs to be exempt from any punishments"

We're going around and around old ground here mate. We are on page 1221 after all!

Suggest you have a read of this, if you haven't already:

<a class="postlink" href="http://www.soccernomics-agency.com/?p=469" onclick="window.open(this.href);return false;">http://www.soccernomics-agency.com/?p=469</a>

 

[patrickblue]

Re: City & FFP (continued)

It's not 'on the face of it' in breach of European Law though.

The average punter in the street has been mislead into believing you can't put restrictions on how a business sector operates, but you can.
It's not 'wrong' per se to put financial restrictions on businesses, and certainly not teams. The law allows for it.

The question is more is it appropriate to be applying it, and if so, is the application a good implementation of it. UEFA have to demonstrate that there was a problem that needed fixing, and that any restrictions it imposes are truly for the benefit of the industry, including the consumer. That's the bit that's highly subjective.

In fact, it's more the other way around. On the face of it, what UEFA are doing is perfectly fine. That's how it's got this far. DuPont is trying to illustrate that below the surface, all is NOT fine at all, and the motives are questionable and the implementation is a poor one, and particularly punitive for some clubs.

Financial restrictions on buisness of any sort do not say you cannot invest in your business. Unless it's a business governed by UEFA

Neither do UEFA.
UEFA do not say you cannot invest. They put no restriction on the amount of investment you can make. It's unlimited.
Nor do they place any restriction on the amount you can spend, or on what you spend it on.

They do place SOME restrictions on what you can spend on players (and associated expenses) if you want to play in their competition (which you're not obliged to partake in). But again, even then, there's no restrictions on the amount of investment.
It's not without precedent either. There are various capping limits in multiple sports, be it player salaries, or in the case of formula one, technology spending. Although working against UEFA is the fact they've not implemented a flat figure. It's proportional, giving rise to the criticism it favours bigger clubs.

I'm playing devil's advocate a little here, but essentially the above is true. Already the picture becomes a lot more complex doesn't it?
They aren't stopping you doing anything except taking part in their competition. They aren't dictating any business practices to you whatsoever.
Of course, you can argue that taking part in their competition is virtually a necessity to succeed as a business, but already, you're into a different argument now.

I was playing devil's advocate a little too regarding investment, but it's essentially the case that although investment is permitted, it's not a realistic amount to be able to compete with the top tier of clubs, and there is no way to be able to compete without investment far above that allowed in EUFA's FFP rules.
I would say that the rules as they stand are not fit for purpose and I would think in breach of Article 101 regarding collusion and cartels. Not being a lawyer myself, and even if I was, that will all come down to interpretation in the end, but that's what DuPont is fighting it on and as I said before, on the face of it, he has a valid point.
And I'm sure a lawyer wouldn't be taking this on if he didn't think he had a good chance of winning.

 

[Chippy_boy]

Re: City & FFP (continued)

And I'm sure a lawyer wouldn't be taking this on if he didn't think he had a good chance of winning.

And I am sure the lawyers advising UEFA think that it's legal and defensible if challenged.

It's going to be interesting to see which way the courts decide. But either way, it's really of only passing interest to City now.

 

[CatMan]

Re: City & FFP (continued)

And I'm sure a lawyer wouldn't be taking this on if he didn't think he had a good chance of winning.

And I am sure the lawyers advising UEFA think that it's legal and defensible if challenged.

It's going to be interesting to see which way the courts decide. But either way, it's really of only passing interest to City now.

And with it a chance to close a thread that is utterly dull! Lets do it Mods!

 

[SilverFox2]

Re: City & FFP (continued)

And I'm sure a lawyer wouldn't be taking this on if he didn't think he had a good chance of winning.

And I am sure the lawyers advising UEFA think that it's legal and defensible if challenged.

It's going to be interesting to see which way the courts decide. But either way, it's really of only passing interest to City now.

I agree completely.

What's more, even if FFP is abolished it is unlikely to allow the global wealth we are now seeing in football trickle down to other Clubs. Business is never fair.

This skewed wealth distribution is exactly how it happens in other sectors of business that are unrestricted.

 

[80s Shorts]

Re: City & FFP (continued)

And I'm sure a lawyer wouldn't be taking this on if he didn't think he had a good chance of winning.

And I am sure the lawyers advising UEFA think that it's legal and defensible if challenged.

It's going to be interesting to see which way the courts decide. But either way, it's really of only passing interest to City now.

And with it a chance to close a thread that is utterly dull! Lets do it Mods!

What a facile comment.

Very interesting thread with some well written and thoughtful contributions. I have enjoyed it very much indeed. I do think that the collapse of FFP would be of more than just a passing interest to City though. Especially with the spectre of Gill and his cronies overseeing any future goalpost moving.

 

[jonmcity]

Re: City & FFP (continued)

And I am sure the lawyers advising UEFA think that it's legal and defensible if challenged.

It's going to be interesting to see which way the courts decide. But either way, it's really of only passing interest to City now.

And with it a chance to close a thread that is utterly dull! Lets do it Mods!

What a facile comment.

Very interesting thread with some well written and thoughtful contributions. I have enjoyed it very much indeed. I do think that the collapse of FFP would be of more than just a passing interest to City though. Especially with the spectre of Gill and his cronies overseeing any future goalpost moving.

Hard to see what Gill can do if our turnover is higher than the Rags and our debt lower in a few years. Perhaps they will just try and go off and have there own league by invite. But then the Rags would never win a game again, and the public would walk away from a league with no promotion, relegation.

 

[cleavers]

Re: City & FFP (continued)

And I'm sure a lawyer wouldn't be taking this on if he didn't think he had a good chance of winning.

And I am sure the lawyers advising UEFA think that it's legal and defensible if challenged.

It's going to be interesting to see which way the courts decide. But either way, it's really of only passing interest to City now.

And with it a chance to close a thread that is utterly dull! Lets do it Mods!

Nodody is holding a gun to your head making you read it, maybe you could just not enter the thread if its so dull ?

 

[City Raider]

City & FFP (continued)

its more than coincidence that in same week platini announces working closely with european commission, that he also mentions potentially changing criteria to include debt etc

it was of course badged as uefa looking at regulations to see if they are indeed onerous on some, to appease likes of city, psg etc but i'd imagine they are a result of his talks and advice he was given on surviving legal challenge

but what it also provides is leverage with likes of bayern and madrid, in other words he can eventually say it is not uefa driving these changes, he is working towards meeting european law

 

[BluessinceHydeRoad]

Re: City & FFP (continued)

Article 101

(ex Article 81 TEC)

1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development, or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

- any agreement or category of agreements between undertakings,

- any decision or category of decisions by associations of undertakings,

- any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;

(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

This is the relevant section of the European treaty. The wording is unequivocal: limits and/or controls on investment are clearly "prohibited" and any decisions based on such an agreement (eg the sanctions imposed on the nine "offenders") "shall be automatically void." This will NOT be the case ONLY if the agreement actually promotes technical or economic progress AND brings benefits to consumers WHILE NOT restricting the rights of undertakings more than strictly necessary or which allows for the elimination of competition.allow for the elimination of competition.

This clause expresses quite explicitly a desire to protect the right to invest, to prevent any interference with that right and illustrates the fundamental principle of the treaty, that investment is an important means of bringing benefits benefits to the consumer and in terms of economic development. It is thus inconceivable that the ECJ would accept as a justification of the break even rule, that Berlusconi has been losing 100 million euros a year or that certain rich, successful clubs would find it harder to compete with PSG or City. It would find it hard to understand why or how restricting investment at City and PSG or anywhere else contributes to financial stability at any other club. It is hard to accept that restricting investment makes football anything but less competitive in sporting terms. A further problem for UEFA is that financing investment through borrowing is a normal practice in every other area of business life, and law suits for anti-competitive behaviour would fly if anyone suggested that Tesco could not borrow to invest, to make up ground lost to other supermarkets recently. Here the connection between investment and progress for undertaking and consumer is more evident than in football, but is of the same nature. Any claim by ASDA that investment by Tesco should be stopped because it might make ASDA less competitive would be laughed out of court, but this is the view of competition that UEFA wants the ECJ to espouse. This is not a "sporting exception" but is asking the ECJ to reject the fundamental principles underlying competition law in Europe, and replace them with a completely different, not to say contrary, set of principles.

Nor can UEFA pull the "by invitation only" rabbit out of the hat. UEFA is clearly an association of undertakings and, in the case of the CL, it is not acting as a governing body at all, but as a competitor to the clubs. It has laid down clear criteria to take part in an "open" competition, but it enjoys a privileged ctatus - it alone sells the TV rights, it competes for sponsorship, won't allow non-sponsors to "appear" on TV and distributes money to the participants as prizes. To refuse an invitation to a club which qualifies on grounds other than the sporting criteria would be to "apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage" and would be one further breach.

That's my case, I suspect M. Dupont's is much more detailed but not greatly different and I can't see how the court cannot find in his favour. I'm not sure that UEFA have actually taken a great deal of legal advice, unless M. Berlusconi is acting for them! Certainly Platini has never come remotely near an explanation of how the law allows the regulations he has put in place. Certainly in the Bosman case UEFA relied on an argument that the law didn't apply because UEFA didn't think it was good for football. Can't try that one again!

 

[fbloke]

Re: City & FFP (continued)

One element of this that I simply cannot get my head around is why the EU would apparently pander to the wishes of an organisation that is based in a non-EU country, pays no tax in the EU and is on very dodgy ground even in terms of the Swiss tax system.

What does the EU 'gain' from allowing a non-EU body/company to limit the options of EU citizens?

 

[FanchesterCity]

Re: City & FFP (continued)

Article 101

(ex Article 81 TEC)

1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development, or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

- any agreement or category of agreements between undertakings,

- any decision or category of decisions by associations of undertakings,

- any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;

(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

This is the relevant section of the European treaty. The wording is unequivocal: limits and/or controls on investment are clearly "prohibited" and any decisions based on such an agreement (eg the sanctions imposed on the nine "offenders") "shall be automatically void." This will NOT be the case ONLY if the agreement actually promotes technical or economic progress AND brings benefits to consumers WHILE NOT restricting the rights of undertakings more than strictly necessary or which allows for the elimination of competition.allow for the elimination of competition.

This clause expresses quite explicitly a desire to protect the right to invest, to prevent any interference with that right and illustrates the fundamental principle of the treaty, that investment is an important means of bringing benefits benefits to the consumer and in terms of economic development. It is thus inconceivable that the ECJ would accept as a justification of the break even rule, that Berlusconi has been losing 100 million euros a year or that certain rich, successful clubs would find it harder to compete with PSG or City. It would find it hard to understand why or how restricting investment at City and PSG or anywhere else contributes to financial stability at any other club. It is hard to accept that restricting investment makes football anything but less competitive in sporting terms. A further problem for UEFA is that financing investment through borrowing is a normal practice in every other area of business life, and law suits for anti-competitive behaviour would fly if anyone suggested that Tesco could not borrow to invest, to make up ground lost to other supermarkets recently. Here the connection between investment and progress for undertaking and consumer is more evident than in football, but is of the same nature. Any claim by ASDA that investment by Tesco should be stopped because it might make ASDA less competitive would be laughed out of court, but this is the view of competition that UEFA wants the ECJ to espouse. This is not a "sporting exception" but is asking the ECJ to reject the fundamental principles underlying competition law in Europe, and replace them with a completely different, not to say contrary, set of principles.

Nor can UEFA pull the "by invitation only" rabbit out of the hat. UEFA is clearly an association of undertakings and, in the case of the CL, it is not acting as a governing body at all, but as a competitor to the clubs. It has laid down clear criteria to take part in an "open" competition, but it enjoys a privileged ctatus - it alone sells the TV rights, it competes for sponsorship, won't allow non-sponsors to "appear" on TV and distributes money to the participants as prizes. To refuse an invitation to a club which qualifies on grounds other than the sporting criteria would be to "apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage" and would be one further breach.

That's my case, I suspect M. Dupont's is much more detailed but not greatly different and I can't see how the court cannot find in his favour. I'm not sure that UEFA have actually taken a great deal of legal advice, unless M. Berlusconi is acting for them! Certainly Platini has never come remotely near an explanation of how the law allows the regulations he has put in place. Certainly in the Bosman case UEFA relied on an argument that the law didn't apply because UEFA didn't think it was good for football. Can't try that one again!

I think they stood a chance arguing for the overall benefit of the industry, especially if there was a clear consumer benefit. They've missed a massive trick there. UEFA's stance seem to be that 'the market' is the clubs (and the subtext being 'only some clubs'). They've totally forgotten about the consumer - the fans (match goers, or tv subscribers). The price of watching this competition's not gone down, and it's no more accessible than previously either.

Platini's soundbites are all about the clubs, nothing about the consumer (terrible term really, but that's what we are).
Why not give clubs an incentive to lower prices? make an FFP exemption for subsidised tickets?
The pressure to comply with FFP not only encourages clubs to spend less (which they believe is a good thing), but it encourages them to charge more too (not consumer friendly).