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

Re: City & FFP (continued)

FanchesterCity said:
There are two sides the FFP and legality coin.

On the one side, there's fairly prima facie that it restricts business by placing limits on investment and 'policing' partnerships and sponsorship deals that are entirely legal.

On the other hand, there's the argument that clubs opt to be part of Premier League, and in this case, CL too. There are competition rules set out by UEFA and clubs are at liberty to withdraw from their competition.

A parallel that you COULD draw, is this:

The Olympics sets out the rules for it's 100m sprint competition, and a disabled or highly scientific competitor wishes to take part. The disabled competitor is aided by the use of a high speed wheelchair (or set of super fast artificial limbs) and the scientific competitor has developed a pair of trainers that allow him to run faster than any other competitor.
The Olympic Games committee opt to ban both competitors. The two competitors claim cases of disability discrimination and general discrimination respectively. Both competitors are paid sportsmen and failure to participate affects their earnings. In fact, the Olympics are THE number one competition for athletes - there is no viable alternative competition that could generate the same earnings.

This is the crux of the problem. Football clubs are businesses (yes) but they enter into a private competition (CL).
A similar situation occurs when we hear of golf clubs prohibiting women, and managing to circumvent sexual discrimination laws.

So, the issue will be two-fold.

1) Is Champions League (run by UEFA) simply a competition that sets out a set of rules that must be adhered to in order to partake (including fines)?
2) If it's MORE than a competition, then could those rules be anti-competitive, or restrictive?

Even if it's considered just a competition, that doesn't necessarily mean it can invent any rules it likes, but it does make like more awkward for anybody wishing to oppose those rules. i.e. you can have a competition that excludes women (or men) but you can't have one that excludes black or gay people etc.

It could also be argued that collusion between clubs (regardless of UEFA's involvement) is a form of price fixing, but it's tenuous. Agreeing to limit expenditure, or set investment caps could be seen as creating a barrier to entry, knowing full well it will secure the positions of the 'cartel' and restrict opportunity for others. But I repeat, it's quite tenuous at best.

Needless to say, in summary, it's not quite as clear cut as many think, which in part, is probably why UEFA and clubs are reluctant to get into a protracted legal wrangle that could take years to resolve and create a great deal of negative press for both sides. It's likely City have chosen to be pragmatic and play along with UEFA. The compromise reached allows both parties to save face.

DuPont isn't faced with sponsors and brand value.... he has little to lose and a lot to gain from a test case.
Click to expand...

Your post misses several points, Fanchester. In the case of the Olympic sprinters those taking part in the olympic sprints have to meet certain stringent sporting standards, in the form of qualifying times, before they get anywhere near the Olympics proper. I believe Pistorius met the standard for some meetings and competed, so there's no question of discrimination. UEFA lays down purely sporting criteria for qualification for its CL and those meeting them can compete. They may not lay down conditions which are not in accordance with European laws. As Petit pointed out:

More fundamentally, the requirement to break even challenges the way the EU should function as laid down in Article 101 of the European Treaty. From the very start, in the eyes of the law, there is no real question that UEFA is an association of “associations (national associations) of companies (the clubs)” and that, if need be, its regulations are “decisions” must be in accordance with what is laid down in Article 101 (1) of the Treaty.
 
Re: City & FFP (continued)

Financial Fair Play is the must cunning of naming tricks, leading casual observers to believe it's about fair play on the pitch.

In theory, a game of football is about 11 players per side, and a club tries to get the best out of those 11 players with great scouting and coaching.

In reality, clubs with most money tend to buy the best players, and thus skew the balance of probability in their favour.

That doesn't mean buying the best players guarantees success, but it massively influences the odds.

Now, we can argue 'til the cows come home about how some clubs 'generated' their wealth, and others 'inherited' it, etc, but the principle remains. The richest backers skew the odds. How is that 'fair play'?

The sad reality is (and it's been this way since time began) the biggest clubs don't want REAL fair play. Why would they want to share the same budget as Crewe or Rochdale? They want a world where winning a trophy is 'carried over' for years to come, so that they can earn more money from their past success in order to influence their previous success.

Imagine in golf, if last years winner had his handicap increased!!!... thus helping him.

Nobody can deny clubs like United and Liverpool have had success and they've capitalised on it well. But why should that give you an advantage for years to come? Each new season should be a level playing field with no advantages carried over from previous seasons.

Let rich clubs build amazing stadiums and lower ticket prices for their fans. Let them create fantastic brands that sponsors will pay for (and this make cheaper merchandise too). But don't let the size of a club, or its wealth buy increased odds of success.

Make no mistake, City are guilty of buying increased odds too. Of course they are, and even a club like Norwich can still outspend Peterborough... so it affects ALL clubs no matter where in the pyramid they are. But most of all, NEVER EVER fall into the myth that FFP will create fairness.
 
Re: City & FFP (continued)

BluessinceHydeRoad said:
FanchesterCity said:
There are two sides the FFP and legality coin.

On the one side, there's fairly prima facie that it restricts business by placing limits on investment and 'policing' partnerships and sponsorship deals that are entirely legal.

On the other hand, there's the argument that clubs opt to be part of Premier League, and in this case, CL too. There are competition rules set out by UEFA and clubs are at liberty to withdraw from their competition.

A parallel that you COULD draw, is this:

The Olympics sets out the rules for it's 100m sprint competition, and a disabled or highly scientific competitor wishes to take part. The disabled competitor is aided by the use of a high speed wheelchair (or set of super fast artificial limbs) and the scientific competitor has developed a pair of trainers that allow him to run faster than any other competitor.
The Olympic Games committee opt to ban both competitors. The two competitors claim cases of disability discrimination and general discrimination respectively. Both competitors are paid sportsmen and failure to participate affects their earnings. In fact, the Olympics are THE number one competition for athletes - there is no viable alternative competition that could generate the same earnings.

This is the crux of the problem. Football clubs are businesses (yes) but they enter into a private competition (CL).
A similar situation occurs when we hear of golf clubs prohibiting women, and managing to circumvent sexual discrimination laws.

So, the issue will be two-fold.

1) Is Champions League (run by UEFA) simply a competition that sets out a set of rules that must be adhered to in order to partake (including fines)?
2) If it's MORE than a competition, then could those rules be anti-competitive, or restrictive?

Even if it's considered just a competition, that doesn't necessarily mean it can invent any rules it likes, but it does make like more awkward for anybody wishing to oppose those rules. i.e. you can have a competition that excludes women (or men) but you can't have one that excludes black or gay people etc.

It could also be argued that collusion between clubs (regardless of UEFA's involvement) is a form of price fixing, but it's tenuous. Agreeing to limit expenditure, or set investment caps could be seen as creating a barrier to entry, knowing full well it will secure the positions of the 'cartel' and restrict opportunity for others. But I repeat, it's quite tenuous at best.

Needless to say, in summary, it's not quite as clear cut as many think, which in part, is probably why UEFA and clubs are reluctant to get into a protracted legal wrangle that could take years to resolve and create a great deal of negative press for both sides. It's likely City have chosen to be pragmatic and play along with UEFA. The compromise reached allows both parties to save face.

DuPont isn't faced with sponsors and brand value.... he has little to lose and a lot to gain from a test case.
Click to expand...

Your post misses several points, Fanchester. In the case of the Olympic sprinters those taking part in the olympic sprints have to meet certain stringent sporting standards, in the form of qualifying times, before they get anywhere near the Olympics proper. I believe Pistorius met the standard for some meetings and competed, so there's no question of discrimination. UEFA lays down purely sporting criteria for qualification for its CL and those meeting them can compete. They may not lay down conditions which are not in accordance with European laws. As Petit pointed out:

More fundamentally, the requirement to break even challenges the way the EU should function as laid down in Article 101 of the European Treaty. From the very start, in the eyes of the law, there is no real question that UEFA is an association of “associations (national associations) of companies (the clubs)” and that, if need be, its regulations are “decisions” must be in accordance with what is laid down in Article 101 (1) of the Treaty.
Click to expand...

Those taking part in CL almost need to qualify, so there's little difference, other than UEFA also impose additional criteria (financial).
The point being made though is that the criteria set can be perceived as discriminatory, but holds firm still. Hence men can't enter the women's race... even though they meet all criteria bar one (gender). It's not considered sexual discrimination though.


Code: 
article 101:
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.

It's nowhere near as clear cut as you suggest and sport DOES clearly impose restrictions on competitive events that would contravene EU law were it not a sporting competition (e.g. gender based competition).

The counter argument to the anti-competitive angle is that clubs are free to form their own league if they wish, and they are not prohibited from spending as much as they like... they are only prohibited from doing so IF they wish to partake in CL.
A club is free to resign from the PL if it wishes too, and apply to join the FL if it wished to do so). Of course, that's very unlikely given it would be bad for business, but it's an option available.

It's simply far too simplistic to claim 'it's a no brainer and in City's favour'. It's not. We don't know which way any ruling would go. If either side knew for certain, they'd have made the call already.
I 'think' a great deal of UEFA's criteria would fail, but again, you never can tell, and there can be some strange rulings from time to time - which is probably why City opted to take the safer route... since the restrictions imposed don't outweigh the gamble through the courts.
 
Re: City & FFP (continued)

tolmie's hairdoo said:
The ruler of Qatar, asked yesterday what he thought of FFPR?

"My answer? David Luiz!"

I like these guys.
Click to expand...


I like the way we still get tarred with the same brush as PSG even after comments like this.

Two clubs in a similar position but with 2 different ways of dealing with the situation.
 
Re: City & FFP (continued)

abu13 said:
tolmie's hairdoo said:
The ruler of Qatar, asked yesterday what he thought of FFPR?

"My answer? David Luiz!"

I like these guys.
Click to expand...


I like the way we still get tarred with the same brush as PSG even after comments like this.

Two clubs in a similar position but with 2 different ways of dealing with the situation.
Click to expand...

Paris have done nowt wrong, imagine how strong we would be now if we had taken their stance the last two years.

I hope they continue to throw money at it and blow the whole fucking thing apart.

They can start by giving us £70m for Toure!!
 
Re: City & FFP (continued)

@Fanchester:

I don't disagree with your conclusion, i.e. that it is not a open and shut case and could go either way.

But I do disagree with how you arrived at your conclusion.

There is no doubt that FFP falls under the scope of Article 101 of the TFEU, which is designed to control restrictive practices and anti-competitive arrangements. However, EU competition law accepts that effects that are restrictive can be acceptable where those effects are inherent in the pursuit of justified objectives. It matters not whether participation in the CL is by invitation, or on merit: It is governed by Article 101, irrespective.

If UEFA were to successfully defend a case brought against FFP, it would have to show that any restriction on the free movement of players, and downward pressure on wages was an unavoidable and proportionally justified consequence of rules introduced for the good of the game as a whole. And probably also that no alternative rules - without anti-competitive consequences - could achieve the same objectives. They would not get anywhere by trying claim that EU law does not apply because it's an invite-only competition - that's irrelevant.

http://www.soccernomics-agency.com/?p=469
 
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