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

[Matty]

Ex-United chief Gill's Financial Fair Play warning

6th March 2014

FORMER Manchester United chief executive David Gill has warned that clubs breaching financial fair play rules will come under close scrutiny in the coming months.

Mr Gill, who left Old Trafford after 16 years as finance director and latterly CEO, is now a now a key figure within European football's governing body, UEFA, and was speaking to business leaders at a dinner in Manchester organised by accountancy firm PwC and recruitment firm Odgers Berndtson.

He said the new Financial Fair Play rules were designed to protect the integrity of European and domestic competitions and are crucial to the long-term interests of football.

Without explicitly naming United's nearest rivals Manchester City - which has been transformed over the last five years by the near £1bn investment of Abu Dhabi's Sheikh Mansour - Mr Gill said: "Tough investigations will be taking place over the next couple of months.

"In some cases we're not talking about rich men owning clubs, but countries, and there will be work to do around related party transactions".

This latter point is particularly pertinent to Manchester City, given its commercial relationship with Abu Dhabi owned, or related companies, including the Abu Dhabi Tourist Board and major club sponsor Etihad Airlines.

During his speech he paid tribute to his "friend" Sir Alex Ferguson, but laughed-off the Scot's recent claim that he had told Gill to demand £150m from Real Madrid for star player Cristiano Ronaldo, who was sold for £80m.

"He (Sir Alex) is a great man, but he's not always right." he said.

He said in terms of global profile and popularity Manchester United punches way above its weight, and at heart it is : "a small business based on an industrial estate two-and-a-half miles outside the UK's third-largest city."

He reiterated his support for the club's American owners the Glazer family, and said the club had been able to be run more effectively as a private business, rather than as a listed company, and the Glazers had "really added value" and overseen remarkable commercial growth of the business by "exploiting the brand on a global scale."

While discussing on the impact of the Bosman Ruling on football - which allows freedom of movement after contracts expire - and the impact on player wages, Mr Gill said United striker Wayne Rooney new contract is not worth the reported £300,000 per week.

"While it's not at that level, I think, it's fair to say the Rooney family will not be wondering where the next holiday is coming from," he added.

Journalists were asked not to report questions from the audience about Manchester United's current league position.


C**t of the highest order. How on earth can he be seen to be independent given his past affiliation to the Rags?

Translation: "when we drew up the FFP rules we used the generally accepted definition of related party transactions in use across every major economy in the western world.

Then somebody told us it didn't cover deals like the Etihad deal so we are basically going to make it up as we go along."

If that happens they'll be hit by legal action so hard they won't know which day of the week it is. The only reason FFP still exists is because, at this stage, there's no real challenge to it legally. Yes there's a lawyer (the Bosman one) and an agent challenging it, but what UEFA really fear is a member club, with deep pockets, coming after them. They know FFP doesn't hold much water from a legal standpoint, and any challenge, albeit expensive and lengthy, would result in FFP being torn to shreads. That is reason enough for them to bend over backwards to try and placate the likes of City and PSG. All this talk of sanctions and punishment, and investigations, is just to keep people sweet, UEFA know they can't really hurt City or PSG, as they will ultimately end up losing heavily.

 

[George Hannah]

Ex-United chief Gill's Financial Fair Play warning
6th March 2014
FORMER Manchester United chief executive David Gill has warned that clubs breaching financial fair play rules will come under close scrutiny in the coming months.
Mr Gill, who left Old Trafford after 16 years as finance director and latterly CEO, is now a now a key figure within European football's governing body, UEFA, and was speaking to business leaders at a dinner in Manchester organised by accountancy firm PwC and recruitment firm Odgers Berndtson.
He said the new Financial Fair Play rules were designed to protect the integrity of European and domestic competitions and are crucial to the long-term interests of football.
Without explicitly naming United's nearest rivals Manchester City - which has been transformed over the last five years by the near £1bn investment of Abu Dhabi's Sheikh Mansour - Mr Gill said: "Tough investigations will be taking place over the next couple of months.
"In some cases we're not talking about rich men owning clubs, but countries, and there will be work to do around related party transactions".
This latter point is particularly pertinent to Manchester City, given its commercial relationship with Abu Dhabi owned, or related companies, including the Abu Dhabi Tourist Board and major club sponsor Etihad Airlines.

During his speech he paid tribute to his "friend" Sir Alex Ferguson, but laughed-off the Scot's recent claim that he had told Gill to demand £150m from Real Madrid for star player Cristiano Ronaldo, who was sold for £80m.

"He (Sir Alex) is a great man, but he's not always right." he said.

He said in terms of global profile and popularity Manchester United punches way above its weight, and at heart it is : "a small business based on an industrial estate two-and-a-half miles outside the UK's third-largest city."

He reiterated his support for the club's American owners the Glazer family, and said the club had been able to be run more effectively as a private business, rather than as a listed company, and the Glazers had "really added value" and overseen remarkable commercial growth of the business by "exploiting the brand on a global scale."
While discussing on the impact of the Bosman Ruling on football - which allows freedom of movement after contracts expire - and the impact on player wages, Mr Gill said United striker Wayne Rooney new contract is not worth the reported £300,000 per week.
"While it's not at that level, I think, it's fair to say the Rooney family will not be wondering where the next holiday is coming from," he added.
Journalists were asked not to report questions from the audience about Manchester United's current league position.
C**t of the highest order. How on earth can he be seen to be independent given his past affiliation to the Rags?

Translation: "when we drew up the FFP rules we used the generally accepted definition of related party transactions in use across every major economy in the western world.
Then somebody told us it didn't cover deals like the Etihad deal so we are basically going to make it up as we go along."

If that happens they'll be hit by legal action so hard they won't know which day of the week it is. The only reason FFP still exists is because, at this stage, there's no real challenge to it legally. Yes there's a lawyer (the Bosman one) and an agent challenging it, but what UEFA really fear is a member club, with deep pockets, coming after them. They know FFP doesn't hold much water from a legal standpoint, and any challenge, albeit expensive and lengthy, would result in FFP being torn to shreads. That is reason enough for them to bend over backwards to try and placate the likes of City and PSG. All this talk of sanctions and punishment, and investigations, is just to keep people sweet, UEFA know they can't really hurt City or PSG, as they will ultimately end up losing heavily.

Am I foolish not to share your confidence that we have nothing to fear from this carefully orchestrated campaign?

 

[Bozzie]

But what happens when we drop £150m on Messi this summer?

All above goes into meltdown.[/

 

[Hamann Pineapple]

Ex-United chief Gill's Financial Fair Play warning

6th March 2014

FORMER Manchester United chief executive David Gill has warned that clubs breaching financial fair play rules will come under close scrutiny in the coming months.

Mr Gill, who left Old Trafford after 16 years as finance director and latterly CEO, is now a now a key figure within European football's governing body, UEFA, and was speaking to business leaders at a dinner in Manchester organised by accountancy firm PwC and recruitment firm Odgers Berndtson.

He said the new Financial Fair Play rules were designed to protect the integrity of European and domestic competitions and are crucial to the long-term interests of football.

Without explicitly naming United's nearest rivals Manchester City - which has been transformed over the last five years by the near £1bn investment of Abu Dhabi's Sheikh Mansour - Mr Gill said: "Tough investigations will be taking place over the next couple of months.

"In some cases we're not talking about rich men owning clubs, but countries, and there will be work to do around related party transactions".

This latter point is particularly pertinent to Manchester City, given its commercial relationship with Abu Dhabi owned, or related companies, including the Abu Dhabi Tourist Board and major club sponsor Etihad Airlines.

During his speech he paid tribute to his "friend" Sir Alex Ferguson, but laughed-off the Scot's recent claim that he had told Gill to demand £150m from Real Madrid for star player Cristiano Ronaldo, who was sold for £80m.

"He (Sir Alex) is a great man, but he's not always right." he said.

He said in terms of global profile and popularity Manchester United punches way above its weight, and at heart it is : "a small business based on an industrial estate two-and-a-half miles outside the UK's third-largest city."

He reiterated his support for the club's American owners the Glazer family, and said the club had been able to be run more effectively as a private business, rather than as a listed company, and the Glazers had "really added value" and overseen remarkable commercial growth of the business by "exploiting the brand on a global scale."

While discussing on the impact of the Bosman Ruling on football - which allows freedom of movement after contracts expire - and the impact on player wages, Mr Gill said United striker Wayne Rooney new contract is not worth the reported £300,000 per week.

"While it's not at that level, I think, it's fair to say the Rooney family will not be wondering where the next holiday is coming from," he added.

Journalists were asked not to report questions from the audience about Manchester United's current league position.


C**t of the highest order. How on earth can he be seen to be independent given his past affiliation to the Rags?

Translation: "when we drew up the FFP rules we used the generally accepted definition of related party transactions in use across every major economy in the western world.

Then somebody told us it didn't cover deals like the Etihad deal so we are basically going to make it up as we go along."

If that happens they'll be hit by legal action so hard they won't know which day of the week it is. The only reason FFP still exists is because, at this stage, there's no real challenge to it legally. Yes there's a lawyer (the Bosman one) and an agent challenging it, but what UEFA really fear is a member club, with deep pockets, coming after them. They know FFP doesn't hold much water from a legal standpoint, and any challenge, albeit expensive and lengthy, would result in FFP being torn to shreads. That is reason enough for them to bend over backwards to try and placate the likes of City and PSG. All this talk of sanctions and punishment, and investigations, is just to keep people sweet, UEFA know they can't really hurt City or PSG, as they will ultimately end up losing heavily.

Exactly, I see it as the equivalent of Marks & Spencer trying to tell the corner shop owner they are not allowed investment in their business to expand. Ridiculous, hopeless, illegal.

 

[Bozzie]

It's pretty frightening the legal resources our club would be able to call upon should they have to.

The legal profession will always come down to who has the deepest pockets and we could tie this up in red tape for the next decade, or until the money runs out at UEFA.

I don't think the biggest threat comes from UEFA, however.

I think that comes from the cartel of clubs who will simply threaten to walk away and form another version of the Champions League, outside of UEFA, who are now caught between a rock and a hard place.

Bayern, United, Arsenal and Liverpool would be at the forefront of this, with Chelsea, simply playing both ends until they decide which side the coin drops.

UEFA can cope without City and PSG, which is why, even if they don't want to, may have no option but to see us in court, to protect their very own existence.

I think that's why the club are trying to assume a very conciliatory approach with UEFA. I think they'd like to be seen as a club that has spent big in order to redress to balance and play 'catch up' but now having caught up want to operate in a sound financial manner. The new academy facilities help to demonstrate our commitment to developing young talent from all across Europe. The financial figures are improving year on year and, in my opinion, the recent sponsorship deals that have been announced involving other clubs help to demonstrate the value involved in our current deals and actually allow for re-negotiation in the future.

But what happens when we drop £150m on Messi this summer?

All above goes into meltdown.

Well someone would immediately pen a song for Messi which would no doubt involve him pissing in sinks and snorting various types of recreational drugs.
Season tickets sales would go through the roof
Sales of City shirts worldwide would increase to a level none of us could imagine
Interest and awareness in the football club and the Etihad brand would be enormous
The MEN would run a headline grabbing article congratulating Wee Davey on his acquisition of Lee Cattermole from Sunderland for a bargain £22 million
Martin Samuel would praise City for bringing the worlds best player to the Premiership
Shaun Custis would say "Lionel who?" and
Henry Winter would say "Shaun, you really are a thick Geordie twat"

 

[Chris in London]

Ex-United chief Gill's Financial Fair Play warning

6th March 2014

FORMER Manchester United chief executive David Gill has warned that clubs breaching financial fair play rules will come under close scrutiny in the coming months.

Mr Gill, who left Old Trafford after 16 years as finance director and latterly CEO, is now a now a key figure within European football's governing body, UEFA, and was speaking to business leaders at a dinner in Manchester organised by accountancy firm PwC and recruitment firm Odgers Berndtson.

He said the new Financial Fair Play rules were designed to protect the integrity of European and domestic competitions and are crucial to the long-term interests of football.

Without explicitly naming United's nearest rivals Manchester City - which has been transformed over the last five years by the near £1bn investment of Abu Dhabi's Sheikh Mansour - Mr Gill said: "Tough investigations will be taking place over the next couple of months.

"In some cases we're not talking about rich men owning clubs, but countries, and there will be work to do around related party transactions".

This latter point is particularly pertinent to Manchester City, given its commercial relationship with Abu Dhabi owned, or related companies, including the Abu Dhabi Tourist Board and major club sponsor Etihad Airlines.

During his speech he paid tribute to his "friend" Sir Alex Ferguson, but laughed-off the Scot's recent claim that he had told Gill to demand £150m from Real Madrid for star player Cristiano Ronaldo, who was sold for £80m.

"He (Sir Alex) is a great man, but he's not always right." he said.

He said in terms of global profile and popularity Manchester United punches way above its weight, and at heart it is : "a small business based on an industrial estate two-and-a-half miles outside the UK's third-largest city."

He reiterated his support for the club's American owners the Glazer family, and said the club had been able to be run more effectively as a private business, rather than as a listed company, and the Glazers had "really added value" and overseen remarkable commercial growth of the business by "exploiting the brand on a global scale."

While discussing on the impact of the Bosman Ruling on football - which allows freedom of movement after contracts expire - and the impact on player wages, Mr Gill said United striker Wayne Rooney new contract is not worth the reported £300,000 per week.

"While it's not at that level, I think, it's fair to say the Rooney family will not be wondering where the next holiday is coming from," he added.

Journalists were asked not to report questions from the audience about Manchester United's current league position.


C**t of the highest order. How on earth can he be seen to be independent given his past affiliation to the Rags?

Translation: "when we drew up the FFP rules we used the generally accepted definition of related party transactions in use across every major economy in the western world.

Then somebody told us it didn't cover deals like the Etihad deal so we are basically going to make it up as we go along."

If that happens they'll be hit by legal action so hard they won't know which day of the week it is. The only reason FFP still exists is because, at this stage, there's no real challenge to it legally. Yes there's a lawyer (the Bosman one) and an agent challenging it, but what UEFA really fear is a member club, with deep pockets, coming after them. They know FFP doesn't hold much water from a legal standpoint, and any challenge, albeit expensive and lengthy, would result in FFP being torn to shreads. That is reason enough for them to bend over backwards to try and placate the likes of City and PSG. All this talk of sanctions and punishment, and investigations, is just to keep people sweet, UEFA know they can't really hurt City or PSG, as they will ultimately end up losing heavily.

I'm not so sure FFP will be blown out the water in all forms, but I agree entirely in its current form it probably doesn't stand up to scrutiny.

Basically the issue is about EU competition law, which, in a nutshell, exists to ensure that anti-competitive practices are illegal.

The argument you will have no truck with is that the FFPR as they stand effectively cement the position of an existing cartel by making it virtually impossible for any team outside that cartel to challenge the position of those within it. Every business in the world knows that long term and large scale growth is rarely entirely organic, somewhere along the line heavy investment is usually needed.

That however only takes the argument so far. There is an equally valid argument that if you are prepared to stomach mind blowing losses indefinitely, you eventually reach the point that the competition collapses exhausted. The big supermarkets for instance withdrew from the net book agreement, to go off at a slight tangent, and started selling books more cheaply. Independent bookstores who had been protected by the NBA were unable to compete, and one by one went out of business. Why were supermarkets able to do this? Because they could absorb losses and were not prevented from doing so. Now, books cost as much in supermarkets as they ever did in bookshops. (Any competition lawyers out there will know that there is a lot more to that analogy than meets the eye but I simplify grossly in the interests of saving space.)

The point is, propping up an obviously uneconomic enterprise with unsustainable losses and waiting until the competition collapses from financial exhaustion in the long term creates a monopoly, and that is anti-competitive too. So I suspect the competition laws will permit FFPR in principle, provided that they are sufficiently flexible to enable a club that is not part of the existing cartel to challenge the position of those who are by means of investment on a large scale.

The current version of FFPR however limits losses to €45m over three years. This pales into insignificance in terms of the amount you would need to spend to take even a well-established club like Newcastle up to the level at which challenging for the knockout phase of the champions league on a regular basis is feasible. There was a thread on here not long ago questioning how much you would need to spend on a mid table club to put them on a par with City, Arsenal, Chelsea etc and the consensus seemed to be not less than about £200m.*

So I suspect that FFPR will fail the test of EU competition law not because it puts a ceiling on allowable losses, but because that ceiling is set at such a low level as to be anti-competitive in itself. The balance the FFPR need to strike is to prevent anti-competitive conduct in terms of absorbing losses over a sustained period with a view to creating a monopoly, whilst also allowing for investment to enable challenges to be brought to the status quo.

The current allowable debt levels fall laughably short of striking that balance.


*EDIT I suppose another way of testing the current figure is by saying that if you gave Alan Pardew £38m and said 'I want Newcastle in the last 16 of the Champions league in 3 years' he would almost certainly respond by saying 'Well if you do I'll need a shedload more cash than that.'

 

[Newman Noggs]

That senior united officials Gill and Dyke have acquired senior and influential positions in UEFA and the FA respectively to coincide with the implementation of ffpr may indeed be a coincidence. On the other hand, the fact that Gill,with such an obvious conflict of interest, feels confident enough to make such overtly partisan and self-interested comments in public does concern me.

Dyke's proposals will be interesting. I expect that they will conform to the model being practiced by the same paragon of fiscal prudence referred to by Gill.

 

[Balti]

But what happens when we drop £150m on Messi this summer?

All above goes into meltdown.

Well obviously the first thing that would happen is that someone on this forum would pen a song for Messi. No doubt this would involve him pissing in sinks and snorting some type of recreational drug.
Secondly, season ticket sales would go through the roof and then,
Sales of City shirts worldwide would increase to a level none of us could imagine,
Awareness of the football club and the Etihad brand would be huge.
Bluemoon forum would go into meltdown
MUEN would write a headline grabbing story about Davey Moyes fantastic capture of Lee Cattermole from Sunderland for a bargain £22 million and
Shaun Custis would say "Lionel who?"[/quote]

come off it.....everyone knows he is signing for the rags

apparently it's not just cos they are massive but because of the 'istree as well

 

[aguero93:20]

Translation: "when we drew up the FFP rules we used the generally accepted definition of related party transactions in use across every major economy in the western world.

Then somebody told us it didn't cover deals like the Etihad deal so we are basically going to make it up as we go along."

If that happens they'll be hit by legal action so hard they won't know which day of the week it is. The only reason FFP still exists is because, at this stage, there's no real challenge to it legally. Yes there's a lawyer (the Bosman one) and an agent challenging it, but what UEFA really fear is a member club, with deep pockets, coming after them. They know FFP doesn't hold much water from a legal standpoint, and any challenge, albeit expensive and lengthy, would result in FFP being torn to shreads. That is reason enough for them to bend over backwards to try and placate the likes of City and PSG. All this talk of sanctions and punishment, and investigations, is just to keep people sweet, UEFA know they can't really hurt City or PSG, as they will ultimately end up losing heavily.

I'm not so sure FFP will be blown out the water in all forms, but I agree entirely in its current form it probably doesn't stand up to scrutiny.

Basically the issue is about EU competition law, which, in a nutshell, exists to ensure that anti-competitive practices are illegal.

The argument you will have no truck with is that the FFPR as they stand effectively cement the position of an existing cartel by making it virtually impossible for any team outside that cartel to challenge the position of those within it. Every business in the world knows that long term and large scale growth is rarely entirely organic, somewhere along the line heavy investment is usually needed.

That however only takes the argument so far. There is an equally valid argument that if you are prepared to stomach mind blowing losses indefinitely, you eventually reach the point that the competition collapses exhausted. The big supermarkets for instance withdrew from the net book agreement, to go off at a slight tangent, and started selling books more cheaply. Independent bookstores who had been protected by the NBA were unable to compete, and one by one went out of business. Why were supermarkets able to do this? Because they could absorb losses and were not prevented from doing so. Now, books cost as much in supermarkets as they ever did in bookshops. (Any competition lawyers out there will know that there is a lot more to that analogy than meets the eye but I simplify grossly in the interests of saving space.)

The point is, propping up an obviously uneconomic enterprise with unsustainable losses and waiting until the competition collapses from financial exhaustion in the long term creates a monopoly, and that is anti-competitive too. So I suspect the competition laws will permit FFPR in principle, provided that they are sufficiently flexible to enable a club that is not part of the existing cartel to challenge the position of those who are by means of investment on a large scale.

The current version of FFPR however limits losses to €45m over three years. This pales into insignificance in terms of the amount you would need to spend to take even a well-established club like Newcastle up to the level at which challenging for the knockout phase of the champions league on a regular basis is feasible. There was a thread on here not long ago questioning how much you would need to spend on a mid table club to put them on a par with City, Arsenal, Chelsea etc and the consensus seemed to be not less than about £200m.*

So I suspect that FFPR will fail the test of EU competition law not because it puts a ceiling on allowable losses, but because that ceiling is set at such a low level as to be anti-competitive in itself. The balance the FFPR need to strike is to prevent anti-competitive conduct in terms of absorbing losses over a sustained period with a view to creating a monopoly, whilst also allowing for investment to enable challenges to be brought to the status quo.

The current allowable debt levels fall laughably short of striking that balance.


*EDIT I suppose another way of testing the current figure is by saying that if you gave Alan Pardew £38m and said 'I want Newcastle in the last 16 of the Champions league in 3 years' he would almost certainly respond by saying 'Well if you do I'll need a shedload more cash than that.'

The really funny part Chris is they think they're dropping that 15m p.a. figure to 10m p.a. in a few years.

 

[aguero93:20]

Few words for thought after the newspapers claims on the Liverpool situation yesterday from the regulations written by UEFA:

Article 11 – Equal treatment and confidentiality
1 The licensor ensures equal treatment of all licence applicants during the core
process.
Article 12 – Definition of licence applicant
1 A licence applicant may only be a football club, i.e. a legal entity fully responsible
for a football team participating in national and international competitions which
either:
a) is a registered member of a UEFA member league
1 The licence applicant must prove that as at 31 March preceding the licence
season it has no overdue payables (as defined in Annex VIII) towards its
employees as well as social/tax authorities as a result of contractual and legal
obligations towards its employees that arose prior to the previous 31 December.
1 All licensees that have qualified for a UEFA club competition must comply with
the monitoring requirements, i.e. with the break-even requirement (Articles 58 to
63) and with the other monitoring requirements (Articles 64 to 68).


The following clubs are exempt from the break-even requirement:
a) a club that qualifies for a UEFA club competition on sporting merit and is
granted special permission as defined in Article 15;
b) a licensee that demonstrates it has relevant income and relevant expenses
(as defined in Article 58) below EUR 5 million in respect of each of the two
reporting periods ending in the two years before commencement of the
UEFA club competitions. Such an exemption decision is taken by the UEFA
Club Financial Control Body and is final.
Article 15
1 If a club qualifies for a UEFA club competition on sporting merit but has not
undergone any licensing process at all or has undergone a licensing process
which is lesser/not equivalent to the one applicable for top division clubs,
because it belongs to a division other than the top division, the UEFA member
association of the club concerned may – on behalf of such a club – request an
extraordinary application of the club licensing system in accordance with
Annex IV.
2 Based on such an extraordinary application, UEFA may grant special permission
to the club to enter the corresponding UEFA club competition subject to the
relevant UEFA club competition regulations. Such an extraordinary application
applies only to the specific club and for the season in question.

Liverpool belong to the top division of a UEFA member league, will presumably qualify for a UEFA European club competition, (F.A. or in our case Premier League as the F.A. have delegated) and have been a member for at least 3 years, with turnover exceeding 5m euro in each of those years, therefore they are not exempt and have to pass the break-even requirement like everyone else.

 

[gordondaviesmoustache]

*EDIT I suppose another way of testing the current figure is by saying that if you gave Alan Pardew £38m and said 'I want Newcastle in the last 16 of the Champions league in 3 years' he would almost certainly respond by saying 'Well if you do I'll need a shedload more cash than that, you fackin' ald cant.'

Edited for accuracy.

 

[dave_blue12]

If that happens they'll be hit by legal action so hard they won't know which day of the week it is. The only reason FFP still exists is because, at this stage, there's no real challenge to it legally. Yes there's a lawyer (the Bosman one) and an agent challenging it, but what UEFA really fear is a member club, with deep pockets, coming after them. They know FFP doesn't hold much water from a legal standpoint, and any challenge, albeit expensive and lengthy, would result in FFP being torn to shreads. That is reason enough for them to bend over backwards to try and placate the likes of City and PSG. All this talk of sanctions and punishment, and investigations, is just to keep people sweet, UEFA know they can't really hurt City or PSG, as they will ultimately end up losing heavily.

I'm not so sure FFP will be blown out the water in all forms, but I agree entirely in its current form it probably doesn't stand up to scrutiny.

Basically the issue is about EU competition law, which, in a nutshell, exists to ensure that anti-competitive practices are illegal.

The argument you will have no truck with is that the FFPR as they stand effectively cement the position of an existing cartel by making it virtually impossible for any team outside that cartel to challenge the position of those within it. Every business in the world knows that long term and large scale growth is rarely entirely organic, somewhere along the line heavy investment is usually needed.

That however only takes the argument so far. There is an equally valid argument that if you are prepared to stomach mind blowing losses indefinitely, you eventually reach the point that the competition collapses exhausted. The big supermarkets for instance withdrew from the net book agreement, to go off at a slight tangent, and started selling books more cheaply. Independent bookstores who had been protected by the NBA were unable to compete, and one by one went out of business. Why were supermarkets able to do this? Because they could absorb losses and were not prevented from doing so. Now, books cost as much in supermarkets as they ever did in bookshops. (Any competition lawyers out there will know that there is a lot more to that analogy than meets the eye but I simplify grossly in the interests of saving space.)

The point is, propping up an obviously uneconomic enterprise with unsustainable losses and waiting until the competition collapses from financial exhaustion in the long term creates a monopoly, and that is anti-competitive too. So I suspect the competition laws will permit FFPR in principle, provided that they are sufficiently flexible to enable a club that is not part of the existing cartel to challenge the position of those who are by means of investment on a large scale.

The current version of FFPR however limits losses to €45m over three years. This pales into insignificance in terms of the amount you would need to spend to take even a well-established club like Newcastle up to the level at which challenging for the knockout phase of the champions league on a regular basis is feasible. There was a thread on here not long ago questioning how much you would need to spend on a mid table club to put them on a par with City, Arsenal, Chelsea etc and the consensus seemed to be not less than about £200m.*

So I suspect that FFPR will fail the test of EU competition law not because it puts a ceiling on allowable losses, but because that ceiling is set at such a low level as to be anti-competitive in itself. The balance the FFPR need to strike is to prevent anti-competitive conduct in terms of absorbing losses over a sustained period with a view to creating a monopoly, whilst also allowing for investment to enable challenges to be brought to the status quo.

The current allowable debt levels fall laughably short of striking that balance.


*EDIT I suppose another way of testing the current figure is by saying that if you gave Alan Pardew £38m and said 'I want Newcastle in the last 16 of the Champions league in 3 years' he would almost certainly respond by saying 'Well if you do I'll need a shedload more cash than that.'

The really funny part Chris is they think they're dropping that 15m p.a. figure to 10m p.a. in a few years.

It's interesting to put it into the context of the money that is available from being in the CL which is currently £25-30m rising to £30-40m next season. And no club is allowed to invest more than £15m dropping to £10m per annum to try to compete with the clubs on that gravy train !

A coach and horses methinks !

 

[aguero93:20]

I'm not so sure FFP will be blown out the water in all forms, but I agree entirely in its current form it probably doesn't stand up to scrutiny.

Basically the issue is about EU competition law, which, in a nutshell, exists to ensure that anti-competitive practices are illegal.

The argument you will have no truck with is that the FFPR as they stand effectively cement the position of an existing cartel by making it virtually impossible for any team outside that cartel to challenge the position of those within it. Every business in the world knows that long term and large scale growth is rarely entirely organic, somewhere along the line heavy investment is usually needed.

That however only takes the argument so far. There is an equally valid argument that if you are prepared to stomach mind blowing losses indefinitely, you eventually reach the point that the competition collapses exhausted. The big supermarkets for instance withdrew from the net book agreement, to go off at a slight tangent, and started selling books more cheaply. Independent bookstores who had been protected by the NBA were unable to compete, and one by one went out of business. Why were supermarkets able to do this? Because they could absorb losses and were not prevented from doing so. Now, books cost as much in supermarkets as they ever did in bookshops. (Any competition lawyers out there will know that there is a lot more to that analogy than meets the eye but I simplify grossly in the interests of saving space.)

The point is, propping up an obviously uneconomic enterprise with unsustainable losses and waiting until the competition collapses from financial exhaustion in the long term creates a monopoly, and that is anti-competitive too. So I suspect the competition laws will permit FFPR in principle, provided that they are sufficiently flexible to enable a club that is not part of the existing cartel to challenge the position of those who are by means of investment on a large scale.

The current version of FFPR however limits losses to €45m over three years. This pales into insignificance in terms of the amount you would need to spend to take even a well-established club like Newcastle up to the level at which challenging for the knockout phase of the champions league on a regular basis is feasible. There was a thread on here not long ago questioning how much you would need to spend on a mid table club to put them on a par with City, Arsenal, Chelsea etc and the consensus seemed to be not less than about £200m.*

So I suspect that FFPR will fail the test of EU competition law not because it puts a ceiling on allowable losses, but because that ceiling is set at such a low level as to be anti-competitive in itself. The balance the FFPR need to strike is to prevent anti-competitive conduct in terms of absorbing losses over a sustained period with a view to creating a monopoly, whilst also allowing for investment to enable challenges to be brought to the status quo.

The current allowable debt levels fall laughably short of striking that balance.


*EDIT I suppose another way of testing the current figure is by saying that if you gave Alan Pardew £38m and said 'I want Newcastle in the last 16 of the Champions league in 3 years' he would almost certainly respond by saying 'Well if you do I'll need a shedload more cash than that.'

The really funny part Chris is they think they're dropping that 15m p.a. figure to 10m p.a. in a few years.

It's interesting to put it into the context of the money that is available from being in the CL which is currently £25-30m rising to £30-40m next season. And no club is allowed to invest more than £15m dropping to £10m per annum to try to compete with the clubs on that gravy train !

A coach and horses methinks !

It can rise to a lot more than that as well, I think in a few more years time it'll be possible for the bigger clubs if they progress to the latter stages to make anything up to £70-80m from tv money alone.

 

[Chris in London]

*EDIT I suppose another way of testing the current figure is by saying that if you gave Alan Pardew £38m and said 'I want Newcastle in the last 16 of the Champions league in 3 years' he would almost certainly respond by saying 'Well if you do I'll need a shedload more cash than that, you fackin' ald can't.' before sticking the heed on you for asking the question.

Edited for accuracy.

Further edited for further accuracy.

 

[cibaman]

Wouldn't City be the benchmark?

If the courts wanted to determine what would be the necessary investment required to break into the cartel then they only have to look at the amounts invested by Sheikh Mansour.

 

[aguero93:20]

Wouldn't City be the benchmark?

If the courts wanted to determine what would be the necessary investment required to break into the cartel then they only have to look at the amounts invested by Sheikh Mansour.

I think about 150-170% of the total cost of any of the Cartel's squads (including the costs of bringing home-developed players through) in their own league allowing for phases of development/recruitment like we had would be fair (although I wouldn't call myself an expert on this)

 

[inbetween]

It's pretty frightening the legal resources our club would be able to call upon should they have to.

The legal profession will always come down to who has the deepest pockets and we could tie this up in red tape for the next decade, or until the money runs out at UEFA.

I don't think the biggest threat comes from UEFA, however.

I think that comes from the cartel of clubs who will simply threaten to walk away and form another version of the Champions League, outside of UEFA, who are now caught between a rock and a hard place.

Bayern, United, Arsenal and Liverpool would be at the forefront of this, with Chelsea, simply playing both ends until they decide which side the coin drops.

UEFA can cope without City and PSG, which is why, even if they don't want to, may have no option but to see us in court, to protect their very own existence.

Two points here.

Firstly, it's not often mentioned, but this is one of the key reasons that Ferran is our CEO. He has a very impressive contacts book that includes key figures from the very top of the football world down. He's put in a lot of work already into building relationships with the world's biggest clubs (except for those who fall into that category who are our domestic rivals). Let's take Bayern as a case in point. Remember a couple of years back how, when we drew them in the CL, they regarded us will ill-disguised contempt? In the summer just gone they invited us to Munich to feature in their showpiece pre-season tournament and when they came to Manchester in September for their next CL engagement against us, their execs shared a platform with ours.

One thing I'd remember about the above scenario. Our owner is the son of the President, a key government minister and prominent member of the royal family of the nation with the world's second biggest sovereign wealth fund. If it comes to a breakaway, think what could be brought to the table if we're involved that won't be available if we're excluded. Do people think that Bayern, Barca and Real would turn their backs on that? I don't. There'd certainly be a risk of alienating them if they were going to have to compete in the long-term with a City that's propped up by Abu Dhabi money, but City are going be complying with FFP so aren't going to be rocking the boat in a way that would upset these teams. And the potential other benefits we can supply are vast.

In my opinion, if the likes of Kroenke or Henry think they can manoeuvre to exclude us, they may just get a shock.

I would certainly be interested in the reaction of PSG's owners if attempts are also made to exclude them from any breakaway.

Barcelona might not want to bring an end to a £125m shirt sponsorship deal with the Qatar Foundation.

Or even Arsenal, for that matter? The Emirates deal might suddenly disappear if Sheikh Mansour has a word with his father-in-law.

Whilst all the above would certainly bring major leverage for consideration, I would not trust some of the lengths our rivals will go to.

Perhaps someone in Abu Dhabi might want to sponsor Real Madrid's shirts next season, or just buy T Mobile in Germany just for a little extra insurance!!

That isn't going to happen over football, football isn't the be all end all to these businesses rather just the front of the shop... Fully complying with the FFP isn't a bad thing for us, it means we are financially sound and that the club is sustainable. To attack the idea we need to be in profit is ridiculous because a business cannot operate outside it's means. We can't go on forever relying on Sheikh Mansour to pump in this money, yes he probably would do forever, but we are building a world class academy, expanding the stadium and creating a commercial powerhouse for a reason. We do not want to take on UEFA because they have the power to explode this brand. I still don't believe for one second that UEFA are out to get City like many seem to think. I actually honestly believe they are trying to get a grip on the transfer market and regulate the wild spending which is getting beyond ridiculous in terms of player valuations and even wages are only going up.

If City were to fail the FFP test, I don't believe it is in UEFA's interests to expel us because that punishment does not fit the bill, it would result in lower income and therefore a further failure of the FFP rather than attempting to work with the club to solve it. If UEFA wants to tackle this problem and judging on the objective of FFP, they will warn clubs and stage the punishments. If a club like PSG wants to carry on spending without worrying about FFP then the punishments will get more severe because we already know the allowable losses fall every year. The way we have been doing things shows that in the very near future we will pass FFP without a problem so it does not make sense for UEFA to expel us and I am sure they won't.

As for a breakaway league, that would never happen because a statute of continued membership of UEFA is that it's member associations participate in UEFA competitions. Therefore if the FA and it's clubs fail to participate in UEFA competitions or refuse to. England could be expelled from competing in UEFA and possibly even FIFA competitions (World Cup, Euro's etc). It will never ever happen.

 

[james1910]

gary cook is on talksport this afternoon lets see what the monster as to say about this!!!!!!

 

[aguero93:20]

gary cook is on talksport this afternoon lets see what the monster as to say about this!!!!!!

Dreading it, I now hold him in much higher regard than I used to but he shouldn't be allowed near microphones to talk about football.

 

[Exeter Blue I am here]

That senior united officials Gill and Dyke have acquired senior and influential positions in UEFA and the FA respectively to coincide with the implementation of ffpr may indeed be a coincidence. On the other hand, the fact that Gill,with such an obvious conflict of interest, feels confident enough to make such overtly partisan and self-interested comments in public does concern me.

Dyke's proposals will be interesting. I expect that they will conform to the model being practiced by the same paragon of fiscal prudence referred to by Gill.

What concerns me is that this is their last realistic chance to nobble us. Next year, with costs down and incomes up, will be too late. I therefore have little doubt that the assorted reps of Liverpool, Barca, Madrid, Munich, Arsenal and the Rags will be putting the squeeze on Twatini for all they're worth backstage, to "do something about us". City have done well to comply thus far, and engage with UEFA, but these backstabbers are not our friends. They will want us out because we are a long term threat to their incomes and trophy winning chances, and we should prepare for every sly piece of manipulation, rule changing and shady interpretation possible