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

forensic onions said:
Hi Guys. I have a general football blog started recently (it's called Forensic Onions). I have just posted an article about FFP which I think is obviously relevant to ManCity and their fans. If you want to have a gander here's a link:

https://forensiconions.wordpress.com/2015/09/24/the-fs-of-ffp/

If you want to subscribe on twitter it's @ForensicOnions


I'm not a ManCity fan but I think the part of FFP which is trying to cap the likes of City, PSG, Chelsea from competing with the old money uber clubs is utter bollocks.
Click to expand...

You've gone wrong in the first sentence there. FIFA is nothing to do with FFP
 
forensic onions said:
Have City or PSG actually challenged FFP legally yet ?
Click to expand...

There are people better qualified than me to reply; Prestwich blue being your man.
Niether Club has challenged it. However City supporters club and PSG supporter club are part of DuPont's case against UEFA as affected consumers. Part of the argument as consumers is, as I understand it, that the clubs will have to increase ticket prices in order to increase revenue, to stay competitive. This is because by UEFA's ffp model they have placed restrictions on how much an owner can invest into their business. This means revenues have to be raised primarily by sponsorship deals, match day income, tv deals, competions and merchandise. As City and PSG have not had a long history of sustained success neither club can command as high a sponsorship deal as the established clubs. All of whom gained their position initially by owner investment far surpassing what their revenue streams were at the time. As owners are limited to what they can invest then the argument is it will inevitably lead to an increase burden on the fans (match going ones) to pick up the slack. It will also entrench the position of the so called 'big clubs' protecting their advantageous position - stiffling true competition.

In reality this is a far bigger problem to PSG than City as their league has less TV money and global appeal. Also French tax laws mean they are at a disadvantage and have to pay higher salaries to compensate for the higher tax paid in France. City are in a better position due to the premier league money and also because City are one club in a football group. City's idea with the City football group is obviously to attract sponsors by offering exposure on many continents and therefore increase revenues for the whole group. Most City fans i know arr against it as we see it as immoral. We know we won the lottery when the sheik bought the club, but are not against other clubs being lucky as well. Think it is good to have a truely competitive league. Unlike arsenal, rags etc I don't think our owners are scared of healthy competion.

City made it very clear they were extremely angry about the rule changes that were brought in AFTER our books had been submitted for ffp inspection that led to us 'failing' ffp. Think it is pretty clear they left UEFA in no doubt that there would be court action if it was tried again. Personally I think City or PSG would win any court action because it has to be anti competitive. Our club has no debt, the sheik has put it all in equity. Therefore there is no risk to the club, with the hypothetical scenario of the sheik asking for his money back, which would be the case if the money was loaned to the club like other owners have done, abromovich being one. The club and its revenues have grown hugely so it is difficult to say the sheiks business model isn't working. His personal wealth is so great that his investment in City is small in comparison and if he wanted to continue investing at the rate he did in 2010, placing it in to equity he clearly could. However that clearly never was his plan to behave as a 'sugar daddy' it was projected large scale investment to eventually make profit's and have fun on the way. He is following a business plan. Can't see how a court would see it any other way and UEFA's efforts to prevent him from investing in his own business at no risk to the club would be slaughtered. As footballers are professionals and have a career can't see how it could be argued football is purely a sport, and outside of normal business laws particularly when it has billions of pounds swilling around. So being blocked from UEFA competions, when you have satisfied the qualification process to compete because you have fallen foul of cartel protectionism wouldn't wash I think. Saying it is an invitation competion would be shown up as the champions league has no precedent to say that is the case (to my knowledge). Participating is the only way you gain sponsorship thus improving your business.

City didn't challenge it for 2 reasons I think. 1. It would take years and end up being a pyrrhic victory. By the time its won you would be so far off the pace, and no top players would have joined the club. 2. Financially City were/are in a strong and improving situation where the fine and punishments were 'a pinch' in the long term trajectory of the club. Ffp is being slackened for new owners simply because it is clear that it will now have a limited impact on the club

Sorry for the long post,
 
Just incase it comes across wrong, City fans I know don't think the City Football Group is immoral its ffp they think is immoral!!
 
magicscarf said:
There are people better qualified than me to reply; Prestwich blue being your man.
Niether Club has challenged it. However City supporters club and PSG supporter club are part of DuPont's case against UEFA as affected consumers. Part of the argument as consumers is, as I understand it, that the clubs will have to increase ticket prices in order to increase revenue, to stay competitive. This is because by UEFA's ffp model they have placed restrictions on how much an owner can invest into their business. This means revenues have to be raised primarily by sponsorship deals, match day income, tv deals, competions and merchandise. As City and PSG have not had a long history of sustained success neither club can command as high a sponsorship deal as the established clubs. All of whom gained their position initially by owner investment far surpassing what their revenue streams were at the time. As owners are limited to what they can invest then the argument is it will inevitably lead to an increase burden on the fans (match going ones) to pick up the slack. It will also entrench the position of the so called 'big clubs' protecting their advantageous position - stiffling true competition.

In reality this is a far bigger problem to PSG than City as their league has less TV money and global appeal. Also French tax laws mean they are at a disadvantage and have to pay higher salaries to compensate for the higher tax paid in France. City are in a better position due to the premier league money and also because City are one club in a football group. City's idea with the City football group is obviously to attract sponsors by offering exposure on many continents and therefore increase revenues for the whole group. Most City fans i know arr against it as we see it as immoral. We know we won the lottery when the sheik bought the club, but are not against other clubs being lucky as well. Think it is good to have a truely competitive league. Unlike arsenal, rags etc I don't think our owners are scared of healthy competion.

City made it very clear they were extremely angry about the rule changes that were brought in AFTER our books had been submitted for ffp inspection that led to us 'failing' ffp. Think it is pretty clear they left UEFA in no doubt that there would be court action if it was tried again. Personally I think City or PSG would win any court action because it has to be anti competitive. Our club has no debt, the sheik has put it all in equity. Therefore there is no risk to the club, with the hypothetical scenario of the sheik asking for his money back, which would be the case if the money was loaned to the club like other owners have done, abromovich being one. The club and its revenues have grown hugely so it is difficult to say the sheiks business model isn't working. His personal wealth is so great that his investment in City is small in comparison and if he wanted to continue investing at the rate he did in 2010, placing it in to equity he clearly could. However that clearly never was his plan to behave as a 'sugar daddy' it was projected large scale investment to eventually make profit's and have fun on the way. He is following a business plan. Can't see how a court would see it any other way and UEFA's efforts to prevent him from investing in his own business at no risk to the club would be slaughtered. As footballers are professionals and have a career can't see how it could be argued football is purely a sport, and outside of normal business laws particularly when it has billions of pounds swilling around. So being blocked from UEFA competions, when you have satisfied the qualification process to compete because you have fallen foul of cartel protectionism wouldn't wash I think. Saying it is an invitation competion would be shown up as the champions league has no precedent to say that is the case (to my knowledge). Participating is the only way you gain sponsorship thus improving your business.

City didn't challenge it for 2 reasons I think. 1. It would take years and end up being a pyrrhic victory. By the time its won you would be so far off the pace, and no top players would have joined the club. 2. Financially City were/are in a strong and improving situation where the fine and punishments were 'a pinch' in the long term trajectory of the club. Ffp is being slackened for new owners simply because it is clear that it will now have a limited impact on the club

Sorry for the long post,
Click to expand...


Thanks for taking the time. Personally I would love to see the City ownership take on UEFA, as if anyone has the resources to do so, they do. It's an utterly bullshit piece of legislation that is contra to various basic corporate and competitive laws.
 
forensic onions said:
Thanks for taking the time. Personally I would love to see the City ownership take on UEFA, as if anyone has the resources to do so, they do. It's an utterly bullshit piece of legislation that is contra to various basic corporate and competitive laws.
Click to expand...
I read the piece on the train back from London tonight and I'd say you certainly make the right sort of noises but your argument isn't developed as well as it could be. Also you haven't understood the difference between debt and losses. You can make a loss as a business without increasing your levels of debt. For example, one of the biggest costs to a football club is the amortisation of player contracts but that cost doesn't involve any cash leaving the club. Similarly, you can have high levels of debt but still be profitable, as long as your profit covers the interest payable on the debt. The issue with FFP from that point of view is that high debt levels, particularly when secured on the assets of the club, are potentially dangerous, even if the debt appears to be manageable.

The case against FFP, as I understand it, is based on the specific issue of the use of the break-even requirement rather than the whole world issue of financial regulation. No one who has the genuine interest of the game at heart could seriously object to an attempt to ensure financial stability and sustainability. There's nothing intrinsically wrong with trying to regulate the financial health of football clubs but regulation can also have unintended consequences and i nthe case of FFP, it appears to secure the status of the financially powerful clubs and discriminate against those willing and able to invest, even if that leads to losses in the short to medium term. The addition of Annex XII, which allowed investment under agreed & controlled circumstances, went some way to dealing with that issue.

But ultimately, any regulation that doesn't deal with the not uncommon situation where a club has debts either secured against its assets, which can lead to those being stripped away from the club, or owed to an owner, and that the club has no way of repaying if & when called upon to do so, is fatally flawed.

City could probably have challenged the specific issue which caused them to be sanctioned, as that involved UEFA moving the goalposts when to late to do anything about it and after we'd satisfied one of their original requirements. But this could have gone on for years, made us enemies at UEFA and would have been largely irrelevant if we can actually meet FFP for the foreseeable future.
 
You must log in or register to reply here.
Unread Posts

Don't have an account? Register now and see fewer ads!

SIGN UP
Back
Top
✖
  AdBlock Detected
Bluemoon relies on advertising to pay our hosting fees. Please support the site by disabling your ad blocking software to help keep the forum sustainable. Thanks.