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FFP facing legal challenge (updated pg 12)
- Thread starter Neil_K
- Start date
Newman Noggs
Well-Known Member
Re: Wall St Journal Article on FFP
Hmmmm. Not convinced by any of that argument. For a start, there are rules in place to prevent major businesses from becoming too large and oppressing smaller businesses for a very good reason. Fewer major players equals lower competition and the proliferation of cartels fixing prices and generally acting in their own interests and to the detriment of the consumer.
The businesses that thrive are either businesses that identify a niche and fill it before anyone else or businesses that thrive and grow in an existing market place due to investment. Some of the largest companies go to the public to raise that investment to enable them to expand, others seek private investment. It's a cornerstone of any sensible economy that a business should be able to raise finance in any legal way it sees fit.
United themselves raised monies to invest in their infrastructure by offering shares to the public and then used that money to buy players. This isn't an option for most clubs so the only alternative is private investment. Now United and other clubs who have established themselves as major earners through public or private investment have decided that they are not going to allow anyone else to to do the same. The effect of that is that there is no competition.
One part of what you say I do agree with is;
"Continuing the analogy to a traditional business, almost all of them have to show to someone, either a bank or an investor, that their business plan will have some chance of success"
However, what UEFA are proposing, and you agree with, means that no-one can be successful because no-one can invest. And United et al, as architects of the rules, know that very well.
As for football fans just choosing another club. I well recall Middlesbrough's Ayrsome Park being locked up by the Official Receiver following the club's compulsory winding-up. They just formed a new company and carried on as before. Rangers will do the same eventually and be in a stronger position presuming, of course, that new rules aren't introduced to stop them.
enzoedinson said:As for business practices, the analogy to Microsoft is not accurate. Microsoft started very slowly and only grew when they were sure that they would be able to sustain growth. That's what any successful entrepreneur will tell you -- don't get ahead of yourself. You have to have sound fundamentals for growth. If you try to grow too fast, you get in too deep and unless everything goes perfectly you will fail. Yes, that's the free market, but this is a sport and not a business. When a club fails, the supporters lose something that you can't just go out and buy more of on the free market. If City goes under, are we all just going to become Utd or Arsenal fans? I would actually support a 49 percent rule like in Germany. The free market be damned.
Continuing the analogy to a traditional business, almost all of them have to show to someone, either a bank or an investor, that their business plan will have some chance of success. A wealthy owner could certainly fund their own business indefinitely, but if they were to stop, their business will either fail or other investors will have to be sure that the business is sustainable. You see small business fail all the time because they are funded only by their owners as a pet project and the owner is free to run the business as poorly as he wants. This makes sense when he is the only truly interested party, but with football clubs, the supporters are also interested parties. Their interests should be taken into account, and just letting the free market take its course isn't good for anyone.
Hmmmm. Not convinced by any of that argument. For a start, there are rules in place to prevent major businesses from becoming too large and oppressing smaller businesses for a very good reason. Fewer major players equals lower competition and the proliferation of cartels fixing prices and generally acting in their own interests and to the detriment of the consumer.
The businesses that thrive are either businesses that identify a niche and fill it before anyone else or businesses that thrive and grow in an existing market place due to investment. Some of the largest companies go to the public to raise that investment to enable them to expand, others seek private investment. It's a cornerstone of any sensible economy that a business should be able to raise finance in any legal way it sees fit.
United themselves raised monies to invest in their infrastructure by offering shares to the public and then used that money to buy players. This isn't an option for most clubs so the only alternative is private investment. Now United and other clubs who have established themselves as major earners through public or private investment have decided that they are not going to allow anyone else to to do the same. The effect of that is that there is no competition.
One part of what you say I do agree with is;
"Continuing the analogy to a traditional business, almost all of them have to show to someone, either a bank or an investor, that their business plan will have some chance of success"
However, what UEFA are proposing, and you agree with, means that no-one can be successful because no-one can invest. And United et al, as architects of the rules, know that very well.
As for football fans just choosing another club. I well recall Middlesbrough's Ayrsome Park being locked up by the Official Receiver following the club's compulsory winding-up. They just formed a new company and carried on as before. Rangers will do the same eventually and be in a stronger position presuming, of course, that new rules aren't introduced to stop them.
Tim of the Oak
Well-Known Member
- Joined
- 29 Dec 2012
- Messages
- 20,833
Re: Wall St Journal Article on FFP
We don't need to challenge Uefa because City are playing the long games as people have said. If we are patient and comply with the rules for the foreseeable future then another Club / owners are likely to challenge FFPR anyway. In this way, we enhance our reputation with the powers that be with the possibility of benefitting from a successful FFPR legal challenge brought from elsewhere (although we may be self-sufficient by then anyway).
There are masters of this long game who can learn from. For example, The French continue to secure billions for their farmers from the EU through the Common Agricultural policy because they maintain many friends in e.g. the European Commission and Member State allies by supporting them year in year out on policy and legislative changes that are small beans compared to the CAP. Then when it comes to the major deals worth billions the French use the loyalty they have built up to secure the most advantage deal for themsleves. In contrast, the UK has tended to argue against less significant issues in the EU if they are not in our (sometimes short-term) interests. Having few friends in the EU contributes to us / the UK getting shafted on the major deals where the stakes are highest. This is a bit over-simplified I know and there are a few exceptions I know such as the UK helping to block a budget increase from the European Commission, recently.
Surely part of the reason we have Soriano, Txiki's and Vieira in prominent positions is partly because their skills and reputations will help to open doors with the likes of Uefa - compared with the more confrontational Cook. Clearly, they have a lot of other things on their plate too like developing the Club.
Also, people who have worked with European institutions will know that the best time to influence the rules are in the thinking and planning stages. As we know, The horse has bolted on FFPR with implementation happening so we need to make the best of the situation.
Pam said:mancity dan said:jake28 said:Totally agree. Anything won by Europe's cartel from here on in will always be tainted in my eyes. What irritates me most is the criticism of City with no comeback whatsoever from the club,we just seem to be pandering to the very clubs that instigated these rules.
We as a club don't want to be seen as upsetting the apple-cart - very shrewd move imo as Abu Dhabi is linked to how City handle themselves in the public eye. There will be, in the future a player or a club who will take UEFA to court over the FFPR's. Until then we can easily comply to the guidelines set without any of the plans set by ADUG failing.
Uefa are universally despised so challenging them wouldn't represent bad publicity anyway.
We don't need to challenge Uefa because City are playing the long games as people have said. If we are patient and comply with the rules for the foreseeable future then another Club / owners are likely to challenge FFPR anyway. In this way, we enhance our reputation with the powers that be with the possibility of benefitting from a successful FFPR legal challenge brought from elsewhere (although we may be self-sufficient by then anyway).
There are masters of this long game who can learn from. For example, The French continue to secure billions for their farmers from the EU through the Common Agricultural policy because they maintain many friends in e.g. the European Commission and Member State allies by supporting them year in year out on policy and legislative changes that are small beans compared to the CAP. Then when it comes to the major deals worth billions the French use the loyalty they have built up to secure the most advantage deal for themsleves. In contrast, the UK has tended to argue against less significant issues in the EU if they are not in our (sometimes short-term) interests. Having few friends in the EU contributes to us / the UK getting shafted on the major deals where the stakes are highest. This is a bit over-simplified I know and there are a few exceptions I know such as the UK helping to block a budget increase from the European Commission, recently.
Surely part of the reason we have Soriano, Txiki's and Vieira in prominent positions is partly because their skills and reputations will help to open doors with the likes of Uefa - compared with the more confrontational Cook. Clearly, they have a lot of other things on their plate too like developing the Club.
Also, people who have worked with European institutions will know that the best time to influence the rules are in the thinking and planning stages. As we know, The horse has bolted on FFPR with implementation happening so we need to make the best of the situation.
Shaelumstash
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- 30 Apr 2009
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- 8,305
Re: Wall St Journal Article on FFP
The same 4 clubs are going to win the CL for the next 50 years. The Shite will win 15 out of the next 20 league titles, no matter who the manager is. And there's nothing anyone can do about it.
I don't want to be part of a cartel that says to Villa, Everton, Leeds, Newcastle etc, clubs a similar size to us, you are never going to win the league again ever, and in all likelihood you'll never even get to play in the Champions League. It's just going to be boring. The Shite are going to win the league every year, and the 5 below are going to be playing for 2nd place.
I just think it's a really sort sighted and selfish viewpoint to have no problem with rules that help you and fuck everyone else. I'm totally against FFP because it's terrible for City, but I'm also against it because it's terrible for the league and football as a whole.kenzie115 said:Shaelumstash said:"Raising the drawbridge" is exactly what the established big clubs are trying to do to us. I don't want City to do to smaller clubs what the Shite are trying to do to us. We're better than that.kenzie115 said:Hopefully this just delays FFP being implemented for a few years, thus allowing us to make the final steps in improving our squad, without restriction, before raising the drawbridge to the castle which is the Champions League.
We should be arguing for a free market in football, the same as it has been for the last 50 years or whenever it was the maximum wage was abolished. I don't want City to be part of a bullying cartel who invent rules to suit themselves and fuck everyone else over. I want us to win, but winning is hollow if you change the rules so that you've got a huge advantage over your competition.
I want us to win fair and square. Unfortunately it seems 2012 might be the last ever league title won in a free market Premier League.
It's clear to anyone that these rules have been created to hinder us and as such no-one can believe we had anything to do with their creation. However, the fact is, if they come to fruition they'll help keep us at the top for years, and I'm not about to complain about that.
The same 4 clubs are going to win the CL for the next 50 years. The Shite will win 15 out of the next 20 league titles, no matter who the manager is. And there's nothing anyone can do about it.
I don't want to be part of a cartel that says to Villa, Everton, Leeds, Newcastle etc, clubs a similar size to us, you are never going to win the league again ever, and in all likelihood you'll never even get to play in the Champions League. It's just going to be boring. The Shite are going to win the league every year, and the 5 below are going to be playing for 2nd place.
Re: Wall St Journal Article on FFP
I go along with that.
I am sure the Sheikh has been informed of every possibility and at the moment we are covering every angle
OB1 said:I have never had any doubt that FFPR are anti-competitive and open to a successful challenge in the ECJ; not that I am a lawyer.
My opinion is that City will play along with FFP only so far as it suits them.
I'd like to think that City are playing the long game here. I think they are being cautious about FFP but I am also sure that they want to move City to a sensible sustainable business model and FFPR can be a tool for that. I am sure that City do not want to antagonize UEFA, other teams, the media etc unless they have to.
We do not know for sure how much money Mansour is prepared to throw at achieving his ambitions for City but I doubt that he continually wants to pay over the odds for transfer fees and wages indefinitely.
I could be wrong. City could be running scared of UEFA. The guys that run City may not be as smart or as cunning as I give them credit for. Even if they are as bright as I hope, they are not beyond making mistakes, and putting the brakes on the spending as they did last summer may prove to have been a big blunder. Some would say that it has already proved itself to be a serious misjudgment but that picture, and City's true intent, should become much clearer over the next year or so.
I go along with that.
I am sure the Sheikh has been informed of every possibility and at the moment we are covering every angle
Re: Wall St Journal Article on FFP
Now ain't this interesting? inb4 FFP is mysteriously abolished if this is proven.
Now ain't this interesting? inb4 FFP is mysteriously abolished if this is proven.
Exclusive: Madrid at centre of illegal state aid investigation
FFP implications as Real alleged to have colluded with city council over price of land around Bernabeu
Real Madrid are the subject of a European Commission investigation following allegations they have received illegal state aid, the decision on which is overdue and will be of great interest to the likes of Manchester City and Chelsea, under pressure to conform to Uefa Financial Fair Play regulations.
The Independent has learn that the EC competition office, run by the Spaniard Joaquin Almunia, has delayed its decision on the case. It is alleged that Real and Madrid City Council agreed a favourable deal for land around the Bernabeu stadium which is to be redeveloped into a lucrative new shopping mall and hotel complex.
The club's pre-eminence in the transfer market and their ability to borrow money is partly dependent on the success of the development, as well as the construction of a roof over the stadium, which will then be subject to a naming rights auction. Florentino Perez is expected to be re-elected president in May, with the club targeting more high-profile players this summer, possibly including Gareth Bale.
The allegation against Real is that their transactions with Madrid city council, dating back to a 1996 agreement between the two parties, constitute illegal state aid under article 87 of the Treaty of the European Community. It is alleged that the council hugely overestimated its debt to the football club in order that the former could give Real the prime city-centre land they require for their new development.
As with all leading European clubs, Real are subject to Uefa FFP regulations which forbid any form of state aid. In a joint statement released by Uefa's president, Michel Platini, and Almunia last year, they declared that the "objectives [of FFP] are also consistent with the aims and objectives of European Union policy in the field of state aid".
The investigation into Real's deal with Madrid city council centres upon an area of land in the north of the city, Las Tablas. Having originally been valued at €421,000 when it was part of a payment by the council to the club in 1998; the same land was then valued at €22.7m in 2011, a 5,400 per cent rise, when the council decided they had to take it back. In lieu of a €22.7m payment, the club was given the land they needed to develop their stadium.
Under the competition commission's guideline 7.2 on state aid they have a year to investigate and rule on the complaint, made about the valuation of Las Tablas property, unless they are still awaiting information from respondents. The allegation was raised in December 2011. The investigation into Real has been mentioned publicly just once by Almunia, who has also focused on other clubs alleged to have received state aid.
The Spanish club Valencia were judged to have received illegal state aid by a Spanish regional court because a loan from the state-owned Spanish bank Bankia was underwritten by the regional government. Last month, Almunia issued a statement on an investigation into five Dutch clubs, including PSV Eindhoven, over allegations that they had received state aid from local councils in the Netherlands.
FFP has become an issue key to the future of Europe's elite clubs and those clubs who seek to challenge them. Manchester City, in particular, have come under scrutiny for their 10-year Etihad Airways sponsorship deal they signed in 2011, estimated to be worth between £350m-£400m. West Ham's original deal to take over the Olympic Stadium was scrapped after a complaint to the European Union that funding from Newham Council represented state aid.
In response to The Independent's questions about the process, Real said that they had not received "any special privileges in its real estate activities since it has always been subject to the then current legislation and has received the same treatment as any other entity."
The club claimed that the valuation of Las Tablas in 2011, which found its value to have increased 54-fold, was carried about by Madrid City Council, and was therefore "independent". "Acting like this, MCC, through the agreement with Real Madrid, has protected the municipal interests," Real said, "avoiding judicial proceedings that when executed would have foreseeably resulted in an obligation to provide Real Madrid with a higher amount of compensation."
Real said: "The valuation of all the properties have increased due to the time lapse between the different valuation that in some cases exceeds 10 years, the degree of evolution of the urban development process and the evolution of property prices."
The Independent has seen documentation confirming the existence of an investigation by the competition commission into Real receiving state aid. A spokesman for the EC competition office said that the investigation was at a "preliminary" stage.
<a class="postlink" href="http://www.independent.co.uk/sport/football/european/exclusive-madrid-at-centre-of-illegal-state-aid-investigation-8557550.html" onclick="window.open(this.href);return false;">http://www.independent.co.uk/sport/foot ... 57550.html</a>
BluessinceHydeRoad
Well-Known Member
- Joined
- 26 Mar 2012
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- 2,562
Re: Wall St Journal Article on FFP
Here we have the Independent muddying the waters again. FFPR has absolutely nothing to do with this issue at all. The transaction dates back to 1996, long before FFPR was a twinkle in Mr Platini's eye. The article gets it right when it states that article 87 of the EC treaty prohibits some forms of state aid, and the question is whether this deal constitutes such state aid. In other words, it is the law, not Mr Platini's regulations, which will decide the matter. Since agreements to limit investment are also prohibited by article 101 of the same treaty Mr Platini's regulations are unenforceable because, as the article published in the WSJ in March pointed out, the ECJ has stressed that sporting bodies are subject to the law just as much as any other group or organisation in Europe.
LoveCity said:Now ain't this interesting? inb4 FFP is mysteriously abolished if this is proven.
Exclusive: Madrid at centre of illegal state aid investigation
FFP implications as Real alleged to have colluded with city council over price of land around Bernabeu
The allegation against Real is that their transactions with Madrid city council, dating back to a 1996 agreement between the two parties, constitute illegal state aid under article 87 of the Treaty of the European Community.
As with all leading European clubs, Real are subject to Uefa FFP regulations which forbid any form of state aid. In a joint statement released by Uefa's president, Michel Platini, and Almunia last year, they declared that the "objectives [of FFP] are also consistent with the aims and objectives of European Union policy in the field of state aid"
<a class="postlink" href="http://www.independent.co.uk/sport/football/european/exclusive-madrid-at-centre-of-illegal-state-aid-investigation-8557550.html" onclick="window.open(this.href);return false;">http://www.independent.co.uk/sport/foot ... 57550.html</a>
Here we have the Independent muddying the waters again. FFPR has absolutely nothing to do with this issue at all. The transaction dates back to 1996, long before FFPR was a twinkle in Mr Platini's eye. The article gets it right when it states that article 87 of the EC treaty prohibits some forms of state aid, and the question is whether this deal constitutes such state aid. In other words, it is the law, not Mr Platini's regulations, which will decide the matter. Since agreements to limit investment are also prohibited by article 101 of the same treaty Mr Platini's regulations are unenforceable because, as the article published in the WSJ in March pointed out, the ECJ has stressed that sporting bodies are subject to the law just as much as any other group or organisation in Europe.
Re: Wall St Journal Article on FFP
Another whopping headache for Platini is that the French Government have confirmed that footballers are not exempt from the new 75% tax rate for those in earning above a million euros per year
hence the exodus of french players to geordieland
expect another flood of players trying to get out of France again during the next transfer window
furthermore, psg will have to pay even more over the odds to get players to join them, owners bleating to the media, platini jnr asking pops for an increase in his allowance
Another whopping headache for Platini is that the French Government have confirmed that footballers are not exempt from the new 75% tax rate for those in earning above a million euros per year
hence the exodus of french players to geordieland
expect another flood of players trying to get out of France again during the next transfer window
furthermore, psg will have to pay even more over the odds to get players to join them, owners bleating to the media, platini jnr asking pops for an increase in his allowance
A
A
Anonymous
Guest
Re: Wall St Journal Article on FFP
I'm amazed no one in the press has covered PSG's approach to FFP and Napoleon's lad working for them etc. I would have thought Saviour of Football David Conn would have had it nailed?
I'm amazed no one in the press has covered PSG's approach to FFP and Napoleon's lad working for them etc. I would have thought Saviour of Football David Conn would have had it nailed?
Re: Wall St Journal Article on FFP
The really interesting thing about the 75% tax is that its the employer and not the employee who is now liable for it (legal gymnastics pure and simple) so I do wonder if Monaco will have a massive advantage on that one?
Also, third party ownership will be judged to be illegal under FIFA rules soon so an exodus from South America will perhaps happen this summer as 'owners' of players rush to get paid out.
bluedanza said:Another whopping headache for Platini is that the French Government have confirmed that footballers are not exempt from the new 75% tax rate for those in earning above a million euros per year
hence the exodus of french players to geordieland
expect another flood of players trying to get out of France again during the next transfer window
furthermore, psg will have to pay even more over the odds to get players to join them, owners bleating to the media, platini jnr asking pops for an increase in his allowance
The really interesting thing about the 75% tax is that its the employer and not the employee who is now liable for it (legal gymnastics pure and simple) so I do wonder if Monaco will have a massive advantage on that one?
Also, third party ownership will be judged to be illegal under FIFA rules soon so an exodus from South America will perhaps happen this summer as 'owners' of players rush to get paid out.
Re: Wall St Journal Article on FFP
Charles Sale:
So Reading, who pathetically abstained in the vote, have changed their mind... but so have Swansea! If this group stays together and just one club can be convinced before the final vote, the domestic version of these rules wouldn't pass.
PS: You won't be in Europe every year Swansea, you short-sighted fools.
Charles Sale:
A gang of six Premier League clubs strongly opposed to wage restraint in the top flight held a clandestine meeting last week to discuss how they can best combat the measures.
The summit at the Grove Hotel outside Watford, where England stay before Wembley matches, was attended by the refusenik group of Manchester City, Fulham, Reading, Aston Villa, West Bromwich and Southampton.
The Premier League executive, who had lobbied so hard to get their proposal limiting the amount of TV money spent on players’ wages voted through by the narrowest of margins, had no knowledge about the gathering arranged by Southampton finance director Gareth Rogers.
Because the rule changes were accepted by a two-thirds majority, the rebel clubs can only fight the details of the regulations, which will be put to the 20 clubs a week today, rather than derail a process that includes restrictions on club losses over a three-year period.
Reading were at the Grove despite having controversially abstained from the 13-6 vote over the way the plans were presented. However, Swansea, who had voted against, were absent. They are understood to have switched sides after it was explained that TV money from European competitions are not included in the Premier League restrictions.
So as it stands, the current 14-6 balance would allow the rule changes to be implemented. Legal action was not on the Grove agenda.
So Reading, who pathetically abstained in the vote, have changed their mind... but so have Swansea! If this group stays together and just one club can be convinced before the final vote, the domestic version of these rules wouldn't pass.
PS: You won't be in Europe every year Swansea, you short-sighted fools.
dave_blue12
Well-Known Member
Re: Wall St Journal Article on FFP
Here is the full text of the press release issued today:
“Today, 6 May 2013, Mr Daniel Striani, player agent (registered with the Belgian Football Association), represented by lawyer Jean-Louis Dupont, lodged a complaint with the European Commission against UEFA in order to challenge infringements to fundamental principles of EU law caused by some provisions of the UEFA “Financial Fair Play” regulation (FFP).
Specifically, this complaint challenges the restrictions of competition caused by the “Break-even rule” (article 57 of the UEFA FFP regulation).
The rule imposes on clubs that participate in the UEFA Champions League or in the Europa League the obligation “not to overspend” (the expenses of a club cannot exceed income). In effect, a club owner is prohibited from “overspending” even if such overspending aims at growing the club.
The “Break-even” rule (which, according to article 101 of the Treaty on the functioning of the EU, is an “agreement between undertakings”) generates the following restrictions of competition:
- Restriction of investments;
- Fossilization of the existing market structure (i.e. the current top clubs are likely to maintain their leadership, and even to increase it);
- Reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club;
- Deflatory effect on the level of players’ salaries; and
- Consequently, a deflatory effect on the revenues of players’ agents (depending on the level of transfer amounts and/or of players salaries).
At the same time, because of the aforementioned restraints, the “Break-even” rule also infringes other EU fundamental freedoms: free movement of capital (as far as club owners are concerned), free movement of workers (players) and free movement of services (player agents). Consequently, such restriction of competition and violation of EU fundamental freedoms cannot be justified by the objectives put forward by UEFA (long term financial stability of club football; and integrity of the UEFA interclub competitions).
Moreover, detailed legal and economic analysis shows that, even if the “Break-even” rule may appear initially a plausible concept, the rule is not able to achieve efficiently its objectives as presented by UEFA (whereas other means are available to attain such objectives. For additional information, see The Wall Street Journal op-ed published 25 March 2013 – <a class="postlink" href="http://online.wsj.com/article/SB10001424127887324077704578357992271428024.html" onclick="window.open(this.href);return false;">http://online.wsj.com/article/SB1000142 ... 28024.html</a>
As far as the integrity of the UEFA competition is concerned, in order to avoid the risk that club X would jeopardize the smooth running of the competition because its owner stops mid season providing funds (the “overspending”), it is not necessary to prohibit such “overspending” (as implemented by the “Break-even rule”), when it is sufficient to require “overspending” to be fully guaranteed (for instance, by means of bank guarantees) before the start of the competition and for its whole duration.
In short, the current prohibition – even assuming it to be justifiable (quod non) in the light of the pursued objective (i.e. integrity) – is in practice illegal because the rule is not proportionate (since it can be replaced by another measure, equally efficient but less damaging as far as EU freedoms are concerned).
In conformity with article 101.2 of the Treaties of the European Union, the complainant requests the European Commission to declare that the Break-even rule is null.
It is important to note this complaint does not at all question the legality of the UEFA rule (also included in the FFP regulation) that states that any club participating in the UEFA competition must prove – before the start of the competition – that it has no overdue payables towards clubs, players and social/tax authorities. In our view, this rule is justified in principle for the attainment of the integrity of the football competition and proportionate to this objective).
A copy of the complaint has been provided to UEFA.
ENDS”
The argument bears some similarities to the arguments I have advanced against FFP but in case any one is interested, I have not been working with the lawyers, although we have exchanged emails. I’m going to be at a conference in Leuven next week talking about FFP and hope to meet Mr Dupont there.
dave_blue12 said:
Here is the full text of the press release issued today:
“Today, 6 May 2013, Mr Daniel Striani, player agent (registered with the Belgian Football Association), represented by lawyer Jean-Louis Dupont, lodged a complaint with the European Commission against UEFA in order to challenge infringements to fundamental principles of EU law caused by some provisions of the UEFA “Financial Fair Play” regulation (FFP).
Specifically, this complaint challenges the restrictions of competition caused by the “Break-even rule” (article 57 of the UEFA FFP regulation).
The rule imposes on clubs that participate in the UEFA Champions League or in the Europa League the obligation “not to overspend” (the expenses of a club cannot exceed income). In effect, a club owner is prohibited from “overspending” even if such overspending aims at growing the club.
The “Break-even” rule (which, according to article 101 of the Treaty on the functioning of the EU, is an “agreement between undertakings”) generates the following restrictions of competition:
- Restriction of investments;
- Fossilization of the existing market structure (i.e. the current top clubs are likely to maintain their leadership, and even to increase it);
- Reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club;
- Deflatory effect on the level of players’ salaries; and
- Consequently, a deflatory effect on the revenues of players’ agents (depending on the level of transfer amounts and/or of players salaries).
At the same time, because of the aforementioned restraints, the “Break-even” rule also infringes other EU fundamental freedoms: free movement of capital (as far as club owners are concerned), free movement of workers (players) and free movement of services (player agents). Consequently, such restriction of competition and violation of EU fundamental freedoms cannot be justified by the objectives put forward by UEFA (long term financial stability of club football; and integrity of the UEFA interclub competitions).
Moreover, detailed legal and economic analysis shows that, even if the “Break-even” rule may appear initially a plausible concept, the rule is not able to achieve efficiently its objectives as presented by UEFA (whereas other means are available to attain such objectives. For additional information, see The Wall Street Journal op-ed published 25 March 2013 – <a class="postlink" href="http://online.wsj.com/article/SB10001424127887324077704578357992271428024.html" onclick="window.open(this.href);return false;">http://online.wsj.com/article/SB1000142 ... 28024.html</a>
As far as the integrity of the UEFA competition is concerned, in order to avoid the risk that club X would jeopardize the smooth running of the competition because its owner stops mid season providing funds (the “overspending”), it is not necessary to prohibit such “overspending” (as implemented by the “Break-even rule”), when it is sufficient to require “overspending” to be fully guaranteed (for instance, by means of bank guarantees) before the start of the competition and for its whole duration.
In short, the current prohibition – even assuming it to be justifiable (quod non) in the light of the pursued objective (i.e. integrity) – is in practice illegal because the rule is not proportionate (since it can be replaced by another measure, equally efficient but less damaging as far as EU freedoms are concerned).
In conformity with article 101.2 of the Treaties of the European Union, the complainant requests the European Commission to declare that the Break-even rule is null.
It is important to note this complaint does not at all question the legality of the UEFA rule (also included in the FFP regulation) that states that any club participating in the UEFA competition must prove – before the start of the competition – that it has no overdue payables towards clubs, players and social/tax authorities. In our view, this rule is justified in principle for the attainment of the integrity of the football competition and proportionate to this objective).
A copy of the complaint has been provided to UEFA.
ENDS”
The argument bears some similarities to the arguments I have advanced against FFP but in case any one is interested, I have not been working with the lawyers, although we have exchanged emails. I’m going to be at a conference in Leuven next week talking about FFP and hope to meet Mr Dupont there.
City Raider
Well-Known Member
Re: Wall St Journal Article on FFP
Here we go! :)
Here we go! :)
squirtyflower
Well-Known Member
Re: Wall St Journal Article on FFP
“Today, 6 May 2013, Mr Daniel Striani, player agent (registered with the Belgian Football Association), represented by lawyer Jean-Louis Dupont, lodged a complaint with the European Commission against UEFA in order to challenge infringements to fundamental principles of EU law caused by some provisions of the UEFA “Financial Fair Play” regulation (FFP).
Specifically, this complaint challenges the restrictions of competition caused by the “Break-even rule” (article 57 of the UEFA FFP regulation).
The rule imposes on clubs that participate in the UEFA Champions League or in the Europa League the obligation “not to overspend” (the expenses of a club cannot exceed income). In effect, a club owner is prohibited from “overspending” even if such overspending aims at growing the club.
The “Break-even” rule (which, according to article 101 of the Treaty on the functioning of the EU, is an “agreement between undertakings”) generates the following restrictions of competition:
- Restriction of investments;
- Fossilization of the existing market structure (i.e. the current top clubs are likely to maintain their leadership, and even to increase it);
- Reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club;
- Deflatory effect on the level of players’ salaries; and
- Consequently, a deflatory effect on the revenues of players’ agents (depending on the level of transfer amounts and/or of players salaries).
At the same time, because of the aforementioned restraints, the “Break-even” rule also infringes other EU fundamental freedoms: free movement of capital (as far as club owners are concerned), free movement of workers (players) and free movement of services (player agents). Consequently, such restriction of competition and violation of EU fundamental freedoms cannot be justified by the objectives put forward by UEFA (long term financial stability of club football; and integrity of the UEFA interclub competitions).
Moreover, detailed legal and economic analysis shows that, even if the “Break-even” rule may appear initially a plausible concept, the rule is not able to achieve efficiently its objectives as presented by UEFA (whereas other means are available to attain such objectives. For additional information, see The Wall Street Journal op-ed published 25 March 2013 – <a class="postlink" href="http://online.wsj.com/article/SB10001424127887324077704578357992271428024.html" onclick="window.open(this.href);return false;">http://online.wsj.com/article/SB1000142 ... 28024.html</a>
As far as the integrity of the UEFA competition is concerned, in order to avoid the risk that club X would jeopardize the smooth running of the competition because its owner stops mid season providing funds (the “overspending”), it is not necessary to prohibit such “overspending” (as implemented by the “Break-even rule”), when it is sufficient to require “overspending” to be fully guaranteed (for instance, by means of bank guarantees) before the start of the competition and for its whole duration.
In short, the current prohibition – even assuming it to be justifiable (quod non) in the light of the pursued objective (i.e. integrity) – is in practice illegal because the rule is not proportionate (since it can be replaced by another measure, equally efficient but less damaging as far as EU freedoms are concerned).
In conformity with article 101.2 of the Treaties of the European Union, the complainant requests the European Commission to declare that the Break-even rule is null.
It is important to note this complaint does not at all question the legality of the UEFA rule (also included in the FFP regulation) that states that any club participating in the UEFA competition must prove – before the start of the competition – that it has no overdue payables towards clubs, players and social/tax authorities. In our view, this rule is justified in principle for the attainment of the integrity of the football competition and proportionate to this objective).
A copy of the complaint has been provided to UEFA.
ENDS”
The argument bears some similarities to the arguments I have advanced against FFP but in case any one is interested, I have not been working with the lawyers, although we have exchanged emails. I’m going to be at a conference in Leuven next week talking about FFP and hope to meet Mr Dupont there.
great find
i'm sure the Dupont fella has come up before in the thread
Here is the full text of the press release issued today:dave_blue12 said:
“Today, 6 May 2013, Mr Daniel Striani, player agent (registered with the Belgian Football Association), represented by lawyer Jean-Louis Dupont, lodged a complaint with the European Commission against UEFA in order to challenge infringements to fundamental principles of EU law caused by some provisions of the UEFA “Financial Fair Play” regulation (FFP).
Specifically, this complaint challenges the restrictions of competition caused by the “Break-even rule” (article 57 of the UEFA FFP regulation).
The rule imposes on clubs that participate in the UEFA Champions League or in the Europa League the obligation “not to overspend” (the expenses of a club cannot exceed income). In effect, a club owner is prohibited from “overspending” even if such overspending aims at growing the club.
The “Break-even” rule (which, according to article 101 of the Treaty on the functioning of the EU, is an “agreement between undertakings”) generates the following restrictions of competition:
- Restriction of investments;
- Fossilization of the existing market structure (i.e. the current top clubs are likely to maintain their leadership, and even to increase it);
- Reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club;
- Deflatory effect on the level of players’ salaries; and
- Consequently, a deflatory effect on the revenues of players’ agents (depending on the level of transfer amounts and/or of players salaries).
At the same time, because of the aforementioned restraints, the “Break-even” rule also infringes other EU fundamental freedoms: free movement of capital (as far as club owners are concerned), free movement of workers (players) and free movement of services (player agents). Consequently, such restriction of competition and violation of EU fundamental freedoms cannot be justified by the objectives put forward by UEFA (long term financial stability of club football; and integrity of the UEFA interclub competitions).
Moreover, detailed legal and economic analysis shows that, even if the “Break-even” rule may appear initially a plausible concept, the rule is not able to achieve efficiently its objectives as presented by UEFA (whereas other means are available to attain such objectives. For additional information, see The Wall Street Journal op-ed published 25 March 2013 – <a class="postlink" href="http://online.wsj.com/article/SB10001424127887324077704578357992271428024.html" onclick="window.open(this.href);return false;">http://online.wsj.com/article/SB1000142 ... 28024.html</a>
As far as the integrity of the UEFA competition is concerned, in order to avoid the risk that club X would jeopardize the smooth running of the competition because its owner stops mid season providing funds (the “overspending”), it is not necessary to prohibit such “overspending” (as implemented by the “Break-even rule”), when it is sufficient to require “overspending” to be fully guaranteed (for instance, by means of bank guarantees) before the start of the competition and for its whole duration.
In short, the current prohibition – even assuming it to be justifiable (quod non) in the light of the pursued objective (i.e. integrity) – is in practice illegal because the rule is not proportionate (since it can be replaced by another measure, equally efficient but less damaging as far as EU freedoms are concerned).
In conformity with article 101.2 of the Treaties of the European Union, the complainant requests the European Commission to declare that the Break-even rule is null.
It is important to note this complaint does not at all question the legality of the UEFA rule (also included in the FFP regulation) that states that any club participating in the UEFA competition must prove – before the start of the competition – that it has no overdue payables towards clubs, players and social/tax authorities. In our view, this rule is justified in principle for the attainment of the integrity of the football competition and proportionate to this objective).
A copy of the complaint has been provided to UEFA.
ENDS”
The argument bears some similarities to the arguments I have advanced against FFP but in case any one is interested, I have not been working with the lawyers, although we have exchanged emails. I’m going to be at a conference in Leuven next week talking about FFP and hope to meet Mr Dupont there.
great find
i'm sure the Dupont fella has come up before in the thread
Ardwick Green Blue
Well-Known Member
Re: Wall St Journal Article on FFP
This will clearly take time as you don't get instant rulings so what happens to FFP in the interim period? Can it still be implemented pending a ruling or will it be delayed? If UEFA implement it and the challenge succeeds then they could potentially be liable for huge damages claims.
This will clearly take time as you don't get instant rulings so what happens to FFP in the interim period? Can it still be implemented pending a ruling or will it be delayed? If UEFA implement it and the challenge succeeds then they could potentially be liable for huge damages claims.
Re: Wall St Journal Article on FFP
Remember when i said this -
<a class="postlink-local" href="http://forums.bluemoon-mcfc.co.uk/viewtopic.php?f=1&t=280291&start=40" onclick="window.open(this.href);return false;">viewtopic.php?f=1&t=280291&start=40</a>
Now we have
***walks away whislting merrily***
Remember when i said this -
Just a few pages back.From what I understand of EU law any EU citizen or business can ask for an investigation into such business practices.
<a class="postlink-local" href="http://forums.bluemoon-mcfc.co.uk/viewtopic.php?f=1&t=280291&start=40" onclick="window.open(this.href);return false;">viewtopic.php?f=1&t=280291&start=40</a>
Now we have
In conformity with article 101.2 of the Treaties of the European Union, the complainant requests the European Commission to declare that the Break-even rule is null.
***walks away whislting merrily***
Re: Wall St Journal Article on FFP
Yes ;)
What about the premier FFP would same rules apply?
fbloke said:Remember when i said this -
Just a few pages back.From what I understand of EU law any EU citizen or business can ask for an investigation into such business practices.
<a class="postlink-local" href="http://forums.bluemoon-mcfc.co.uk/viewtopic.php?f=1&t=280291&start=40" onclick="window.open(this.href);return false;">viewtopic.php?f=1&t=280291&start=40</a>
Now we have
In conformity with article 101.2 of the Treaties of the European Union, the complainant requests the European Commission to declare that the Break-even rule is null.
***walks away whislting merrily***
Yes ;)
What about the premier FFP would same rules apply?