Prestwich_Blue
Well-Known Member
OK - here's my guide to FFPR which is as concise as I can make it. Mods - any chance of making this a sticky?
When does FFPR kick-in?
This is one of the most complicated bits. The first season that UEFA will do the sums will be in the 2013/14 season (the first “monitoring period”) and this will be based on accounts for the financial years ending in the previous 2 seasons. As our accounts run from 1st June to 31st May, the first accounts that will form part of FFPR will be the ones for the financial year 2011/12 starting next week. From 2014/15, it will be 3 years accounts that get considered. The results will determine if a club gets a licence for European competitions in the following season.
What do clubs have to do?
FFPR talks about breaking even but you can make an aggregate loss of €5m in the accounts making up the monitoring period. So you can make a loss in one or even two years as long as these are covered by a profit in the third. You are also allowed to make a further aggregate loss of €45m in 2013/14 and 2014/15 if the owners are prepared to cover it. After that it drops to €30m for the next 3 monitoring periods. After that is still to be decided.
What income is allowed?
The usual match-day, commercial & media income counts as well as profit on disposal of assets and players. In addition, we can count any non-football income from operations in or near to CoMS or that use the club branding as part of their operations. So income from any hotels or other leisure/commercial facilities in Eastlands owned by the club can count.
A lot of talk about excluding commercial deals above “fair value” but this only applies to related party transactions. These are tightly defined so the Sheikh buying a box for £50m would be excluded but a £50m sponsorship from Etihad probably wouldn’t. If Jaguar were to pay us £100m that would be OK as well.
What expenses can be excluded?
Any expenditure on the youth system and infrastructure can be excluded. Also, if you would have been in profit but for player amortisation incurred on players bought before June 1st 2010, then this can be excluded as well. As that was £71m in those accounts, that’s good for us.
Are there any other get-outs?
Yes. UEFA can ignore any losses if they think you are on track to be profitable up to three years ahead. So if we’re making losses and they’re getting smaller or we can demonstrate we will be profitable in a few years’ time, they can grant a licence.
How do we stand at the moment?
Our accounts to 31 May 2010 showed a loss of £121m, of which £71m was related to player amortisation. Increasing income by just £35m in the forthcoming financial year (to 31 May 2012) should allow us to meet the requirement and a decent CL run could give us most if not all of that.
When does FFPR kick-in?
This is one of the most complicated bits. The first season that UEFA will do the sums will be in the 2013/14 season (the first “monitoring period”) and this will be based on accounts for the financial years ending in the previous 2 seasons. As our accounts run from 1st June to 31st May, the first accounts that will form part of FFPR will be the ones for the financial year 2011/12 starting next week. From 2014/15, it will be 3 years accounts that get considered. The results will determine if a club gets a licence for European competitions in the following season.
What do clubs have to do?
FFPR talks about breaking even but you can make an aggregate loss of €5m in the accounts making up the monitoring period. So you can make a loss in one or even two years as long as these are covered by a profit in the third. You are also allowed to make a further aggregate loss of €45m in 2013/14 and 2014/15 if the owners are prepared to cover it. After that it drops to €30m for the next 3 monitoring periods. After that is still to be decided.
What income is allowed?
The usual match-day, commercial & media income counts as well as profit on disposal of assets and players. In addition, we can count any non-football income from operations in or near to CoMS or that use the club branding as part of their operations. So income from any hotels or other leisure/commercial facilities in Eastlands owned by the club can count.
A lot of talk about excluding commercial deals above “fair value” but this only applies to related party transactions. These are tightly defined so the Sheikh buying a box for £50m would be excluded but a £50m sponsorship from Etihad probably wouldn’t. If Jaguar were to pay us £100m that would be OK as well.
What expenses can be excluded?
Any expenditure on the youth system and infrastructure can be excluded. Also, if you would have been in profit but for player amortisation incurred on players bought before June 1st 2010, then this can be excluded as well. As that was £71m in those accounts, that’s good for us.
Are there any other get-outs?
Yes. UEFA can ignore any losses if they think you are on track to be profitable up to three years ahead. So if we’re making losses and they’re getting smaller or we can demonstrate we will be profitable in a few years’ time, they can grant a licence.
How do we stand at the moment?
Our accounts to 31 May 2010 showed a loss of £121m, of which £71m was related to player amortisation. Increasing income by just £35m in the forthcoming financial year (to 31 May 2012) should allow us to meet the requirement and a decent CL run could give us most if not all of that.