FFPR in a nutshell

[RandomJ]

Just pisses me off so much these rules. The established "big clubs" have been allowed to spend large amounts of money for years and years and aquire the best players and as a result win a lot of cups. Now City are in the position to do the same it's suddenly "bad for football". All I can say is fuck you FIFA!

 

[ste.sully]

Would the Champions League be tainted if the Champions of England were excluded? ITV and Sky who control the biggest TV market would be well pissed if that happened. UEFA manipulate everything to suit what they want. FFP is all about protecting the elite group of clubs of which we are now a member, just in time

This is what I'm thinking.

ITV/Sky and all the sponsors are not going to be happy if clubs with large fanbases are excluded if their finances aren't in order. All Premier League clubs are in debt and most made a loss so the chances of a breakaway European league are surely high if these plans go ahead.

My main concern is that if you are forced to spend within your means then that just solidifies the top clubs position and turns it into a procession rather than a competition.

 

[fbloke]

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.

Is that in total or 45M per season?

That's total aggregrate loss over 3 seasons.

-- Sun May 29, 2011 12:00 am --

For example if BP wanted to sponsor City and pay £200m per season to have their name on the shirts would that be OK?

As long as anyone at BP was not someone, or a close relation of someone, that had control over City then yes it is. Fair value only applies to related party transactions, not arms-length ones.

Even Etihad probably wouldn't count as a related party even though two of Sheikh Masnsour's half-brothers are on the board and one of their directors is a non-exec at City.

Thats the point of course.

City's owners have so many interests in so many companies as to make policing things impossible.

So City's fair market value is whatever we get really.

 

[Prestwich_Blue]

My main concern is that if you are forced to spend within your means then that just solidifies the top clubs position and turns it into a procession rather than a competition.

Something needed to be done about clubs getting further into debt but an owner who can afford it should not be treated in the same way that a club like Pompey were. As long as that owner is prepared to give guarantees of his future financial support with maybe a limit put on that support, that should be enough.

 

[LoveCity]

Those who are pissed off by these rules, you have a right to be but just be glad we got taken over then and not now - a new cash rich team like Roma can't go all-out and spend because they have to follow the new rules, but we had a number of transfer windows to get some heavy investment in.

 

[okstate99]

My main concern is that if you are forced to spend within your means then that just solidifies the top clubs position and turns it into a procession rather than a competition.

Something needed to be done about clubs getting further into debt but an owner who can afford it should not be treated in the same way that a club like Pompey were. As long as that owner is prepared to give guarantees of his future financial support with maybe a limit put on that support, that should be enough.

Agreed, but most all the problems comes from debt. They should be more worried about clubs debt, than were the money they spend on players comes from.

The reason they dont care, Liverpool, Man U, Barca and Real Madrid, and heck all the clubs in Italy were debt ridden when this came about, your going upset the apple cart.

 

[Prestwich_Blue]

My main concern is that if you are forced to spend within your means then that just solidifies the top clubs position and turns it into a procession rather than a competition.

Something needed to be done about clubs getting further into debt but an owner who can afford it should not be treated in the same way that a club like Pompey were. As long as that owner is prepared to give guarantees of his future financial support with maybe a limit put on that support, that should be enough.

Agreed, but most all the problems comes from debt. They should be more worried about clubs debt, than were the money they spend on players comes from.

The reason they dont care, Liverpool, Man U, Barca and Real Madrid, and heck all the clubs in Italy were debt ridden when this came about, your going upset the apple cart.

That's what I said. Debt is the issue not rich owners.

 

[fbloke]

For anyone that thinks these rules will stop any other teams from developing as we have then thats not necessarily true.

The money can be readily invested to any amount by an owner as the old thing that will happen is that they 'might' be refused a UEFA licence.

It could be argued that a rich owner who turns £400m of investment into equity wil be looked upon quite kindly by UEFA.

As long as the owner can show that the club they have invested in is moving towards breaking even then that should be enough. The pre-cursor investment can also be argued as necessary to get onto a quasi-level playing field with the existing big names.

 

[WNRH]

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.

Also

Grey Areas

What is 'fair market value' - and who decides?

The whole proposition of controlling what is acceptable in terms of income and fair market value is a hot topic for FFPR.

For example if BP wanted to sponsor City and pay £200m per season to have their name on the shirts would that be OK?

Some are suggesting that the 'fair market' value for City shirt deals is far below that as even Barca only get about 1/5 of that.

But if a company IS willing to pay can UEFA argue with such a commercial decision?

Surely not.

Why would BP be willing to do something as crazy as that though?

Well City are owned by very wealthy and important people whom companies want to be close to. There are also other countries who want to be 'in' with Sheikh Mansour and of course some are relatives and friends of the Sheikh and his family.

It could be argued that City are indeed unique in terms of 'fair market value' because of who controls the club.

Therefore commercial income could well be the panacea for all of City's FFPR ills.

Could UEFA fight that?

Of course they could but I suspect that that would be a fight UEFA (and perhaps City) wont want and as such the fair market value will mean that City will get away with whatever they want to.

Why would BP pay Manchester City £200m for sponsorship when the likes of Real Madrid, United and Barca get a fifth of that? Why not just sponsor Barca and Real Madrid and have plenty of change left. It's all about common sense at the end of the day.

 

[Guy_Fawkes2010]

Does it matter if your investors or sponsors are going into debt to push money into a club or are all financial transactions viewed on face value ?

Could be interesting with some clubs being sponsored by banks or insurance companies