FFPR in a nutshell

[fbloke]

It has everything to do with Barca and Real as they along with the rags are the most valuable clubs in world football, if we are getting 5 times as much sponsorship than them then it makes a mockery of the FFP rules. If that is the case then Sheffield Wednesday could receive £300m to display Saudi Arabia airlines on their shirts as disguise for being taken over by multi billionaire sheiks.

-- Sun May 29, 2011 1:56 am --



So there are 20 companies willing to sponsor us each for £20m per year? You've got the stadium, shirt sponsors up to three with home, away and european at a push then what? stands? training ground? the bars in the ground? Santander invest £20m in the club and in return they get their name above the car park entrance? If that is the case then why are these rules coming into place if they can be exploited so easily?

THe interesting part of this is that you perhaps still think City are like any other club?

City are owned by hugely wealthy and influential people in a way that no other club is.

Its only really City that can dance around FFPR like this, something we should all appreciate and rejoice.

We do not have the brand awareness as Barca, Real or United, it will take years to get to their level, companies pay millions of pounds to football clubs to exploit their brand awareness.

If QPR for example were to announce that 10 companies were each putting £20m into the club and all were connected to their owners would that be allowed?

-- Sun May 29, 2011 2:05 am --

It has everything to do with Barca and Real as they along with the rags are the most valuable clubs in world football, if we are getting 5 times as much sponsorship than them then it makes a mockery of the FFP rules. If that is the case then Sheffield Wednesday could receive £300m to display Saudi Arabia airlines on their shirts as disguise for being taken over by multi billionaire sheiks.

It was a hypothetical example. They wouldn't but if they wanted to it would be within FFPR.

But surely these FFP rules are a waste of time then?

But only for the very few.

Isnt that great?

 

[WNRH]

THe interesting part of this is that you perhaps still think City are like any other club?

City are owned by hugely wealthy and influential people in a way that no other club is.

Its only really City that can dance around FFPR like this, something we should all appreciate and rejoice.

We do not have the brand awareness as Barca, Real or United, it will take years to get to their level, companies pay millions of pounds to football clubs to exploit their brand awareness.

If QPR for example were to announce that 10 companies were each putting £20m into the club and all were connected to their owners would that be allowed?

-- Sun May 29, 2011 2:05 am --

It was a hypothetical example. They wouldn't but if they wanted to it would be within FFPR.

But surely these FFP rules are a waste of time then?

But only for the very few.

Isnt that great?

I suppose it doesn't make a difference as FFP rules or not we weren't going to spend hundreds of millions every year as that is no way to run a business and it is not part of their long term plan.

 

[samharris]

What i am saying is that companies sponsor football clubs to promote their company. If you could sponsor Barca, Madrid or United who have 3x, 5x, 10x or even 20x as many fans as us and have a profile bigger than us worldwide, why would they sponsor Manchester City for £200m? They could sponsor all three of them for £120m without touching us and have 60x more exposure.

Getting 10m or even 20m more maybe but for an astronomical amount like that compared to bigger clubs (brands) would make a mockery of the FFP rules.

Again this has nothing to do with Barca or Real.. He was just giving an example, of something that could happen.

It has everything to do with Barca and Real as they along with the rags are the most valuable clubs in world football, if we are getting 5 times as much sponsorship than them then it makes a mockery of the FFP rules. If that is the case then Sheffield Wednesday could receive £300m to display Saudi Arabia airlines on their shirts as disguise for being taken over by multi billionaire sheiks.

-- Sun May 29, 2011 1:56 am --

What i am saying is that companies sponsor football clubs to promote their company. If you could sponsor Barca, Madrid or United who have 3x, 5x, 10x or even 20x as many fans as us and have a profile bigger than us worldwide, why would they sponsor Manchester City for £200m? They could sponsor all three of them for £120m without touching us and have 60x more exposure.

Getting 10m or even 20m more maybe but for an astronomical amount like that compared to bigger clubs (brands) would make a mockery of the FFP rules.

I never thought you were so narrow minded and naive mate!

City will push the deals as far as is needed to comply but comply we will.

Thanks to the fact that over 800 companies now have investments in them from Abu Dhabi SWF and Sheikh Mansours family.

If you take

Ferrostaal
Etihad Airways
Etisalat
ADTA
AABAR

Then add

Virgin Galactic
AMD
Tesla Cars
Santander
Daimler

This is just a tip of a few icebergs.

So there are 20 companies willing to sponsor us each for £20m per year? You've got the stadium, shirt sponsors up to three with home, away and european at a push then what? stands? training ground? the bars in the ground? Santander invest £20m in the club and in return they get their name above the car park entrance? If that is the case then why are these rules coming into place if they can be exploited so easily?

The rules are that sponsorship deals must be fair and not too extreme....dont say owt about how many you can have does it.. :)

 

[Stretford Born Blue]

Our owners know exactly what they are doing, no issues and no prblems........

 

[Deleted member 14625]

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.

Yeah, but can we still sign Messi?

I don't want Messi. Messi is a Barca player. I'd rather we spent the same amount of money developing a kid to become the next best player in the world and he be a City player, not someone we've bought from another club.

 

[Prestwich_Blue]

The rules are that sponsorship deals must be fair and not too extreme....dont say owt about how many you can have does it.. :)

You can have as many as you want and that's how the rags make so much money from commercial deals.

However I must stress again that they only have to meet the fair value test if they are with a "related party" and that is quite tightly defined in the FFPR.

I'll dig out the exact definition later but it's about one person or members of their close family that have a controlling interest or position of influence at both parties. So Mubadala Group, owned by Khaldoon al Mubarak, would be a related party. Any company owned by the Dubai royal family, the Al Maktoums, would probably be classed as related as well as one of Sheikh Mansour's wives is a member of this family.

But other sponsors like Jaguar wouldn't be related parties so could pay what they wanted. That then becomes market value.

 

[Irwell]

What i am saying is that companies sponsor football clubs to promote their company.

Do you think that's always the case? How many people do you reckon watch a Manchester City match, see a Ferrostaal sign and suddenly think "you know what, I'll hire them to build that new power station instead"? Or do company executives think "I think I'll turn down that investment from Aabar because they don't seem to sponsor any football teams"?

Some companies do it to promote the company and it's product, Jaguar for instance, but other sponsorships look very much like a means to an end for FFPR to me.<br /><br />-- Sun May 29, 2011 11:05 am --<br /><br />

But other sponsors like Jaguar wouldn't be related parties so could pay what they wanted. That then becomes market value.

Sheikh Mansour owns a large stake in Jaguar too through his investment vehicles.

To be honest I think that our owner has such a complex web of investments that it would be hard for UEFA to enforce any FFPR related entity clauses against us.

 

[baldybouncer]

Financial lawyers will drive a 40 ton truck through these rules!

 

[fbloke]

What i am saying is that companies sponsor football clubs to promote their company.

Do you think that's always the case? How many people do you reckon watch a Manchester City match, see a Ferrostaal sign and suddenly think "you know what, I'll hire them to build that new power station instead"? Or do company executives think "I think I'll turn down that investment from Aabar because they don't seem to sponsor any football teams"?

Some companies do it to promote the company and it's product, Jaguar for instance, but other sponsorships look very much like a means to an end for FFPR to me.

-- Sun May 29, 2011 11:05 am --

But other sponsors like Jaguar wouldn't be related parties so could pay what they wanted. That then becomes market value.

Sheikh Mansour owns a large stake in Jaguar too through his investment vehicles.

To be honest I think that our owner has such a complex web of investments that it would be hard for UEFA to enforce any FFPR related entity clauses against us.

I would venture that there are unlikely to be any major companies that Abu Dhabi or other SWF's in the Middle East dont have major investments in.

I was reading some time ago that Abu Dhabi now owns all the parking meters in Chicago, or at least they have leased them for 75 years and get all the revenue from them..

 

[Marvin]

The rules are that sponsorship deals must be fair and not too extreme....dont say owt about how many you can have does it.. :)

You can have as many as you want and that's how the rags make so much money from commercial deals.

However I must stress again that they only have to meet the fair value test if they are with a "related party" and that is quite tightly defined in the FFPR.

I'll dig out the exact definition later but it's about one person or members of their close family that have a controlling interest or position of influence at both parties. So Mubadala Group, owned by Khaldoon al Mubarak, would be a related party. Any company owned by the Dubai royal family, the Al Maktoums, would probably be classed as related as well as one of Sheikh Mansour's wives is a member of this family.

But other sponsors like Jaguar wouldn't be related parties so could pay what they wanted. That then becomes market value.

This could become important when considering a stadium re-naming deal involving Etihad or another UAE company. We could agree an above market rate deal, but argue that we don't have a strong relation to the sponsor, not in the sense meant by UEFA?

Thanks for the original post. Hope it is retained on Bluemoon as a sticky as it's a regular question