The Fixer
Well-Known Member
Platini puts an end to City’s ‘total anarchy’ in the transfer market but will it kill United?
30 AUGUST 2010
UEFA president Michel Platini claims the new rules on spending will end the “total anarchy” in the transfer market. This summer’s transfer window is expected to show another drop in spending by Premier League clubs, despite City’s £126 million spending spree.
UEFA’s new financial fair play rules, aimed at ensuring clubs in European competition only spend what they earn, are due to come into force from next season though they will be introduced gradually. Manchester City look to have the most to fear (in terms of player purchases) from the new rules given our current turnover and wage bill, but there will be some leeway for the first six years. Owners will be allowed to inject 15 million Euros (£12.3 million) a year into clubs up until 2015, and then 10 million Euros (£8.2 million) until 2018, but the cash cannot be a loan.
However, the situation at The Swamp® (and Anfield), who have been paying large sums to pay off the interest on the debts their owners, took out to buy the club remains less clear. The Rags™ say that they will comply with the rules to only spend what they earn but UEFA general secretary Gianni Infantino confirmed that interest payments are taken into account.
Infantino pointed out that, “In 2018 we (UEFA) will assess it and the objective is to go further down. It cannot be a loan however it must be a capital injection or donation. The costs to finance the debt are included.”
So, although these new restrictions may be seen as a problem by Manchester City’s hierarchy it is certainly a lot more worrying for Man Ure (and Liverpool) in their current financial situations, as a result of their huge debts. I can’t see the Glazers turning around and saying, “OK, forget the debt, you can keep it; think of it as a cash injection, oh, and here’s another £200 million for the next ten years.” David Gill, will continue to protest that there is nothing to worry about. That’s fair, he is after all only doing his ‘job’ by making the right noises to calm the Rag™ fans.
But, I seriously can’t see any solution for that lot. It was reported earlier this week that four more of the shopping malls owned by the Glazer family have fallen into default on their mortgages, meaning that nine in total have defaulted with four of those actually going bankrupt. A further 29 out of the 68 malls owned by the Glazers’ ‘First Allied Corporation’ are now so empty of retail units that the revenue they generate does not cover the mortgage payments. The interest rate charged on The Rags™ enormous ‘payment in kind debts’ is set to rise from 14.25% to 16.25% this month, so the news comes at a bad time for the Glazers. United are saddled with huge debts as a result of the takeover by the Glazers. Investment analyst Ansy Green, who has investigated and written about the situation at The Swamp®, believes the situation is one of great concern.
“They show that the Glazer family’s only significant other business is making almost no money, and certainly not generating the cash to reduce United’s massive debts,” he said, “The family’s shopping malls are afflicted by low occupancy rates, more have fallen into default, and whatever David Gill says, there appears no doubt that Manchester United itself will be made to service these useless debts and pay huge interest payments, all money which could have been spent signing players.”
The situation at City though is very different. If Sheikh Mansour handed over a large capital sum to Manchester City now, before the new rules kick in, that would tide us over the next decade. This is likely to be City’s solution to the problem. City’s Football Administrator, Brian Marwood said the club were ‘comfortable’ with the UEFA rules, hinting that this was the way that the club planned to move forward.
“It’s a concern, it’s something that every club has got to be aware of but we are fairly comfortable in terms of where we are at and moving forward, and that element is something that not just Manchester City will face but everybody.”
UEFA President Michel Platini said, “For years and years we were in total anarchy but the clubs asked for the rules because they knew they could not continue. We can see already that the clubs are spending less as they look to balance their books. This is because the first time the break even rule will kick in is in the coming year, the 2011/2012 season. It’s very soon and this means that the strategy to say ‘I can now go and spend hundreds of millions’ doesn’t work because we will see it in two years at the latest. Transfers have not been as crazy as in the last few years, they are pulling up their socks and the clubs are making special efforts to comply with the rules.”
So, that’s how I see it. UEFA have introduced this new rule to curb excessive spending. Something that clubs like Man Ure, Chelsea, Liverpool, Real Madrid etc have been doing for years; but only now City have this huge cash injection and financial benefactor is the rule ‘created’. Fine, we can live with it; as I said I predict that Sheikh Mansour will hand over a vast sum, before next season, to ensure the clubs continued development. However other clubs, such as Man Ure, who have huge debts, will somehow have to balance the books. The Glazers wont, and more importantly, can’t (afford) to do this; so that leaves them with no other option than to sell their prized assets eg Wayne Rooney and, erm, that’s it. Unless of course, the unimaginable, sell The Swamp®, bulldoze it and turn it into a Tesco. David Gill will continue to protest as he squirms through press conferences, but even he must admit to himself in private that this impending regulation could bring dire consequences to his club. Theatre of Dreams? Hardly.
So, it may have been designed to ‘put City in our place’ but the potential backfire could be the ruin of many of Europe’s top clubs, and none more so that the debt ridden Manchester United.
30 AUGUST 2010
UEFA president Michel Platini claims the new rules on spending will end the “total anarchy” in the transfer market. This summer’s transfer window is expected to show another drop in spending by Premier League clubs, despite City’s £126 million spending spree.
UEFA’s new financial fair play rules, aimed at ensuring clubs in European competition only spend what they earn, are due to come into force from next season though they will be introduced gradually. Manchester City look to have the most to fear (in terms of player purchases) from the new rules given our current turnover and wage bill, but there will be some leeway for the first six years. Owners will be allowed to inject 15 million Euros (£12.3 million) a year into clubs up until 2015, and then 10 million Euros (£8.2 million) until 2018, but the cash cannot be a loan.
However, the situation at The Swamp® (and Anfield), who have been paying large sums to pay off the interest on the debts their owners, took out to buy the club remains less clear. The Rags™ say that they will comply with the rules to only spend what they earn but UEFA general secretary Gianni Infantino confirmed that interest payments are taken into account.
Infantino pointed out that, “In 2018 we (UEFA) will assess it and the objective is to go further down. It cannot be a loan however it must be a capital injection or donation. The costs to finance the debt are included.”
So, although these new restrictions may be seen as a problem by Manchester City’s hierarchy it is certainly a lot more worrying for Man Ure (and Liverpool) in their current financial situations, as a result of their huge debts. I can’t see the Glazers turning around and saying, “OK, forget the debt, you can keep it; think of it as a cash injection, oh, and here’s another £200 million for the next ten years.” David Gill, will continue to protest that there is nothing to worry about. That’s fair, he is after all only doing his ‘job’ by making the right noises to calm the Rag™ fans.
But, I seriously can’t see any solution for that lot. It was reported earlier this week that four more of the shopping malls owned by the Glazer family have fallen into default on their mortgages, meaning that nine in total have defaulted with four of those actually going bankrupt. A further 29 out of the 68 malls owned by the Glazers’ ‘First Allied Corporation’ are now so empty of retail units that the revenue they generate does not cover the mortgage payments. The interest rate charged on The Rags™ enormous ‘payment in kind debts’ is set to rise from 14.25% to 16.25% this month, so the news comes at a bad time for the Glazers. United are saddled with huge debts as a result of the takeover by the Glazers. Investment analyst Ansy Green, who has investigated and written about the situation at The Swamp®, believes the situation is one of great concern.
“They show that the Glazer family’s only significant other business is making almost no money, and certainly not generating the cash to reduce United’s massive debts,” he said, “The family’s shopping malls are afflicted by low occupancy rates, more have fallen into default, and whatever David Gill says, there appears no doubt that Manchester United itself will be made to service these useless debts and pay huge interest payments, all money which could have been spent signing players.”
The situation at City though is very different. If Sheikh Mansour handed over a large capital sum to Manchester City now, before the new rules kick in, that would tide us over the next decade. This is likely to be City’s solution to the problem. City’s Football Administrator, Brian Marwood said the club were ‘comfortable’ with the UEFA rules, hinting that this was the way that the club planned to move forward.
“It’s a concern, it’s something that every club has got to be aware of but we are fairly comfortable in terms of where we are at and moving forward, and that element is something that not just Manchester City will face but everybody.”
UEFA President Michel Platini said, “For years and years we were in total anarchy but the clubs asked for the rules because they knew they could not continue. We can see already that the clubs are spending less as they look to balance their books. This is because the first time the break even rule will kick in is in the coming year, the 2011/2012 season. It’s very soon and this means that the strategy to say ‘I can now go and spend hundreds of millions’ doesn’t work because we will see it in two years at the latest. Transfers have not been as crazy as in the last few years, they are pulling up their socks and the clubs are making special efforts to comply with the rules.”
So, that’s how I see it. UEFA have introduced this new rule to curb excessive spending. Something that clubs like Man Ure, Chelsea, Liverpool, Real Madrid etc have been doing for years; but only now City have this huge cash injection and financial benefactor is the rule ‘created’. Fine, we can live with it; as I said I predict that Sheikh Mansour will hand over a vast sum, before next season, to ensure the clubs continued development. However other clubs, such as Man Ure, who have huge debts, will somehow have to balance the books. The Glazers wont, and more importantly, can’t (afford) to do this; so that leaves them with no other option than to sell their prized assets eg Wayne Rooney and, erm, that’s it. Unless of course, the unimaginable, sell The Swamp®, bulldoze it and turn it into a Tesco. David Gill will continue to protest as he squirms through press conferences, but even he must admit to himself in private that this impending regulation could bring dire consequences to his club. Theatre of Dreams? Hardly.
So, it may have been designed to ‘put City in our place’ but the potential backfire could be the ruin of many of Europe’s top clubs, and none more so that the debt ridden Manchester United.