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Uefa in the firing line as it faces its biggest tests of all time

By Tony Attwood

I wrote yesterday about how Uefa was facing up to, and failing, a test of its ability and willingness to take on racists.

But there is a second that Uefa are facing.  What to do about the clubs that are flagrantly ignoring the Financial Fair Play rules, and are simply pursuing a course which is utterly contradictory to what Uefa set out in its FFP.

There is no doubt that Manchester City will fail the FFP test.  The question is will Uefa just give them a ticking off, or fine them a sum which Man City can easily pay.  Or will they refuse them a licence to play in Europe.   By this, as with by their treatment of Serbia, Uefa will be judged.

Man City’s reported yesterday were £97.9m for last year.  True that is under half of the  £197.5m loss for the previous year reported, mostly because of increased European revenue, and increased media exposure.  But Man City’s wage bill has continued to rise and now has reached £201m.  They can reduce that a bit this year, but they will have to produce some extra income from somewhere.  Clearly they were expecting a qualification for the  Champions League knockout stages, and the failure to get money from that, is a major setback.

Man City do not have Chelsea’s problem, wherein huge sums are spent every year or two paying off managers.   This time round they just spent half a million on getting rid of chief executive Garry Cook.   And they can claim that £15m or maybe even £20m has been spent on allowable areas like youth development.  As well knocking out money spent on wages for contracts that started before June 2010.  So Carlos Tevez’ pay packet doesn’t count as long as that is the only reason that the club fails FFP.   In fact, I can’t see how this can be the case because so much of their spending has been on bringing in new players.

 

Somehow the loss has to be got down to £38m – and that means a much lower wages bill With the City wage bill for 2012-13 unlikely to drop and no substantial new commercial deals believed to be in the pipeline, converting the notional £30m “FFP loss” into an overall two-year £38m “FFP loss” looks a tall order. The £50m pre-2010 wages figure cannot be taken off again in the accounts delivered next year.

Mancini however wants new players, and this is the key to it all.  If he gets them because the owners want victories then they might well just give up on the Champions League for the sake of winning the Premier League.  They could also suggest that they are moving in the right direction, that their situation is unusual, and here’s a few bob for the coffers of Uefa.  That could work.

Ownership by Abu Dhabi means silverware is not an option, and in return for such demands the owner has inserted £169m of new shareholdings.  That makes the club debt free and some have argued that therefore Man City can get around FFP.  That argument doesn’t work however.  Debt doesn’t matter – it is year by year profitability.
Receipts from matches can rise, but the ground is already full, and there would be a reaction against the huge sort of price rises needed to use this as a major means of reducing losses.  The Etihad sponsorship injects £400m over 10 years although there could still be an appeal against accepting this as separate sponsorship because of the links between sponsor and owner.   If Uefa buckles on that issue, and allows Man City into the Champions League once FFP is up and running on the grounds that they are moving in the right direction, then we’ll know it is all a farce – just like the fine of Serbia.

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The books…

The sites…

17 comments to Uefa in the firing line as it faces its biggest tests of all time

  • Don Charles

    From a lifelong Man City fan… A. Wishful thinking B. Lord Wenger, coach of the deade. You’re having a laugh but please stick with him.

  • americangooner

    I don’t doubt FFP but I doubt UEFA. its basically run by Neanderthals. these people don’t even have the courage to fine a team more than a single player. these people think racism 2nd priority to showing a brand name. how do we expect them to uphold FFP and punish city. as the news says city will be working very hard to fool UEFA using allowances such as gradual reduction in losses. so they are trying to use some projectiles to predict losses hence they think they are well in course for FFP compliance. obviously when you have laws you also have loopholes. so I am expecting the likes of MANC, PSG, CHE to use these large holes to portray a compliance with FFP.

  • Blue Anorak (Richard Mottershead)

    Lets be honest, FFP is not in anyway shape or form ‘fair’. It is designed to keep the same G14 pigs in the golden trough of UEFA TV and commercial rights. The only way to get in to the Champions league is to spend money on your team to bring it up to scratch. FFP now means you can’t get in unless you already have the money. English clubs with a strong ‘history’: Everton, Newcastle, Sunderland, Villa, Leeds, Sheffield Wednesday, Villa etc are all excluded.

    It would appear that you have e a false sense of entitlement as to Arsenal’s place in the pig trough of UEFA TV and Commercial rights. Actually by signing up to FFP it Arsenal have guaranteed that Manchester United should win the Premier League every year. As, since Arsenal last won it, only Chelsea and City have challenged

    The Ethiad Sponsorship injects £400m into MCFC. The Stadium naming rights part was top dollar – but actually that part is actually slightly less than Arsenal got when Emirates recently renegotiated their deal with Arsenal. The shirt deal less than those recently signed up to by Liverpool and United (The Investment into the academy is outside the scope of FFP). The deal is obviously fair by current standards.

    You also say we will struggle to get £80m of additional income to (to overcome pre 2010 player contract wages that can’t be written off in future). You were wrong last year and you’re wrong again! City nearly broke even in FFP terms for last season (an FFP loss of around £2.5m) so City only have to find an additional £47.5m this season to meet FFP.

    The changes in Player Amortisation costs meet over half of this sum. As players signed over 3 or 4 years (Transfer Fee + Wages) resign for 4 or 5 years (Just wages of the new contract term) there will be a saving of around £30m on it’s own.

    So that is £17.5m of additional commercial deals. The message is clear – invest in City and you are more likely to do deals in Abu Dhabi. So you are dreaming if you think City will struggle to find additional commercial revenue. City are in negotiation for major deals with at least 10 major Chinese and Indian companies that I know of – and there are may others besides. Let’s say 5 of the big ones come off at around £3m a pop. That’s £15m on it’s own. Say another £15m from smaller companies.

    Mark my words, City will be in profit in 3 years time. Match-day revenue will double as City increase the size of the stadium and provide twice the private boxes (City could have sold twice the number of this season BTW) and increase the capacity towards 64,000.over the next few years.

    Anyone who thinks the Sheikh who employs the best lawyers, accountants and decision makers couldn’t get past the FFP (Fix Football Permanently) rules is a clown. It’s just a shame that the rest of England’s clubs have been locked out.

  • Stuart

    Tony,

    A little while ago I wrote to UEFA asking several questions about FFP, whether it will actually be implemented and if so how seriously and what will happen to the clubs who currently spend beyond their means should they continue to do so. You usually hear something back from these people when you write to them (albeit not answering the question) but on this occasion my enquiry has been unanswered. It’s been about 4 months now I think and I know they received the email because I got their automated response telling me so.

    It really does need to be introduced and more vigorously than they have claimed but I fear nothing will happen as a long term view is not something UEFA have. I think it is because they don’t have time what with being constantly fire fighting all the time and covering their asses.

    They are as bent as a 9 bob note.

  • Mandy Dodd

    That organisation are incapable of enforcing anything, it is frustrating that we stick so rigidly to something which in the case of some clubs, unfortunately will not be put in place. I do however see a change of culture coming about, too many will go out of business trying to keep up with some,of these clubs

  • nicky

    I too have little faith in the integrity of UEFA, FIFA and even our FA.
    The “sugar daddies” with their lawyers are going to cut through the FFPR like a hot knife through butter and I question whether there is really the will, in toto, to ensure compliance with the Regs.

  • WalterBroeckx

    If Uefa doesn’t apply the FFP rules then it is something that was first predicted on Untold Arsenal. Not in a “nah they will not do anything with it” without telling why.
    I wrote an article 2 years ago telling that it wouldn’t be implemented because of the person responsible for it would be Jean Luc Dehaene. I know him as he is a former prime minister of Belgium and well according to how he did that and if he would do it the same when working for uefa it would be nothing but compromises and compromising.

    In a recent interview that I had kept to write an article but then lost it the title was that he was sure his committee would handle it very strict. But the article got lost so I couldn’t read it in full.

    will it happen or not? I sure hope my compatriot will prove me wrong. And then I will write an article to tell me how I judged him in a wrong way. But somehow I feel that the chance of me writing an article pointing at my earlier article about how JL Dehaene would screw up together with Uefa is more on the cards.

    But as been said: I hope I was wrong. Completely wrong.

  • WalterBroeckx

    Don Charles,
    actually Wenger was named coach of the first decade. Not by Untold by the way.

  • Andrei

    There is also ‘little’ question of UEFA legal authority to regulate commerce which FFP is essentially about. Especially in the UEFA member countries that are not part of EU.

  • Okay Liverpool is beaten by A/villa and things happen Arsenal draws with Villa and its the end of the world. So who decides which is which? I hate the whore-lists .

  • WalterBroeckx

    Hysteria it is called Kampala gun… hysteria…
    I regret to say it but a lot of Arsenal supporters are just hysteric in their reactions

  • robl

    Hi Andrei, what I think they are saying is stick to our guidelines else we won’t invite you to play in our competitions, the national associations policw their own leagues.

  • ARSENAL 13

    @ Walter….and those fans are not complaining about the draw….BUT their main issue is the inclusion of RAMSEY in the team.

  • yassin

    I can accept those fans point about Ramsey for last year, but this year what has he done so.wrong, he is played mostly good, not brilliant but not as bad as some would say…
    as for some other claiming that Wenger must play a 442 as if they know anything about tactics, well he has.done it when u think ramsey playing on the right, he is not, he is a central offensive mid, who give poldi a second striker pos. its just the defence which both shall.take the wing for…so Stop blaming Wenger for playing Ramsey @ the right.
    And no Man united plays 4231 NOT 442 no body plays 442 except those who plays long balls, stoke as an example, so stop this too..
    either be a fan and defend yr team from this outrageous media, boo the referee and protest against the FA and PGMOL, support ur team and give them.mental strength, or just search for some team who.can.win u yr dream trophy

  • Mandy Dodd

    Rambo is a very goodplayer, just think he has been played out of position a bit lately