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FFP: let the leagalities begin

By Tony Attwood

It has been a long time coming, but now we are there.  The question is to be asked: are the Financial Fair Play rules that exist European and Football League competitions, legal?

First out of the blocks were the Football League clubs – Leicester City, QPR, Blackburn Rovers  and Wolverhampton Wanderers are said to be the front runners in terms of taking legal action against their league over FFP.  The European clubs will not be far behind.   And it all happens in the coming months.

The rules in the League were introduced to try and stop clubs bankrupting themselves by spending everything they had plus a load more in the gamble of getting into the Premier League.

But these rules are set out against a backdrop of the fact that clubs that come down from the Premier League into the Championship share the parachute payments  which run to £59m over four years.

It is indeed just about money.   Cardiff won the Championship by making a £31m loss. For Hull it was £26m.  (And that’s before we think about the changing of the club’s colours or name).  And the model has been seen as a way into the big time by those who are interested in owning a Premier League club but don’t want to pay the price.  Leicester City, Watford, Nottingham Forest and Leeds United are just four more names of clubs being gobbled up by overseas owners ready for them gaining Premier League status.

Now it seems the solicitors acting for some of the Championship and League One clubs with most invested and most to lose have got their lawyers lined up and have issued the customary letter before action.

And one of the arguments is interesting: it is that the Championship and League One rules are not the same as the Premier League rules and that this is a restriction of trade.   But the clubs voted for it, and the majority of clubs like it since it brings down salaries.

In essence the clubs can lose £3m plus a further £5m if that is paid into the club by the owner.  If the clubs don’t stick to this they are banned from signing players from next January, until such time as the spending returns to the FFP established limits – limits which go down year on year.

If the club is promoted it gets fined.  Leicester under the current rules will be find around £19m – the money going to charity.

And among the bigger clubs playing in Europe, the limit of €45m in total in terms of losses across 2011/2 and 2012/3 will come into play for the start of next season.

76 clubs (around 30% of those involved in European competitions) are being investigated.  The list undoubtedly includes Manchester City and PSG.

The first cases – probably the “minor cases” will be decided by the end of  April, and all results given by the end of June.  The legal challenges will start immediately after.  All results will be made public.

Appeals to the Court of Arbitration for Sport will be heard in July and August.

Since these time scales incorporate the end of the European competitions this season and the start of them next season, we can expect a certain amount of heat to be generated, plus the normal level of lawyer created confusion.

11 comments to FFP: let the leagalities begin

  • Brickfields Gunners

    And so it begins !

    http://burnpit.us/2013/01/jacta-alea-esto-let-die-be-cast-julius-caesar-crosses-rubicon-river

    “Jacta Alea Esto” (Let The Die Be Cast)
    January 10, 49 BC
    Today’s history lesson involves the beginning of the large chapter in the career and life of Julius Caesar, Roman general, governor, politician, and patrician. By the act of crossing the Rubicon, he initiated a civil war, essentially making himself a criminal in the eyes of the Senate of Rome.

  • Brickfields Gunners

    Questions ,questions , questions….

    What is the probability that something will happen according to the odds?

    Why isn’t there mouse-flavored cat food?

    What do you do when you see an endangered animal that is eating an endangered plant?

    Is it possible to be totally partial?

    Why do people who know the least know it the loudest?

    You can’t have everything. Where would you put it?

    If stupidity can get you into a mess, then why can’t it get you out?

    If Ignorance is Bliss, why aren’t more people happy?

    If con is the opposite of pro, is Congress the opposite of progress?

    Despite the cost of living, have you noticed how it remains so popular?

    What happens if you get scared half to death twice?

    If one synchronized swimmer drowns, do the rest have to drown too?

    Why do psychics have to ask you for your name?

    Do the know-it-all AAAA really have all the answers ?
    If so what are they doing with it ?

  • TommieGun

    Tony,

    I think that the question in your post raises very interesting aspects of juidicial interpetation.

    If a judge would follow the intent of the law, they would have to consider that the rationalle behind the FFP rules is to prevent clubs’ bankcrupy and players not getting paid, etc. Thus, if could be inferred that in cases that there is satisfactory proof that the club will not go bankrupt, the FFP could be relaxed. This would serve mega rich clubs such as Man City.

    Conversly, if the judge would follow the strict language of the rules, I don’t think there is any differntiation between “rich clubs” and “wanna be rich” clubs, so to speak.

    The first problem lies, in my opinion, with the fact that clubs that would argue “trade restriction” are actually the clubs who would be more susceptible to bankrupcy and other adverse financial situations.

    The second problem is that we do not know what is the leading juidicial interpetation method to be applied by CAS, making it impossible to predict the results.

  • nicky

    In the midst of all the recriminations about our sudden fall in the EPL table. Our injury list. Our forthcoming fixtures. And who will we buy in the Summer sales.
    Amidst all this, Brickfields Gunners hits the nail right on the head and brings us down to earth into the real world..
    “Why isn’t there mouse-flavoured cat food?”

  • Mike T

    It was always going to come to this.

    With regard to the 76 teams playing in European completion it is worth noting that the investigation at this time is based on the 2011/12 accounts. Some clubs, such as Liverpool still haven’t released their figures for 2012/13

    I haven’t been able to find anywhere where UEFA say which clubs are being looked and it seems that people are making assumptions.

    However it is worth noting that Liverpool showed close to a £41 million loss in that period 2011/12 ( they changed their accounting period so that loss only reflected a 10 month period)and yes in 2012/13 they did play in the UEFA cup. It will be interesting as I say because its pretty safe to assume that they will show another loss in the 2012/13 period meaning that their owners will have to inject capital or right off some of the money that is owed to FSG.
    As for us I wouldn’t expect us(Chelsea) to be under examination for the 2011/12 period but certainly would for the first proper monitoring period

  • Brickfields Gunners

    Bee Gees

    An excited Prince Charles phones the Queen and says he’s finally got proof that plants talk back if you teach them properly.

    ‘Why, only last week I was in the Palace Herb Garden, Ma’am, singing some favorite old Bee Gees numbers and now, guess what? The herbs are starting to sing straight back at me.’

    ‘Don’t be such a fool, Charles,’ HM replies, “it’ll probably turn out to be just some chives talking’.

  • Quincy

    Hi, this is my first post here, but I’ve been following this blog for a long time. I must say it really is top quality, and I agree with most of the subjective stuff, as opposed to the loads of tripe elsewhere on the web.

    I particularly enjoy the ‘behind the scenes’ stuff like this article. I came across this article, and would like to know what you think of it, because I have absolutely no legal or financial knowledge. I apologise if it’s been brought up before.

    http://www.fourfourtwo.com/features/bosman-lawyer-battling-ffp-were-happy-man-city-we-dont-want-another-pompey

  • Micheal Ram

    BFG,

    As usual your comments never fail to brain storm. Haha. Good one, buddy.

  • Brickfields Gunners

    A man with a winking problem is applying for a position as a sales representative for a large firm. The interviewer looks over his papers and says, “This is phenomenal. You’ve graduated from the best schools; your recommendations are wonderful, and your experience is unparalleled. Normally, we’d hire you without a second thought.

    However, a sales representative has a highly visible position, and we’re afraid that your constant winking will scare off potential customers. I’m sorry…. we can’t hire you.”

    “But wait,” the man says. “If I take two aspirin, I’ll stop winking!”

    “Really? Great! Show me!”

    So the applicant reaches into his jacket pocket and begins pulling out all sorts of condoms: red condoms, blue condoms, ribbed condoms, flavored condoms; finally, at the bottom, he finds a packet of aspirin. He tears it open, swallows the pills, and stops winking.

    “Well,” said the interviewer, “that’s all well and good, but this is a respectable company, and we will not have our employees womanizing all over the country!”

    “Womanizing? What do you mean? I’m a happily married man!”

    “Well then, how do you explain all these condoms?”

    “Oh, that,” he sighed. “Have you ever walked into a pharmacy, winking, and asked for aspirin?”

  • Brickfields Gunners

    Sometimes its better to just shut up !

    Farmer Azmat slaughtered a goat and hung it up for the night, intending to butcher it in the morning, but the next day it was gone.

    He didn’t tell a soul about it, and nothing happened for more than two months.

    Then another farmer, who lived down the road, came by and said, “By the way Azmat, did you ever find out who stole your goat?”

    “Nope,” said Azmat. “Not until just now.”

  • Micheal Ram

    Mr Rupert Cook,

    I think I know people like you. The safe type. The follow along type. The self-pleasing type. The emotional freek type. You still have not learn about this website yet. And im yet pretty sure you have been here for quite some time, am I not right? This website supports Arsene Wenger’s theory and practice of financial responsibilities. Even if there is no law or policies to stop him from doing so. Even if the law enforcers are the devil himself. Its all about ethics and code of condoct which is one of the highest order of moral values. You are keep repeating the same mantra or in a polite way, b**ching about financial management at Arsenal FC. We all know that Arsene is the highest voice in the club and if he chooses, he can and able to splash the cash as much as he wants because the club are and will continue to be financially goliath much to his prudence and economic expertise. And yes, to be in this position is way better than winning trophies at the moment. The reason? To win the EPL now has the same conditions to win the EPL 100 years from now. 3 points for a win, 1 point for a draw and no points for losing. The club with the highest points win the EPL. There is no extra points for buying so-called world class players or strikers scoring hattricks in every match. A citizen can complain about a government’s unnecessary expenditures because he thinks about his future generations. I believe Arsene Wenger has done the same sacrifice despite of constant adversaries from outside and within the club. At the end of the day, a father would to the same thing for his family no matter what.