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Trying to decipher the code: what are the EPL going to do next?



Today’s Sponsor:

Making the Arsenal: historical fiction on acid

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There is a story doing the rounds that says that the EPL is about to propose that transfer fees must be paid within a year of a player signing.  At the moment the fee is paid over a period up to five years, which is why Portsmouth owe a penny or three.  (Actually £14m on transfers).

This will come up at the AGM in early June, and the motion before the EPL is that 50% of the fee must be paid on the player signing with the remainder due within 12 months.

This will make no odds to Arsenal, Chelsea and Man C but will be a blow for Liverpool and Man U who are trying to pay off debts, and the multitude of clubs who lose money every year and have nothing in reserve.  If Birmingham can’t pay their banker £2m they owed, how do they cope with this?  Same situation for clubs from Everton to West Ham.  There is not a penny cash in the drawer.

The EPL think that this move will make Uefa see that they are addressing the financial doping issue, and will then back off from other changes it wants to impose in a year’s time.

This is part of the little Englander concept of “they won’t do that to us” or “they wouldn’t dare do that to us” which football lives in, in my view.

Portsmouth are appealing against the disqualification from the Europa league next year -which is a telling case.  West Ham and Portsmouth were the only clubs refused aEuro licence last year because of their finances, so the chances of success seem slim – but if they did get their way, that would mean that Uefa is in retreat.



Manchester City are paddling a similar canoe. The EPL has said they can’t take their keeper back from a loan deal, now they are down to one.  Clearly when they did the deal they expected to be able to stroll around breaking any rules, simply because they have money.  It is an interesting development – although it is possible that Chelsea (who are clearly able to ensure that the EPL never takes action when their mob surround a ref) is having a growing influence on how the EPL acts and thinks.

Birmingham have been charged with failure to ensure their players conduct themselves in an orderly fashion after the referee Martin Atkinson was surrounded in the game against Villa.  Roger Johnson, meanwhile, has been asked to explain the comments he made to the media after the Villa game when he branded Atkinson a “disgrace”.  As the complaints come in, and Chelsea escape, (and as Man U are never done for Sir Alex F Word’s comments)  it does get a lot clearer how things are arranged.

But to finish off where we started with money (actually this has all been about money) former Man IOU chairman Sir Roy Gardner has announced that the Man IOU situation is not “a sustainable model”.

I’m glad that’s clear.

In total, interest and fees amounting to £460m have become payable by Man IOU to service the borrowings, including two refinancings.  So to be clear, that is not the money borrowed by Glazers, that is the money taken by the bank to arrange the debt, and interest on that.

My overall point though is away from Man IOU.  They, like Liverpool, are basket cases and cannot be retrieved apart from through a Man C style buyout.  But the issue remains: what is Uefa going to do about financial doping of this type, and what is the EPL going to do in response?

If the Chelsea-EPL axis believes it can change Uefa’s mind through persuasion and/or bribes (I make no allegation, I am exploring a set of philosophical positions) then the changes we are seeing (the 25 rule next season, the proposed payment up front deal etc) might be part of the bargaining process.  Neither will hurt Chelsea at all.

But the Uefa plan to licence clubs on the basis of their profitability and to include benefactor payments when doing the calculations, would rule Chelsea and Man C both out.

I suspect the dealing has only just started.

Having misunderstood the 25 rule totally myself at the start, I am the last one to pass judgement on it now, but that’s never stopped me before, so for what it is worth I think we are utterly fine ourselves, and Chelsea have clearly been trying to get themselves sorted, but I am not sure if Man City are that well prepared.  Nor come to that are the Tiny Totts.  But I do need some help on this.  It will be fun to see the declared squads when they are announced, presumably in August.

And finally on money, my season tickets renewal came through today, all nice and efficient.  Let’s hope that they have got their ticketing sorted out after last year’s fiasco.  (See I can complain about Arsenal!)

Tony Attwood

17 comments to Trying to decipher the code: what are the EPL going to do next?

  • TheSKAGooner

    Tony – What’s your take on us paying off the Highbury development shortly? If stories are to be believed, we’ve cleared all but about 2m pounds on Highbury, which reportedly will be finished within a couple weeks. How do you see the Club moving forward with follow-on profits from the land developments and so forth?

  • Arthur The Gooner

    Intersting points made Tony and a very good article. I believe we are all yet to wintness where is this going and as far as I can tell we will be sitting on top looking down all the way.

  • Ska – I am not 100% on this but as far as I recall, we changed the way the financing worked because of the collapse in the property market, selling a whole bunch of the flats to a developer at a lower profit than originally expected – to keep finances moving. I have also heard that we have sold on some of the old business premises around the stadium area too.

    What the chairman said was that the additional money we were getting was going to be used to strengthen the squad and to make the match day experience even better for the loyal supporters.

    I imagine that is where we are going. I don’t think the mortgage is being mucked about with – infact it probably can’t be. So that is real live money coming into the club as the rest of the development generates more income.

    At a time when everyone else is on the downward spiral, or wondering how to cope with the 25 rule and the new Financial Doping rules, we seem to be well set.

    But you wouldn’t expect anything else.

  • TheSKAGooner

    Tony – Right, that was pretty much my thinking as well. I believe we extended the Highbury note a bit last year due to the credit crunch, but we’re now in line to pay off Highbury early as overall revenues have increased. The note on the stadium is at a low, fixed rate which is very comfortable, so no real need to tinker with that & as you said, it’s probably not really something we can tinker with anyway.

    I know you pound on this issue, and I’m really glad you do, but I often have the feeling that there are many folks who don’t quite get how the past couple years’ financial restraint will yield real financial power shortly. We’re beyond well positioned from a financial perspective, and while there will always be a Sheikh Yer Money out there somewhere who can throw untold sums at players and teams for transfers, we’ll not suffer the whims of such ownership (even if Silent Stan takes over at some point).

  • Clerkenwell Gooner

    I’m intrigued by the 25-man squad rule, and looking forward to next season to see how it takes effect.

    As we seem to have space in our 25 allocation for a handful of non-home-grown players, and it looks as if Billy Gallas and Sol might not be up for another year (Sol is getting married in July), I wonder if we couldn’t splash some of that Highbury cash on RM’s Sergio Ramos?

    I’m not joking. Apparently he’s been touting himself in Italy because he wants a better contract, he knows Cesc, he’s only 24, he’s incredibly versatile, could play at CB or RB, hell, he could even play as a striker he scores so many goals. Him and TV = partnership made in heaven!

    Ramos is incredibly physically fit, which is the Arsenal way, and his “no prisoners” mentality would blend right in with the PL.

    Arsene, what are you waiting for? I know you don’t like party animals (Serg has a bit of a rep), but get Cesc to have a word, and we’d be set defensively for next year.

    And shirt sales (have you seen him with his shirt off?) would go through the roof!

  • sammy

    pls can some one explain the 25rule d more does it mean that we cannot add to the 25 does it mean d transfer widow will not be effective pls help me out…..

  • Richard B

    Presumably a combination of the UEFA ‘anti-financial-doping’ regulations and the rumoured requirement to pay all transfer deals in full within 12 months must force down the cost of transfers.If Arsenal new these new rules were coming (and I can’t believe that they haven’t been instrumental in getting them drafted) then it would very much explain why they have apperaed reticent over the last year or two to spend really big. Why spend £10m on a player last summer when he will go for half that this summer – or maybe, under a Bosman, for free! Prices will only rise if there is real competition for a player – hence Wengers remark that Chelsea and Man City ‘can’t buy everyone’ implying that Arsenal will have the pick of those that those clubs don’t go for. And, if gifts from sugar daddy owners aren’t allowed any more, maybe they can’t go for those players without selling first anyway.
    Arsene, as ever, knows best.

  • Paul C.

    I think the plan is to have closed out all property dealings within a year, and that includes some properties around The Ems that the club is selling the development rights to. They have also leased a big block of flats which will provide small yearly income and long-term can be sold when prices have rocketed again some day in the future.

    I would rather the club just put that profit in the bank account as a war chest for that rainy day when we just might absolutely need it. If we ever were in trouble it would be nice to know we had 150million tucked away somewhere safe, wouldnt it?

    The club can do just fine with their current yearly profits given the money AW makes in the market. The problem with given the manager big sums to spend is that the manager might start thinking he’ll get those sums all the time, and as we all know that is when the problems start.

    Good piece Tony. I think you are right that there is some serious horse trading going on right now within UEFA.

  • Marc

    Sorry to be dim but can someone clarify the 25 man rule for me. Is it 8 players under 21 & home grown or 8 players either under 21 or home grown? i.e. Do players like Terry & Lampard at Chelsea count?

  • walter

    If you look on this site you will find an explenation on the rule but as it was very confusing at the beginning you must read all the comments as int the comment section some people have told who and which players is what.

    And we look really good and we can even add a few players without even realy having to sell anyone.

  • Marc

    Cheers Walter

  • But don’t go reading my version of the rule – read everyone else’s

    I got it totally wrong

    Tony

  • finn

    Oh man this is getting really confusing. I thought Wenger was happy with his goalies, I thought he said (and meant) that Almunia was world class. (at least according to our resident experts of course it’s just the standard bigging up your own players and doesn’t mean a thing). Now why would it come out that he was chasing this goalie Seb Frey in 2006? Could it be that he was interested but had his hands tied by the club policy for the last few years as regards money? I’m beginning to think the sheep will eventually follow each other over a cliff with all this info trickling out slowly next few years. Another one of their latest rants has of course been that he won’t spend but not only that he’s indicated that he wants to do it before the WC. If Wenger does spend this Summer and we do get the upgrades at the positions the moaners want it in will this end the moaning? Interesting question methinks.

  • finn

    well it looks like all our signings will be made before the world cup starts on june 12,i believe.i agree with wenger that you should not sign players just because they have had a few good games in the world cup.didn’t man u sign some polish player on the back of a world cup-total waste of time.i think we signed gilberto after a world cup,but i think wenger does his homework on the player first,so i presume he was looking at gilbero for a while.lets just hope the players that he does buy are ready made,no more potential please,we have enough of that at the club already.i hope he buys some players who already have prem experience,we need to hit the ground running next season cause it’s going to be tougher than ever.vermaelen hit it of staight away but some can take months to settle in,can we afford that knowing that there are going to be clubs outhere who we cant compete with in the transfer market.i will be glued to skysports news and talksport that’s for sure.

  • daokta

    The 25 rule as far as I understand it, will not affect Arsenal at all. Also, I understand that there are so many changes available to the original 25 at various times – that I wonder why this rule came out in the first place?.
    p.s good article as ever Tony

  • Rhys Jaggar

    I had quite a long chat a couple of months ago with one of the Club Deck sales managers – there’s definitely a position that they want to do more for the fans. You must always take it with a pinch of salt, but my judgement was that they really meant it.

    They adjusted their price spread a bit, making our seats a bit cheaper, those near the half-way line the same or up a little, which reflects both the economy but also the fact that watching from halfway is the best seat in the house. That’s why the Directors sit there!!

    We saw a greater spread of food offerings, particularly the cheaper snack end (not just hot dogs now, also Chinese stuff too).

    I suspect they’ll try and sweat the assets of the Club deck facilities, trying to maximise income from exhibitions, dinners, meetings, you name it. That space is fantastic, so they could probably get up to £10m a year from it not on matchday. At a good margin. Probably enough to buy one young player a year……..

    I do wonder when they’ll finally do up Holloway Road tube and open it on matchday. It was supposed to be part of the regeneration deal. I guess TfL is busy on Olympic related stuff right now…….

    To be fair to Arsenal, I raised a few points and made a few suggestions after the first year at the Emirates and they acted on almost all of them. Maybe I should charge them a consultancy fee like the Glazers?

    Oh I forgot. I’m more interested in the team than the money…..