By Tony Attwood
Manchester United and Liverpool make an unlikely pairing in any sense, and the animosity felt between them is huge and long-term.
But today they are indeed linked together in a new campaign to persuade the Board of the Premier League to introduce new rules that would control the finances of Premier League clubs.
From the start of our publishing venture on Untold we have argued that the Billionaire model of ownership adopted initially by Chelsea, but then copied by Manchester City, PSG and clubs across Russia was not sustainable, in that these clubs potentially could turn every league into replicas of the two team leagues that we have seen in Scotland (until this year) and Spain.
It is perhaps difficult for younger supporters to recognise that it was not so long ago that big clubs could tumble, because although they had more money than others they did not have so much that they could ultimately buy anyone – and indeed buy players whom they hardly wanted at all, but would like to keep away from a rival. Likewise even the smallest of the small could rise.
Indeed many younger supporters seem to think it natural that today’s big teams have always been the big teams at the top, and will always be so, forgetting perhaps that Manchester City were relegated in 2001, that Wimbledon were a Premier League club until 2000, that while we were winning the league in 1991 Notts County were getting promoted to the top division, or indeed that Chelsea were a second division club in 1989.
The further back the more odd it looks to today’s eyes. Luton (now in the Conference) in the top division in 1982, Tottenham getting relegated after coming bottom of the league in 1977, Manchester United being relegated in 1974…
That is how it used to be. Arsenal, in fact, were the only team safe, having been in the top league in 1919. But now the big boys are buying their way to success that will last as long as the rich man is a) alive and b) interested, and such a limitation on who can actually succeed is not good for the game.
It is of course ironic that the move for change in the Premier League should come from Man U (owned by billionaires who have fallen on hard times, and who regularly remove vast chunks of money from the club every year) and Liverpool (who were raped by their previous owners and now can’t find a way out of the muck). But sometimes we can’t choose our allies, and if an alliance with those two is what it takes to bring financial sanity and competition back to the league, then so be it. It is what Untold has been hammering on about all this time.
Discussions began earlier this year, and have involved a wide number of clubs, and indeed the range of clubs that are supporting the move is interesting – from the aforementioned Man U through to Wigan Athletic whose chairman identified Man U as the particular mover of the proposal this time around.
To be fair to Manchester United, David Gill has been as strong a proponent of financial fair play as anyone at Arsenal (and of course such a move would be good for Arsenal because the club is regularly in profit.) Gill has talked before about taking the FFP rules of Uefa and putting them into the Premier League, and it seems he’s now looking to gather allies.
Today it appears that the clubs in favour of some sort of restriction (and that means just about everyone except Chelsea and Manchester City) are not so much debating if they should have a financial rule in the Premier League but whether they should just take the FFP rules, or use something more hard edged, so that dubious deals such as the sponsorship of a club by an organisation owned by the chairman of the club is clearly ruled out of order.
Liverpool desperately need such a change since they have been in a hole ever since the government owned Royal Bank of Scotland took them over and ultimately sold the club to John W Henry. Henry is very strong on the need for restrictions, and very anxious not only to have rules in the Premier League but also to ensure that Uefa really make the FFP rules hurt the loss making clubs.
As matters stand in Europe clubs need to limit their losses to €45m over three seasons from last season to avoid being refused entry into the Champions League or the Europa. (Incidentally it is not a simple matter to translate that sum into pounds at the current exchange rate because there is a clause in FFP that says that currency fluctuations will be taken into account. I am not sure how, but the clause is there.)
Henry said in one statement that, “We believe the league itself may have to adopt its own rules, given that clubs seem to be ignoring Uefa’s rules, which may be porous enough to enable clubs to say that the trend of huge losses is positive and therefore be exempt from any meaningful sanctions.”
The problem is that over half of the 20 Premier League clubs last season ended up making a loss, so getting everyone onside is going to be tough. But the fact that Liverpool, making a loss of £49m in the year ending 2011 are so strong on the move may help get things going.
But Liverpool are helped by the fact that a lot of their losses to 2011 were due to exceptional items, and they are looking to return to profit soon, so that might explain their position.
The Premier League has already had one little go at trying to make the playing field more even – the “25” player rule, with the extra “home grown” sub-clause. That may now be seen as a trial run for the much bigger challenge of pushing this regulation through.
Certainly it is this approach to finances that should be remembered when looking at the comments by Arsenal’s board that the club could not compete in the transfer market with Chelsea and Man City. The statement was at one level stating the obvious (although the AAA seized on it as they do on anything to bash Arsenal with) but was also a preparation for today’s developments.
It would be ludicrous to say that the constant attempt by this blog to highlight the insanity of the way in which the transfer market and wage structure has gone in recent years has influenced the clubs – a blind man in a dark tunnel at midnight with his eyes closed could see the mess the Premier League is in. But it is nice to know that maybe at last something might be done.
The club that changed football
Follow us on Twitter @UntoldArsenal
Making the Arsenal
—————————–
Here’s a brief selection from recent finance articles on Untold:
- Liverpool’s finances not in the best of shapes
- Uefa squares up to the Billionaire clubs
- Why bother with internationals, when countries can own clubs?
- How come everyone else spends billions but we don’t
- Football as an indication of a source of madness
- Which club has the most debt
- Is £203m per trophy a sane way to spend money?
And elsewhere…
- The 31 players in Arsenal’s “25″
- Serge Gnabry – another exciting prospect
- Dejan Iliev makes it four
- The team works, as a team, for each other, all the time.
When Wenger complained about clubs overspending he was labelled a whiner. I wonder what the “experts” will say now that Fergie is doing it too.
fergie throwing his toys out the cot again cos he cannot get his own way,only works against the media,not anybody elsely ,put up or get out fergie,u cannot change football only man utd
It wasnt a problem when it was a two team league with Man U and Arsenal !!!!!
Whilst you defend Gill’s commitment to this subject. I can’t help laughing heartily. At what point whilst Man U were the richest club in the top flight did they ever complain about financial fair play. What a bunch of complete and utter hypocrites.
And I completely agree with Dominic (2.01pm) the media slated AW when he complained, let’s see if they get their heads out of the back of Fergie’s underpants long enough to give him the same level of criticism.
Still, looking on the bright side, if Fergie complains to the FA then something will definitely be done about it…..
Only a few months ago I wrote an article saying that if Man City would win the league that it would be beneficial for financial sanity in the PL.
I then said that if City would win he league it would force MU to support and commit for 100% with FFP rules in the PL.
I remember a few saying I was a fool to believe such a thing.
Did I ever mention that I believe what we do with the refs will force the PGMOL to open up? and to bring in new refs and clearer regulations? I still am the fool right now…
Indeed Tim, because it was our own money.
Dream on…
Funny when Liverpoor were run by the Moores familey and were rich from the money generated by Pools (winning the majority of thier trophies as well) this was not an issue. Was the League not a one horse race for many years until the Lottery stop thier income?
The PL will not and cannot change the rules, and if they did do you really think Roman or the Sheik are not driven or clever enougth to get around this!!!
Tim – you are right it wasn’t a problem when Arsenal and Man U were 1 and 2 for four years in a row. But there are two points. Both clubs were making money from footballing activities, and it was only four years.
The fear is that with their almost unlimited wealth Man C and Chelsea could try and dominate the league for 20 years.
Mike, as you must know, I am an Arsenal supporter and season ticket holder, so no friend of Man U.
Throughout this saga we have seen odd movements. Remember the whole idea of FFP was put to Uefa by Abramovich when he was certain that he had created his dynasty – I imagine he wanted to stop someone else coming along and repeating the saga.
Then two things happened. Man C did come along, but worse for him, his youth project (which had involved bringing in what he thought were top young players and top youth coaches) failed to produce in the way that Arsenal produces.
So yes, of course people in all walks of life change their minds, and I certainly am no apologist for Sir F Word. I am merely trying to report an interesting development.
Blue Boy… can you tell me (and I am not trying to score a point or have an argument between fans of different clubs, I want to get this right) the basis for your statement
The PL will not and cannot change the rules,
The “25” rule which I mention in the article was exactly this – a change of the rules. As I understand it the Premier League can change the rules of its own competition as it wishes. It cannot change the laws of the game without putting itself outside the scope of the FA and Uefa, just as it can’t change its commitments to Fifa to release players for internationals, etc etc, but in terms of the way it rules the clubs who are its members, as I see it, it can do what it likes.
Can I clear up one myth first, the Glazers have not put a single penny into United since the takeover in 2005.
When we were the “richest club in the league” we were still bound by financial constraints, the new billionaire clubs are not, there are rumours in the press today that Man City were willing to offer Real £145m for Ronaldo, if true thats an insane amount of cash, and it wouldn’t be coming via a bank loan.
Also it’s not Fergie backing this, so quite the paranoia, it’s the club, the board, call it what you will, United like a lot of clubs are seeing sense, Gill wants parity in the EPL with Europe, that’s common sense, it will enable any English club to play in Europe, so whats wrong with that.
FFP has to be made to work, especially in the EPL, if football is to survive as we know it, it’s not the time for bickering over who said what in the past, it’s about protecting the game and stopping it becoming the Circus F1 has become, because that’s the way it’s heading
Man Utd Forum
What I dont get is if a very rich person wants to put his own money into a club then why should anyone be against that? Yes there would be a need to ensure the money was put in and debt wasnt building up.Why not say that a club can only have accumulated debts of say 25% of there turnover? If say they were to exceed that they would be given say 2 years to bring the debt level down if not they would be expelled.
People like Platini say they want to stop debt but thats not it at all its all about stopping other clubs coming to the party.
Liverpool were massively supported by the Moores family (of Littlewoods Pools fame) and no one said anything when they went out and spent big money on players. Man U couldnt give a flying aout anything when they were winning the league just about every year.
The real funny one hear is Dave Welan. Wigan has been supported by his money for years and in an attempt to stop another club of Wigans size putting the pressure on he wants to change the rules.
In the articule you suggest that FFP within the EPL will lead to otheres winning things. Thats total tosh. To date in the last 19 years there were 7 winners of the old first division , in the 19 years of the EPL there have been 5 different winners. Hardly the 2 horse race you suggest.
Tony
The 25 man rule is actually a bit of a joke, it has a massive loophole in the EPL the same as it does in UEFA.
Teams do not have to include U21’s, they can register as many as they like, the same applies with the B Squad system under UEFA FFP.
Clubs are already using loopholes in FFP, City for instance and the £400m stadium sponsorship, when spread over the ten year deal ( fine under FFP) it’s on the books as £40m per year, it’s the same with players, sign Hazard for £30m over a 5 year deal, amounts to a spend of £6m per year, this is how clubs are already getting around FFP.
This is of course all about self interest with these two, but it may also benefit the whole game…but I sincerely hope they succeed, and on this front, Arsenal end up fighting with them
So to get this straight.
Man United throw money around and regularly make record signings – Totally ok.
Other teams do it (albeit on a grander scale) – It’s not ok.
Don’t get me wrong, I fully support such moves to cap spending but it does seem a bit hypocritcal to me that United have the cheek to moan when others are doing what they have been doing since the original Sky money boom in 1992.
I know the big difference is United spent their own resources but to me thats not the whole point.
Blackburn won the league in 1995 (?) – United react by throwing money around.
Arsenal win the league in 1998 – United react by throwing money around, no one gets a sniff at the title for 3 years and then Arsenal go unbeaten. United (and Chelsea) react by throwing big money around.
Basically United don’t give a crap about the integrity of the league / sport.
They’re only complaining now because their not the biggest fish in the pond any more.
Clearly in decline too.
“Blackburn won the league in 1995 (?) – United react by throwing money around.
Arsenal win the league in 1998 – United react by throwing money around, no one gets a sniff at the title for 3 years and then Arsenal go unbeaten. United (and Chelsea) react by throwing big money around.”
Sorry.. factually incorrect.
Meant to put
Blackburn won the league in 1995 (?) – United react by throwing money around.
Arsenal win the league in 1998 – United react by throwing money around, no one gets a sniff at the title for 3 years and then Arsenal win the double and 2 years later go unbeaten. United (and Chelsea) react by throwing big money around.”
Tony,
Any idea how many clubs need to support the proposal if and when it goes to the vote? As I recall any league rule changes need 14 of the 20 clubs to back it. Is that correct?
Aragorn:
I would disagree a little with what you say. The under 21 issue which you call a loophole was there deliberately to encourage the bigger clubs to bring youngsters through, rather than just buy proven 25 year olds. In that regard I think it is a great rule – not a loophole. Arsenal have registered I think 23 over 21s this season, and have 8 or 9 younger players who they will use; I find that good news.
And on your point “Clubs are already using loopholes in FFP” I don’t think this is right, because FFP hasn’t really started yet. No one is being challenged by Uefa and everyone is watching and in consultation.
2 years ago I talked privately with a very senior man in Uefa about this, and he led me to believe that just as Uefa lays down its laws and runs its appeals procedure for the Champs League, and the like, it will do it for FFP.
Any club that in the view of Uefa breaks FFP gets fined or whatever. If they choose to bring the lawyers in and go to court, then they are breaking the Fifa ruling about not going to court, and that leaves them in a really bad situation.
Indeed it was the incredibly silly mistake by Rangers to go to court over the ban on signing players that helped escalate their situation – the new owners knew that a gigantic hole had been dug and in the end they were asking the SFA to implement the ban that they had just gone to court to have overturned.
Of course I could be wrong, but we can’t say that FFP has failed yet, because it has not started.
Shard, I am supposed to be working this afternoon and have two more adverts that must be written for clients in the next hour, so I can’t go and look it up, but the figure you give sounds right to me.
On the whole FFP thing, an interesting piece on Swiss Ramble – he seems to think the English clubs should be ok, if he is right, a bit of a shame in the case of the sugar daddy, petrodollar, soverign wealth funded teams
http://swissramble.blogspot.co.uk/
Now that he has been outspent by MC and Chelsea,red faced/nose is afraid he cannot dominate anymore and his grand plan to exit on a high is ,frankly under threat.As one writer said when Wenger asks for controls,he was labelled whinger.
I just hope Chelsea and Mc will dominate in the next twenty years.Who knows maybe Arsenal could even upstage the rfn whose exit I can’t wait.He has created enormous animosity among fans who hate him for his arrogance and condescending manner.
Tony, I re-phrase my comment, the PL will not change the rules because currently they are the wealthiest and most powerful league in the world. The product is watched by millions across the world, who love the big spending, and the games that are played between powerful teams.
To think this will be changed because some of the clubs who have been pulled out of the dominance trough are squealing like pigs is naïve at best, after all turkey’s do not vote for Christmas!!
I don’t care what the hell the media will call Rednose. I don’t care what the hell Manure and Loserpool want in doing this (of course it’s their own benefits). The point is this is what we, The Arsenal and most of the other clubs, want, so I don’t see any problem fighting with them, in this one and only battle.
@Blue Boy: You are wrong. Most of the fans are smart enough to know that if there is a fair playing field, the league will be much better and much more attractive. Will you watch it anymore if you know that only $hitty or Chelski can win it every year? Tell me, why the Spain League is not the most attractive league in the world?
man utd are panicking because they are being outbid by the teams they used to dominate.It’s totally self preservation.Liverpool are drowning abit and are looking to get a foothold back with the big spenders.If these regulations come in then these 2 clubs will float to the top again having the biggest fan bases.Dont really think this is any fairer.What does £100m mean to the arabs or russians?nothing.City and chelsea arent in fininicial difficulties so whats the problem?The only fair way i can see is to put a net limit on what teams can spend,say £30m a transfer window including wages over the lenght of contract.
Before we go all emotional and tribal…we can simply agree that it is a huge step in the right direction.
The billionaire model hurts the EPL or any League where it is prevalent in the following respects:
1. It imports inflation into the overall wage structure of EPL thereby putting economically weaker but sensibly run clubs at a greater risk of going burst.
2. It intensifies the incentive from good players to break their contracts by fair or foul means in order to join the billionaire club and earn well above market wages for their talents.
3. It weakens the competitiness of the entire league.
4. It weakens the intensive development of the sport in the nation as fewer clubs are able to finance football academies for prospective new entrants – thereby worsening the nation’s employment prospects in the industry.
5. It also weakens the national team for inter-nation FIFA and EUFA competitions.
It is not for nothing that no anti-FFP has been able to develop in ANY EU country ever since Platini had proposed the idea; it is not for nothing that even clubs with opposing and different strata in EPL support the idea. It is not for nothing that no economist of whatever persuasion or bias have offered arguments against the idea.
Challenges to implementing the idea had always been limited to whether EUFA will have the will to do so and whether majority of clubs (via respective FAs)would show the will to support it rather than kow-tow to the inducement of their richest members by fighting it.
Man U + Liverpool intiative is a positive answer in the right direction that will, hopefully, garner enough votes to pass it for the EPL.
It is a credit to Wenger’s Arsenal that we have 3-5years head start in preparing for this eventuality.
Shakabula Gooner – thank you for your reply. That is what I was trying to say, you have said it far more elegantly.
Shakabula Gooner
1 Its called market forces.The alternative is called communisum
2 Its called transfer market. Arsenal have been active in it for years
3 Its called Arsenal not winning anything again
4 Its called putting a lot of words together that sound clever but arent bourne out by the facts.
5 Read 4 above
FFP is UEFas attempt to exert greater control over the EPL. If anyone thinks for one moment that a Spanish club will ever be subject to any sort of sanction then they are misguided.
14 clubs it is..
And apparently Everton and Fulham are also opposed to these rules apart from the north and south oilers.
http://www1.skysports.com/football/news/11095/8057539?
Mike T
‘Market forces’ is often used but I don’t really understand the term.
To me, the usage of market forces indicate that there is a ‘free market’ where the price of commodities is based solely on supply and demand. Which indicates a large enough number of buyers and sellers of the commodity, so that no individual can manipulate the price.
Even if you can count players as commodities, the purchase price has quite clearly been manipulated by a few oligarchs. That isn’t capitalism. It is oligarchy. A couple of examples of a few corporation which came about from so called market forces, being broken up or ordered to do so include Standard Oil (rockefeller), and Microsoft.
You see, there is no such thing as a pure market. I would have thought the collapse of the US and UK banks (and their subsequent bailouts) would have shown people that.
Stock markets, agricultural markets etc they all have rules, restrictions and regulations, which all go against ‘capitalism’. Sports, if anything, need it even more because although the clubs compete with each other, they also rely on each other. Stronger opponents, a stronger league makes for a stronger product. The most capitalist of countries employs ‘socialism’ as you call it in its sports leagues, and they benefit as a result.
Shrad
There are plenty of players available (commodities) the better quality attract a higher price.The purchase price is being set by the seller not the purchaser. The examlple you suggest is more about the seller setting the price not the consumer.
All of this is easily controlled. Not by a wage cap thats easy to get around.Nor by restrictions around spending again very easy to get around. The only way is to control debt levels.Meaning spending would have to be matched by monies coming in and not supported by borrowings.
@Mike T at 8:07 pm
So, that sounds like the proposed FFP?
http://www.chelseafc.com/chelsea-article/article/2852061/title/gazprom
Gazprom have sponsored Chelsea, for how much is not given?
Gazprom is made up of one of Abramovich’s old companies Sibneft.
Gazprom and the Russian state own Zenit St Petersburg who have an ageing squad and are looking to rebuild.
Usmanov works or use to work for Gazprom investment holdings?
Usmanov has spent a small fortune worming his way into Arsenal
Im confused as to what these people want with football?
Oh and one last thing chelsea’s and Zenit’s results in the champions league has received a boost before a ball has been kicked due to Gazprom becoming a sponsor of the competition.
How the F*** is all this allowed?
Georgaki-Pyrovolitis
The point I make is money coming in and not borrowings. FFP does not allow money from a benefactor over a certain level . I have no problem if someone puts money in as a donation I have a problem if that donation remains on the books as a loan.If money is turned into equity then I really cant see what the problem is
If FFP is about keeping debt levels down and that is what they should focus on.
Adam
Nothing will happen as UEFA are also now sponsored by Gazprom.
Look further where say Addidas, who own 10% of Bayern Munich are the clubs major sponsorsbut again nothing will happen as they also sponsor Uefa
MU not only worry about City, they are worry another Citys. If another 2-3 rich crazy peoples come and buy Fulham or Westham or other team, and inject the money like City, MU will fall out of CL place.
Because they don’t have manager that can running club with small budget like our manager.
Because they don’t have manager that can buy unknown players and turn them to superstar like our manager.
So, don’t worry Arsenal selling our best players every year, if Arsene still in Arsenal no need to worry.
@Mike T, So are you saying these sponsorship deals are back-handers in plain sight?
MikeT
“The purchase price is being set by the seller not the purchaser.”
Huh? What does that mean? If you mean players are only sold once clubs agree to sell them for whatever price, then well..of course..isn’t that obvious?
The point still remains that the ‘market’ is skewed because of a few oligarchs. It is not simple supply and demand setting the price, and those clubs don’t work as a purchaser/consumer would. i.e they can spend more than they earn. No business does that, except as a monopolistic/restrictive practice. And those, are illegal in most ‘capitalist’ economies too, because they are harmful to the industry as a whole, as well as the consumer.
to monopolistic or restrictive practices you can add tax dodging, and money laundering as well.
Good article – you are right though, it’s interesting that its Man Utd who are pushing for this (after all they are being outspent by their ‘Noisy Neighbours’).
As a Newcastle fan, I can’t help agree with the idea in principal, purely out of self interest. Hopefully this would see a more ‘fair spread’ of good players throughout every team and stop the PL becoming a more flashy SPL. I remember the good old days when at the beginning of the season about half the leagues fans were able to dream about lifting a trophy, including myself! Now, I tend to hope for a top ten finish and anything place higher is a bonus…
Anyway, best of luck for the coming season lads.
Others have made the observation that it was OK for the duopoly of Man Utd/Arsenal to dominate with some fatuous argument about where the money comes from. Well the sweat shops manufacturers of United merchandise are of course ethical funds if thats the slant you want to put on it. Arsenal have shareholders with the wealth of the other benefactors but they CHOOSE not to invest it in the club. Don’t any Arsenal fans ever wonder about Wenger’s fixation on the financial performance of the club when he has a financial stake? Are Arsenal a football club or an accountancy firm? Liverpool outspent their competitors for decades, but the Lttlewoods catalogue or pools money was “football” money…and that was ok…really? Maybe those advocates of FFP need to look at the flip side where the “smaller” clubs will never be able to splash the cash and try to play catch-up in order to be cometitive. If anything its likely only to preserve the ‘status-quo’…Man Utd & Arsenal fans consider yourself lucky you are among that elite (if Arsenal stopped selling their best players maybe they would have won something!). I don’t see crowds dipping or fans (or more pertinently armchair subscribers) deserting the premiership whether a one/two horse race whatever. I would like to see an impact of reduced ticket prices but that looks like just as unlikely that these proposals are anything other than self interest.
Oh and the FFP puts no restrictions on sugar daddy income into the club in infrastructure, or on the academy. Clubs can still invest in their youth, move to new stadiums etc. But they can’t completely rely on a quick fix every couple of seasons. At least that’s the idea. We’ll see how it’s implemented.
Mike T @ 7.16pm:
You need to seriously review your understanding of economic concepts. The moment you have EPL, an exclusive entity comprising of 20clubs, with its rules of entry and exit as well as ownership rules, etc., you can no longer talk about “free market forces” but controlled or curtailed market forces.
To this shallow oligopoly, you now have a few members with the financial capacity to distort the oligopoly further by cornering the most precious commodities in the market for their exclusive deployment – using resources they garnered from independent and unrelated sources.
UEFA and now, other members of EPL, are reacting to the threat that the billionaire clubs bring to the entire system. This, reaction, admittedly, is not driven by market forces either but by economic survival and desire by the other clubs to still be able to compete with the billionaire clubs that “have it all” where the cash to buy their desired outcomes are concerned.
Of course, they are within their rights to have these concerns and to propose rule changes that will blunt but not completely eliminate the extraneous comparative advantage of the billionaire clubs in their midst.
Rven if we ignore the economic justification for the proposed rule change, we can agree that neither you nor I know how much the shoes is pinching the non-billionaire members of the EPL. But we shall soon get a measure of their concerns by checking, in due course, how much traction the rule review gains and if they are able to get it approved.
Don’t forget also that EPL has to decide to fight or cooperate with the UEFA FFP rules kicking in from 2013. Obviously, in view of this current move they are seriously inclined to cooperate either because they see that it benefits them overall or that they cannot successfully challenge the imlementation of the rule by UEFA.
I have found reading this great article informative (thanks Tony) and many of the above comments really interesting. Things need to change and so I am glad that at least there are tentative steps being taken to address the situation.
Mike T,
In response to your comment @ 7.16pm, you should refer to point 4.
Shakabula Gooner
The irony about needing to understand concepts pure economics is one thing and football ecomomics are another. There is a normal business model and then there is football. Most clubs, not a just few, are owned by billonaires. Some such as Fulham and Wigan will go into free fall if the changes being suggested are introdued. It will be interseting if a majority of clubs vote to change the rules my guess is yes there will be a token change to the rules but nothing that will go anywhere near to the level that some would advocate.
UEFA are making noises that some are lining up behind Platini as they think new rules will lead to more trophies the reality is it wont.FFP can not be applied equally as clubs accross Europe operate to different laws. For instance in Spain top earners (players dont pay the highest rate of tax ) most players wages are calculated after tax etc so in Spain a player getting say 100k Euros a week net will cost a the Spanish club less than say a player in Italy that also gets paid 100k net.will cost the Italian club
Football has never been run on a normal business model nor will it ever be able to. It operates in a bubble it has to as normal business rules cant apply For instance football cant hire and fire employees as normal employers can . If say Arsenal were to miss out on CL income for a year or two would they be able to lay off players in attempt to balance the books.
@Mike T
Pretty sure Uefa banned the Spanish team RCD Mallorca from competing in the Europa league in 2010/11.
Great article Tony , and some very illuminating and persuasive points being brought out here .Well done guys !
In life (especially in politics and business), and more so here in football, we end up with strange bedfellows .
As was pointed out we have already been preparing for the FFP
years ago and were made fun of ; but now we getting new “leaders of the cause ” ? How very quaint !
Reminds me of an old adage , ” ‘Tis time to fear when tyrants seem to kiss “.
Good article Tony.
I don’t have much to add except that for me, in an ideal world, I would like to see the Glazers not make any more money from Man Utd and have their debt empire come crashing down; have the FFP/’spend what you earn’ rules implemented; have the money launderers/Russian mafia leave football alone; and Arsene Wenger and Arsenal stick it to the media/referees/AAA. In an ideal world. In the real world, I will settle for the latter and the former.
Mike T,
The ‘fear’ that smaller clubs will stay small as a result of these rules while valid, ignores the fact that they will necessarily remain even smaller or go bankrupt in the current situation except if they manage to find a financier with deep enough pockets. Experience has shown that there are more ‘owners’ who choose to asset strip the club and bankrupt them, rather than fund them. (even if you believe that the likes of Abramovich are really gifting everything to Chelsea)
Also, the Financial rules don’t necessarily limit growth of smaller clubs. It depends on the details. In any case, the UEFA FFP doesn’t preclude any amount of investment in infrastructure, facilities for youth etc. Which means clubs can still grow organically.
Also, it allows a loss of 45m euros over 3 years, which again means clubs can receive an injection of funds. The growth will just have to be longer term. The smaller clubs who start from a smaller base, will have a slight advantage when it comes to outside injection of funds because 45m will be a larger percentage of their existing costs.
There are however other ways to go about it. Hard wage caps, wages-turnover percentage etc but it remains to be seen how the PL will proceed in this regard, if at all. Those details can be worked out, but in principle, I absolutely agree that something needs to be done to stop this spending spiral, because spending more money than you earn is a sure recipe for disaster.
Has been an interesting debate and I still think that there is a better way to stop the accural of debt.
The FFP rules as they are provide several opportunities to work around and arent level( for instance the levels are in euros and we operate in steling)
I know I am repeating myself but a simple % of debt against total turnover would be fair and wouldnt need any fancy adjustments for exchange rates etc.
Going back to the proposals it seems that in addittion to Chelsea, Man City , Everton and Fulham saying that they will not vote for what is being proposed it now seems that others including WBA and Spurs are saying they want to be left alone to manage their affairs as they themselves see fit.
To make the changes 15 need to vote for it and whilst I think there will be some minor chnges I wouldnt hold your breath expecting a complete overhall.
Anyways as I say be an interesting debate.
A very interesting debate indeed, that’s why Untold is so good a site.
Mike T: What team do you support?
You are not Arsenal otherwise woukdnt have said point 4, which in my opinion is a dig at us, which is fine when talking bout a game or normal tribalism fan stuff, but not about such important subjects as FFP.
Otherwise well done fellas for keeping it civil
I thought it was obvious that I am a Chelsea supporter .Father forgive me!
Have been since 1967.Am a season ticket holder in West Lower and can remember the good old days when we were in the old 2nd division and playing on a bomb site!
I am one of those supporters that try to see positives in other clubs yet at the same time I don’t kid myself that in the main any moves such as the clubs behind this proposal have nothing other than self-interest.
As for Chelsea it’s easy to look at the past few years, in terms of spend, but most don’t quite see what some of that money has brought. Or indeed some say they broke rules or whatever but the facts are they didn’t and are quite healthy placed going forward. Many who display that tribal thing will only look at what the tabloids report as opposed to digging deeper.
Chelsea’s academy is up there in terms of set up and after years of drought the youth team has won the FA youth cup twice in the last few years.
It would be naive of me to suggest that there has been a flood of players breaking through but if you look deeper that was never the target it was more of a planned trickle. There are a significant number of youngsters however that are very close to breaking through. The club also have a significant number of players who are on loan and who will be in contention for a squad place in the next year or two. (De Byrne, Courtouis, Lukaka).
My belief is that Chelsea has been very smart in that they have got a foot onto the worldwide stage and seemingly are in the process of bringing wage costs down in truth following the Arsenal model re one year contracts. Players like Ballack, Deco,Drogba, Kalou, Boswinga, Cole, Lampard , Moulda and Terry who are all or were paid way over a £100k a week have or will be replaced but players coming in, other than the odd top signing, will all be signed for in the region of £60-£100k. If you look Chelsea wage costs reduced in the trading year 2010/2011 and it is suggested that these wage cost reductions will show even further wage cost reductions in 2011/12 due to a radical overhaul of the players bonus scheme which, will be supplemented by the elimination of one off costs( Chelsea packaged some costs into one year’s trading accounts so there was no carry forward into FFP calculations) and a huge increase in CL Revenue last season oh and the significant increased income from player sales which it seemsl point to Chelsea possibly declaring a healthy profit for the year ending 2012.Hard to believe I know but there is a strong possibility.
As for point 4 I wasn’t having a dig at Arsenal, I applaud what their accounts reveal but surely football is more about applauding what goes on the pitch as opposed to a speadsheet?
Many kid themselves that their club is in great financial state but reduce a certain revenue stream at most and the panic button would be hit.
What would happen at Arsenal or Man U say if CL football wasn’t achieved for say 3 years or say the transfer trading account wasn’t supplemented by huge transfer fees received?
What would the position be in FFP terms?
The impact on TV and match day income alone would be a reduction of £40+ million a season but the impact would go further. Less commercial income, less worldwide exposure and of course it’s more difficult to bring in the real top class players without CL and let’s face it when AW and to be fair SAF do move on its hard to believe anyone will be able to work the same magic as them . Both clubs accounts are good but would they is able to support the current levels of wage expenditure and comply with FFP if you stripped away CL income.
I find it too coincidental that the main movers and shakers in this proposal are Man U & Liverpool. Two clubs both owned by quite ruthless American businessmen. In the Glazers case we see already they are taking massive sums out and my guess is seeing by keeping other clubs spending ability down the opportunity for greater profit and the chance to siphon even more money out.
In the case of Liverpool FSG lead by John Henry are lining up much the same sort of model.
That’s why I believe if Roman Abramovich or Alisher Usmanov if he ever gains control want to pump money into their clubs not by way of loans but by taking equity then I believe they should be able to.
Mike T:
Nothing tickles many of us on this blog than to have a 4-letter word free debate with ardent fans of other clubs. being of different tribes we are nearly guaranteed to disagree but don’t have to be disagreeable provided we are not, at our core, obnoxious people.
It has been fun and look forward to more of same from you on this blog.
Keep your corner “blue” until we come for your lunch with our “guns” blazing(smiles)
This is a good step towards cleaning football. The only sad thing, if I may call it that, is the teams that are now trying to take credit for FFP are ones that benefited the most from an uneven playing field long before. IMO teams such as Ajax, Arsenal,etc, should be championing this cause as they have been the ones that have been stripped of their best players for years now by these title-buying clubs.
My understanding anyway was FFP was going to come into play from the 12/13 season; so it does appear a case of rednose & co attempting to get all the glory for something thats well in motion and they didn’t initiate/influence. Pathetic.