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Billy the Dog McGraw runs his finger over Uefa’s financial fair play rules, gets it snagged on a sharp bit and scuttles off to the local A and E for a quick repair.
There is a report on the BBC web site this morning that “Two of English football’s top-four clubs could be excluded from European competition in future as they fail Uefa rules that are about to be introduced.”
This is interesting to me at least because in the last few days a whole swirl of stories relating to the new financial regs have emerged. There’s been little on them for months, and suddenly everyone and his grandmother’s pet rat are dripping pieces into the media. What, one might ask, if one had the time and was not already 10 minutes late for work, is going on?
Well bugger work for a bunch of soldiers, I’m staying put while I type this up.
As our august overlords of the news, the BBC, point out, the Financial Fair Play Regulations do not come into force until 1 June and will not really bite until 2013. So why suddenly get multo agitato just now?
The BBC says that “a study of recent accounts by BBC Sport shows Chelsea and Manchester City would fall well short of the rules if they were being applied today. City were £110m in the red while Chelsea showed a deficit of over £50m. Uefa’s rules allow clubs to run up losses of £65m over the first five years.”
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Uefa will have the power to ban any side that repeatedly flouts the rules from European competition, but as we have noted in past discussion, any revenue earned from side businesses such as property, hotels or media are excluded. Hence the Manchester City plan to build lots of emporia in sunny Manchester next to the ground, and Tottenham’s plan to build a superb six star hotel next to their ground, making use of the exquisite local features, the water fountains, the open garden spaces, and the proximity to more prostitutes and drug dealers than you can shake a stick at. (Some of that sentence is ironic, some of it is true – you have to sort it out. I would do it but I am too busy typing this).
Using this bit of rope Manchester IOU can get out of some of their problems because the interest payments incurred by the Glazer family won’t count. So although Man U made a pre-tax loss of £79m in 2010 according to the Uefa Book Cooker in Chief, they made a profit of £42m. Clever eh? (That fellow used to work at Lloyds).
Arsenal would also easily meet the guidelines, posting a surplus of £55m. But you, me, Andersred of Man U (whose knowledge of such things is spoken of from the plains of Cornwall where their supporter base is to the wild uplands of Mongolia when the Ulan Bator clan climb aboard their bus for home games) and Swiss Ramble have some doubts about the rest of the gang.
Take Manchester C and Chelsea (I wish). Andersred considers that a ground like Arsenal’s might pull in enough dosh for Chelsea. Swiss Ramble, the other financial blog of note on such matters reckons Man City have a cunning plan relating to property.
But for any of this to work – indeed for the clubs to survive, the financial players need the Champs League each year. There is no choice in this for Man City, Chelsea and Man U if they are going to meet the Uefa requirements. Arsenal can survive outside the top four, because the finances are so sound. But if Man U Man C Chelsea and Arsenal do constantly secure the top four, for the little clubs like Tottenham and Liverpool trying to break into to the big boys room, life is tough and money is hard to come by.
Of course this is Uefa, so there’s always a laugh on the horizson. This time it is Uefa general secretary Gianni Infantino. Try this one for size…
“The English clubs are among those generating the highest revenues in Europe. The basic rule is the break-even rule that says you cannot spend more than you generate, so if you generate more than the others you have an advantage. So I am not worried at all about the English.” Yes, well, I suppose so. Like Nat West, Lloyds and Northern Rock… Or come to think of it, Woolworths.
“They know what these rules mean and how we will implement them. I am sure that tomorrow they will put their finances in order so they are able to break even. Our president spoke to Manchester City’s owners over a year ago when we started with this process and they were very happy with it.”
So there we have it. Uefa speaks to Man City and Man City says, there there little man, let the big boys sort it out.
Of course clubs can change – that’s true. As Mr Infantino said, “Ten years ago Arsenal reported less income than Chelsea, Liverpool and Newcastle. Now it is more than those clubs and in 2009 more than double Newcastle’s. This shows what is possible with good management and careful investment.” Yes, except this is now the post-wanker crisis recession doom gloom and end of the world. No one lends money any more.
Elsewhere there are reports that Sheikh Mansour (I have to use his real name because I have used up all the Shake Rattle and Roll jokes, and the titles of those wonderful Frank Zappa albums like Sheikh Yerbooty, and Sheikh Yermoney) has sent club officials to hold talks with European football’s governing body to discuss how they can comply with new regulations.
Uefa’s head of licensing Andrea Traverso stated: “We are in talks with the club, they are aware of the rules and they probably have a strategy to raise their income.”
Michel Platini said: “Last year in Abu Dhabi I met up with the owner of Manchester City and he promised they would live with the rules and regulations.”
Roberto Mancini said the £27m-signing of Edin Dzeko was the end of his spending until next Tuesday when he had promised to take his wife out for a meal. He also said they need another two or three players in the summer (that bit is true).
Platini also said, “There will be no witch hunt,” which I think is a shame. I like witch hunts. Not that I have anything much against witches of course, but given that a witch hunt involves chasing people who don’t exist with powers that don’t exist who undertake tasks that don’t happen, witch hunts involve the rather futile passing of time for no particular benefit – which makes it an ideal activity for Uefa.
Just look at the figures: 655 top clubs in Europe reported a loss in 2009 and the combined deficit across Europe’s 53 football nations was £1bn. Spending on player wages is up almost 10%, with clubs spending 64% of their income on these and other staff expenses. 73 European clubs are spending more than 100% of their revenue on wages.
An analysis of the accounts of the EPL clubs last year for the Guardian showed that almost three-quarters of them would fall foul of the new Uefa regulations, if they were applied tomorrow.
So why no good friendly witch hunt? Why no action. Why is suddenly everything tickety boo and hunky dory (to quote David Bowie).
Because tucked away in the deepest of deep print in the smallest typeface ever conceived in the history of eyesight it says that if clubs can show that they are travelling in the right direction, that their losses are reducing year on year and can point to them being a result of contracts signed before June 2010 when the rules were enshrined they are safe.
So even though costs are rising across Europe at around twice the rate of revenue, and only four leagues (Germany, Austria, Belgium and Sweden) broke even overall.
Yes, at the start of all this I did naively think that maybe we were onto something here, and that Uefa might just get it right for once. But now it seems that it is all for nothing – expect the fact that as Ireland, Portugal and Greece have found, eventually if you go on spending lots of money you don’t have something goes bang. The only interesting question now is, which big club goes bang first.
Barca were close last year when they failed to pay their players. Liverpool got right to the edge once their were owned by the bank. Everton are struggling on day by day but just can’t sell themselves even for 1p. Rangers have to find a new buyer and have to win their case against Revenue and Customs to survive (lose both and they vanish totally). Man U are dependent on the Emperor’s New Clothes act of the Glazers (look money, look no money). Even the astounding Tiny Totts who print their own money in their off-shore hideaways are talking about selling off players if they don’t get into the Champs League again.
In effect Uefa has made itself irrelevant. Our old capitalist chum Market Forces will run the show, and that means someone will get hurt. It always ends in tears.
The failures of Herbert Chapman. Was the great man really that great? Or just another Wenger. Time to find out.
The failure of Arsenal – when we went bust
The failure of Untold Arsenal to keep its index up to date
Nice Article… Although I dont really believe a lot of doom predicted for the big clubs is going to happen. Sooner or later, the big businesses always find a way out through whichever way be it creative accounting or getting the rules changed.
I’ll again say what i had said a long time ago regarding the financial fair play rules – Big clubs will get a way around it.
Many months ago, this very same site told how ManU will not be able to follow the rules bcoz of massive losses and now we’re being told that they’re running a profit according to the rules??
Thats why i said, big clubs will have a way around these rules. UEFA need the big clubs for their own revenue, so dont expect them to hit the hammer on their own finger. The fact that the Financial Fair play was originally meant to start from the 2010-11,but was postponed by Uefa till 2013 says it all.
Guys, wake up and smell the coffee, no one is going to get banned.
I have to agree with Dark Prince in that regard. I do not think the rules are going to be applied fairly across the board. Certain big clubs are too important for UEFA’s revenues to leave them out. The likes of ManCity may get banned though, if nothing else but to make a show of seriousness about the rules, though I doubt even that will happen.
But I think the article said as much anyway. That UEFA are basically not going to act. They will shut their eyes to all the madness going on, and eventually the madness will claim its own victims.
there is never going to be a level playing field, the champions league would end up like the europa league over night if the big clubs werent allowed in and the competition would be discredited because the best teams werent allowed to pay, the perceived power of UEFA / fifa would be embarrassed because the big clubs could make their own competition set their own tv revenues and sky would pay it, the greedy clubs like barca would gladly cut schalke, shaktar out of a piece of the pie, the golden rule is he who has the gold makes the rules.
personally I would like to see a competition where each league nominates their all stars and you have premier all stars versus la liga all stars and so on.
The scary thing for me with arsenal is we have adapted the ajax model and I confess I dont know the reason why it failed but it did and ajax were very successful.
I think it all went wrong the day Uefa asked JL Dehaene to be president of the committee that would look at things. I even wrote an article about it here on Untold. Seems a century ago.
And I then warned: if Uefa take on this Belgium former politician to implement the FFP rules, it would lead to nothing.
Because JL Dehaene is know in Belgium for doing nothing. Oh, and when he did something it was such a terrible law that if you asked 100 people how the rules should be read you got at least 110 different answers.
I then hoped I would be wrong but it seems that I was right with my prediction.
The one thing we can be sure of is that, in order to comply, all other clubs (other, that is, from Arsenal) will have to change the way they operate. And change always entails risk.
Chelsea have already done things like not renewing the contracts of Ballack, Deco, Cole etc. that they would not have done had it not been for the FFP regulations. And one glance at the table shows what effect that has had in weakening Chelseas position this season. The sale of Ronaldo by Manure probably falls under the same heading. Yes, they may still win the league, but they have never sold their best player before, at any price, and it’s likely that it’s to do with proving that their balance sheet is ‘moving in the right direction’.
Spurs are talking today of ‘streamlining their squad’ because it’s bigger than anyone elses – when we all know that all squads are 25 players strong so that’s bollocks designed for uninformed City ears and to demonstrate to UEFA that they are ‘moving in the right direction’ despite still not getting a new stadium and still being managed by a serial bankrupter of clubs.
The most common mistake when assessing the effects of change is to over estimate them in the short term and to under estimate them in the long term. Change is already happening and the effects of that change are already noticable. But in five years time (and maybe a lot less) football could look quite different to how it looks now and those differences will suit Arsenal very nicely thank you.
Don’t worry, the other clubs and UEFA will find a way to screw Arsenal. They always do.
If you’ve ever seen the U.S.-based TV show “NCIS,” you know that sometimes paranoia is justified: “Rule Number 40: If it seems like someone is out to get you… they are.”
If UEFA wanted to screw Arsenal they wouldn’t be publicly holding them up as the template by which they want all clubs to be run in the future. And the other clubs have’ where they can, tried to screw us by spending money that they don’t have. And their main screwdriver is being taken away from them!
Cripes! Master William Mcgraw,
is it capitalism for the poor and communism for the rich all over again? of course it is.
the posturing is ridiculous until you realise just what a logistical nightmare is involved if you were going to rigorously delve into the finances of football clubs and just how many layers of specialist paper pushers are in for a big pay day, and of course the backhand brigade will be warming their envelope passing hands and various branches of the tax offices of various counties will be doing their best for the tax dodging elite all on our coin. the future looks muddy, the future looks vodaphoney, Oh bollocks!- Give me my arsenal to take the pain away and please god, blight the trolls with leprosy and open sores they’re ruining Untold for Me.
Tony/Walter/Billy,
Totaly off topic I know, Id like to ask a question though.
What if anything have you heard about an immenent announcement from the Arsenal board as quoted on Arseblog the other day ?
Whats your thoughts on the youth chamions league due to start this summer with group games and a knockout phase in january.
Do you feel it will be unbalanced as most clubs have all their youth out on loan to gain experience and only spanish clubs will benefit as they play together in the second divison ?
Sorry about been off topic there was no where to ask these questions Regarding financial fair play. I think most people will believe it when they see it.
@Ugandan Goon
Your comments are an absolute joy..Even in their lack of joy..if that makes any sense..
@shard,
When you see thoroughly dysfunctional organizations trying to reposition themselves for another big pay day, it is amazing just what shiny new dawn is promised to keep the proles looking in the other direction while the sharks slip into position out of sight. no one believes they can carry it off or that they have thought this out thoroughly, the only reason anyone has tried to cut costs on players is the credit crunch and the recession, but what better time to come out sabre rattling than when you enemy is preoccupied with surviving a bigger threat! it would go a long way if anyone could explain the qatar world cup just for starters.
I agree Ugandan Goon..That’s a good point. It actually is quite amazing when you think about it, that there isn’t a larger acknowledgment that there is bound to be rampant corruption in the game..From people in general I mean, I understand why none of the media will talk about it. I mean, just the vast sums of money alone would be enough. But when you factor in that they operate in a world where there are no clear laws, no defined jurisdictions, and that they are only answerable to themselves and no one else, then how can anyone in their right minds not agree that there is bound to be corruption?
I was shocked to see that at the start of the World Cup in South Africa, when after the opening ceremony Jacob Zuma and Blatter went to meet the players, it was Sepp Blatter who took precedence.. Doesn’t that have to be some sort of a breach of protocol? Or does the FIFA president outrank a Head of State?
while we’re on the subject of finance- there have been pockets of fans calling dein back to the club, i am yet to so read a convincing argument against our current financial model. everyone is tightening their belts and yet we should throw money around?
50 million, say, for a world class striker, proven in the premiership, with champions league experience?
@Ugandan Goon
I am yet to hear a convincing argument from all who say that Wenger should go, or that we need massive changes. They have one or two reasonable, and reasonably good points, but when you force them to put it in context and build the argument as a whole, then you realise it’s all bluster and very little substance. It’s just headless chickens running around in the belief that the sky is about to fall on their heads… Yes, it is as ridiculous as that.
@Redgooner – picked up on the imminent board announcement a couple days ago on Arseblog.
He did not seem to know much about the forthcoming announcement, but did say Lady Nina was becoming conspicuous by her presence at recent games, and he suspected the whole thing may have “an orange glow about it” – which I assume is a reference to Usmanov.
Just hope it isnt Usmanov doing too much anyway – if in charge, he would certainly be prone to breach the fair play rules!
Pure speculation but maybe just Nina selling her shares to Usmanov but even if she did, would imagine Stan + board would not allow a takeover – heres hoping!
Or maybe Deins coming back! Sorry being very silly there!
Guess we will find out soon if there is actually anything going on.
@shard,
Clearly, the worlds meanest party organizers have decided they are going to step up the entry fee by employing more of their friends to riffle through your pockets anywhere they chose right across the planet!
World government sucks!
@ Mandy thanks should be interesting indeed 🙂
Anybody see Wenger’s press conference? I know there will be, and already are, people who take his comments out of context, and call for blood on the streets, but I love it when Arsene comes out fighting. He makes some good points too, but I think part of him wanted to just stick the knife into the more fickle fans. I guess that sort of attitude will not be to everyone’s liking, but as I said, I love it when he fights back.
@ Shard, I agree with the part would you swap the FA cup for chamions league qualifiaction each year.Id sooner have 0 FA Cups and 15 champions league qualifications even it means listening to we won nothing for 6 years.
The points he make are valid and a lot of our frustration is as much to do with the crap the media are saying about us winning nothing more than going through 6 years without a trophy. we have gone longer before and it seemed shorter because every muppet out there wasnt constantly on about it.
Agree Shard – his comments oozed intelligence.
Sections of the media and so called fans will brand him a satisfied loser as you say but these fans need to get over themselves and as for the media, we all know their agenda…
The fact is, we are competing against clubs financed by billionaires, a club who has half the refs, the FA and most British managers in its pockets and we are not doing so badly.
Great to hear Wenger on the attack.
There will be many interpretations on his words,I believe he is categorically telling all and sundry he has not been given the finances, at least not until very recently.
There are a few things wrong that need to be fixed – for instance some of the Barca pressing and work ethic would not go amiss. I also think a revamp of coaching staff would help
My favorite bit of all – he would love to manage us for another 20 years!
Wenger has not helped by saying things to the effect that if this team do not win silverware in the next couple of years – he will have failed….but this press conference seems to be a new stance.
Wenger, unlike Jose and to a lesser extent, Arry is not a quick fix merchant and never will be. Fans cannot take silverware for granted – look at what we are up against.
Some fans seem to have imploded after the Carling Cup – if this competition hits them so badly, says a lot about them as fans.
On a happy note, we have Lee Mason as ref this weekend, you know – they guy who managed to single handedly get the Mancs back in the game when 2-0 down against West Ham. Should befun1
Who honestly didn’t see this coming? Did you really expect the likes of Man Utd, Chelsea, and Barcelona to be excluded from European tournaments because their books aren’t in order.
Anyway, when is Arsenal going to start fighting fire with fire and stop thinking that one day Jesus Christ himself will come down and tame the sharks and the lions and make sure all Football Clubs live within their means. Maybe Wenger should be president of UEFA when he eventually leaves Arsenal, as I have faith in Wenger’s moral code(although I wouldn’t leave him alone with my wife).
What is it they say about the victors writing history? Well, this is it. The victors are Man United and Barcelona and they are the ones who write the UEFA rules. If Arsene Wenger wants to have the authority to re-write the way football is run he has to win (I think he knows this), but the question is, “Do we have enough in the squad to pull this off?”. If the answer is “YES” (Wenger’s answer is YES) then we sit and wait for these players to get us to the promise land. If the answer is “NO”…
The next question is, “Does spending 30 million pounds on players to improve the team hurt our perceived righteousness?”…If the answer is “YES” (Wenger’s answer would be YES) then sit and wait for these players to pull off a miracle. If the answer is “NO”, then we go out there, buy the pieces needed to get us to the mountain top and we worry about paying off that money later.
The most important thing to do is to WIN, the next important thing to do is remember why we want to win. It is not just because we want glory for Arsenal, but because we want to show the world that Building a club around A FEW PURCHASED PLAYERS is just as effective as just splashing cash on every free agent on the market.