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The problems facing Chelsea, Man C, Tott and Liverpool

By Tony Attwood

Chelsea has a problem.  In fact, even if they win the Champions League this year they have a problem.  The owner wants success now and does not like to hang around if he doesn’t get it.  But the owner also backed the ideas of Uefa to bring in financial controls – effectively to stop anyone else doing what he had done, and just spending whatever it takes to buy the Premier League.  In fact some say that it was all his idea.

So Ambramovich wants success based on financial fair play, and he has had quite a few managers in to try and deliver that.   At present there are no restrictions on spending – anyone can do as they please and play in the Champs League, so if Chelsea win the Champs League or come 4th in the Premier League they are in.  But the financial figures from this year will count towards the calculations on who can play in 2013/14.  So Chelsea might not be ok the season after next.

From 2013/14 on clubs must meet the requirement to break even on their balance sheets, with calculations based on financials from 2011/12 onwards.  You can still make a £45m loss over the first two years, and Uefa is continuing to say they will impose penalties on clubs that don’t come under that figure.

So when Chelsea appoint their new manager he will know that either the club is gambling on it being able to bend the Uefa rules – maybe breaking the limit but getting away with a “warning” from Uefa, or maybe breaking the limit and being fined by Uefa (a useful source of extra income for the guys in Switzerland.)

The problem is that last season Chelsea lost £67.7m – greater than that allowable over the two years introductory period.  Of course in part Mr Abramovich is to blame because he keeps buying and selling managers – at a considerable loss.  £64m spent on managers in four years hasn’t helped.

So how do you rebuild Chelsea while turning a loss of £67.7m a year into enough of a profit to get the average right down?  Not by filling the ground, because it is largely full.  Not by more marketing, because Chelsea have done a lot on that front and they don’t have any new reasons why anyone should pay more (unless they win the Champs League of course).

Thus we are back to selling a few players.  But that means bringing others in, in their place, and unfortunately for Chelsea the chance of promoting from the youth system is small since Chelsea have few youth players of the highest quality waiting to step up.  Also a lot of the top players are in their 30s and thus worth less on the transfer market than might be thought.

Didier Drogba could leave as a free agent in the summer.  Torres could be sold – for quite a bit, although certainly a lot less than he cost. The Wenger technique of raiding the world for the best in the world is harder now because others have picked up the notion, and the chance of picking up an unknown anywhere abroad are lower because of the enhanced interest of prowling scouts everywhere.

But if it is a problem for Chelsea, consider poor Liverpool.  They are nearer the foot of the table than the top, and they clearly won’t get into the Champs League.   That makes recruiting new players of the highest quality hard, but then so do their losses.

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The £35m spent on Carroll is not just money spent on a player who doesn’t look that good, but it is also money that is counted when it comes to financial fair play.  Additionally Liverpool  spent £50 million on three midfield players: Henderson, Adam and Downing, and still look as if they need a left back and a central defender.  They could also be said to need a centre forward but that depends on how you see the racist Luis Suárez.

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Of course Liverpool did get £56m for Fernando Torres and Ryan Babel, but still, they need players, and whoever they buy will take them into further loses, and that will hit their FFP position.  You need to pass FFP in order to play in the Europa league as much as in the Champs League.
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So where then does that leaves Manchester City?  They like Chelsea have found that just buying players doesn’t guarantee success, although they could still win the league.  But they have losses of £197million for 2010-11 and even if they got rid of half the team now they would still find it hard to recover not least because players would have to take a pay cut to play elsewhere, and might not be inclined to agree to give up their lovely pay cheque to play for non-top–five team. 
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There is also the pesky little problem of the £350m, 10-year sponsorship deal with Etihad.  Most likely the Fifa gnomes will agree it is ok, simply for a quiet life, and that the Etihad is a ‘related party’ and the £350m was not inflated above a market rate to help overcome the problem.  In any normal court the deal is indefensible but even with Uefa backing down there is still the problem of the wage bill.
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So three clubs, none of them getting what they want, and all of them having a look over the shoulder at the financial fair play regulations.  How will it turn out?
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One possibility is that Uefa will be strong and ban all three clubs from the season after next along with PSG and maybe even Barcelona whose president often speaks of having £40m a year to spend on transfers.  Except that last year they were unable to pay salaries, and had to sell Yaya Toure  and Dmitro Chygrynskiy (the latter for £9m less than they bought him for 10 months before).
Of course a lack of funds doesn’t mean a club fails the financial tests, but it does suggest that the club is making huge losses despite all the noise that comes out of the club.  And they will have to spend big this summer to attempt to keep up with Real Mad.
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So Uefa bans the clubs.  What then?   The most likely outcome would be that the banned clubs would set up their own league to play when the Champs League plays.  A league of Chelsea, Man City, Liverpool, Barca, PSG – maybe even Real Mad although I can’t make head nor tail of their accounts.  Add a few other wannabes and other clubs who have difficulty balancing the books, and you could have an eight team league easily.   Uefa might huff and puff at that, but any order from Uefa for further sanctions against the clubs would probably have no support.
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Alternatively Uefa gives in and finds loopholes – such as fines of £20k or something, and a warning.   That is the most likely outcome I think.
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But here’s one more point: Tottenham.  Seemingly balancing the books, although one is never quite sure with tax-haven owners who don’t have declare any earnings.
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They might be free of the FFP problem, but I doubt that they are free of the problem that besets Arsenal each year – the moronic journalist talk of “Arsenal will have a problem of holding onto…”   There are several players in the Tottenham team that clubs like Man C would like to prize away – and I suspect this summer the Nasri-Cesc issue will focus on Tottenham.
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Of course they might be clever enough to do a Wenger and get ludicrously inflated for players, as well as having replacements lined up.  Arry will love such wheeling and dealing, and that may be the biggest reason for Tottenham holding onto him.  If he goes and the vultures fly over, Tottenham could lose several interesting players.
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Preview of the upcoming league games involving the clubs who might just have a thought about ending in the top four.

33 comments to The problems facing Chelsea, Man C, Tott and Liverpool

  • Richard B

    Re Spurs – the players they don’t lose will be those who are quite old and/or chronically injured. All at a time when they are desperate to find the funds to build themselves a new stadium so that they can sell naming rights to it. Who would lend them the money to do it knowing that the squad (and maybe management/coaching staff) are in such a state of flux?
    To an extent such a situation is replicated at all the clubs who have been looking to move stadium recently…. Liverpool, Everton,Chelsea.
    Forming a ‘rival’ league may be an option but will fans turn up or be willing to pay full price to watch such an artifial construct – and what of the TV rights/sponsorships versus existing ones related to the Champions League?

  • Gerry Lennon

    It does make us feel rather smug doesn’t it?

    I think the option of banned clubs having their own mini tournament cold be sanctioned, may be as part of pre-season stuff – ie, not clashing with the real thing – and get kudos if they played it in neatral stadiums around the world?
    That way they would get full houses, a fair bit of tv coverage, … but lacking the class of the ‘real one’.
    Not that I want to give them ideas …

  • Gerry Lennon

    1000 lines for spelling!
    COULD not cold
    NEUTRAL not neatral

    Grrrr I must get some new glasses

  • Shard

    I don’t think a rival league is possible till 2016 because that’s the contract that the European Clubs Association have with UEFA. I think Karl Heinze Rumminegge threatened that clubs will break away after that if their concerns aren’t taken into account. So, unless these banned clubs (which I think will NOT happen because UEFA are corrupt, weak scum) are willing to stand apart from all the other European Clubs, and not just UEFA, they can’t form a breakaway league.

    Regarding Spurs. Even if they keep their players, that will surely be at the cost of an increased wage bill. Much was made of the fact that their wage bill is much less than Arsenal’s, and so Harry is the better manager. But their wage bill reflects reward for one year in the Champions League. Ours reflects a decade and a half of that achievement and more. We’ll see how many of their players are willing to stay, and for how much. However, I don’t trust their finances. I simply don’t believe their figures mainly because their ownership is so murky, and they have been spending quite wastefully for years.

  • Laundryender

    Is AW once again drawing on UA with his comments on the number of elite Referees and the need to expand the group.

    I too “do not belive in coincidence”

  • walter

    The problem for an 8 club mini CL would be that Uefa will not given them referees. So the games cannot be played.
    I will try to look it up but I remember that clubs have to ask permission to get refs to play even a friendly international game

    So if Uefa or FA(under pressure from Uefa) says no they have no refs. An no ref is no game

  • Richard B

    Good point Walter – could they hire recently retired refs on a ‘private’ basis?

  • ADAM KHAN

    With being an LFC fan I have also done my research on this. What you didnt mention in your blog was the revenue each club brings in. In LFC’s case they have recently done a deal with Warrior Sports £26m a season which is the biggest shirt deal in the epl. Also other sponsership deals with Standard Chartered Bank (£20m ps). LFC have also spent alot of money on the academy which UEFA do not take into account in the losses. £46m and with the promise of John W Henry to raise the revenue even further will hold LFC in good stead..on field this season has been a tragedy but off field everything is rosy…
    Fenway Sports Group were attracted to buy LFC after finding out about the FFP. Thats why our LFC’S wage bill was reduced dramatically since FSG takeover..and as Tom Werner only put the other day (after Comolli’s sacking) “we are on target to meet ffp regulations”..

  • Mandy Dodd

    who knows, even Utd could be facing a few problems as well (tho at the moment, no suggestion they did anything wrong………..)

    http://www.mirrorfootball.co.uk/news/Manchester-United-Anti-corruption-police-probing-Bebe-transfer-to-United-according-to-reports-article890171.html

    I really hope we do not let complacency set in, because if we keep going, either …or tantalisingly both Chelsea and Spurs could fail to get into the CL next season, that could be huge for both. Quite amazing we are ahead of these two, and Liverpool when the most expensive player in our current squad cost us..what £12m? Wengers lost the plot… eh??

  • ADAM KHAN

    also with £110 million spent on players £75 mil was recouped by selling and loaning other players..this season alone LFC are £37 million spent..The £46 million freefall we will get at the beginning of this season will do alot to bring the losses down..

  • Mohamed Zubairu

    The only thing that I reckon would restore sanity to football is the implementation of the FFP rule. Any attempt to circumvent it would spell disaster for football in the long run. There is no way to sustain the practice of spending the money you cannot generate.

  • Mandy Dodd

    Agreed Mohamed, the biggest bubbles are just the ones closest to bursting

  • none

    Well the mini league may not be able to get Refs. They could however employ the assistant refs from the EPL as they are not professionals and are paid on a per game basis. No idea if this is the same for other leagues.

    Or is there the possibility of hiring refs from outside UEFA? e.g Refs from CAF.

    Where there is a will there is a way. Hmm that sounds like a tag line for FA/UEFA corruption

  • Marcus

    I think at some point Tony, you need to decide if the site is polemical or relatively neutral. Walter & Dogface strive to be objective, so at some point you probably have to back them up, and cease to be polemical. Otherwise the identity of the site will get muddled….

    (Alternatively, the Refs could start a separate site…)

    I am not going to highlight any particular lack of objectivity, but for instance since you are pretty outspoken, why not mention Alan Davies’s ranting conceited offensive drivel, and distance yourself editorially from it?

    Regards Marcus

  • Laundryender

    @ Marcus

    exactly what point of Alan Davies rant was conceited offensive drivel. It is my opinion that this day is worthy of Liverpool honouring, it is my opinion that the Liverpool public were hugely misrepresented on that day, and I have never bought the Sun since. However it is also my opinion that if they choose not to play on that day they should not do so at an other clubs inconvenience, and if principle is so strong, withdraw from the competition.

    Alan Davies point about Manchester Utd and Munich, Rangers and Hampden is a valid one. And the one regarding Heysel was too close to the bone for any Liverool supporter I have spoken to, but also equally valid.

    Davies too, like the Liverpools supporters was badly misrepresented by the press, however he did apologise!

  • Sid

    Marcus

    Looks like you have been getting your opinions, in handy bitesize tabloid pieces.

    You think the site should be objective? Have you seen the name of this blog? There’s a little clue there.

    Laters

  • Marcus

    lol

    Seems like I’ve tripped a few switches…

    I thought the way Davies spoke about it was pretty offensive actually. I think that was what struck me as offensive and immature, and in a way conceited, because he seems to think he can say what he wants, however he wants, because he is a TV celebrity.

    @Sid
    The site has radically changed over the last year or two. Tony is often quite outspoken, which is fine, its his prerogative….but, I am suggesting that since the site has changed so much in the last year, with DF and Walter’s massive input, maybe it’s time he considered the priorities of the site…that’s all I am saying.
    With the massive readership he has, clearly there is a sense that the blog is making waves…if indeed it has the power to affect public opinion re Fifa/Fa/refereeing, then maybe he should consider the editorial slant of the site. That’s my only point really.

  • Marcus

    (I am not disputing that AD is voicing a point, but I don’t think that is at all the way to do it – imo)

  • Marcus

    @Laundry

    Point taken…the press have jumped on AD like he is trying to sell ham sandwiches at a Barmitzvah.

    Maybe it all throws up a much bigger picture….

    Why did the Murdoch backed Sun write such inflammatory and apparently defamatory things about Liverpool, things which cause intense outrage to this day? (E.g Accusations of necrophilia)

    I leave that one hanging…

  • Sam

    I believe if UEFA ban those players who play in an illigle competition set up by those clubs banned by UEFA for not meeting FFP terms, it might act as deterrent for these clubs to set up a rival competition.

  • bob

    Marcus,
    Why leave it hanging? Here’s a response: Since you’ve raised the issue, WHY do YOU think the Murdoch-owned Sun so severely slandered Liverpool’s fans then?; fans who lost 95 of their own in that terrible tragedy. Who, if any, would benefit from that slander Football-Wise, if anyone, from adding grief to a traumatized fanbase, fans were blamed in that media for causing their own losses? And, before you answer, if you feel like considering it: have you read yesterday’s groundbreaking article by David Conn on this tragedy in yesterday’s (non-football section of the) Guardian: http://www.guardian.co.uk/football/2012/apr/12/hillsborough-battle-orgreave?intcmp=239

  • Shakabula Gooner

    It does seem UEFA is shaping up for a strong backbone on the issue of clubs making nonsense of the FFP rule. Check out this link from last month’s meeting between EU and UEFA on the issue:http://www.dailymail.co.uk/sport/football/article-2118248/UEFA-Financial-Fair-Play-loophole-closed.html

  • nicky

    Tony,
    One of your extra-interesting posts.
    If the FFP rules are firmly implemented and it came to pass that a “mini league” of backsliders was the result, it seems to me that the satellite tv companies would control whether the “league” succeeded or not. I cannot see how a few Clubs playing each other could survive without television coverage.

  • Stuart

    Nicky,
    The mini league may be very appealing (or appalling), it all depends on who is in it. At the end of the day, people watch football because of who is playing, not because of who (Uefa, FA etc..) controls it.

    I’m sure if the satellite companies in each country aren’t prepared to cough up, terrestrial television would, potentially resulting in a higher audience and making it more popular.

  • Mandy Dodd

    I think UEFA will make sure they do everything to keep a few giants onside to prevent any effective breakaway league – hence the seemingly preferential treatment of the likes of Real and Barca and probably others

  • John L

    i dont think UEFA will enforce FFP, not because they are corrupt or weak, but because of the potential butterfly effects it could have.
    i cant argue with UEFA being corrupt but im not sure about weak. i see them more as company men that have gotten where they are by not rocking the boat. not fully enforcing FFP will maintain the status quo and keep a lid on a potential can of worms, while also giving UEFA the appearance of fighting corruption. however, if banned clubs were to form a mini league i think the backlash from FIFA and UEFA would be prompt and severe. that would cut far to close to their biggest fear; losing absolute control over the game.
    in other words, FIFA and UEFA are happy to keep things as they are, since they are in control and making healthy profits. any change is greeted with cold disdain and if that change gathers enough momentum they “do” something about it i.e the “war” against racism. but if one dares to fuck with them? if one dares to step outside the company line? if they are backed into a corner? they are not so weak.
    so you will probably see an croatian or ukrainian side sanctioned allowing UEFA to save face and point to their own exceptional work. they will not enforce FFP in full simply because enforcing their own rules could potentially lead to their demise.

  • bob

    “not fully enforcing FFP will maintain the status quo and keep a lid on a potential can of worms, while also giving UEFA the appearance of fighting corruption” AND “enforcing their own rules could potentially lead to their demise”
    John L,
    Kudos. You’ve nailed it. The Profit Center aka Football is about producing the appearance of enforcing rules that cannot be enforced. Amazing!

  • Marcus

    @Bob

    Interesting read. As I have not read much about these events, I am not really able to comment.

    Going back to Alan Davies, he has a point, but to talk like that, calling Liverpool supporters something like “scum” (I think) and Tottenham supporters “vermin” (I think) and at the same time to disparage Liverpool FC for not playing on April 15 seems to me just ignorant and nasty.

  • Arun

    It’s unlikely that UEFA is going to ban any of the big names especially farca. Further, I don’t think they will allow any type of rival league to form which is strictly against the rules. May be a monetary fine, that’s all.

  • WalterBroeckx

    Uefa could say to refs who would be asked to do such games that they will be thrown out. Of course that new mini league could employ them and pay them. Mmmm sounds like the current situation 😉 🙂

    But then again think of the “el classico” hype. For a few games okay but for the moment I couldn’t be bothered about an El Classico. It is getting very boring.

  • Arun

    @ Walter, even if somehow they manage to start the league, then the hype is going to be very short lived and without TV money, it’s only going to die. And most importantly, as pointed by Richards, are the fans going to pay for this. It is also another issue as it will be an unofficial tournament and there will be no pride associated with winning it.

  • SouthernGunner

    Good write-up Tony.

    Am going to remain skeptical about FFP in Europe until I see how it’s implemented by UEFA. The football governing bodies don’t exactly have a great track record in keeping the game fair, and having to kick out or punish some of the better known clubs from their competitions could have an adverse affect on viewing figures, as well as advertising and sponsorship deals.
    Cant honestly see clubs like Barca, Real, or MUFC being kicked out unless UEFA are serious about FFP and not just keeping up appearences, being seen to be doing something. Hopefully they’ll stick to their word.

    Also something else to consider. If some of the teams, such as the Manchester clubs & Chelsea, are forced out of European comps for FFP reasons, their form in domestic cups may be helped, seeing as they won’t have tricky European away games to worry about, unless FFP is implemented by every league. Hopefully that isn’t the case, UEFA do what right and everyone is treated fairly.

  • elkieno

    Good article, very intresting indeed.
    However I have absolutely no faith in any footballing governing bodies so uefa and it’s FFP rules will be bent, broken and stretched so that these clubs will ‘be safe’, especially Spanish duo.