FFP info

[Rosco]

When FFP was first introduced, most people wondered what loop-holes high-spending clubs would find to get round the rules. Now that we have seen the first published accounts for the first FFP season (2011/12), we have a much better idea about the various options clubs might use.
UEFA are very serious about the analysis of the club accounts and are using accountants, largely from the top two firms, to check accounts for any clubs using non-authorised techniques to help them Break Even.
I have attached a list of the techniques I have seen so far and recommend you read the list whilst listening to the audio from the seminar I gave at Birckbeck (University of London) recently. The audio can be accessed here 58.40mins in.
The loop-holes outlined in this presentation/article are all ones the auditing accountants are aware of and are lined up to spot. Where a non-standard practice is used, the accountants will submit an impact assessments to UEFA's Control Body.
Please note that in the audio, I refer several times to the Club Financial Control Board (it is of course the Club Financial Control Body)

uPure Related Party transaction e.g. PSG sponsor

uMixed Related Party transaction e.g. Etihad deal

uDeclared Related Party transaction e.g. City sale of ‘intellectual property and know how’

uNon football-related income e.g. Real’s Dubai complex, Trabzonspor’s Hydro-Electric power plant

uChanging accounting duration e.g. Liverpool

uTransactions & costs outside club accounts

uPlayer write-down in season prior to FFP e.g. Man City

uCancelled provision e.g. Ancelotti at Chelsea

uExclusions e.g. Youth/Community spend

uAccount auditing issues

uState Subsidies

uMembership fees

uTax differences

As a post script to this article, I have since become aware of a further potential loop-hole that seems to have been used by some Ukrainian and Russian teams - 'artificial timing of the Euro exchange rate'. UEFA's Break Even limits are all denominated in euros and where the exchange rate fluctuates over the year, a club may decide to choose an incorrect transaction date (i.e. on where the exchange rate is the most favourable). Again, this should be picked up the accountants.

 

[Molbystwin]

When FFP was first introduced, most people wondered what loop-holes high-spending clubs would find to get round the rules. Now that we have seen the first published accounts for the first FFP season (2011/12), we have a much better idea about the various options clubs might use.
UEFA are very serious about the analysis of the club accounts and are using accountants, largely from the top two firms, to check accounts for any clubs using non-authorised techniques to help them Break Even.
I have attached a list of the techniques I have seen so far and recommend you read the list whilst listening to the audio from the seminar I gave at Birckbeck (University of London) recently. The audio can be accessed here 58.40mins in.
The loop-holes outlined in this presentation/article are all ones the auditing accountants are aware of and are lined up to spot. Where a non-standard practice is used, the accountants will submit an impact assessments to UEFA's Control Body.
Please note that in the audio, I refer several times to the Club Financial Control Board (it is of course the Club Financial Control Body)

uPure Related Party transaction e.g. PSG sponsor

uMixed Related Party transaction e.g. Etihad deal

uDeclared Related Party transaction e.g. City sale of ‘intellectual property and know how’

uNon football-related income e.g. Real’s Dubai complex, Trabzonspor’s Hydro-Electric power plant

uChanging accounting duration e.g. Liverpool

uTransactions & costs outside club accounts

uPlayer write-down in season prior to FFP e.g. Man City

uCancelled provision e.g. Ancelotti at Chelsea

uExclusions e.g. Youth/Community spend

uAccount auditing issues

uState Subsidies

uMembership fees

uTax differences

As a post script to this article, I have since become aware of a further potential loop-hole that seems to have been used by some Ukrainian and Russian teams - 'artificial timing of the Euro exchange rate'. UEFA's Break Even limits are all denominated in euros and where the exchange rate fluctuates over the year, a club may decide to choose an incorrect transaction date (i.e. on where the exchange rate is the most favourable). Again, this should be picked up the accountants.

Interesting Rosco... where is the audio link?

 

[Mors]

Source

http://www.financialfairplay.co.uk/latest-news/uefa-ffp-loop-holes

 

[Mors]

Interesting, but even though that article reports that they know all the 'tricks', the big teams continue to spend 100mill every year regardless. So I presume that all these clubs believe that anything the FFP accountants say they can appeal or wriggle out of.

How many teams with a sugardaddy are seriously cutting back their spending because of FFP?

 

[Mors]

Interesting Rosco... where is the audio link?

http://www.lawinsport.com/podcast/i...-birkbeck-sports-business-centre-18-june-2013

 

[Mystic]

Interesting, but even though that article reports that they know all the 'tricks', the big teams continue to spend 100mill every year regardless. So I presume that all these clubs believe that anything the FFP accountants say they can appeal or wriggle out of.

How many teams with a sugardaddy are seriously cutting back their spending because of FFP?

Us, Arsenal and United it seems.

 

[Mors]

This link shows you how teams finished compared to what they spent on wages, we spent the 5th most and finished 7th. The top 3 spenders.............all finished in the top 3.

http://www.financialfairplay.co.uk/latest-news/archive/2013/July

 

[FoxForceFive]

Us, Arsenal and United it seems.

All three clubs have owners who don't want to spend any cash at all though.

Hardly a sugardaddy.

City, Chelsea & PSG are those that should be most worried, but are spending money like it's fucking water.

 

[King Binny]

[article=http://www.foxsportsasia.com/home/news/detail/item1008973]Jose Mourinho has labelled clubs who continue to spend big in an era of Financial Fair Play as "economic sharks".

The Chelsea manager was speaking about UEFA's FFP policy which was designed to ensure a club's expenditure does not exceed its income.

A summer of lavish spending has ensued regardless, though, and Mourinho - who believes his club have taken a correct and prudent approach - is unhappy that some continue to splash the cash.

"Clubs have to think about the future, where financial fair play will make us think about football in a different way," he said in an interview with ESPN which was carried by several national newspapers.

"We have already started but other clubs seem to think FFP will never start or they think they can override what FFP says and determines. They have continued spending incredible sums. We have gone with another thought."

Chelsea have not exactly traded on a shoestring themselves, with the likes of Andre Schurrle, Marco Van Ginkel, Willian and Samuel Eto'o all arriving for varying amounts.

Mourinho, though, points to an investment in youth as evidence that Chelsea are using the market sensibly.

"The club has invested in young players and, with those young players mixed with the players who came to Chelsea in the past, we are constructing a team to compete directly with those who invest more," he said, with 32-year-old Eto'o the exception to that.

"But we are happy. We have a young team with a bright future. We have two players almost for every position, some more experienced, some with more potential for growth. And we have other players, loaned out for one, two or three years, that have to come back.

"And with less investment, we intend to maintain the level of these economic sharks who seem like they will continue with the desire to buy and they will keep buying. I'm happy for them that they have that objective."

The former Real Madrid coach, now in his second spell at Chelsea, added: "I am used to these injustices. I won the Champions League with Porto without investing and playing teams who had spent money. It was not mentioned much."

Mourinho's sense of foul play has hardly subsided over recent days owing to the fallout from his side's Super Cup loss to Bayern Munich.

The Portuguese hinted at a conspiracy against him after his side ended with 10 men, saying referee Jonas Eriksson had "killed" the game by dismissing Ramires.

He feels equally strongly about FFP too, making reference to the perceived criticism he faced after heavy investment during his first spell with Chelsea.

"After I arrived at Chelsea at the start of Mr (Roman) Abramovich's investment, he spent money and bought players, and when I won they said it was because I had spent money," he said.

"And now we do not buy players, the others do and I do not see the same sort of opprobrium criticising these clubs spending a huge amount at a time when, socially and politically, Europe is not in a very good moment.

"I do not see the same sort of criticism. That is the injustice."[/article]

 

[red_maradona]

"And now we do not buy players"

What planet is Jose on?

 

[peekay]

I thought Jose was a top quality wind up merchant but sometimes I wonder if he really believes some of the bullshit he spouts.

 

[King Binny]

[article=http://www.london24.com/sport/chelsea/chelsea_chief_reveals_ffp_concerns_1_2873028]Chelsea chairman Bruce Buck believes the Barclays Premier League’s Financial Fair Play regulations are like ‘cutting off an arm when you have a broken finger’.

UEFA has already implemented its own financial controls aimed at stopping clubs spending more than they earn, with sanctions including a possible ban from European competition coming into effect from 2014 for those posting losses of more than £36million over three seasons.

The English Premier League, meanwhile, is set to bring in regulations which prohibit a loss in excess of £105m aggregated across to 2015/2016, with restrictions on wage increases above a level of £52m and on up to £60m in those three seasons.

Chelsea insist they are on course to meet UEFA’s measures, having in 2011/2012 posted a small profit of £1.4m for the first time since Roman Abramovich’s takeover with the owner’s £166.6m loan converted into equity and as such leaving the club debt free.

Buck, though, believes the issues over how the Premier League’s new financial restrictions are to be implemented leave a lot of unanswered questions, such as how massive sponsorship deals or naming rights are taken into account.

“Football had a problem and football has a problem which is that there are some clubs who spend money they do not have,” Buck said at the Leaders in Football event, hosted by Chelsea at Stamford Bridge.

“We felt that football should do something from a rule-making perspective, but our approach was really financial stabilisation, in other words rules which would require clubs to pay their taxes and would not permit them to spend money they did not have.

“The problem we have identified with Financial Fair Play is that it goes a long way to preserving the status quo, and one of the great things about football in this country is that if you are in last place in League Two, you can still hope that some day you will win the Premier League. That is now difficult if not impossible due to Financial Fair Play.

“Financial Fair Play will now have to wrestle with issues like: are certain sponsorship agreements really bone fide? Insularly revenues, is it appropriate to put those into the equation?

“We would have preferred something which really dealt with the issue of stabilisation regulations.

“We feel that what we have is we had a broken finger, so we cut off the arm.

“Having said that, Financial Fair Play at the UEFA level is in effect, we all want to play in UEFA competitions, so we will all do what we have to comply.”

Buck continued: “It took us three or four years for us to realise we had to change our (business) model and be more frugal, more conservative and have a structure for the future. that is what we are doing now.

“Hopefully for the long-term, we will be successful in breaking even or better

“We will comply with UEFA’s form of Financial Fair Play, but we have a lot of work (to do) into that.”

Chelsea are expected to make a sustained challenge for the Premier League title this season following the return of Jose Mourinho as manager.

Buck revealed he was enjoying having the popular Portuguese coach back in the dugout.

“This has been a very relaxed season for me to be honest, because we hired Jose back which is what our fans wanted,” he said.

“I don’t have to explain to the fans who might come up to me on the Fulham Road asking, ‘Why is this player not playing?’ or ‘Why is this player playing?’

“We have the manager they want, and it is for him to do.”[/article]

 

[King Binny]

[article=http://www.independent.co.uk/sport/football/news-and-comment/financial-fair-play-policy-unfair-on-smaller-clubs-claim-chairmen-of-chelsea-and-southampton-8872161.html]The chairmen of two of the Premier League's more ambitious clubs, Chelsea and Southampton, both condemned Uefa's Financial Fair Play policy today for denying small clubs the chance to challenge big ones.

It was as if “we had a broken finger and we cut off the arm,” said Bruce Buck, Chelsea's chairman. Nicola Cortese, his counterpart at Saints, added: “It is wrong to call it 'financial fair play', it is financial regulation. Though we are a club that believes a lot of things are possible to close the gap in commercial income with a club like Manchester United will be virtually impossible.”

Under Cortese, Southampton have gone from bottom of League One to the upper echelons of the Premier League, a process made much easier by access to the fortune of the late Markus Liebherr. Taking the next step however, will be more difficult as they will no longer be able to significantly outspend as they speculate to accumulate.

Chelsea are fortunate to have already made the transition from a club with potential to a European power by dint of Roman Abramovich's millions. Nevertheless Buck said: “The problem with FFP in essence is it goes a long way to preserving the status quo. One of the great things about football in this country, and many others, is if you are last in League Two you can still hope one day you will be in the Premier League. That is difficult, if not impossible, with FFP.”

“We have got to not feel disadvantaged,” said Cortese, “we will grow our commercial income but if we cannot close the gap commercially, which will probably be the case for all time, we have to use other aspects [such as youth development].”

He added: “We fought against the [Premier League] salary cap. We think it can lead to a situation where we make profits but cannot use those profits to retain a player on a higher salary as we are capped quite low.”

Buck revealed Uefa inspectors had been to Chelsea to examine their financial accounts and offer advice on areas that needed work to pass FFP. “We all want to play in Uefa competitions and we will do what we can to play within those rules,” he said. “We will comply with Uefa's form of Fair Play but we have to do a lot of work to do that.”

The Chelsea chairman added, in what seemed a veiled reference to Manchester City's sponsorship deal with Etihad, “Uefa now has to wrestle with third party sponsorships. We are all hopeful Uefa will apply these rules in a fair and equitable manner.”

Speaking at the Leaders in Football Conference at Stamford Bridge both men also addressed managerial stability. Buck, who has overseen eight permanent and interim managers, conceded “Having a manager for a longer period is better but you have to have that stability with the right manager. I appreciate we have had a lot of managers over the last ten years, but fortunately it has worked out and we have been successful on the pitch. The biggest problem when we change manager is the reaction of the fans. Sometimes a change wins the fans approval and sometimes it doesn't. This has been a very, very relaxed season for me. We have hired Jose back who the fans wanted and I don't have to explain to fans now 'why is this player not playing' because they have the manager they wanted.”

Cortese, who has twice controversially dismissed managers, and subsequently been proved to have made a smart decision, said “you don't change the manager for the sake of it, we all want best for the club. Inside the club you have information that is often not open to the public. League One was a different situation to the Championship, then it was different again in the Premier League. So we made the changes. The worst thing for any club is to stand still, you need to keep on progressing. He added that, having been criticised for not having a replacement lined up when he sacked Alan Pardew, and criticised again when he fired Nigel Adkins having lined up Mauricio Pocchetino in the wings, that he would do the latter should he need to make another change. “Players need to accept the change and you need someone lined up so they can start working with them immediately.”[/article]

 

[King Binny]

[article=http://as.com/diarioas/2013/10/18/english/1382106946_113123.html]The total debt of Spain’s professional football clubs is 3,600 million euros, according to official League figures. And 900 million of that is directly due to Real Madrid and Barcelona (including their reserve teams). The League didn’t offer details of the two largest clubs when it first gave the figures back on 20 September in order to “avoid distorting the picture of the health of Spanish football, given the capacity of the two clubs to generate income”, said League general manager Javier Gómez.

However, the League have now decided to go into more detail and to give a pointed defence of Real Madrid’s accounts, saying that the club “has excellent financial management”. However it recognised that the overall debt of the club is 541 million euros, the amount stated by Carlos Mendoza, President of the Association for Madrid’s Values, in an interview with this newspaper on 8 October. This was also confirmed by renowned economist José María Gay de Liébana; by a Professor of the Economics Department of the University of Oviedo; and the director of the Sports Economics Observatory, Plácido Rodríguez. The League's argument is that Madrid has the ability to generate sufficient income to be able to cope with the debt.

Defending Real Madrid’s accounts, the League said that it is net debt that UEFA takes into account in its ‘Fair Play’ program and in Madrid’s case this is 18% of the amount permitted, “which shows the financial excellence of the club”. They also stated that Real Madrid has “no debts with the tax authorities” and a total net value of 312 million euros, along with annual commercial income of 160 million. “The club has the capacity to deal with the debt and the figures show that Madrid is economically solvent, within the economic controls established”. Continuing its strident defence of Madrid the League pointed out that Madrid had set an example by “publishing its accounts in July”.

However the governing body confirmed that the club’s liabilities amount to 541 million euros, with 115 of bank and other credit institution debt; 127 owed to other clubs, 143 for provisions and 156 of expenses (salaries, purchases, services etc).

According to the league Real Madrid and Barcelona account for 900 million of the total debt of Spanish professional clubs, while the the debt of the other clubs was 2,700 million euros, at 30 July 2012. The governing body aims for this sum to be reduced to 2,400 euros in 2014 and 2,000 in 2017.

In total the league said that the player costs of Spanish professional clubs had been reduced by 90 million euros from the 750 million of 2012-13 to the expected 660 million in 2013-14.[/article]