Clubs Must Balance Their Books – Or Be Banned From Europe


The madness started when Roman Abramovich bought Chelsea in the summer of 2003, and he has spent ¬£1B since then in trying to make Chelsea into a top team – and yes – he has done that and they finally won the Champions League last season, and they have won the Premier League three times – well that didn’t cost much did it? ūüėÄ

Michel Platini – UEFA President – clamping down on big spenders – good

And the same thing has happened at Manchester City,  when a short four years ago Sheikh Mansour Bin Zayed (or to be more accurate РAbu Dhabi United Group for Development and Investment) bought the club, and Manchester City are the reigning Premier League Champions and have spent north of £700M since the Sheikh took over Рand maybe even more than that.

We should point out that the Financial Fair Play Rules, which are being phased in over a number of years, say that clubs must balance their books and can only spend what the club brings in (in revenue or turnover), and as an example in the financial year ended in June, 2011 РManchester City lost £197M, and Chelsea were in the red too Рas just two examples.

And now we have QPR in this country and PSG in France going along the same path – and last¬†season¬†QPR’s wage bill was in excess of their revenues, and they have brought in 25 players in the last year – so that doesn’t bode well if they are to balance their books.

Whether fans like it or not, football is now a big global business, and has to be run like one, and it’s ridiculous that Billionaires have been allowed to come in and buy their teams, and in essence they have simply bought their trophies too.

When UEFA President Michel Platini introduced the Financial Fair Play Rules a few years ago, he said any club that didn’t meet the new requirements would be banned from participating in Europe, and with most clubs (Newcastle¬†are not one of them) ignoring the rules, ¬†we were hoping Platini would keep his word.

Michel has today come out and revealed he has given 27 European clubs a deadline to put their financial houses in order:

‚ÄúThey were told to sort their finances out before June 30th. Then they had until July 15th to discuss any problems.‚ÄĚ ‚ÄúThe next check on September 30th will be vital. For clubs who can‚Äôt follow the rules of the Financial Fair Play system, it is over and out of Europe.” ¬†‚ÄúWe are also protecting clubs who have sold players and struggle to receive payment. A number of clubs have had to chase their money for years.‚ÄĚ

Some managers don’t know (and don’t want to know) about any financial restrictions and Roberto¬†Mancini¬†is one of them, and he has complained (again and again) that his club have not brought in¬†enough new ¬†players or spent¬†enough¬†money this summer.

When you are £197M in debt in the last financial year for which figures have been released, what does he expect?

And it may be that some managers will need to take some lessons in business finance, to¬†understand¬†that money doesn’t grow on trees, and what it means to balance the books in any business.

We’re pleased Michel Platini is coming down on those clubs who keep spending money like it’s¬†going¬†out of style.

On a positive note, Newcastle United are in a  good financial postilion,  and have a long term viable business plan, but as we have seen that means we will not pay out outlandish transfer fees for the players that arrive on Tyneside.

Comments welcome.

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54 comments so far

  • Hatem's better than Messi

    Sep 2, 2012 at 9:43 AM

    Comment #1

    Too easy to fiddle the books.

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  • obatoyou

    Sep 2, 2012 at 9:43 AM

    Comment #2

    Booyaa!!!! Newcastle hon move up in da world moit

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  • BelfastMagpie

    Sep 2, 2012 at 9:44 AM

    Comment #3

    Man city,Chelsea,Man,utd,Barcelona will all sign huge sponsorship deals,easy way around it.

    Question for Platini.

    What about Psg you twat? ūüôā

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  • Ben3arfa

    Sep 2, 2012 at 9:46 AM

    Comment #4

    as if this is even gonna be implemented

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  • BelfastMagpie

    Sep 2, 2012 at 9:46 AM

    Comment #5

    It’ll probably just make the big 4 in the premiership even stronger.

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  • The Future is Bright The Future is Black & White

    Sep 2, 2012 at 9:50 AM

    Comment #6

    Why do people actually think this is gonna happen? If they can’t fiddle the books they will start there own league….. And obviously the worlds best players will go to that league as 99% of them already go to the big clubs for the money…. Then all the teams like us will want to join the league for some of the income from being in that league tv rights etc etc…. Then we are back to square one again….? Anyone agree that’s a likely story?

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  • BelfastMagpie

    Sep 2, 2012 at 9:50 AM

    Comment #7

    And Platini has said nowt from his team started spending crazy money.

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  • seancavaz

    Sep 2, 2012 at 9:50 AM

    Comment #8

    Kinda made this point yesterday by posting links when the debates were going on about how we didn’t spend enough

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  • voodoo85

    Sep 2, 2012 at 9:51 AM

    Comment #9

    So if money doesn’t grow on trees, why do banks have branches ?

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  • outsidethebox

    Sep 2, 2012 at 9:52 AM

    Comment #10

    man city owners ..will just pay ¬£197 m for advertising rites for stadium ..just a joke psg will pay ¬£200 for the rites to hold concerts for next 12 months …sports direct will just pay ¬£50 mill for right to change stadium name ..oops ..dont need to income greater than outgoings …now that psg have money can you really see real madrid barcelona man utd several russian teams chelski man city thrown out of european competitions ..no neither can i.ed…

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  • Tsunki

    Sep 2, 2012 at 9:53 AM

    Comment #11

    Sounds like a signal for the trophy club owners to make it look good. Once they do, uefa will validate them once and for all, and on we go, business as usual. Its all a game, and its not necessarily footy.

    Our satisfaction comes from keeping up with these guys on a fraction of their budget

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  • Jail for Ashley

    Sep 2, 2012 at 9:56 AM

    Comment #12

    Even if they do have to balance the books it works totally in the top clubs favour as your Bayern Munichs,Barcas, Real and ManU will always have a huge turnover,so all its going to do is keep the rich clubs richer,and rule out the dreams of every small club that a billionaire owner will one day come along.

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  • voodoo85

    Sep 2, 2012 at 9:56 AM

    Comment #13

    @ 10

    for any of the FFP rules to apply they need to eliminate self-sponsorship

    the Etihad stadium deal for instance is a strange one considering the links of the Man City owners to the Airline

    it negates the whole point so Uefa need to look into these big bucks sponsorship deals and make sure they are from a true 3rd party

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  • ash-out

    Sep 2, 2012 at 9:59 AM

    Comment #14

    The future is Brig – yes this going to happen and about time.
    So if man city are banned from European games you think Newcastle would leave the premier league and Europa league and hope that the Arabs at city could concoct some Euro league?

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  • scotty17321

    Sep 2, 2012 at 10:01 AM

    Comment #15

    There’s been murmurings of an euro super league in the past, if uefa really press with the FFP and sanction European bans, transfer embargo’s or whatever to get clubs houses in order, then they will disband away from their respective leagues , or they’ll just get there lawyers to find every single loophole in the rules which the likes of city and united already have with these outrageous sponsorship deals, and it will be business as usual !!

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  • Spuggy

    Sep 2, 2012 at 10:02 AM

    Comment #16

    Something has to be done because Man C and Chelsea are inflating the transfer fees for all players. If Hazard is worth x then my player is worth y etc.

    Football is about only money these days, whereas teams like Everton, Arsenal and Newcastle should be rewarded for running self-sustaining clubs.

    It really has sucked the very soul out of football when you can buy trophies. Where is the fun in clever scouting, bargaining, building a team, developing youth. I am really concerned for the future of english talent who are not going to get a look in.

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  • jawballsaswallwell

    Sep 2, 2012 at 10:02 AM

    Comment #17

    I don’t see how that encourages a more even playing field. The bigger clubs will continue to generate greater turnover and therefore continue to pay the biggest wages to attract the best players. Surely it’ll just limit Man City, PSG, QPR type scenarios, but I think the Man City challenge for example has reinvigorated the EPL. Maybe they should be looking at a salary cap. That would make the likes of Newcastle very competitive. It works well in other sports such as rugby league and does encourage all clubs.

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  • outsidethebox

    Sep 2, 2012 at 10:04 AM

    Comment #18

    voodoo 85 @ 13
    or sports direct
    just a nice idea of platini,s ..but so many loopholes .would be great if he made an example of psg and threw them out..yeah right ….
    can see him waiting till a major club dont qualify by league position ..then hitting them with a £300 fine for not complying with rules and banning them for 3 months

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  • Rotonda heights

    Sep 2, 2012 at 10:05 AM

    Comment #19

    Great in theory, Just too many ways for big clubs to get round it.

    Team I would love

    Krul

    Jonas(RB) Colo Saylor Santon

    Tiote Cabaye Anita

    Benny Cisse Marveaux

    Team we will get

    Krul

    Simpson Colo Saylor Santon

    Benny cabaye Anita Jonas

    Cisse Ba

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  • Spuggy

    Sep 2, 2012 at 10:06 AM

    Comment #20

    If the big clubs are banned from Europe – what is the point in Europe – you want to see the best teams on show.

    Another solution is needed. Wage cap (but would have to be global really or at least European).

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  • Grafton83

    Sep 2, 2012 at 10:07 AM

    Comment #21

    They have already back tracked on a number of sanctions and deadlines for FFP already, I anticipate even more softening of the rules until the whole process is completly pointless.

    I think the Germans have a pretty efficent system in place to make sure the clubs don’t aquire too much debt. If memory serves me correctly no 1 owner can have more than a 49% share of the club. All accounts get regularly inspected by the league, any club in debt is not allowed to buy anyone until they sell someone for more than the cost of the player they’re going to buy. There’s probably a whole bunch of other sanctions they have too.

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  • Rotonda heights

    Sep 2, 2012 at 10:07 AM

    Comment #22

    @ comment 17

    You’re right, a salary cap is what would do it. Imagine trying to live on only 50K a week!

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  • BelfastMagpie

    Sep 2, 2012 at 10:08 AM

    Comment #23

    Exactly it’ll just make the bigger clubs stronger.

    Now Psg are doing it,Platini just looks like a fool.

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  • Rotonda heights

    Sep 2, 2012 at 10:10 AM

    Comment #24

    Grafton,

    That sounds a really good model the Germans have there. So 51% belongs to the fans, I like it.

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  • voodoo85

    Sep 2, 2012 at 10:10 AM

    Comment #25

    outsidebox @18

    would have mentioned sports direct but thats not really a sponsorship, no money is involved i believe. its just to showcase the sponsorship opportunity for other companies

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  • SupaToonKid

    Sep 2, 2012 at 10:12 AM

    Comment #26

    love the new banner Ed, good work Tony Anderson. Think a couple of players may feel a bit left out i.e. Raylor seeing they didn’t make it.

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  • Grafton83

    Sep 2, 2012 at 10:13 AM

    Comment #27

    From wiki:

    At the end of each season, clubs in the Bundesliga must apply to the German Football Federation (DFB) for a licence to participate again the following year; only when the DFB, who have access to all transfer documents and accounts, are satisfied that there is no threat of insolvency do they give approval.[32] The DFB have a system of fines and points deductions for clubs who flout rules and those who go into the red can only buy a player after selling one for at least the same amount. In addition, no individual is allowed to own more than 49 percent of any Bundesliga club

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  • outsidethebox

    Sep 2, 2012 at 10:14 AM

    Comment #28

    the mail today mentions fat sams own agent is also nolans oh and andy carrol,s and oh and matt jarvis ,s ..just signed for ¬£11 m ..wonder what agent mark curtis cut of andy,s transfer will be….

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  • voodoo85

    Sep 2, 2012 at 10:14 AM

    Comment #29

    rotonda @24

    i think thats no one owner can have more than 49% so for example, three people could each own a 33.3% stake in the club or 2 owners with 40% each and 20% in shareholders

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  • Grafton83

    Sep 2, 2012 at 10:18 AM

    Comment #30

    I’m also in favour of a salary cap too but any change in rules would have to be phased in over a long enough period so that everyone has a chance to adjust. Can’t see anything really changjng in the near future. It would be a terrible shame in we allowed football, the best sport in the world, to be ruined by money.

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  • jawballsaswallwell

    Sep 2, 2012 at 10:18 AM

    Comment #31

    Yeah really, try selling a salary cap to Wayne Rooney etal. No freakin chance. It did happen in Australia though. League stars used to be on big bucks, then they they introduced the cap and the gravy train came to a grinding halt. The players just wore it. Dumbass league players.

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  • LewSpi

    Sep 2, 2012 at 10:21 AM

    Comment #32

    Speaking of sponsorship, I wonder at what point Dekka stopped searching for sponsors for the stadium name.

    In case people forgot, we do still play in the “Sports Direct Arena”, I’m not reigniting a charge for SJP, it just makes me smile when I think of the stress and upheaval it caused, then we sign Papiss and qualify for Europe and its never been mentioned since.

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  • Hatem's better than Messi

    Sep 2, 2012 at 10:25 AM

    Comment #33

    Salary cap lol, that just helps the owners.

    Salary cap – Ticket and shirt price cap – One EPL match on free to air TV Saturday night at 8pm – Standard contracts (no agents needed) … no chance, too many people getting rich that won’t want it to change.

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  • Grafton83

    Sep 2, 2012 at 10:26 AM

    Comment #34

    How about instead of getting a salary players are paid in shares when they join so they own a small percentage of the club. If the club makes a profit they can pay themselves bonuses and get a dividend each year. Stupid speculating about changes that will never happen but it’s a thought.

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  • wynsleap

    Sep 2, 2012 at 10:30 AM

    Comment #35

    Football needs to get to the actual roots of the problem.
    All this talk about Financial Fair Play Rules is just rubbish.
    The rich top teams will always find way to get round their problems and FIFA won’t have the bottle to stop teams like Barcelona, Real Madrid, Citeh and Manure etc.from participating in Europe.
    I also wonder what Sky would think about all of this if that happened as their gravy train would certainly stop without all the ‘big club’ hype.
    The solution would be to have a sensible wage cap and a sensible maximum transfer fee (in or out) which would not preclude the majority of decent sized clubs clubs in the world. Further, a limit on how much total value a squad can be (as in Fantasy Football League style) would also sort out the problems and determine who REALLY are the best managers, coaches and owners.
    The time to stop all this ridiculous high priced transfer of players with obscene wages is over as it is an insult to hard working supporters.
    Will the Football authorities ever get round to doing this though? Answers on a postcard please.

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  • stuart no9

    Sep 2, 2012 at 10:34 AM

    Comment #36

    could it be that ashley is using these “fair play rules ” to his advantage. By citing these rules as a reason for not buying players.He s been “balancing the books ” since his arrival, and lets face it, he is not whiter than white, why should he be a good boy now and do what the authoritys tell him.? are we the only club in the world who are abiding by these rules? whats going to happen to chelsea , man u, man city? are they going to be kicked out of europe? yeaaaaah of course they are. could it be just a ruse so we think ashley has the club at heart? just a thought.

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  • wingspan

    Sep 2, 2012 at 10:35 AM

    Comment #37

    We dont need 2 holding midfielders at home against aston villa. 442 will work great against a very average villa team, cheik and yohan will boss the midfield and we will have great outlets in ba and cisse.

    My team:
    Krul
    Simmo Colo Tayls Santon
    Bennny Tiote Yohan Marv (But i he will play Jonas)
    Ba Cisse

    2-0 Against a poor villa side.

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  • Transfer Sage

    Sep 2, 2012 at 10:35 AM

    Comment #38

    A salary cap would be great but wouldn’t work.

    It would have to be applied to every league or else a lot of top players would move to Italy or Spain or somewhere else in the world.

    I think uefa needs to be serious about this though.

    I just can’t see them turning to their sponsor ls and saying we are chucking Madrid and barca out of the champions league and I dont care of you stop paying is silly sponsorship money.

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  • Hatem's better than Messi

    Sep 2, 2012 at 10:35 AM

    Comment #39

    I’m not sure a cap would be legal.

    The system works well. Sure the figures are obscene.

    But so are the amounts SKY rake in from advertisers and subscribers.

    Take the revenue generated by the EPL and divide that by the number of players on the pitch.
    They’d all be asking for massive pay rises.

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  • Transfer Sage

    Sep 2, 2012 at 10:39 AM

    Comment #40

    Financial fair play favours the top club anyway.

    You can only spend what you earn.

    Therefore top clubs who have high revenues stay at the top as they can buy the best.

    Small teams with no champs league money or huge merchandising revenue can only spend small amounts.

    It’s basically saying whoever is successful now will stay that way and it’s very hard to break into the elite teams.

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