Clubs Finding Creative But Silly Ways To Circumvent FFP Rules


We’ve seen clubs like Manchester City, PSG and recently QPR spend money like it’s going out of style, and the Financial Fair Play Rules (FFP) seem to be having little or no effect on some of the big spending European football clubs.

michel platini _1290734c

Michel Platini – UEFA President

And some clubs – notably PSG and Manchester City – are trying to find creative (but  illegal) ways to beat the system – with City’s deal with Etihad Airl;ines of £400M over 10 years being way above the fair market price of such deals, and the Airline is also closely linked to its Abu Dhabi-based owner – so there’s a conflict of interest there too.

And we hear that PSG have recently done a deal with the Qatar Tourism Authority, for £125M a year with the Qatar Tourist Authority over four years – to promote tourism in the country – give me a break – what’s this to do with football?

In business,  these types of deals have to be at the “fair value” or market value of other sponsorship deals – basically it’s what the market will pay for the deals – and you cannot inflate these by up to ten times their value and expect to get away with it – well not in the real business world that is.

UEFA have just released their latest report, and losses have gone from €0.6B(£0.52B) in 2007 for European clubs to €1.7B  in 2011, and 46 clubs would have failed the financial break-even test – and we’re certain Newcastle are not one of them.

UEFA’s General Secretary, Gianni Infantino had this to say about the losses:

“It is a hell of a lot of money and a very worrying situation that the clubs have the responsibility to take very seriously. It is not about just one club that might go bankrupt. The whole of football cares, because the consequences of a club going bankrupt are felt across the game,”

“Everyone, including PSG, know the rules and knows when they kick in. They know the rules are that they have to generate revenues to cover their costs without cheating know the rules and knows when they kick in.” “When we first discussed FFP it was Chelsea that attracted some questioning, then you have Manchester City, then it was PSG”

“Our responsibility is to have a system that works for more than 630 clubs and not look at one club and neglect the rest. Each individual situation will be assessed very carefully by these two panels.” “PSG have to respect the rules, they want to respect the rules.” “They are telling us they want to respect the rules.”

“The FFP rules are there to help the clubs. UEFA doesn’t want to sanction the clubs, we want to help them. But sometimes we have to sanction someone to help the clubs.” “We have a regulation which speaks about fair value of deals and the fact that a related party cannot just inject money into a club directly or indirectly.”

UEFA has a team of team of 15 accountants who will begin analyzing financial figures next spring for the years 2011-12 and 2012-13, and that is the first period to be looked at under the new break-even regime.

Clubs will be allowed an acceptable loss of up to €45M over those two years, as long as it is met by some benefactor – which are usually the club owners.

And news that PSG are donating David Beckham’s wages of £3M over five months to charity, hoping it will not be included in the FFP calculation – good try but what nonsense!

Finally. Infantino had this to say about FFP:

“It is healthy and much more sustainable than someone coming in, promising a lot and then the next day the club is bankrupt. Look at the situation with Rangers. Secondly, big clubs have always existed, this will not change.”  

“In the past this was attendances, then commercial rights and TV rights.”  “”We think this should be the case all over the world, certainly all over Europe.   If   FIFA will not do it, we will certainly do it as far as Europe is concerned,”

Mike Ashley has done a of things wrong since he took over the club in June of 2007, by his own admission, but one thing he has been very good at is to get Newcastle United on a solid financial footing, and yet still we have still been able to bring some top players in on fantastic bargains – the most recent one being the great Moussa Sissoko for just £2M.

And one last thought – have UEFA had a look at QPR’s books recently?

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234 comments so far

  • ToonDownSouth

    Feb 5, 2013 at 2:43 PM

    Comment #1

    FFP has nothing to do with QPR. It only affects teams looking to participate in European competition.

    No surprise UEFA has already issued bans to a number of the smaller Spanish clubs – no doubt it’s balls will shrink when the prospect of banning a bigger club arises.

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  • JAMSHA

    Feb 5, 2013 at 2:45 PM

    Comment #2

    hi

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  • rainrix

    Feb 5, 2013 at 2:47 PM

    Comment #3

    Meh i think everyone knows that UEFA wont have the gonads to enforce it against the bigger clubs. Massive apathy towards this.

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  • magpiebop

    Feb 5, 2013 at 2:50 PM

    Comment #4

    At least we have our house in order but will be interesting to see if UEFA follow up the big talk.

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  • Graeme

    Feb 5, 2013 at 2:53 PM

    Comment #5

    Fair Play Rules v Future of CL incomes for the top few??

    How long before a European Super League is put in place by the Top Clubs – They walk away from their National Association and UEFA and play amongst themselves generating even greater revenues!!

    Sponsors will love it, the TV Companies will love it – the FA & UEFA will be reduced to toothless spectators.

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  • Beattie25

    Feb 5, 2013 at 2:55 PM

    Comment #6

    We could talk about what FIFA can do until the cows come home but ultimately I believe our very own club will cchange (or has the potential to change) world football.

    I said this a year ago but our misadventure in the summer made me question the things I believed in.

    The reason I think we will change world football is because we are starting a new way of thinking. Last season we showed you didn’t have to spend lots of money to have success.

    Other teams have shown this but have never sustained that success. Dortmund are a wonderful model but they still spend a lot of money.

    The only way to change the mindset of football is not by letting shirts and ties dictate to clubs the way to do it, it’s by 1 club setting an example.

    If NUFC could achieve the success that the team we have could potentially do, that would show people that it doesn’t matter if you spend billions or millions, it’s investing money correctly into decent players that gets success.

    I’ve said all along that NUFC has players capable of being part of a title winning team if only we had depth and a little more quality.

    I honestly believe we are 3 first team players and 2 seasons away from something truly amazing that will change the face of football, much like the moneyball of American baseball.

    We will become a model to copy and thus we might find more competition in the future for players, but IMO it is us that can change the world.

    That’s only if we don’t fall into the trap again of no investment.

    I’ve continued to post that without investment you cannot compete, bit you don’t need to invest £100’s of millions. We literally could win the leauge if we spend another £30 million. Consider how much the European giants spend every season and that’s nothing.

    Doing something like that will show small teams how to do it and force bigger teams to reduce wage bills. It will also show that businessmen can run football like a business and still have on the field success.

    Yeah, it’s a lot of ifs and buts, an most will disagree but as somebody posted on twitter on Saturday, our team cost approximately £47 million, Torres cost £50 million.

    Were so near, but so far away, but I kid you not, we are making waves in football and rival teams, owners and fans are incredibly jealous in what we are doing.

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  • outsidethebox

    Feb 5, 2013 at 2:56 PM

    Comment #7

    as pointed out on a previous blog a certain laurent platini (son )effectively works for psg thru qta …so cannot ever see psg having any constraints put on them

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  • outsidethebox

    Feb 5, 2013 at 3:09 PM

    Comment #8

    sorry correction
    platinis son works for qsi not qta ..

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  • giimps

    Feb 5, 2013 at 3:10 PM

    Comment #9

    The new tv deal will allow us to fairly compete with the big boys as we will increase our revenue from tv and “wonga”.
    Based on what players we have now and what finances are available next season, our success as a team will be rocking a few bigger boats and may even increase again if we get CL football within 2 seasons.
    Were not far away but as the beginning of the season has proved, we cannot afford to stagnate otherwise you get left behind and it may not be as smooth a road back to where we belong the next time we dont refresh the squad .
    HWTL

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  • Graeme

    Feb 5, 2013 at 3:12 PM

    Comment #10

    Beatie 25 – Laudable sentiments, nicely put.

    Yes, it is most certainly possible and, having demonstrated once again in January, that YOU CAN find great VALUE, if you go and look for it.

    The problem then becomes that the French market cost rises as demand from those copying our example wont explore new markets, they will simply follow our example!!

    If 8 or 10 clubs looked for other markets to provide players at “sensible” prices, it would be much, much better. France cannot and probably will not, continue to be so generous with their better players!!

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  • Jonas's better than Messi

    Feb 5, 2013 at 3:14 PM

    Comment #11

    I’m not sure SKY would be happy with a European Super League.

    They hold all the cards in the UK broadcasting market.
    Why would they want to devalue the EPL (The main reason for SS subscription).
    Who’s going to have the broadcast rights for the European Super League. Free to Air or subscription only?

    The BIG question:
    Will Sky end up with more customers and/or be able to charge more?
    I think that’s unlikely on both counts.
    So why would they support a European League?

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  • Tsunki

    Feb 5, 2013 at 3:16 PM

    Comment #12

    Good post beattie I think its not outlandish to suggest the MA’s arrogant approach to how his business practice should be imposed upon the football game is actually a far-reaching as well as a brave one. I have said before I would seriously struggle to think the same way about NUFC if we had an Abramovich-style owner. The kind of mentality that pervades a club of that sort is one of diminishing returns, the more cash thrown around the less the whole equals the sum of its parts, the gane becomes a bragging sport for elitist spoiled brats, and the craft of the game is lost to glamour and corporate hob-nobbing. The illustration of the cost of Torres speaks volumes about profligate spending for its own sake. I would dearly love us to win a top competition just to prove it.

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  • outsidethebox

    Feb 5, 2013 at 3:18 PM

    Comment #13

    instant karma …some reports claim loic remy has a clause in the event of qpr being relegated remy gets a free transfer ..toon could go for remy offer him signing on fee equivalent to difference in wages …simples

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  • Nick 69

    Feb 5, 2013 at 3:20 PM

    Comment #14

    outsidethebox – Who would want Remy here after he’s shown his true colours? I know i wouldn’t and pretty much every other Toon fan I know wouldn’t

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  • Jonas's better than Messi

    Feb 5, 2013 at 3:25 PM

    Comment #15

    Lots of the French clubs are now feeder clubs for the EPL, great academies and coaches, plus a big talent pool of French, African and North African (Arab) players.

    These French clubs are owned by privately.
    The market isn’t going to dry up.
    No while French chairmen are treating their club’s like we feared Ashley was going to do with ours.
    Sell your best players each year, sit back light up a big stogie and drink that huge cognac.
    It’s Xmas every window for French chairmen.

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  • Jonas's better than Messi

    Feb 5, 2013 at 3:28 PM

    Comment #16

    Some players are injury prone (we have a few) Remy seems to be crocked a lot.

    I think we did well to miss out. I like Gouffran he runs and runs.

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  • outsidethebox

    Feb 5, 2013 at 3:29 PM

    Comment #17

    nick 69 …understand your viewpoint and from a moral point agree …but from a financial point .. not even for free??….

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  • Hatem

    Feb 5, 2013 at 3:32 PM

    Comment #18

    This will never get solved. Football makes way too much money and the big clubs won’t stopped doing whatever they want with money. It’s a real shame as English football would be way more exciting if 10 of the 20 clubs had a sniff at winning it. Our models great, but if this FFP rules aren’t enforced then it won’t bring Newcastle forward, a similar thing is happening at Arsenal.

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  • gonufc (not Arf' bad)

    Feb 5, 2013 at 3:32 PM

    Comment #19

    But wasn’t part of the Remy thing that he wanted to play up front and we wanted him to play on the left?

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  • Beattie25

    Feb 5, 2013 at 3:37 PM

    Comment #20

    The value of the French Market will either serve to drive up prices in that country or reduce costs in others as the markets all fight for value.

    Whilst it is possible that competition for resources in France may force prices up I believe NUFC are already identifying other markets to exploit.

    Least we forget the Italian international we got for 6 million and the Dutch international we also got for a similar price.

    I really believe that if clubs stopped going for trophy signings and concentrated on hard working talented professionals who could make a team then football would be richer, better and similar to days gone by.

    The arrogance of modern day professionals including their lack of caring is destroying the soul. How many times have we seen scenes like those at ST James park on Saturday at other clubs? We are bringing back that unity between players and fans and other clubs will have to take note.

    I think that Newcastle will continue to find bargains and that search will spread out all over Europe.

    Look at michu from Spain, even in that inflated Market bargains are there. The most inflated Market is Britain and until that is rectified we will struggle as a force internationally. The way to do it is by following the French, German, Dutch and Spanish models and investing money into youth development. If clubs continue to buy individuals that want to be central to a team rather than part of it for mega money then good luck to them, but NUFC is the future. Buying success now at reasonable prices and investing in youth.

    We might have bastardised a few models but ours seems to be unique to me. I have never seen a club with so much talent at such little cost over such a small period of time.

    We are on the cusp of greatness but our one weakness is perhaps our biggest strength, mike Ashley.

    Without footballing knowledge it is hard to predict if he knows what he is doing fully. If he sees the potential and follows through with the direction we seem to be going in, then football will find it’s soul again and the days of £80 million transfers and £200k a week wages will be replaced by men deserving of decent wages, success and honour due to professionalism, quality and talent alone.

    Case and point being Beckham. Decent footballer, but an abomination of the game I love. Not his fault, but his impact on the modern game has been a progressive disease that has nearly killed football. Nobody deserves that much success based on mediocre talent, and the desire to find the next Beckham over shadowed the desire for the next Bobby Moore.

    Cabaye could be the new poster boy of football but he is professional enough to understand what he owes football because of what football gave to him.

    I’m ranting.

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  • Nick 69

    Feb 5, 2013 at 3:37 PM

    Comment #21

    outsidethebox – personally, no, I would not have him for free now. He has shown he is all about the money and not ambition. We have had enough money grabbers over the years and that resulted in us being relegated.

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  • Jonas's better than Messi

    Feb 5, 2013 at 3:40 PM

    Comment #22

    With the usual back 4 and Krul.

    We have …

    Tiote — Cabaye
    Sissoko
    HBA – Cisse – Gouffran

    With Perch, Anita, Mbwia
    Marv, Obertan, Jonas, Fergy, Sammy Shola as possible subs.
    Vukic, Gosling when they are back.

    Siem de Jong in the summer.
    Andy Carroll if and when his price and wage demands are too silly to resist.
    Bony, PEA, RVW first window we can afford them.

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  • donkeypunch

    Feb 5, 2013 at 3:51 PM

    Comment #23

    good post Beattie25. FFP only affects teams looking to participate in European competition so really cant see the point of this new ruling by UEFA is it really going to help your little clubs from overspending when there only hope is mid table at best dont mind these billionare owners of clubs spending crazy amounts of money to get success as long as they can pay for it Its when you get these dodgy people like risdale at leeds gambling on the whole clubs future thats need a stop putting to it .and simple way to do this is have the money secure in some sort of bank to upfront for all future wages transfer fees and etc and if they havent got the money to do it.then tough this way no clubs can go under

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  • Graeme

    Feb 5, 2013 at 3:51 PM

    Comment #24

    Jonas @ 11.

    If the “Super League” does break away, with Manure, shitty, Chelski, Arse, the Milans, Barca, Madrid, Munich etc etc – who wouldnt want to watch it?

    If those 4 teams left the EPL, it would reduce the number of games played, raise the standards of the remaining Clubs and increase the competition for the League Title and the Cups – instead of it all being dominated by the top 4 with the occasional shock.

    No doubt UEFA would through the teddy out of the pram and ban the Breakaway teams from the CL, Europa League, but this would again create a much more even playing field for those teams still competing in their own leagues.

    To me, it will deliver all round

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  • Hatem

    Feb 5, 2013 at 3:58 PM

    Comment #25

    Jonas-I don’t even think I want Andy Carroll back here. He’s English, and was fairly devastating when he played here before, and of course he’s a geordie born and bred.

    However, I’m doubtful that he will ever retain that form, as Liverpool really did mess his career up. Mainly though, if we signed him up now or in the next few seasons its highly likely that the hoofball would return, with the ball playing talent we have at the moment it would be a big step in the wrong direction.

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  • BOOM BOOM THE 1ST

    Feb 5, 2013 at 3:59 PM

    Comment #26

    With the bigger clubs being the ones generating the most cash through champions lge and foreign merchandise sales and gates doesnt this make it even harder for other clubs to gatecrash this closed shop? They cant spend the wild sums they are right now but are still able to spend more than the teams playing catch up what a joke.

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  • LooneyToon41

    Feb 5, 2013 at 4:05 PM

    Comment #27

    @6. Beattie, Interesting post mate, liked it! Oh, but its UEFA not FIFA… different baby.

    Like many i have major doubts about whether UEFA will have the balls to restrict the major (wealthiest) clubs participating. What is apparent however, is that in the age of easy communication, UEFA will look like idiots if they don’t back up these ‘statements of intent’. And remember, this is NOT Sepp Blatter at FIFA, ie International football, this is UEFA!

    I do passionately agree with Beattie by the way, that good businessmen can run clubs properly, and still have success on the field! 😉

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  • donkeypunch

    Feb 5, 2013 at 4:10 PM

    Comment #28

    nufc should go all out for wilfreid bonyThe lad looks slow, but is deceptively fast, has a lowcentre of gravity, and can certainly throw his body about, appears pretty strong and hard to knock of the ball, has a high level of stability, doesn’t go to ground or try endlessly for free kicks, and has the composure to control the ball so as to place it successfully, not just hoof and hope at the goal mouth. I like him and think he could adapt to the faster pace and dirtier defenders in the PL. a cheap get, good resale value back to the continent if he doesn’t work out, so very little risk and potentially high return i personly feel 12 million is really cheap for him hes like a drogba and berbatov all rolled into one. and if we cant get him get carrol for 8 10 million or offer liverppol a swap with cisse

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  • LooneyToon41

    Feb 5, 2013 at 4:11 PM

    Comment #29

    @26 Boom. It’s all about TV. Yes, shirt sponsorship, stadium naming rights, gates, and merchandise can really help a clubs revenues, but basically it’s all about the BIG banana…. Television rights!

    That’s why there will never be a Super League of the top 10 wealthiest teams in Europe because, MOST fans actually don’t support those top ten teams, and therefore SKY (ESPN etc etc) will not pay the big $ for the rights.
    I have a SKY and ESPN package as a NUFC fan, but would i pay for a SuperLeague subscription without NUFC being in it…. no i would not! The big TV companies know this, and so do UEFA!

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  • Ketsbaia9

    Feb 5, 2013 at 4:11 PM

    Comment #30

    Would like to see us go for Benteke and Alderweireld. I’m not bothered who else we sign. If we want value for money, we should look at signing Sulejmani, Douglas and Gomis for free.

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  • LooneyToon41

    Feb 5, 2013 at 4:15 PM

    Comment #31

    Tim Krul to start for Holland against Italy tomorrow!
    😉

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  • Ketsbaia9

    Feb 5, 2013 at 4:17 PM

    Comment #32

    Can’t wait to see Mbiwa and Haidara in action. Great players.

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  • surreytoon

    Feb 5, 2013 at 4:18 PM

    Comment #33

    I hate to bring up the subject but the nature of Remy’s contract with QPR intrigues me.

    Would they pay £8m and £75k for a player then allow him to leave for free if they go down?

    That is stupidity of the highest order.

    You would want to recoup as much as you could.

    A player would want to know that they can move on easily should the team be relegated and not be held on to by virtue of their contract, but to placate a player signing on, all you have to do is put a mutually agreeable buyout clause in there.

    So, my guess is that there is a buyout clause, not a “free transfer” – I suspect it is set at around £4-6m. I would love it if we could find out and broadcast it bit like Arry Arse face did with Demba.

    Of course it works both ways, you don’t want a player hiding behind their contract and staying on at £75k/week if you are in the Championship, but to pay £8m for a player and say both parties can walk away is mad isn’t it?

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  • rainrix

    Feb 5, 2013 at 4:21 PM

    Comment #34

    I think we should look at investing more in our academy system. Lets be honest prices for players are only gonna stay the same or steadily increase, especially if more clubs follow our example.

    The young players we’re producing are either average or down right bad with the occasional gem such as campbell carroll and taylor. Our under 21s are pretty bad as well. I feel that instead of buying foreign youngens to bring into our development squad we should just invest that money into our academies local scouting system and facilities. Not to slate that young swiss kid we just bought but i’d rather we’d invest the money we paid for him into our academy and produce a more consistent better level of young talent.

    Plus being english means their sell on value will be astronomical 🙂

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  • rainrix

    Feb 5, 2013 at 4:25 PM

    Comment #35

    Surrey… I think its more of a case of remy wanting the free leave bit in his contract in case of relegation. Thats probably one of the reasons he joined i think. Its naivety on QPRs part, they’re taking a huge risk and they know it, there banking on these players saving them and the owners must be pretty confident of it happening.

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  • BOOM BOOM THE 1ST

    Feb 5, 2013 at 4:29 PM

    Comment #36

    LOONEY TOON The big clubs get the tv money as well as all their other revenues therefore they CAN spend more than smaller clubs I dont see ur point about tv money.

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  • Toon-Prodigy

    Feb 5, 2013 at 4:31 PM

    Comment #37

    Im sure i read somewhere when that Remy transfer happened that Harry said he had a minimal buy out of 5 mil.

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  • Munster Mag

    Feb 5, 2013 at 4:32 PM

    Comment #38

    I would LOVE IT, LOVE IT if QPR went down. I jsut hate Floppy Chops and all his Sky journalist lovers. Remember when he was out of a job – he was on sky at least once per week been interviewed on the golf course about this that and the other. They adore him. Wanker.

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  • Munster Mag

    Feb 5, 2013 at 4:34 PM

    Comment #39

    Harry Redknapp, what a cnut

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  • Glowey

    Feb 5, 2013 at 4:34 PM

    Comment #40

    As a Man City supporter, I find it all very amusing that, those clubs who used to be able to spalsh the cash and did, yourselves included. Are now coming on all holier than thou, now they no longer have the cash to splash.

    Exactly the same applies to ManU, Arsenal and Spurs, thtee of the all time big spenders in English football who, now other clubs can outspend them, have actually written a joint letter to the EPL, demanding they introduce even toughr FFP measures than UEFA intend! Talk about hypocritical.

    Still, if UEFA do think they have the ball to take on our owners, they better be prepared for a looooooong and costly legal battle in the European courts, I think its called anti trust laws when organisations try to prevent businesses spending their money on improving.

    As for a european super league, its getting closer all the time.

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