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News and Commentary On Newcastle United Football Club By Ed Harrison, A Proud Exiled Geordie And Lifelong Fan

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Financial Fair Play Really Starts To Bite The Big Spenders

1:22 pm, Saturday, May 17th, 2014 by Dr. Ed Harrison · 21 Comments

News that both English Premier League Champions Manchester City, and French Champions Paris Saint-Germain have each been fined €60M (£48.8M)by UEFA yesterday, for not abiding by the Financial Fair Play rules over the last three years, and both teams will also have their Champions League squads for next season reduced from 25 players to 21 players.

Michel Platini     987

Michel Platini – UEFA President

Manchester City had been negotiating with UEFA for the past week or so, and have finally agreed not to appeal the penalty, but they don’t agree with the ruling by UEFA – but that’s not surprising, as they try to save face.

In all, nine European clubs were handed penalties in an attempt to stop the gross spending of huge amounts of money that Billionaire owners have been allowed to spend over the last decade – starting with Chelsea and Roman Abramovich back in 2003.

Manchester City has accepted the sanctions, but they point out they have a ¨fundamental disagreement¨ with UEFA about its ¨interpretations of the FFP regulations on players purchased before 2010.¨

But since UEFA created the rules, we think they are clear what the rules are – but as we said – both City and PSG have to save face after simply flaunting the rules of FFP over the last three years.

UEFA has said that both clubs have agreed to reduce their spending in the transfer market in the next two years, although City said it will not affect what they had already decided in transfer outlays in that time period.

It’s now a full five years since UEFA President Michel Platini launched the program, to try to curb big spending by wealthy owners, which at the time he referred to as ¨cheating” – and its interesting at the time it was mainly Premier League clubs who were spending the big money.

But some would argue that Platini has waited too long to clamp down, and both clubs have significantly flaunted the rules and are now both in the Champions League and Champions of their respective countries, because of the over-spending – for instance City have spent a round a £1B gross on players since the new owners took over in August of 2008.

And PSG have spent huge amounts in less than three years, since they were acquired by Billionaire owners in July of 2011.

Other clubs fined by UEFA include Galatasaray, Trabzonspor and Bursaspor from Turkey, Zenit St Petersburg, Anzhi Makhachkala and Rubin Kazan from Russia, in addition to Levski Sofia from Bulgaria.

And the other thing that UEFA has clamped down on are some of the ridiculous commercial deals both PSG and City have been operating, including selling image rights and consultancy fees to third parties.

City also have a ten-year commercial deal – worth £40M a year with Etihad Airways – over ten years for the stadium naming rights, which is hardly the going commercial rate – and exceeds the fair market value by as much as maybe a factor of five, and that deal has been in effect for three years – so why did UEFA wait this long to clamp down?

Since both  Manchester City and PSG have won their country’s League twice in recent years, they probably think it was worth the fines they have just received from UEFA – so it paid off.

Newcastle United have abided by the rules, and over the last three seasons we have broken even financially in every single season, with a £9.9M profit in the last financial year, and that’s expected to be a lot more than that in the financial year ending at the end of June.

However, we were 10th in the Premier League and nowhere near qualifying for the Champions League.

So it has its trade-offs. :(

What do you think?

Comments welcome.



Tags: Europa League · European Champions League · European Competition · Financial Fair Play · Financials · Newcastle News



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21 responses so far ↓

  • 1 gonufc (Newcastle United Sports Direct Advertising Club) // May 17, 2014 at 1:31 PM

    Whilst in other news, Barcelona appeal against their sentence for MASS TRAFFICKING OF UNDER 14s and get let off….

  • 2 Graeme // May 17, 2014 at 1:39 PM

    Its highly unlikely to ever affect us – we spend sod all. In reality, we run our transfer system to create a net profit rather than actually invest to improve the squad; replace players sold, when they are sold -not
    1-2 seasons later.

    A sham of a club.

  • 3 Ian Toon // May 17, 2014 at 1:44 PM

    Interesting to note that ManC in order to comply with FFP are required to have a drastically reduced net spend( not specified that I can determine) in the transfer market for two years and a maximum of £49 million this window.There does appear to be an inconsistency agreed with PSG over respective sponsorship deals. With ManC being unable to write off wages on contracts signed pre 2010 there could now be opportunities for us to take players on loan from them at a shared cost as there is a ban on them increasing their wage bill for a season. FFP has thrown up a number of inconsistencies but with ManC having spent £1 billion under this regime they were always going to be a target for a large fine.

  • 4 Graeme // May 17, 2014 at 1:55 PM

    Ian, I would suggest that you would need to take FCB into a small room, sit him down and explain that philosophy in words of one syllable. Its the only way they would understand.

  • 5 The next Mike Williamson // May 17, 2014 at 1:55 PM

    I don’t get how the FA do nothing about it. This year 19 teams reigned in their spending to comply with the new rules which effectively are a handicap. Man City ignored the handicap rules and gave themselves a massive advantage. Imagine Liverpool had also cheated and overspent. They might be champions now. Man City should have points deducted or be relegated. I am not acknowledging them as champions because they did not follow the rules and have therefore clearly cheated.

  • 6 colwell // May 17, 2014 at 1:59 PM

    Only way to make teams stick too the rules is handing out transfer bans, points deduction and cup entry refusal.

    Other than this the fines are just there to make more money, an easy route.

  • 7 colwell // May 17, 2014 at 2:01 PM

    TNMW

    City are champs though, they spent money and won the league. Its not their fault the rules have a huge amount of flexibility in them.

  • 8 jimiley // May 17, 2014 at 2:06 PM

    This club is not fit for purpose as the ownership has publicly stated that it is not trying to win anything. What is the purpose of its existence except to make money for the owner? What is the aim of an owner who tells the fans that the club is not trying to win anything? Which club has ever said that before? Incredible!!!! The owner is taking away our hopes and dreams. A deliberate policy to destroy the soul of the club. And boy is it working.!!! STAY AWAY.

  • 9 Ian Toon // May 17, 2014 at 2:08 PM

    Graeme- Cheer up mate. Pardew at Anfield said that we would likely have a first signing by this coming Tuesday. Early days yet!

  • 10 jesperfuglsang - captain of the lemon crew // May 17, 2014 at 2:12 PM

    Colwell…could you explain that last part again?

  • 11 jesperfuglsang - captain of the lemon crew // May 17, 2014 at 2:16 PM

    FCB?

  • 12 Ian Toon // May 17, 2014 at 2:17 PM

    Fat Cockney -astard.

  • 13 jesperfuglsang - captain of the lemon crew // May 17, 2014 at 2:21 PM

    Shouldn’t it read the FCB then?

  • 14 Ian Toon // May 17, 2014 at 2:26 PM

    Graeme’s and you last post was FCB! Have you been out in the sun. So much for Mad Dogs and EnglishMen!

  • 15 jesperfuglsang - captain of the lemon crew // May 17, 2014 at 2:28 PM

    Well I assume you can read mate?

  • 16 Ian Toon // May 17, 2014 at 2:31 PM

    Graeme
    May 17, 2014
    Ian, I would suggest that you would need to take FCB into a small room, sit him down and explain that philosophy in words of one syllable. Its the only way they would understand.

    FCB ie Fat Cockney -astard ( illegitimate).

  • 17 jesperfuglsang - captain of the lemon crew // May 17, 2014 at 2:35 PM

    And I repeat shouldn’t it read the FCB then?

  • 18 Ian Toon // May 17, 2014 at 2:41 PM

    LOL – FCB is Ashley. Therefore you would not say The Ashley.

  • 19 Laurent Robert 32 // May 17, 2014 at 2:43 PM

    It gives Uefa a slice of the cheese. They are just in the mix to get some of the money under the guise of a penalty.

  • 20 Ian Toon // May 17, 2014 at 2:44 PM

    Jesper- Calm down your starting to show the early signs of the “blog bully”. I knew perfectly well what Graeme was saying. It shouldn’t be a big deal for you, given that your the linguist in this conversation. Were the only two left on the blog and I am off to the pub.

  • 21 Lost Plot // May 17, 2014 at 3:56 PM

    Even if it was Newcastle in the firing line for over spending and only claiming a top of league finish .. We’d still have people on here winging!

    Bring back the Docks n Pits and realise what a real hard day work is

    Back the team that’s in front of yer and H’way the Lads




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