Possibly The Biggest Change In Football In A Decade

[Barrs Court Red]

http://news.bbc.co.uk/sport1/hi/football/europe/8709871.stm

Now you can look at this two ways;

1) This will create a more even playing field, in which well run clubs can prosper and those bankrolled become untenable.

2) This hastens pressure to form a closed shop Premier League to hoarde even more money

Too tired to post much on this now, but this really have far reaching consequences not just for City, but how English football is run.

[Proper Job]

In the short term I'm guessing this will mainly effect clubs looking to compete in Europe the way I read it. But who knows, it may filter down the leagues in some form or other

[Guest]

The way I see it is that the ones currently at the top with CL football each year will have a huge advantage as that revenue will allow them to buy more. Those that are outside the elite group cannot now gamble to get in as much for fear of being banned.

To me it would just indicate the rich will get richer and the rest of us poorer.

[havanatopia]

The way I see it is that the ones currently at the top with CL football each year will have a huge advantage as that revenue will allow them to buy more. Those that are outside the elite group cannot now gamble to get in as much for fear of being banned.

To me it would just indicate the rich will get richer and the rest of us poorer.

I read it somewhat differently.

Firstly, it has to be not only a sane and positive move but also the only conceivable one to stop more clubs going into meltdown by spending £4 and only taking in £3... bit like Labour then.

Those clubs wishing to play catch up will, i believe you are right, suffer for the first few years but gradually the playing field will be levelled as those massive spenders will see their investment in players maturing and passing their best. When that happens they will need replacing and will not be able to offer huge sums over and above the teams 'behind' them. This will bring forth more clubs in a position to compete for those players and although normal economic thinking would suggest increased demand would drive prices up in this case it would not do so anywhere near the levels previously seen simply because there would be these new rules forcing clubs to perform like a normal business.

I applaud UEFA for this long mooted move and i think it can only have a positive effect which we will see played out only after about 4-5 years in.

[chinapig]

I posted this from David Conn (the best in the business imo) on another thread:

http://www.guardian....a-club-finances

Have to say I never thought Platini would get this through against the opposition of the Premier League, though it appears that some rich clubs begged him to save them from themselves. As Conn says this will promote stability. Germany apart the major leagues are in huge debt (Spain even worse than England) and something had to be done. There is a case for saying the rich will prosper but this has to be a good first step in financial reform. The next challenge for Platini will be a more equitable distribution of money, something he also believes in. That will be much tougher but he has already exceeded expectations.

[Economou]

I loved this comment; ''We don't want to kill anyone, this is why we have a phased-in approach."

On a more general point it seems once again that Germany are the model for how football/football clubs should be run, mirroring the way Europe is on the whole financially at the moment.

[the frampton balti]

Definitely a move in the right direction.

Now lets get a fairer distribution of money down the leagues and a european cup place for the winners of domestic cup competitions i.e true champions and not teams that come fourth in their respective leagues.

Very impressed with mr Platini so far.

[Barrs Court Red]

I've said to a few people in the last year I can actually see German football being the bext big thing. Exciting wingers, decent stadiums with lots of noise and colour. Whether this can be marketed to the rest of the world as a serious contender to the Premier League remains to be see.

In terms of this UEFA ruling, will this affect how many clubs have structured themselves, with a seperate stadium company?

Expect the FA to follow suit on this. I hope this doesn't result in HIGHER ticket prices, it's already £49 to go in the Shed at Chelsea for example.

[the frampton balti]

Moving down the leagues if higher ticket prices mean lower gates then they would defeat the objective. I think a balance at city will be found when we have a further 15000 seats to sell prices may even go down at our new stadium!

[Laner]

I've not read the rules in depth but what's stopping a rich oil-baron walking into a club shop picking up a shirt and then just simply paying £50million for it? Or buying a small piece of land the club owns (car park etc.) for a ridiculous sum? All revenue into the club to then help bank-roll the buying of new players? Or alternatively the bigger clubs might say 'screw-you' to Uefa and form their own CL style tournament?

[Blagdon red]

I've said to a few people in the last year I can actually see German football being the bext big thing. Exciting wingers, decent stadiums with lots of noise and colour. Whether this can be marketed to the rest of the world as a serious contender to the Premier League remains to be see.

In terms of this UEFA ruling, will this affect how many clubs have structured themselves, with a seperate stadium company?

Expect the FA to follow suit on this. I hope this doesn't result in HIGHER ticket prices, it's already £49 to go in the Shed at Chelsea for example.

I'd agree with that to a degree ... you can certainly see a club like Bayern Munich becoming a powerhouse in Europe (again) as a result of this, as they already have their financial house in order and will only be strengthened by the likes of Chelski and Glazers Utd having their wings clipped (or even being banned).

Well done Platini, I say ... and to some of the billionaire owners who begged UEFA to save them from themselves!

[CHIPLEY RED]

How would this effect us.

I don't know the financial facts but i guess without money from Steve Lansdown we wouldn't be able to buy players like Nicky Maynard (£2.25m).

Clubs historically have relied on a local business putting money into them thje difference being the money used to be a gift not a loan.

[CHIPLEY RED]

I'd agree with that to a degree ... you can certainly see a club like Bayern Munich becoming a powerhouse in Europe (again) as a result of this, as they already have their financial house in order and will only be strengthened by the likes of Chelski and Glazers Utd having their wings clipped (or even being banned).

Well done Platini, I say ... and to some of the billionaire owners who begged UEFA to save them from themselves!

How will this clip Man Utd wings. They will get stronger surely as they generate more income than any other club in England if not the world so will be able to spend the most.

[Guest]

How will this clip Man Utd wings. They will get stronger surely as they generate more income than any other club in England if not the world so will be able to spend the most.

Because at the moment they are £700m in debt. They need to be debt free within 3 years of this rule coming in or no CL football.

[Nibor]

Because at the moment they are £700m in debt. They need to be debt free within 3 years of this rule coming in or no CL football.

That's not how I read it. They will just be expected, in future, to spend no more than they earn. They don't spend more than they earn now anyway.

These regulations appear to be completely unenforcable. What's to stop Abramovich buying a keyring from the Chelsea shop for £100m if he wants to? And if he wants to do a share issue and invest more he's free to do so - then use the capital to pay all the non football bills so that the football bills are paid by TV money and gate receipts... overall the effect is the same.

[Geoff65]

Utd being £700m in debt i.e. owing the money to specific organisations is what they did have, however they paid that off with a bond issue because they knew this was coming.

Wouldnt be surprised if the effect of this would be for individual tv rights instead of the collective rights they have at the moment.

[NiceRed]

I read on another article about this that measures would be put in place to stop clubs circumventing the rule in the way some are suggesting above (e.g. another company owned by Abramovich sponsoring Chelsea's shirts for £500m). Surely the only way to police this would be for all clubs aiming to compete in Europe to submit their accounts for detailed inspection.

The rule would also only refer to general profitability and not debt. So, for example, Utd and Liverpool would be fine, as they are currently servicing their debt as part of their budgets. The clubs that would get into trouble with this ruling at the moment would be Villa, Man City, Chelsea - and I'm guessing Real Madrid.

Although there is a worry that, as pointed out above, the rule would stop clubs like Villa trying to break into the elite group - and thus make the game more interesting - I think this is something that has to be done for the overall good of the game.

On a separate point about Platini - well done to him on this. I've read various comments (not on this thread) about him being "anti-English" for various things he's tried to introduce, when there's not a shred of evidence of that. I think he's doing a good job at UEFA, especially when you compare him to some of the (allegedly) dodgy people at the top of FIFA like Blatter and Warner. I read somewhere one of the major World Cup contracts (for hospitality or something media related - can't remember exactly) went to a complany owned by Sepp Blatter's son....

[Geoff65]

If I'm reading this right then the players salaries will start to decline as no money outside of club revenue will be used for salaries.

[havanatopia]

Utd being £700m in debt i.e. owing the money to specific organisations is what they did have, however they paid that off with a bond issue because they knew this was coming.

Wouldnt be surprised if the effect of this would be for individual tv rights instead of the collective rights they have at the moment.

Man U paid off £700 mil in a bond issue?... i am prepared to stand corrected but that does sound a bit far fetched.

[Barrs Court Red]

That's not how I read it. They will just be expected, in future, to spend no more than they earn. They don't spend more than they earn now anyway.

These regulations appear to be completely unenforcable. What's to stop Abramovich buying a keyring from the Chelsea shop for £100m if he wants to? And if he wants to do a share issue and invest more he's free to do so - then use the capital to pay all the non football bills so that the football bills are paid by TV money and gate receipts... overall the effect is the same.

Isn't that fraud?

[Blagdon red]

That's not how I read it. They will just be expected, in future, to spend no more than they earn. They don't spend more than they earn now anyway.

These regulations appear to be completely unenforcable. What's to stop Abramovich buying a keyring from the Chelsea shop for £100m if he wants to? And if he wants to do a share issue and invest more he's free to do so - then use the capital to pay all the non football bills so that the football bills are paid by TV money and gate receipts... overall the effect is the same.

Actually, there's a big difference: if an Abramovich-type character decides to pay inflated prices for a key ring, does a share issue or sponsors the club's shirts through another of his companies, the money is ending up in the club's coffers. A purchase has been made, period. The club is not saddled with a debt that it has to pay back. The real problem, which these regulations seem to address, arises where a supposed benefactor is, in fact, only making substantial (often interest-bearing) loans to the club, thus putting it more and more into debt.

[beaverface]

How would this effect us.

I don't know the financial facts but i guess without money from Steve Lansdown we wouldn't be able to buy players like Nicky Maynard (£2.25m).

Clubs historically have relied on a local business putting money into them thje difference being the money used to be a gift not a loan.

The difference being with us, is that we've never qualified for the Champions League or Europa League, so they can ban us as much as they want !

[Guest]

Actually, there's a big difference: if an Abramovich-type character decides to pay inflated prices for a key ring, does a share issue or sponsors the club's shirts through another of his companies, the money is ending up in the club's coffers. A purchase has been made, period. The club is not saddled with a debt that it has to pay back. The real problem, which these regulations seem to address, arises where a supposed benefactor is, in fact, only making substantial (often interest-bearing) loans to the club, thus putting it more and more into debt.

This is, infact, what Abramovich did about a year ago when this motion was first touched on. He did a share issue and effectively wiped out Chelsea's debts to him.

[CHIPLEY RED]

The difference being with us, is that we've never qualified for the Champions League or Europa League, so they can ban us as much as they want !

It will be filtered in at the top and soon make its way down so eventually it will impact us.

Call me synical but this will have little impact on the big teams (they'll find a way around it) clubs will still go into administration and be poorly run but teams like Bristol City will suffer. Individual TV rights as someone has mentioned, breakaway leagues, closed shops all of which are already being talked about will be bad news for everyone outside the top 6 just like the premership is bad news for everybody outside it. I remember when the premerier league started and it was about playing less games to help the national team. Its ended up about money to the big teams who now play more games through champions league/europa league/pre season tours.

[Roe]

I still don't understand why UEFA can't simply bring a fair, salary cap into each European league to stop clubs from dominating and overspending ridiculous amounts of money on players from lesser clubs. It really would be the simplest way around all of this.

[Barrs Court Red]

Interesting article in the Times today which shows that only Stoke, Arsenal and Tottenham would be ok under these new rulings.

The back page says that Man City are planning 2 years of purchasing in a bid to get round the rule, but I'm not sure how they plan to finance the wage bill as they must be miles behind Arsenal, Chelsea, Liverpool and Man U when it comes to off field revenue. I'm not even sure they own their stadium.

[Nibor]

Isn't that fraud?

No.

Actually, there's a big difference: if an Abramovich-type character decides to pay inflated prices for a key ring, does a share issue or sponsors the club's shirts through another of his companies, the money is ending up in the club's coffers. A purchase has been made, period. The club is not saddled with a debt that it has to pay back. The real problem, which these regulations seem to address, arises where a supposed benefactor is, in fact, only making substantial (often interest-bearing) loans to the club, thus putting it more and more into debt.

You seem to be saying the problem is shyster investors trying to asset strip or pay themselves interest. If that were a problem, and I don't really think it is, how do the regulations prevent it?

For me, three real financial concerns exist in football.

Leveraged buyout. The problem is that football clubs are great vehicles for debt - high cash flow, hard assets, growing in value. People like the Glazers can buy football clubs with no personal risk on the premise of only servicing the debt until the club is worth more and then selling it on at a profit. The risk is carried by the club. Unless the detail of the proposal is significantly different to the soundbites, this is not addressed.

Poor financial planning. Clubs don't really get into trouble from spending more than they earn. They can stop doing that when/if it gets critical, then have a frugal few seasons. In fact, spending more than you earn can be a great thing - as we're hopefully going to see over the next few years. _IF_ the planning is there and the investment is in areas that improve revenue not increase costs. The real trouble comes from clubs spending badly and is compounded by them not planning for their earnings to be dramatically cut, for example in the event of relegation. This doesn't seem to be addressed, the idea of spending less is just too simplistic.

Poor Trickle down. Wealth accumulates at the top of the pyramid too much, although the top clubs generate the most revenue directly they wouldn't be able to without the rest of the pyramid and not enough money makes it to grass roots, youth development, or lower league clubs. Thanks to UEFA's lack of strong enough regulations covering compensation for poaching young players, development doesn't pay well for smaller clubs. Again, not addressed.

I want to see the details when they're published but the way I would interpret this at the moment is "big clubs in voting to stay at the top shocker". It isn't going to make football finance any fairer or protect any clubs really.

[Bounce Around the Ground]

This is, infact, what Abramovich did about a year ago when this motion was first touched on. He did a share issue and effectively wiped out Chelsea's debts to him.

I read that Man City's owners did this as well.

[chinapig]

I still don't understand why UEFA can't simply bring a fair, salary cap into each European league to stop clubs from dominating and overspending ridiculous amounts of money on players from lesser clubs. It really would be the simplest way around all of this.

Allegedly because of European law, though why that doesn't impact on Rugby Union and Rugby League I'm not sure. Perhaps because it applies in one country only (no salary cap in French Rugby Union)?

[chinapig]

Man U paid off £700 mil in a bond issue?... i am prepared to stand corrected but that does sound a bit far fetched.

The bond issue was £509m I believe and the so called Red Knights would keep it. It doesn't so much wipe out debt as reschedule it at a lower interest rate as I understand it. The Glaziers continue to syphon off money for themselves in the meantime.