Financial Fair Play Rules

Football clubs face transfer bans if they breach Uefa's new rules on financial fair play rules

Clubs could face Europe-wide transfer bans or have appearance money from European competitions cut if they breach new Uefa rules on financial fair play, the Daily Telegraph can disclose.

Leading European clubs including Italian giants Internazionale are pressing for Uefa to adopt the sanctions to ensure that the new rules, designed to ensure clubs live within their means, are not abused by clubs with massive benefactor funding.

Uefa president Michel Platini has said the rules are necessary to stop “financial doping” by the richest clubs driving their competitors into financial trouble as they strain to compete.

Manchester City, backed by Abu Dhabi’s petro-dollar wealth, and Roman Abramovich’s Chelsea are among clubs that the established European elite fear will be able to evade the rules, which effectively tie transfer fees and player wages to turnover.

The rules came into effect at the start of this season but until now the sanctions for clubs breaching the regulations have not been clear, with Uefa saying only that serious breaches could lead to clubs being thrown out of the Champions League or Europa League.

Following discussions at the European Club Association general assembly in Genevea this week however clubs have agreed to ask Uefa to announce a graded system of sanctions.

These would include financial penalties as well as preventing clubs in serious breach from signing any new players, effectively forcing them to comply with financial constraints laid down by Uefa.

Internazionale chief executive Ernesto Paolillo chaired a working group of leading clubs including Arsenal and Real Madrid this week, and said the clubs are keen to know what the penalties will be.

“We are all fully behind the financial fair play rules because we need to make some changes in European football,” he said. “European clubs were in deficit by more than €1bn last season, so we need action.
“But we need to see the sanctions now because the rules have started, so that the clubs know the rules. We think that having a transfer ban, and to have prize money from Uefa withheld, are appropriate penalties for breaking financial rules.”

Paulillo and directors of established European elite clubs are keen that City in particular are forced to comply with the rules, which limit benefactor funding to €45m over the next three seasons.

All other income must be “legitimate” revenue, but there are already complaints over City’s £400m sponsorship and naming rights deal with Etihad, the Abu Dhabi national airline controlled by the same family as City.

City believe that the deal will pass the FFP test because it includes money for youth and community development aspects, which are exempt from the rules.

Prize money for 23 clubs withheld

Published: Tuesday 11 September 2012, 10.30CET
The UEFA Club Financial Control Body's investigatory chamber has announced that 23 clubs involved in 2012/13 UEFA club competitions have had their prize money temporarily withheld.


The UEFA Club Financial Control Body has taken its first measures


UEFA Fair Playclubs involved in 2012/13 UEFA club competitions have seen the payment of their prize money temporarily withheld pending further investigation.

As part of the first measure of the financial fair play requirements included in the UEFA Club Licensing and Financial Fair Play Regulations 2012, the clubs participating in 2012/13 UEFA club competitions had to provide information regarding the status of any overdue payables as at 30 June 2012. Following its last meeting in August 2012, the CFCB investigatory chamber has identified that important overdue payables towards other clubs, and/or towards employees or social/tax authorities existed in 23 cases.

These cases involve the following 23 clubs:
FK Borac Banja Luka (BIH)
FK Sarajevo (BIH)
FK Željezničar (BIH)
PFC CSKA Sofia (BUL)
HNK Hajduk Split (CRO)
NK Osijek (CRO)
Club Atlético de Madrid (ESP)
Málaga CF (ESP)
Maccabi Netanya FC (ISR)
FK Shkendija 79 (MKD)
Floriana FC (MLT)
FK Budućnost Podgorica (MNE)
FK Rudar Pjevlja (MNE)
Ruch Chorzów (POL)
Sporting Clube de Portugal (POR)
FC Dinamo Bucureşti (ROU)
FC Rapid Bucureşti (ROU)
FC Vaslui (ROU)
FC Rubin Kazan (RUS)
FK Partizan (SRB)
FK Vojvodina (SRB)
Eskişehirspor (TUR)
Fenerbahçe SK (TUR)

Consequently, the CFCB investigatory chamber will continue their investigations and request these clubs to provide an updated situation as of 30 September 2012 with regards to overdue payables towards other clubs, employees and social/tax authorities.

This conservatory measure will remain into force until all identified balances have been settled in full or until a final decision by the CFCB adjudicatory chamber is taken.

http://www.uefa.com/uefa/footballfirst/protectingthegame/financialfairplay/news/newsid=1857626.html#prize+money+clubs+withheld

So the first raft of 'sanctions' are against clubs who owe other clubs money or, at least, didn't declare that they still owed money; is that correct?

A nice wee safe starter for U.E.F.A. then - I can't wait to see how they handle the big boys.

So the first raft of 'sanctions' are against clubs who owe other clubs money or, at least, didn't declare that they still owed money; is that correct?

A nice wee safe starter for U.E.F.A. then - I can't wait to see how they handle the big boys.

Seems like so long as you share out the money you can financially dope as much as you want.
Start to miss payments and you're out of the money loop.

Seems like so long as you share out the money you can financially dope as much as you want.
Start to miss payments and you're out of the money loop.

How I'm reading it too,as long as the transfer fee is paid in full which could take 5 years if clubs agree a payment term that long the rules will be exploited.

Would it be a good idea to merge this thread?

Would it be a good idea to merge this thread?

Had thought that myself.
When I posted in it there was a 180 day without reply warning.
Thought that was odd until I saw the Kop thread of similar title.

Where does it become more relevant. It's not merely limited to
Liverpool's adherence to FFP. The reason I posted in here is because
this was other clubs being penalised for failure to comply.

Atletico Madrid and Malaga release Financial Fair Play statements

The Liga pair have given their thoughts on having prize money withheld by Uefa, following investigations into their finances

11 Sep 2012 16:50:00 
By Alex Mott


Getty
Atletico Madrid and Malaga have today released statements regarding revelations that the two Spanish clubs have had their European prize money withheld.

Uefa confirmed on Tuesday that 23 clubs have not been paid prize money, pending further investigation, for breaching Financial Fair Play rules.

But the La Liga pair have come out fighting, issuing press releases saying they are fully behind the initial decision and will remain 'transparent' throughout.

A statement on Malaga's official website read: “Further to the previous statement made by the club, a complete internal restructuring process got underway over a month ago, aiming to guarantee the future viability of the club.

"The starting point of this process was to address the financial commitments, and find a balance between income and expenditure, in order to meet with the Uefa fair play requirements.

“The club is still fully immersed in this process, and has now stabilised the financial situation with other clubs, employees and players, and is in negotiations with ‘Hacienda’.

"Although a definitive agreement has not as yet been reached, the amount owed by the club has been significantly reduced over the last month.  Malaga Club de Futbol has informed Uefa of this situation, and there is a transparent relationship between both organisations.

“The inclusion of Malaga Club de Futbol in the list published today by Uefa is a precautionary measure and not a penalty, which can be lifted as soon as an agreement is reached with the "Agencia Tributaria," something which the club has been working towards for several weeks.”

Atleti were also swift in their response and released the following statement:

"On May 10, 2012, Club Atletico de Madrid SAD obtained from the Committee of First Instance of the RFEF [Spanish Football Federation] the right to participate in Uefa competitions. Subsequently, Uefa announced our admission on June 15, that the club could participate in the Uefa Europa League 2012/13.

"Therefore, Club Atletico de Madrid S.A.D. fulfilled in the first instance with every one of the requirements of regulation and licensing Uefa Financial Fair Play to participate in European competitions.

"This regulation establishes a monitoring procedure or permanent financial control for those clubs who have been licensed with Uefa, which implies the obligation to submit, on a quarterly basis, certain financial information that reliably demonstrates compliance with the monitoring requirements imposed by the panel of financial control.

"In the quarterly monitoring of June, Club Atletico de Madrid SAD submitted all documentation required by Uefa agencies.

"However, we would like to clarify that the measure notified today by Uefa assumes no seizure of any amount to Club Atletico de Madrid SAD, but it is an injunction issued in Uefa licensing regulation until the adoption of a control panel final decision, which we believe will be favourable.”

link

Premier League talks: Clubs close to agreeing to control losses

David Bond

BBC SPORTS EDITOR

The Premier League has taken another step towards introducing new financial controls to stem the vast sums of money spent by clubs on player wages and transfers.

With the League's next round of three-year television deals expected to break through the £5bn barrier for the first time in 2013, club chairmen and chief executives met in West London on Thursday to discuss a way of keeping hold of more of that cash.

Football's 'prune juice' economics dictates that the more money a club has, the more they splurge on players and their agents' fees.

But for the first time since the League was founded 20 years ago there does seem to be genuine consensus that a new way needs to be found to stop the clubs acting as clearing houses for the game's top talent.

Reaching an agreement acceptable to such a broad range of businesses - big, small, privately owned, controlled by shareholders - will not be easy.

And as the club representatives left the meeting it was clear there is still a long way to go before any new rules are introduced.

But there was understood to be an acceptance that there needs to be a compromise, even from those clubs with strong views about the type of method required to control the League's finances.

Some teams favour restricting clubs to spending a fixed percentage of their turnover on players' wages. Others would like to see a cap placed on annual wage bills.

Then there is the break even model which, like Uefa's Financial Fair Play rules, limits a club's spending by preventing teams from running at a loss year after year.

But this is clearly a complex issue. For example, what do you do about those clubs like Chelsea and Manchester City, who are privately owned by wealthy individuals.

How would the rules treat large injections of equity from owners like Roman Abramovich or Sheikh Mansour?

What about clubs which borrow heavily to fund player purchases? And if another model is devised different to the Uefa rules, then how does that sit with those clubs playing in Europe? Would they have to comply with two restrictive sets of regulations?

Finally there is the issue of sanctions. How severe should the penalties be? Points deductions and fines were discussed at the meeting on Thursday but whatever the punishment is for failing to meet the guidelines, they will have to have teeth.

Despite all these issues clubs do appear committed to doing something about the huge losses which English clubs continue to make.

For a League which five years ago was dead set against any regulation whatsoever this is a breakthrough moment.

But with so much money about to flow through the League from TV deals the clubs know this is an opportunity which can't be missed.


http://www.bbc.co.uk/sport/0/football/20346146

Premier League clubs agree new cost controls

By Simon Austin
BBC Sport

The 20 Premier League clubs have agreed, in principle, to introduce radical new cost controls.

There are two main proposals on the table - a break-even rule and a cap on the amount clubs can increase their wage bills by each season.

Club chief executives have now been asked to produce detailed plans for exactly how these proposals will work.

These rules would mark a major change for the clubs, which made cumulative losses of £361m in 2010-11.

Champions Manchester City, for example, made a £97.9m loss in their latest set of results, which were revealed last Friday.

City and Fulham are the only clubs opposed to any spending controls, BBC Sport understands. However, any new Premier League rule requires the approval of only 14 of the 20 clubs in order to be introduced.

With the Premier League's new three-year television deals expected to break through the £5bn barrier from 2013, momentum is growing to find a way of preventing the majority of that cash going straight to players and agents.

There have now been six meetings of top-flight chairmen where cost controls have been discussed without any concrete decisions being made.

The next meeting will be on 6 February.


http://www.bbc.co.uk/sport/0/football/20773526

I believe in financial fair play but then I believe in Santa and the tooth fairy as well.

I noticed that a couple of teams in the Spanish League got banned from Uefa. Teams as low as 8th qualified for Europa. With teams like Real and Monaco spending 100m+, I'd imagine other teams in their leagues have to spend to keep up. Doubt they can all break even. 

I know this is about our 2nd favorite club, but it could have been about any one. (But us )

Chelsea report £49.4m loss but meet Financial Fair Play rules

Chelsea have made a loss of £49.4m for the year ended 30 June 2013.

Their group turnover of £255.8m for the 12-month period is a record figure for the club, but elimination from last season's Champions League in the group stages saw a drop in income.

The club said these figures, combined with the previous year's profit of £1.4m, fall within the criteria set by Uefa's Financial Fair Play  regulations.

Their commercial income rose from £67m to £79.6m - a 19% rise.

Chelsea won the Europa League in 2013 - but the club received significantly less prize money for that than they did in winning the Champions League in 2012, which contributed to the loss.

"For Chelsea FC to achieve a record level of turnover, despite our first group-stage elimination from the Champions League, shows we have structured our business and are growing in the correct way for long-term stability," chief executive Ron Gourlay said.

"Our philosophy is that we build upon success on the pitch - and although in these financial results we haven't repeated the sizeable profits made the previous year from player transfers, we believe the age profile of the existing squad means we will benefit from that investment for many years to come."

Chelsea's profit last year was their first since Roman Abramovich took control of the club in 2003.

That profit was aided by money brought in from player sales, in addition to a one-off financial boost that came when the broadcaster BSkyB agreed to cancel its shares in a joint digital media venture with the club.

The last two seasons have been the first monitoring period for Uefa's FFP regulations.

Chairman Bruce Buck added: "A long-term objective was financial sustainability, and the subsequent implementation of Financial Fair Play by Uefa and by the Premier League has brought that to the top of the agenda for football clubs.

"We are pleased therefore that we will meet the stipulations set down by Uefa in their first assessment period.

"By our own analysis, we are progressing from a commercial viewpoint as well as continuing to add trophies to our collection, which we never lose sight of as our most important goal."

What are Uefa's Financial Fair Play regulations?
• The Club Financial Control Body (CFCB) was set up in June 2012 to oversee the application of the Uefa Club Licensing System and Financial Fair Play Regulations

• Clubs cannot repeatedly spend more than their generated revenues, and clubs will be obliged to meet all their transfer and employee payment commitments at all times

• Higher-risk clubs that fail certain indicators will also be required to provide budgets detailing their strategic plans

• Teams participating in Uefa club competitions have had their transfer and employee payables monitored since the summer of 2011. The break-even assessment covering the financial years ending 2012 and 2013 will be assessed during 2013-14

http://www.bbc.co.uk/sport/0/football/25564078

Seriously people, WHAT IS THE POINT?

So if Chelsea have 50m worse than last year,  how do they meet the requirements? Surely it is for Uefa to decide if the requirements are met not Chelsea. As far as I knew. 30m was the limit that people can spend over their revenue,  with the loop whole if they had better turnover than the previous system any figure is plausible.  None of these situations apply. I am confused with it.

It's a lot more complicated than a simple rule.

In the first monitoring period over two years, losses of 45m euros are allowed. But in the 11/12 year (the one Chelsea made a profit in) wages for players signed before June 2010 don't count so for FPP purposes Chelsea made a much bigger 'profit' than what was disclosed. I'm guessing that was enough to get losses down to 45m or less.

Found this table which probably explains it better:

Merchandising, retail, hospitality and overseas tours can all swell the coffers, but the Holy Grail for football clubs is stadium naming rights. The only club that has (reportedly) inked such a deal for a meaningful sum is Manchester City, as an element of their long-term Etihad sponsorship, while clubs like Chelsea have to date failed to secure a deal, despite many years of searching.

Many have expressed scepticism over City’s Etihad deal, including Liverpool’s owner John W Henry, who asked, “How much was the losing bid?” and Arsenal manager Arsene Wenger, “If FFP is to have a chance, the sponsorship has to be at the market price. It cannot be doubled, tripled or quadrupled, because that means it is better we don’t do it and leave everybody free.”

UEFA tackle such deals by assessing whether they represent “fair value” and then deducting any excess (not the entire agreement) from the club’s income for the purposes of the FFP break-even calculation. Given the rate of change of such sponsorship deals, my view is that they are unlikely to exclude this deal.

If they do, the lawyers will be out in force, asking UEFA to also look at other clubs, such as Chelsea’s sponsorship deal with Russian energy company Gazprom, who bought Roman Abramovich’s stake in Sibneft in 2005. Questions could even be asked of squeaky-clean Bayern Munich, where two of the most prominent sponsors, Adidas and Audi, each own around 10% of the club.

Clearly, any egregious attempts to get round the regulations, such as an owner buying £200 million of replica shirts or paying £50 million for a super-VIP executive box, will be thrown out, but, as we have seen, there is still scope for some serious revenue improvement in commercial operations.

There have been some interesting developments that clubs may use to boost revenue, such as Real Madrid’s $1 billion resort island in the United Arab Emirates and Trabzonspor’s plan to build a hydroelectric power station. On the face of it, any revenue from such activities would have to be excluded from FFP, as “it is clearly and exclusively not related to the activities, locations or brand of the football club.” However, the same clause does confusingly allow the inclusion of revenue from non-football operations if those operations are “clearly using the name/brand of a club as part of their operations” with no reference to location. Another one for the lawyers.

Until the rules are changed to stop the richest from exploiting the system, the problem will just carry on.

The quote is from an article here, long read this one!
http://swissramble.blogspot.co.uk/2012/09/uefas-ffp-regulations-play-to-win.html

It's a lot more complicated than a simple rule.

In the first monitoring period over two years, losses of 45m euros are allowed. But in the 11/12 year (the one Chelsea made a profit in) wages for players signed before June 2010 don't count so for FPP purposes Chelsea made a much bigger 'profit' than what was disclosed. I'm guessing that was enough to get losses down to 45m or less.

Found this table which probably explains it better:

Couldn't Abramovich get round this by just injecting more money into the Chelski coffers then? Or does cash injection refer to merchandising, sponsorships etc? If it's the latter then what City did with the Etihad and that ridiculous amount of money received from sponsorship is how they will stay inside the FFP rules I guess.

Sorry, I have just seen that Man City are not breaching FFP....can there be a bigger laughing stock in football than the clowns who made this up?

They have 400m sponsorship from their owners, how about make it a billion ffs

You have to laugh otherwise you would get angry

Exclusive: Manchester City facing new threat of European expulsion

.

Manchester City's place in next season's Champions' League could be challenged by rival clubs this summer because of detailed new Uefa rules over Financial Fair Play (FFP).

The news comes as the Chelsea manager, Jose Mourinho, cranked up the debate over football finances ahead of tomorrow's showdown with City by declaring that some clubs are dealing with FFP "in a dodgy way". Although Mourinho did not name City, he was speaking days after they released their 2012-13 financial results last week which showed an annual wage bill of £233 million – £639,000 a day.

City's confidence that their balance sheet will pass Uefa's FFP test is openly questioned in some quarters, with sceptics claiming they have used creative accounting to meet the guidelines, though the club categorically deny this.

Now a new problem has emerged in the obscure though highly significant small print of the new FFP rulebook. If City fail to meet FFP, a "directly affected party" has 10 days to appeal against any attempt by the club to then cut a deal with Uefa to reduce their sanction of a likely Champions League ban. City would then be exposed to a Uefa tribunal.

The governing body may deliver their verdict on clubs' finances as early as May. Arsenal and Liverpool have made it clear they expect strong enforcement of FFP by Uefa and both clubs could make the challenge – putting them in a state of open conflict with City – if either miss out on a Champions' League place.

Liverpool's principal owner, John W Henry, said in his first meeting with British newspaper journalists in 2010, that it did not matter he lacked a "'Sheikh' in front of my name" because FFP would deliver a level playing field and he had that in mind when buying Liverpool. Henry's managing director at Anfield, Ian Ayre, said in 2012 that "the rules are rules and should be hard and fast. What will kill the initiative, or certainly stifle it, is people easing themselves into it rather than the rules applying and everyone operating within them," he said.

City's status in next year's competition could only be challenged if they are first ruled a FFP defaulter and then reach a "settlement agreement", which is effectively a plea bargain. The existence of such a system has surprised FFP analysts.

The European Commission has a similar procedure which provides incentives for companies to admit to competition-law breaches in exchange for a lower fine. Thus settlement usually results in a reduced penalty as a carrot to settle in the first place. But, in football terms, it would be double edged. While it might allow FFP defaulters to escape a full Champions' League ban by effectively being put on probation to get their finances in order, it also opens up a legal process by which their rivals could challenge their Champions' League place.

Daniel Geey, the football law specialist at the firm Field Fisher Waterhouse, who has advised clients and written extensively on FFP, said: "The new procedural rules and in particular Article 15 regarding settlement give the [Club Financial Control] Uefa body the power to settle before an infringement decision is made. This new rule has been implemented only months before the first break-even decisions are taken and it will take some time to understand the instances where settlement may be used."

The new rules state that settlement agreements will take particular account of mitigating factors which Manchester City will draw heavily on, such as wages of players signed before June 2010, which the Abu Dhabi-owned club put at £80m.

The revelations will provide an intriguing backcloth to tomorrow night's top-of-the-table clash between City and Chelsea at the Etihad Stadium.

Under the rules, which cover the most recent two years of annual accounts, Chelsea would meet the criteria by virtue of their £1.4m profit in 2012, even though they then lost £49.4m in 2013.

When a journalist said to Mourinho at his Friday press conference: "You talked about dodgy financial fair play, and have spoken about City before..." he interrupted to reply: "There are clubs that are following exactly the project of the financial fair play and there are other clubs doing it in a dodgy way," he said. "That for me is very clear. I don't [name] the clubs, that's not my job.

"If I was a journalist interested in football, and football entourage and whatever, it would be something interesting to do and it's not very difficult to do, but that's when financial fair play, the name, the meaning has to be fair financial fair play, not dodgy financial fair play because if it's dodgy, take the fair and put just dodgy financial fair play."

http://www.independent.co.uk/sport/football/premier-league/exclusive-manchester-city-facing-new-threat-of-european-expulsion-9101725.html

Mourinho is a jut ball, but if he's raising these issues in the public domain, that can only be good for these Sheik clubs to air their dirty laundry.

If indeed we can appeal if City pass FPP, then I'd imagine we'd be appealing as well as Arsenal, Spurs, Everton and Man United. That can only be good for levelling the playing field and since we're right up there with Arsenal in being tight as f#ck, it has to be good for us, no?

To me uefa are just opening a door to give voilaters a slap on the wrist instead of a European ban. It's a joke.  These rules are pretty much worthless now.

This is all over the press today so I thought I would post the updates to show what we all already knew...FFP is a f**king joke.

Looks like the clubs getting themselves in massive debts and buying titles in Europe WONT have any real punishment.............

The CFCB panel will have four options open to them: to dismiss the case; to agree a settlement with the club effectively putting it on probation; to issue a reprimand and fine of up to $147,160; or in serious cases to refer the club to the adjudicatory chamber.
http://theworldgame.sbs.com.au/news/1186849/Clubs-set-to-learn-FFP-fates

$147,160...ffs I bet Man City and PSG are shitting themselves.

The more serious thing for me is that I believe our owners bought the club on the cheap thinking that they wont need to spend money because FFP will make things fairer. I have to ask, if I knew FFP was bollox, you all knew FFP was bollox, then why the feck didn't our owners? or is it just an excuse so they dont have to put their hands into their own pockets and can cream off a nice profit for themselves?