Financial Fair Play Regulations

If you think about last summer, and take say Downing out of the equation, our spending looks a lot more favourable. Cheers for posting by the way.

Well, you might want to knock Ronaldo out of the equation but it still confirms the overall trend that United are not massive spenders any more and Arsenal don't even feature.

Man city would fail FFP even with their dubious deal.

Well it's an interesting question. Take a look at this article from the same site which seems to confirm your conclusion.

City's FFP challenges and the implications for UEFA

Posted by Ed Thompson on Thursday, April 19, 2012



There has been a great deal of interest recently in whether Manchester City will pass UEFA's FFP test for the first Monitoring Period. The debate merits an explanation of how the FFP rules will apply to City and the implications for the club.

The first UEFA Monitoring Period covers the two seasons either side of the 2012 Summer Olympics (the 2011/2 and 2012/13 season. Clubs have to report losses below E45m (or £38m) over this two year period (i.e. an average loss of no more than £19m a season).  UEFA has 8 available punishments for a club that doesn't pass the FFP test and any punishment would commence from the 2014/15 season.   Although City lost £196m during the 2010/11 season, we won't know the scale of the loss for the 2011/12 season (i.e. the first season included in the Monitoring Period) until they release their accounts in November 2012.

At first glance, reducing season losses from £196m to £19m might look like an unachievable task for City.  However I should direct readers to the excellent Swiss Ramble blog where he posts a detailed break-down of how City could possibly bring the losses down to just -£14m for the 2011/12 season.  For the 'Swiss Ramble' scenario to work, everything would have to have run in City's favour (including £10m transfer fees that don’t seem to have been achieved this season).  Although it would be a brave (or potentially foolish) person to argue with Swiss Ramble’s figures, for the 2011/12 season there is rather gaping hole for City in respect of the 2012/13 figures (the second year of the first Monitoring Period). 

As Swiss Ramble points out, for the 2011/12 season, the FFP Break Even rules allow clubs to exclude wages for players signed before 1 June 2010. For City this equates to around £53m and is a key factor in the club reducing their debt close to UEFA’s permitted level.   N.B. UEFA’s wage exclusion is so crucial to this debate that I have attached the relevant text from the rules at the foot of the page.

However, this wage exemption only applies for one season only (2011/12). When calculating the deficit figure for the 2012/13 season, all wages must be included, irrespective of when the player was signed. City therefore have to include the £52m wage cost in 2012/13 and, all things being equal, this would push the projected loss up to around £67m for that season (or roughly double the permitted Break Even Deficit for the two combined seasons of the Monitoring period).

It therefore seems almost certain that City cannot meet the FFP requirements for the initial Monitoring Period.   

But “what about the record-breaking Etihad deal?” I hear you cry.  The £40m a year from Etihad will certainly help the club and, in time, could generate significant commercial income. However the receipts from Etihad have been included in Swiss Ramble’s projection and are unlikely to generate material additional income during the first Monitoring Period.

So, with City seemingly set to fail the Financial Fair Play test, we need to consider how UEFA will react.  For most people, the key question is whether UEFA will ban City from UEFA competitions.  Of course, no-one really knows which of their 8 available sanctions UEFA will impose. There are many contributing arguments on either side of the debate - there are factors influencing UEFA to act leniently but also many factors pushing them towards the harshest of punishments. Rather than speculate, I have outlined the main arguments and rationale for both positions:


UEFA will be lenient because:
•City have fairly modest debts (£43m) and debt is the most important issue in European football.
•Banning a top English Club (potentially the English Champion) would devalue the UEFA competitions.
•There are a number of clubs who look likely to fail the test - if too many are banned, the competition is devalued
•Platini is likely to find life uncomfortable if a number of the top European clubs are banned - City may have safety in numbers and gain new allies with other clubs struggling to comply.
•City's losses are trending in the right direction - UEFA will consider this as a mitigating factor.
•UEFA are keen to phase-in the FFP rules so may be more lenient in the early Monitoring Periods
•UEFA are required apply penalties in a fair and consistent way – it might be hard to exclude one non-compliant club whilst imposing a lesser punishment on another club that fails the test.
•By Excluding a club, the punishment becomes self-fulfilling – a club that doesn’t receive the £25m-£50m of Champions League money is much more likely to fail subsequent Monitoring Periods.


UEFA will react harshly because:

•There is a genuine concern in UEFA over the high levels debt and the amount of losses clubs are making.
•Platini has staked his reputation on FFP and has too much to lose by backing down. Platini and  general secretary Gianni Infantino  seem to be giving progressively more stern pronouncements on FFP. Recent statements included " There'll be no backtracking","  and "We (at UEFA) probably won't be popular but we have to do it, otherwise football will be destroyed"
•FFP is supported by most UEFA members.
•FFP is now an embedded part of the UEFA DNA.
•Platini will probably fail to win the FIFA Presidency in 2015 if he abandons FFP as he needs European support.
•City look set to miss the Break Even Deficit figure by a significant margin.
•City have not had much success in Europe and a ban would probably not have a huge impact on the competition's credibility.
•City (and Chelsea) are not popular in Europe amongst other clubs.
•The German clubs cannot make losses and are very much oppose to the wealthy benefactor model and City in particular.
•The European Club Association (effectively the Trade Association for the top clubs) is headed by Rummenigge (one of the most outspoken opponents of City who even called for the club to be banned).
•The European Commission (EC) approved the FFP rules (and even said they felt they were a good thing). Any club wishing to challenge the legality of FFP will need to go to the EC.
•This year UEFA has significantly bolstered its legal department to ensure it can beat any legal challenge.
•City are likely to be one of the more serious FFP transgressors, probably standing out from other clubs that fail the test.
•Excluding City would present a fairly easy way for Platini to appear tough and serious on this issue.
•UEFA is required to apply penalties in a fair and consistent way - Exclusion is a penalty that may well  meet this criteria
•England's relationship with world football is far from ideal.



UEFA FFP Wage Exclusion paragraph: Annex XI (page 85)






2. For the purpose of the  first two monitoring periods, i.e. monitoring periods

assessed in the seasons 2013/14 and  2014/15, the following additional

transitional factor is to be considered by the Club Financial Control Panel:




Players under contract before 1 June 2010 

If a licensee reports an aggregate break-even deficit that exceeds the

acceptable deviation and it fulfils both  conditions described below then this

would be taken into account in a favourable way.

i) It reports a positive trend in the annual break-even results (proving it has

implemented a concrete strategy for future compliance); and

ii) It proves that the aggregate break-even deficit is only due to the annual

break-even deficit of the reporting period ending in 2012 which in turn is

due to contracts with players undertaken prior to 1 June 2010 (for the

avoidance of doubt, all renegotiations on contracts undertaken after such

date would not be taken into account).

This means that a licensee that reports an aggregate break-even deficit that

exceeds the acceptable deviation but that satisfies both conditions described

under i) and ii) above should in principle not be sanctioned

http://www.financialfairplay.co.uk/latest-news/city-s-ffp-challenges-and-the-implications-for-uefa

I still think it's going to be impossible for FFP to be enforced.

I think a salary cap would be much more realistic and would help to keep clubs from overspending. It's worked for the most part in the NFL. But if all the leagues didn't adopt it then it wouldn't much matter as all of the best players would just go to the league without a cap to get "paid".

We had a salary cap before. Didn't really work as top players just got more "boot money" (that's money stuck in their boots not from sponsorship) than they did wages. I presume nowadays it would be Club houses, club cars, club boats and club expenses rather than the old brown paper envelope but the effect would be just the same.

Man city would fail FFP even with their dubious deal.



City have little debt though as their owners are one of the few that pays down debt by buying equity in the club unlike Abramavich at Chelsea.


Premier League debt

Chelsea                £734m
Manchester United£439m
Fulham                £190m
Newcastle United £150m
Liverpool             £123m
Aston Villa          £110m
Arsenal               £97.8m
Bolton Wanderers£93m
Tottenham         £78.6m
Wigan Athletic    £73m
Sunderland       £66m
QPR                 £56.1m
Everton           £45m
Manchester City£41m
Blackburn Rovers£21m
Norwich          £16.8m
Stoke City       £8m
West Bromwich£2m
Swansea        £0m
Wolves          £0m

I was sure Abramavich had swapped what he was owed by Chelsea into shares, might be wrong

I was sure Abramavich had swapped what he was owed by Chelsea into shares, might be wrong

I think you are right mate, but according to this it is still considered debt.

Roman Abramovich is still owed £726 million by Chelsea despite reports that he had written off the loan.

 

..Chelsea's accounts for 2008-09 announced that Abramovich's enormous loan to the West London club he owns had been converted into shares.

But a report in the Guardian reveals that since Abramovich made his loan to a holding company, rather than the club itself, his debt is yet to be repaid.

The club's debt to the holding company was converted into shares, but the holding company's debt to Abramovich remains at £726m.

"The loan is interest free, but it is repayable if Abramovich gives 18 months' notice," writes David Conn in The Guardian.

"The Russian could still demand the money back some day, either if the club is making a profit, or if he were to sell it.

"He has not, in fact, written off the huge loans he has made on his Chelsea adventure."

PA Sport

"He has not, in fact, written off the huge loans he has made on his Chelsea adventure."

That's one way to put it.

I think you are right mate, but according to this it is still considered debt.

Roman Abramovich is still owed £726 million by Chelsea despite reports that he had written off the loan.

 

..Chelsea's accounts for 2008-09 announced that Abramovich's enormous loan to the West London club he owns had been converted into shares.

But a report in the Guardian reveals that since Abramovich made his loan to a holding company, rather than the club itself, his debt is yet to be repaid.

The club's debt to the holding company was converted into shares, but the holding company's debt to Abramovich remains at £726m.

"The loan is interest free, but it is repayable if Abramovich gives 18 months' notice," writes David Conn in The Guardian.

"The Russian could still demand the money back some day, either if the club is making a profit, or if he were to sell it.

"He has not, in fact, written off the huge loans he has made on his Chelsea adventure."

PA Sport

Having done some research, I am not to sure now ?

 If he has not changed the loan into shares it show how seriously he is concerned with the FFP rule

We had a salary cap before. Didn't really work as top players just got more "boot money" (that's money stuck in their boots not from sponsorship) than they did wages. I presume nowadays it would be Club houses, club cars, club boats and club expenses rather than the old brown paper envelope but the effect would be just the same.

Ahhh...similar to signing bonuses in the NFL.

I am going to be honest here gys, I was intially interested in this thread, then you starting throwing facts and figures around [most of which I didnt understand] and I completely lost interest.

FFP is fatally flawed because the biggest and best clubs in Europe are the main transgressors. Does anyone envisage Real, Barca or Man Utd getting banned from a competition...no chance. At worst they will implement fines around a million Euros, which wont effect anyone. As an example, see how Eufa deals with racism in football, a few thousand Euros fine here n there.

Forget FFP, it bollox, it wont make a difference and cant be implemented because it means that EUFA may have to bite the bullet and go up against football clubs that have infinitely more money and power that EUFA itself.

I am going to be honest here gys, I was intially interested in this thread, then you starting throwing facts and figures around [most of which I didnt understand] and I completely lost interest.

I feel your pain buddy. 

For what it's worth; I 'concentrated' on the "idiots guide" post.

Expenditure = "Only football-related expenses from transfer fees and salaries. Transfer fees would be “amortized” or divided evenly over the term of a player’s contract"
 
Income = "Almost everything will be part of the assessment of income. That means ticket sales, TV money, sponsorships, merchandising, player sales and prize money from competitions."

So what does that mean for us? I guess what we need is a "What it means to me (a Liverpool fan) guide"

* How much income do we have this season? - The Meireles money c/f; money from Warrior; money from Standard Charter; money from Garuda; money from player sales (Aquilani/Kuyt) and money from merchandising.

* How much expenditure do we have this season? - Salaries for existing staff and transfer fees for Borini and Allen (?).

* In theory therefore the amount we have to 'spend' is the difference between the two. What that difference may be? Well anyone's guess but it may be safe to assume it will be close to the 'net spend', at the end of the window. So I guess we'll know better on 1 September.

                                ---------------------------------------------------

What impact will the regulations have on us, our ability to compete and our chances of winning the League? The following is only my opinion - I may be miles of the mark (I quite often am):

* We seem intent on adhering to the 'rules' and are building our 'strategy' around them - which is fair enough: if  U.E.F.A actually impose sanctions against the transgressors. Can they? Will they?... Like many more; I doubt it.

* The 'sanctions' being considered look a bit toothless. Give them a warning? (they'll be shaking in their boots). Fining Abramovich or Sheikh Mansour? (your having a laugh). Deduct points at the group stage? After they've got their reward for qualifying? (not much of a deterrent).

I'm afraid, in my humble opinion, unless the F.A. reinforce the U.E.F.A. 'message' with sanctions of their own; the 'rules', (well meaning as they may be), are destined to fail.

Where such a failure, (if it should pan out that way) leaves us in terms of a strategy to win; F**k only knows. Big sponsorship and increased market share is relative to success (in my opinion) and we may end up finding it even more difficult to compete but I guess we'll just have to cross that bridge when we come to it.

It might not be all doom and gloom tho'. It may well be that the City and Chelsea will adhere to the F.F.P. 'rules' (now that they are at the top and have bigger revenue streams coming in) and all we'll have to do is catch up. That may take a while but (if they do) we might, at least, have a chance. 

I feel your pain buddy. 

For what it's worth; I 'concentrated' on the "idiots guide" post.

Expenditure = "Only football-related expenses from transfer fees and salaries. Transfer fees would be “amortized” or divided evenly over the term of a player’s contract"
 
Income = "Almost everything will be part of the assessment of income. That means ticket sales, TV money, sponsorships, merchandising, player sales and prize money from competitions."

So what does that mean for us? I guess what we need is a "What it means to me (a Liverpool fan) guide"

* How much income do we have this season? - The Meireles money c/f; money from Warrior; money from Standard Charter; money from Garuda; money from player sales (Aquilani/Kuyt) and money from merchandising.

* How much expenditure do we have this season? - Salaries for existing staff and transfer fees for Borini and Allen (?).

* In theory therefore the amount we have to 'spend' is the difference between the two. What that difference may be? Well anyone's guess but it may be safe to assume it will be the total sum or 'net spend', if you prefer. So I guess we'll know better on 1 September.

What impact will the regulations have on us, our ability to compete and our chances of winning the League? The following is only my opinion - I may be miles of the mark (I quite often am):

* We seem intent on adhering to the 'rules' and are building our 'strategy' around them - which is fair enough: if  U.E.F.A actually impose sanctions against the transgressors. Can they? Will they?... Like many more; I doubt it.

* The 'sanctions' being considered look a bit toothless. Give them a warning? (they'll be shaking in their boots). Fining Abramovich or Sheikh Mansour? (your having a laugh). Deduct points at the group stage? After they've got their reward for qualifying? (not much of a deterrent).

I'm afraid, in my humble opinion, unless the F.A. reinforce the U.E.F.A. 'message' with sanctions of their own; the 'rules', (well meaning as they may be), are destined to fail.

Where such a failure, if it should pan out that way leaves us, in terms of a strategy to win; f**k only knows. Big sponsorship and increased market share is relative to success (in my opinion) and we may end up finding it even more difficult to compete but I guess we'll just have to cross that bridge when we come to it.

It might not be all doom and gloom tho'. It may well be that the City and Chelsea will adhere to the F.F.P. 'rules' (now that they are at the top and have bigger revenue streams coming in) and all we'll have to do is catch up. That may take a while but (if they do) we might, at least, have a chance. 

Better Mouse...

Now if you could just throw the odd titty picture in at strategic points of the post you have me...

 

* The 'sanctions' being considered look a bit toothless. Give them a warning? (they'll be shaking in their boots). Fining Abramovich or Sheikh Mansour? (your having a laugh). Deduct points at the group stage? After they've got their reward for qualifying? (not much of a deterrent).

Are they really the punishments for the clubs that don't adhere to the rules mate?

Pointless exercise if so.

Are they really the punishments for the clubs that don't adhere to the rules mate?

I'm only going on Rob's "Idiots Guide" post wahs:

How will UEFA punish violators of FFP?

a) Give them a warning
 
b) Fine the club. Although this may seem like a chicken/egg conundrum when one thinks of it
 
c) Deduct points. This is likely to occur in the group stages of the Champions League and Europa League. Importantly, this measure was a new punishment proposed and ratified immediately at Nyon in an Executive Committee Meeting in January 2012
 
d) Disqualify the team from UEFA competition. Although this is a major step, it is difficult to see if UEFA will take this stance
 
e) Exclude the team from future UEFA competitions. Again, similar to above, it is difficult to see if UEFA will adhere to such a measure
 
f) UEFA will discuss three other potential punishments for violators at the Istanbul UEFA EXCO on March 20-21. They include the withholding of UEFA prize money for taking part in the Champions League and Europa League, preventing clubs from registering “new players” for UEFA competitions, as well as restricting the total number of players that clubs may register for UEFA competitions. UEFA have shelved the proposal to implement transfer bans on clubs after receiving legal advice suggesting that it would contravene the European Community’s Restraint of Trade regulations

http://notbottomline.wordpress.com/2012/03/15/the-idiots-guide-to-uefa-financial-fair-play-what-does-it-all-mean/

Section f) seems to have more teeth but I ain't sure that any of that has went past discussion stage - maybe someone can help with that one?

UEFA publishes their 8 punishments for breaching FFP rules

Posted by Ed Thompson on Sunday, April 15, 2012


Article published 4 April 2012

At the UEFA conference in Istanbul, UEFA ratified three more disciplinary measures for clubs that breach FFP rules.  As I outlined in my article on 7 Feb, five measures had previously been agreed at the Nyon Conference in January. The full menu of punishments now reads:


1.Reprimand / Warning
2.Fine
3.Deduction of Points
4.Withholding of Revenue from UEFA competition
5.Prohibition to register new players for UEFA competitions;
6.A restriction on the number of players that a club may register for UEFA competitions
7.Disqualification from a competition in progress
8.Exclusion from future competitions

Although the European Commission recently announced their approval of the Financial Fair Play regulations, there is a requirement for the rules and punishments to be applied in a fair and consistent manner.  Deciding which clubs receive which punishments and determining the severity of the punishment for all transgressions is likely to prove extremely problematic for Platini.  The FFP rules contain a huge number of potential transgressions, raging from overspend, to failure to have an under-10 youth team.  Even the financial requirements are wide-ranging and UEFA will be challenged when comparing rule-breaking such as  overspend, failure of an owner to inject equity and failure to be up-to date with taxes.   And once the relative seriousness of the crimes are evaluated, there will be issues to be determined within each crime. For example, should a club overspending by £1m be punished the same as one overspending by £50m?  Exclusion isn't an easily scalable punishment. And if the problem isn't difficult enough, UEFA has advised that it is keen to phase-in FFP over the next few years (presumably increasing the severity of the punishments).  When considering this potential minefild, UEFA needs to be mindful that it faces a potential legal challenge if the punishments are not applied fairly and consistently.

Even J.Henry doesn't believe FFP will work and that the Prem may have to impose its own version.

"We believe the league itself may have to adopt its own rules given that clubs seem to be ignoring Uefa's rules, which may be porous enough to enable clubs to say that the trend of huge losses is positive and therefore be exempt from any meaningful sanctions."

FFP is good in theory, but we all know UEFA don't have the balls to implement it.

Man city would fail FFP even with their dubious deal.



City have little debt though as their owners are one of the few that pays down debt by buying equity in the club unlike Abramavich at Chelsea.


Premier League debt

Chelsea                £734m
Manchester United£439m
Fulham                £190m
Newcastle United £150m
LIVERPOOL            £123m
Aston Villa          £110m
Arsenal               £97.8m
Bolton Wanderers£93m
Tottenham         £78.6m
Wigan Athletic    £73m
Sunderland       £66m
QPR                 £56.1m
Everton           £45m
Manchester City£41m
Blackburn Rovers£21m
Norwich          £16.8m
Stoke City       £8m
West Bromwich£2m
Swansea        £0m
Wolves          £0m

Thought we had less debt than that!

I thought the owners had lowered the debt to 50 million

FFP is good in theory, but we all know UEFA don't have the balls to implement it.

This. PSG would be thrown out next season for a start.

Disadvantages clubs further as some will try to adhere to the rules, and those who don't or use loopholes will have more of an advantage than they did before.

Thought we had less debt than that!

We do now mate, that £123million was under Hicks and Gillett, now it is "only" £65million under FSG.

Liverpool’s debt had reached shocking levels under the previous unwanted regime. Although there was “only” £123 million net debt in the football club, the full picture was revealed in the holding company where borrowings had grown to around £400 million. The good news is that this debt was largely eliminated after the change in ownership, though there is still £65m net debt, comprising £38 million bank loans and £30 million owed to UKSV Holdings less £3 million cash.

http://swissramble.blogspot.co.uk/2012/05/liverpool-keep-car-running.html

Many big clubs already have their issues with the UEFA though don't they? I think I read a while ago that the top clubs were basically threatening to break with the UEFA and start their own elite competition once the current contracts run out, or something along those lines. If the UEFA really do what they need to do to enforce these rules, they'll only give clubs more incentive to break with them. It's all a bunch of crap politics, and UEFA will try to keep these clubs happy I'm sure.

Interesting Article.....If there ever was a super league I suppose it would exclude the entire Bundisliga.

To be frank we talk about how sh*te the Arsenal model is, but in fact its nothing more than a spinoff of how Bayren and most of that league operate.
 

Bayern Munich: A model franchise



The annual Super Bowl of world soccer is finally here. Saturday's UEFA Champions League final between Bayern Munich and Chelsea (2:45 p.m. ET, FOX) may lack the sexiness of recent European finals -- neither team finished at the top of its own domestic league, after all -- but I still think this should be a highly entertaining contest.

Why? For starters, Bayern will have plenty of incentive to attack on its home field, attempting to become the first team to win the European Cup at home since Inter in 1965. What's more, both teams will have a nearly full quiver of creative players. Of the seven players suspended on both teams for the final, all but one (Chelsea's Ramires) are defensive-minded. As long as Chelsea doesn't completely park the bus as it did against Barcelona (and I think Bayern will prevent that from happening with an early goal), this final will be a fun watch for the neutral.

If you want to hear more about the final itself, you can check out SI.com's preview podcast, but for now I wanted to provide a bit more information on one of the finalists. Part of my goal in becoming a full-time soccer writer in 2010 was to learn more about the world's top clubs and present that to the U.S. audience. On my way to Madrid a while back for a story on José Mourinho I stopped for a few days in Munich. I ended up writing about Bayern's star midfielder, Bastian Schweinsteiger, but I also got an audience at Bayern's international media day with Karl-Heinz Rummenigge.

A former star forward for Bayern and the German national team (he was twice named European player of the year), Rummenigge, 56, is now the chairman of Bayern Munich and the powerful European Club Association. What makes Bayern Munich special? Here are some of the things I found interesting from our 90-minute round-table conversation (in which Rummenigge spoke fluent English):

• Bayern's tradition of ex-players moving up to the board room is impressive. Bayern has a fascinating mix: It's a financially stable, smartly run SuperClub, and yet it's also led by a powerful board that has included fabulously successful former players such as Rummenigge, Uli Hoeness and Franz Beckenbauer. We've seen plenty of examples of great players who can't hack it as managers or club executives, which makes sense: The skillsets are completely different. So I asked Rummenigge how Bayern has made it work.

"We have a continuity in the club," Rummenigge says. "In the past 40 years we have had just three general directors. Uli Hoeness was nominated general director of the club in the late 1970s, and he was in the club for 30 years in a row. Thanks to him there's a football quality in the management. I never did study because football is maybe not easy to study. I played football and then I had the pleasure to be nominated as [Bayern] vice-president in the early '90s when Bayern was a members club. When we changed the structure into a shareholders company I was nominated as CEO. So I could prepare close to 10 years to do the job I'm doing today."

"I have the impression that many clubs around Europe would like to follow this kind of way, and many tried. In the end, for whatever reason they weren't successful. Maybe it's due to the continuity we always had in the club, and it was easier to do in Bayern than in other clubs."

Bayern has also gotten lucky that its star-players-turned-directors are naturally smart guys who've adapted well to the business world. Hoeness started a thriving sausage-making company, and Rummenigge shows a detailed knowledge of the economics of the sport. But he also can connect with current players due to his background as an athlete.

"I have one big advantage: I always know what the player is thinking about," Rummenigge says, "because I had these experiences in the past when I played football as well. Of course, today my main work is to care about the financial situation."

• Bayern is extremely well-positioned for the future. Bayern has reached two of the past three Champions League finals, so obviously it's competing well on the field these days, but even better fortunes may be on the way. When UEFA's Financial Fair Play rules kick in, Bayern could be one of the big winners in Europe, not least because it isn't saddled with a large debt like so many other top European clubs. "Our 340 million euro stadium, Allianz Arena, is completely privately financed by our club," Rummenigge says. "The big advance today of Bayern Munich is that our infrastructure is strong, not just our team. We invested 25 million euros here [in the team's training facility]."

"From the very beginning, we said if we follow the Italian way or the English way we will always lose, because we don't have that kind of money available. We have no sheik [like Manchester City], no Mr. Berlusconi [like Milan]. We have a completely different situation in Germany and have to find out the best way. That was a wise concept to follow, and today we are a safe club ... Bayern could be the model of the future for many other clubs."

• Bayern's stability includes a balance between smart youth development and targeted buys in the transfer market. As Rummenigge explains it, in the 1990s he and Hoeness wanted to learn how other sports teams did things in different areas. So they hit the road. They visited Ajax to see how its youth academy worked. They visited Manchester United to learn more about merchandising. And they visited the U.S., where they attended the Super Bowl and learned firsthand more about how the Chicago Bulls leveraged the success of Michael Jordan. Then they took those lessons back to Germany.

Now "we are very strong in our youth department with [academy-produced] players like Philipp Lahm, Bastian Schweinsteiger, Holger Badstuber, Thomas Müller and Diego Contento," Rummenigge says. "They didn't cost a penny in transfer fees. We always want to have a strong youth department, because supporters love when players from Bavaria are playing for Bayern Munich. They also love players you can buy, like Franck Ribéry and Arjen Robben, but you have to find opportunities. We probably never could spend 95 million euros like Real Madrid spent in the case of Cristiano Ronaldo. However, we can spend 24 million like we did for Robben."

The result is a Bayern Munich that is competing for Europe's most prestigious trophies while at the same time positioning itself economically for the future. It's a case study that more and more clubs figure to follow in the coming years.

Read more: http://sportsillustrated.cnn.com/2012/writers/grant_wahl/05/17/cl.final.preview/index.html#ixzz24DiwASrT

Wonder where I heard that "we have no sheik line".

I feel your pain buddy. 

For what it's worth; I 'concentrated' on the "idiots guide" post.

Expenditure = "Only football-related expenses from transfer fees and salaries. Transfer fees would be “amortized” or divided evenly over the term of a player’s contract"
 
Income = "Almost everything will be part of the assessment of income. That means ticket sales, TV money, sponsorships, merchandising, player sales and prize money from competitions."

So what does that mean for us? I guess what we need is a "What it means to me (a Liverpool fan) guide"

* How much income do we have this season? - The Meireles money c/f; money from Warrior; money from Standard Charter; money from Garuda; money from player sales (Aquilani/Kuyt) and money from merchandising.

* How much expenditure do we have this season? - Salaries for existing staff and transfer fees for Borini and Allen (?).

* In theory therefore the amount we have to 'spend' is the difference between the two. What that difference may be? Well anyone's guess but it may be safe to assume it will be close to the 'net spend', at the end of the window. So I guess we'll know better on 1 September.

                                ---------------------------------------------------

What impact will the regulations have on us, our ability to compete and our chances of winning the League? The following is only my opinion - I may be miles of the mark (I quite often am):

* We seem intent on adhering to the 'rules' and are building our 'strategy' around them - which is fair enough: if  U.E.F.A actually impose sanctions against the transgressors. Can they? Will they?... Like many more; I doubt it.

* The 'sanctions' being considered look a bit toothless. Give them a warning? (they'll be shaking in their boots). Fining Abramovich or Sheikh Mansour? (your having a laugh). Deduct points at the group stage? After they've got their reward for qualifying? (not much of a deterrent).

I'm afraid, in my humble opinion, unless the F.A. reinforce the U.E.F.A. 'message' with sanctions of their own; the 'rules', (well meaning as they may be), are destined to fail.

Where such a failure, (if it should pan out that way) leaves us in terms of a strategy to win; f**k only knows. Big sponsorship and increased market share is relative to success (in my opinion) and we may end up finding it even more difficult to compete but I guess we'll just have to cross that bridge when we come to it.

It might not be all doom and gloom tho'. It may well be that the City and Chelsea will adhere to the F.F.P. 'rules' (now that they are at the top and have bigger revenue streams coming in) and all we'll have to do is catch up. That may take a while but (if they do) we might, at least, have a chance. 

Thank you bbb. That was an excellent read and simplified it even further than the idiots guide. I downloaded the UEFA PDF file and my brain just fried!. I haven't got the time to read through all that.

My thoughts on the FFP rules?, it is a minefield and Clubs will find loopholes, no matter what the restrictions are.

If they were enforced properly it would strengthen us but i can't see it happening.