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Financial Foul Play?
Footytubeblog (Blog) 2 years ago
Uefa are ready to ban clubs from the Champions League if they continue to report huge financial losses. Europe’s governing body would argue that they’re performing in the best interest of the European game for the long-term, insisting that clubs invest in youth academies and stadiums rather than inflated transfer fees and astronomical wages. But could Uefa’s interfering spark a rebellion from the top clubs in Europe, forcing them to branch off into their own super league and thus cripple the domestic leagues they leave behind?

Uefa recently announced that European clubs totalled a loss of 1.6bn euros in 2010 and stressed that clubs had to comply and break-even or face harsh penalties such as expulsion from European competition. It is said that as many as 13 clubs would fail to break-even if the ruling came into effect now, however clubs are being given leeway of losses up to 45 million euros over a two-year period. But while the elite clubs in Europe certainly hold more power than their lesser counterparts, Uefa stressed that the credibility of the ruling meant that all clubs—no matter of status—had to comply.

But should Uefa be concerned of a backlash from their threats of cutting down squads and even banning clubs from the Champions League in extreme circumstances? The idea of the major clubs in Europe breaking away to form their own ‘super league’ is not a new one, something which would, of course, greatly increasing their revenue.
What would happen then to the most fashionable leagues in world football, and would Uefa look to ease on their demands for Financial Fair Play? While it is a concern that clubs could soon follow the same path as the European economy, it does significantly hinder the personal ambitions and targets of clubs if they are to be chained down by a ruling that they do not necessarily have to sit back and accept.

There is arguably more power collectively in all the major clubs in Europe than the governing body, allowing them greater leverage in a bid to carry on as they please. While enforcing these rules and insisting on the harsh penalties that could be imposed, Uefa are most definitely treading a very fine line with what they are demanding of their greatest assets.

Perhaps it favours Uefa to know that talk of a super league has been brought up and deflated for a number of years, with clubs continuing to weigh up the positives and negatives of the proposal. But while the figures being released are scarily high, is there room for Uefa to tell European clubs how they should be spending their money? The European champions, Barcelona, have reported huge financial losses of late, and yet theirs is a club that continues to perform in competitions while making good use of an incredibly successful youth academy.

But what of clubs who do not boast training facilities equal to that of Barcelona’s? Uefa are suggesting future investors would be attracted to clubs who plan to build equally impressive youth setups in the future, and rather than fast-tracking them up their domestic league, show patience in what could—not would—be a success in the future. What Uefa fail to understand is that the examples we’ve seen at Manchester City and Chelsea in England and now PSG and Malaga in Europe, is that investors, like fans, want to see exciting talents brought into their clubs. There is far less patience in football to expect the majority to sit on a youth academy that is yet to be established and wait for it to bear fruit. Those who put money into clubs, from supporters to Roman Abramovich, want success now and probably won’t want to conduct their business with both hands tied.

A risky game on the part of Uefa for sure; while the figures speak for themselves, it is not in the best interest of major clubs to be restricted in the manner in which Uefa are proposing. At the very least I expect a response from a select few when the FFP does eventually kick in.

Blog by Thomas Hallett



This blog does not necessarily reflect the views and opinions of footytube or its partners.
Atnighthawk (AFC Telford United) 2 years ago
Short Answer:

The governing body of World Football, that is FIFA, UEFA or whoever, does not need to be concerned about the power of the top clubs at all.

The reason for this is that currently most clubs in the World have no connection to those top clubs at all, indeed most fans do not support one of those "top clubs".

"Uefa are most definitely treading a very fine line with what they are demanding of their greatest assets" - No UEFA are not, ironically for UEFA, they appear to have realised that their greatest assets are not the top clubs. Their greatest assets are the people who will go and spend money to watch football, the people who love the game, who invest their time and money into football. Indeed it is why I always say you should love football not a team, sure support your home team or some team you just happen to have a bond with, but when it comes down to it don't defend your teams players if you can see they are just major morons who remind you of a piece of dog poop with their actions (Rooney, Busquets I'm looking at you), cause it doesn't just make your team look bad, it makes football as a whole look bad.

Think of how many supporters the top clubs have.... And now think how many supporters the rest of the football leagues non-top clubs (I. E ones that wouldnt get a super league invite) have, and I mean every team.

I'm not naive enough to think that there is not a more sinister reason for this crackdown on the game as a whole, but well.... Financial fair play is a massive step in the right direction
LAblaugrana (Barcelona) 2 years ago
Yawn.... This blog is so ill-informed that Mr. Hallet should be embarrassed. Barcelona has turned in profits for 5 of the past 6 seasons. Even Madrid, whose transfer spending over the past few seasons dwarfs Barcelona's, report profitable seasons more often than losses. Arsenal, Bayern, Manchester United, Liverpool and many others are also living within their means. Did you ever think that these top clubs who do follow the rules might actually tire of being outbid for top players by the petrodollar clubs. Why would these teams go on strike to stop a law that benefits them directly?

Furthermore, UEFA has stated on innumerable occasions over the past few years that debt accrued in order to invest in physical infrastructure of the clubs, I. E. Youth academies, will NOT be counted against teams in the financial fair play calculations.

The only teams this law will effect are teams that spend more than they earn over a multi-year period and by significant amounts. At the moment the only team that looks to be in danger of falling foul of the regulations is Manchester City, and even they will have four years to raise revenue and/or cut spending to get back in line
Achiox (Manchester United) 2 years ago
A good perspective from the author of the original post, but I totally agree with LAblaugrana - many teams are within their current budget; the exceptions to this are teams like Manchester City. However, I still feel as if other teams are bound to catch up to Manchester City's level of spending (and deficit). I didn't really follow the economics of football until I learned about the existence of a transfer market (which was only a few years ago, sadly). Most clubs today have never really been dominant clubs in their leagues. Be it giving credit to or blaming footytube, but I've heard many counterarguments that all have the same bulk in reasoning: most teams are just mediocre or "nobodies", until some external economic power siphoned capital into their wallets.

Perhaps Barcelona is an exception; they seem to be one of the few teams left today that earns most of their funding from their fan base, rather than rich owners or sponsors.

On a positive note, I especially liked the term "petrodollar club"!
Juno (AC Milan) 2 years ago
@LAblaugrana,

I would prefer to think the writer is right and not as ill-informed.

From Barca.

FC barcelona financial balance

Settlement OF accounts 2009/10 season

Trading income: 415.4 million euros
Operating costs: 486.9 million euros
Ebitda (Earnings before tax and depreciations): -82.6 million euros
Operating profit or loss: +22.4 million euros
Income / financial expenses: -71.5 million euros
Net profit or loss: -11.1 million euros
Cash flow: -79.6 million euros

Budget 2010/11 season

Trading income: 420.2 million euros
Operating costs: 428.1 million euros
Operating profit or loss: -7.9 million euros
Financial and extraordinary profit or loss: -13.5 million euros
Before tax net profit or loss: -21.4 million euros


Link: arxiu.fcbarcelona.cat/web/english/club/club_avui/i...

David Conn has written:
Across Manchester, United made £286m turnover, more than any other club if Arsenal's property income is discounted – yet the costs and interest on the debts the owners, the Glazer family, have loaded on to the club, pushed United into a losing £79m.

Double-winners in 2009-10 Chelsea, whose owner, the Russian oil oligarch Roman Abramovich, is always cited as a supporter of Uefa's break-even "financial fair play" principles, made the next biggest loss, £78m. Tottenham's successful push for Champions League qualification was achieved with a £7m loss and £15m investment from the owners, principally Bahamas-based currency speculator, Joe Lewis.

Net debt by Premiership




Since" Only actual "football-related expenditure", I.E. A club’s outgoings in transfers and wages will be counted over income from gate receipts, TV revenue, advertising, merchandising, sales of players and prize money is included in the assessment. Any money spent on infrastructure, training facilities or youth development will not be included", (from Wiki) , then clubs loaded with cash can be allowed to build state of the art youth facilities and provide top notch development programs and coaches for them. But hey, they can't buy big for youth also. That's the whole idea.

@Achiox, "Perhaps Barcelona is an exception; they seem to be one of the few teams left today that earns most of their funding from their fan base, rather than rich owners or sponsors."

You should state ManUtd lol. Man Utd if without that stupid family buying up their shares, probably won't even be in debt. They earned all their money from fans, merchandise, prize money etc. Glazers? They only loaded debts onto Utd.

Rich owners are not exactly a good thing......Read Sid Lowe' piece for an example.



When they decided to walk out on you...... We can sing a->Na-> Na->Na->Na->Na->Na->Na >Hey->Hey->Goodbye...... To the clubs....

Trust fans to shell out money. Not owners. If your owners loves the club(like Berlusconi, Moratti, or Gianni Agnelli), fine. If its a past time play toy or (Ahsan Ali Syed, Glazers,Thaksin Shinawatra), good luck.


Anyway, I don't agree with the writer's suggestion that the big clubs will walk out on the big ear. It's only a select few who almost cannot pass the financial fair play requirement. Not all the big clubs. Big ear will still have lots of supporting clubs. Breaking out to a super league has loads of problems. Match scheduling, lots of FA rejections and local clubs hatred, plus no top team wants/dare to finish in the super league's lower half of the table. Its a financial and image disaster. If you finish in lower half ->sponsors not willing to shell out big money-> image takes a big hit-> glory hunters switch allegiance-> need to spend more money to compete next year-> fails -> prepare to sack manager every single year -> pay severance fees - > worst off. All because it's a league. (Bear in mind UCL is still basically a year long cup tournament).
TheBarcaShow (Footytube Staff) 2 years ago
I didn't read the whole thing but Barcelona paid off 80 million in debt last season. As long as the trend continues they will be fine. Not sure about anyone else
Citehzen (Manchester City) 2 years ago
Right but had you read it you would see 70 mil then 21 mil losses for the past two years for barca.

As a city fan, I'm not dissing any club spending, but for those on the high horse, the last post proves that few big clubs are breaking even
Atnighthawk (AFC Telford United) 2 years ago
A super league would be THE stupidest move ever. Remove the current (and that word current is important!) top clubs and reorganise into a super league. Means less money from companies like sky for the premierleague OR the existing teams get the sponsorship money. New fans to the game that are around 5-11 now will start to watch the Premierleague and understand the concept of promotion or releagation. The Football League and the Premier League will not agree to being able to be promoted or relegated from and into the new super league, it will be a whole new game. My prediction is the teams that join the super league if one was ever created would not get to enter current competitions like the champions league, they would eventually bled fans as their league becomes nothing more than a harlem globetrotters style world of football and the rest of the world gets on playing the real game.

Most football fans want to watch football in their own country if they attend games, the rivalry between local clubs is great, its what fans want. Wages would hopefully have to be paired down a bit and be kind of realistic, so you may end up with less total money grabbers playing football, just people that love the game. Teams like Leeds Utd and Coventry may once again rise to to top league of English Football because Arsenal, Chelsea, Man Utd, Man City and Liverpool are not there. Teams like your "Evertons" and "Tottenham" would become the big names and if they were all you saw on tv every week for twenty years. Then they would be the current teams and the rest would beg to re-enter the league from their failed super league once they realise that they still have a lot of fans, but their power has gone and they are not a current big club. Hard to imagine it would happen to Milan or Barca or Madrid, but it could.... If you never saw them on tv and only playing each other or Man Utd etc. Plus you can't be sure those teams would be the best after 5 years, they might play a friendly versus Genoa and lose 3-1. All the papers will be paid money/told to say things like "This is the best league in the world" when really it probably isn't.

In reality a whole alternative to uefa/fifa rule would have to be offered for any super league to materialise and offered to all clubs in the world. The threat of a super league is a joke, any idiot can see it would eventually kill those clubs or you would end up with a situation much like you have with wrestling (anyone seen how bad that is recently), except that football as we know and love it would live on. Just without those current big clubs, but hey I can still go watch my local club and some bigger clubs on tv on free channels, not paid satellite.

I can just hear the sky financial director reading this, realise I'm right and realise he would have to buy the sole rights to almost every league in Europe to make a super league feasable.

But it won't happen anyway.

You should always live within your means, regardless if its sport or not, footbal clubs should not get a free pass either. Also Matt in the post below me makes a good point, so read that.

Matt (Footytube Staff) 2 years ago
The biggest issue I have with the financial fair play rules is it basically freezes all the teams in their current status.

What do I mean? Well take a small club that has a small stadium; Now under current rules someone can come into that club and blow all their cash and buy the best players win the league, grow their fanbase and then get a bigger stadium. Until we get to the point where the team is one that players want to play for so kids coming through your academy stay and play for you and the success continues and financial stability arrives.

Under the new rules you could build a bigger stadium and a top notch youth academy but you cannot over invest in players. So the likely outcome is your massive stadium will be half full and any good talent you produce will be bought by the bigger clubs trapping you in mediocrity.

There is a need for a new rules over investment in clubs just take a look at Portsmouth and the horrible issues they have had with awful owners which has resulted in administration and a failure to pay wages this month Link: www.bbc.co.uk/sport/0/football/16797287. But also look at Man City who with their owners seemingly endless cash reserves have broken into the top four and are challenging for the title with no money worries.

The difference between the examples is simply one could afford what they took on the other couldn't and that is what the governing bodies should of been ensuring.

So it will be a situation of 'as you were' at the top now
SimonHang (Real Madrid) 2 years ago
Agree.... Exactly what I was thinking.  
DerBomber (Real Madrid) 2 years ago
My main question would be, if the Super League does come to fruition, difficult as it may be, would the profit margin be as ridiculous as projected by the clubs. Think about it this way, as it is, even in the champions league, we won't see a clash of say between Madrid and Bayern, or Utd and Barcelona etc. So if that Super league is established, we'd see a Milan v Bayern (for example) at least twice in a season. This would cause its novelty to be lost, and as interest wanes, would there be that many people watching the league? Perhaps, the initial few seasons could be interesting, hence commanding that sort of revenue. But what of subsequent seasons? And let's not forget that the dominant teams are likely to gain more revenue, hence creating a division within the Super league itself. Pretty soon, we'll see the super league become a regular league. And that being the case, can there truly be that much of revenue?

Secondly, will the stadiums be able to generate that much of income, given that fans have to travel almost every week. Most fans would end up broke by the end of the first season. So, tickets would almost certainly be incapable of generating a decent income, compared to television rights.

Thirdly, if the Super league charges an extravagant price for television stations, many or most would end up boycotting the Super league, leading to much less profits than the projection.

At the end of the day, I have my doubts that the Super league can generate that much income as claimed by the clubs. And the system would probably remain. Having said that, the FFP would probably be imposed on all clubs, or there would be no champions league for them
Matt (Footytube Staff) 2 years ago
I think even after 20 seasons interest would be high, just look at the fervor around last seasons 'El Classicos' of which there were about 50 (sic).
Not to mention the likes of Manchester United v Liverpool who have played each other around 184 times and still we all sit down to watch it
Atnighthawk (AFC Telford United) 2 years ago
The super league would fail. Interest would be high but only because there would be a massive marketing engine around the whole thing. As soon as people realised that there is no promotion or relegation and no penalties for coming last, no extra competition for the winner, plus the revenue they would have to bring in would need to be massive, to cover all the costs, plus it ruins the clubs history as well. No Man Utd fan could start prancing about saying "19 Times".... Cause well.... It doesn't mean anything, you have kissed real football that matters to local people goodbye, in reality, you all start at 0. Milan fans will love to get onboard a plane every two weeks (sometimes every week if schedules are done badly), to go to Manchester and Madrid. Real fans joust would eventually die away. Guess what guys you can watch Real vs Barca on tv for only £25/$40 pay per view per game.... Most real people who don't earn millions will just watch the Championship on free to watch tv, and if the premiership is less attractive what on earth will happen when sky realises their subscribers are way down? Oh right.... Drop the PL contract and then we can all get along with how football was in the world before massive monopolies on the broadcast rights, which pushed up money clubs had, which pushed up wages which really.... Have caused this problem in the first place
Markodon (NK Dinamo Zagreb) 2 years ago
Stop modern football
HangTime (Chelsea) 2 years ago
No small club will be able to hold on to any good youth player. The big clubs will come knocking and buy them. As a result, the small clubs will never get bigger.

United buying Rooney from Everton
Chelsea buying Lampard from West Ham, Lukaku, Kevin De Bruyne from Genk
LIverpool buying Henderson from Sunderland
United and City got Tevez from West Ham
Everyone wanting Hazard from Lille.

Also, small clubs makes less money compare to bigger clubs. Small clubs will have less money to spend. No surprise that United make the most money from merchandise, tickets, jerseys, ect.... They're a big club with big name players with many many fans
Jeroen (Barcelona) 2 years ago
Lukaku was actually from Anderlecht but you could've mentioned Thibaut Courtois, who was, like KdB, from Genk.

Or you could mention pretty much every player in the last 4 decades that was anywhere between decent and great. There are as good as no players that can be considered greats of the game that didn't move to a bigger club at least once. It's the waterfall effect, and it happens everywhere. People here care about football, and because the transfer business is so obvious here, it's a major topic. But the same happens in business, where the best employees are head-hunted (read: scouted) and lured elsewhere, in world economics, where the big economical powers drain out all resources (human resources and natural resources) from less fortunate countries.

Anyway, that'll be all for my input. Financial fair play is all good and well, but whatever happens, just like in business-life, the big companies will find a way around them and still stay dominant. Look at City trying to bend the rules by being their own sponsor
Juno (AC Milan) 2 years ago
"There are as good as no players that can be considered greats of the game that didn't move to a bigger club at least once. "

Le God. Matthew Le Tessier. If he ever moved clubs during his playing career, I have no doubt he will win some trophies during his active period
Jeroen (Barcelona) 2 years ago
I was thinking of Le Tissier too, which is why I added 'as good as' There are others though. Jan Ceulemans played almost his entire professional career at Club Brugge and is considered Belgium's best ever AM/striker. Inter, AC and Real Madrid all tried to sign him up in vain. That was in the early 80s
Honestabe (Liverpool) 2 years ago
@Juno greats like Steven Gerrard, Ryan Giggs, Paul Scholes, Francesco Totti, Victor Valdes, Iker Casillas, Daniela De Rossi, Andres Iniesta, Xavi, Carlos Puyol, and Bastien Schweinsteiger have all been transferred so many times
HangTime (Chelsea) 2 years ago
@honestabe: you just mentions greats players who are already at a top notch club. Not really for Totti though
Juno (AC Milan) 2 years ago
Honestabe, tell those players to join Southampton for a start. Or their regional clubs instead of powerhouse champions that they are with.... Only a select group of people so blessed with talent stays at one club(championship chasing caliber). Even lesser for someone to stay at one club that has no ambition/hope of getting to Europe(avoiding relegation caliber)
Jeroen (Barcelona) 2 years ago
What bugs me most is that this guy (honestabe) just saw your comment, Juno, didn't derive from the fact you put quotation marks around the quote that it was a quote from MY post, and then he comes up with an argument that makes no sense.

My point was, to make it clear, that there are as good as no legendary players in the world who have not played at a big club in their careers. Le Tissier and his awesome precise passes and shots can be considered a true great, but there really are only a handful of guys like him in the entire history of football
Atnighthawk (AFC Telford United) 2 years ago
Haha I was thinking of Le Tissier when I read this too!
Billy27 (Liverpool) 2 years ago
I think clubs will simply devise new ways of circumventing the FFP rules. Etihad's £400m to Manchester City is good enough testament to what is to be expected from clubs in the future. I wouldn't be surprised to see companies chucking silly money for sponsoring the floodlights or the seats in the stadium.

Another point is, will fifa/uefa have the b@lls to ban the big clubs from participating? After all, the sponsorship money will take a hit. Now, who'd want to see the Champions League without Real Madrid or Barcelona for a start?
HangTime (Chelsea) 2 years ago
Does any Chelsea fan out there know about how much Chelsea can spend this summer? There's romours about Chelsea wanting Ronaldo and Higuain from for like 100m or ect. I know that this romour will not happen but can Chelsea spend that much this summer according to the FFP rule?



   
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