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Podcast Topic: What Do You Think About The Financial Fair Play?
Matt (Footytube Staff) 3 years ago
As part of the adoption of the Financial Fair Play the Premier League has announced a series of rules it plans to adopt. These Include:

  • Each team will not be allowed to make a total loss of more than £105m over the next three seasons

  • In the same period, clubs whose total wage bill is more than £52m will only be allowed to increase their salaries by an accumulative £4m per season.

  • Any club making a loss of above £5m a year will have to guarantee those losses against the owner's assets.

  • The severest punishment for breaking the new regulations is a points deduction.

The Premier League's regulations are much less strict than Uefa's for sides in European competition which only allow for a £39.4m loss over the three years before the 2014/15 assessment date.

In the vote Fulham, West Bromwich Albion, Manchester City, Aston Villa, Swansea City and Southampton are believed to have all voted against the regulation and Reading abstained so the two thirds majority required was only just acheived. In the three years only Manchester City, Chelsea and Liverpool have reported losses of more than £105m over the last three years.

Do you think these regulations are too tough? Do you think they are not far reaching enough? Let us know and we may use your comments in the Podcast.
Jondemassey (Arsenal) 3 years ago
I believe that there is a cynical side to Financial Fair Play.

Within a few years only the few elite teams will survive at a professional level. FFP will eventually ban Wigan, Norwich and the likes from the top leagues, because they "cant afford to be there"!

Because FFP is about one thing and one thing only.... Elitism! UEFA is knowingly sabotaging its own game; biting off the hand that feeds it, if you like.... And it is deliberate, because they are not stupid. It is effectively acting as an agent for the top clubs.

The very base-level problem here is the classification of player transactions as trading income and expenditure rather than capital investment for accounting purposes.

Let us look at Spain right now!

Inconsistent Real Madrid must be glancing furtively over their shoulders at the emerging threat from Real Sociedad.

We have previous! A couple of years back, struggling Atletico forked out €50 million on Radamel Falcao with the result that they have pulled alongside Los Merengues. They could not afford that money in reality; the €45 million they received for Aguero all went to service debts. They will never be allowed to do that again under FFP regulations. Therefore there will be no further challenge to the Real establishment from their cross-city rivals thanks to UEFA. Where is the levelling up there?

In turn, the young Basque side from Sanse may also be one player short of making a serious challenge to the big two next year. All they lack is the real finish at the sharp end. That missing player could be Edinson Cavani. But Cavani will cost £60 million. De Laurentiis said so, "if someone stumps up €70m, we can sit down and have a coffee!"

Ok, this purely hypothetical (the uruguayan may just prefer Juve) but it is a real situation that will occur regularly over the coming years. If Cavani were signed, however unlikely, as a €70 million asset on a 5 year contract and his fee costs (I. E. Wages) were written off over that term, Sanse would meet FFP. Then when they resold him, the asset would revalue creating a capital profit.

But that is not how FFP works. It is deliberately designed by UEFA so that only those clubs who are cash rich at the moment can buy Cavani as trading expenditure, I. E. Fast-food trading transacting. That shortens the list to a 9-club list across the continent. Yes, that many!

San Sebastian is not a small city but it cannot financially support a challenge to the Real/Barca elite at that level without financial help. That would require a rather large loan, the interest on which could be financially justified as a commitment to future European revenues.

Yet UEFA will "ban" Sociedad from signing Cavani under FFP regulations. However, Real or Barca can pay up to 150 million for him if they wish. Why? .... Because they are cash-rich!

Net result? UEFA has preserved Real Madrid's and Barcelona's hegemony over Spanish football. There is no levelling up of the game. FFP could not have been more elitist if it had been drawn up by the G14 themselves! This is totally 'financial "unfair" play'.

The irony is that, had Cavani been a capitalised asset rather than a direct cost, Napoli's trading loss record over the past few years would have been reduced to within FFP constraints. Therefore they themselves would not need to consider selling him, so that his trading profit can cover their wage costs elsewhere.

Thank goodness my beloved Arsenal won't have to face a challenge from cash-strapped Everton borrowing through the nose to sign Cavani!

Nobody with any love for the game would come up with such a sham as FFP, unless their own personal interests become paramount. So we have to ask; why has UEFA deliberately sabotaged the competitive nature of football? Are they individually getting some mutual clawback from the elite clubs who are benefitting from this fraud on the game? We hope not; we would rather they are just being stupid! But nobody out here in the world of the honest day's work trusts institutions any more; they are accountable to nobody. That applies to UEFA as much as to the egregious banks.

I believe that there should be some investigation into the true motivation behind UEFA pandering to the greed of the wealthy clubs, as if they were consultants employed by them directly. Because only UEFA and the Reals and Barcas of this world gain from Financial Fair Play. We need to know the real reason why this is happening.

Regardless of this, FFP needs to be redrafted on completely different accounting principles, otherwise football is finished as a professional game outside the TV-monopolising Champions League.
Mt1234 (Bolton Wanderers) 3 years ago
Pretty good first post. Quality thoughts

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