Manchester United Rumours Archive September 11 2012

11 Sep 2012 23:21:43
How'd the reserves do tonight?

Did anyone see the under21's last night as I would like to know how they actually played?

I would have expected them to have won easily but they lost 2-1.

Oxred

Apparently Kiko was poor again and being our only striker it made it difficult for us to get the goals. He was also at fault for a conceded goal. It was a friendly so not really that important.

Sydney!

Syd... do you see Henriquez playing in the next u21 game??

Oxred

I was surprised the Kiko hasn't been loaned or sold.

I think he will make his debut as a sub against Newcastle if the game is going our way. I have a feeling Pardew will play a weakened team like us.

Sydney!

Kiko's goal at Aston Villa was title decider for me that season...for a young guy at that situation it was just sublime...he surely knows how to finish and would have been a STAR player for us..don't see that happening anymore...

but as with all young players - if you don't support them enough...they are likely to be wasted! we dint win a single trophy during the seasons we were building CRISTIANO RONALDO....I guess Man United has to go trophy less for 1-2 seasons to give playing time for future stars to come up from our academy.

11 Sep 2012 22:49:57
Robin Van Persie took two knees to his thigh and was taken off for precautionary measures and it was not as bad as first feared... I know we are playing Wigan who shouldn't be under rated as proven on many occasions but even if RVP is not 100 percent maybe he should be benched and hernandez and Welbeck given a chance.

Na I'm not sittin in to watch kid and play and road runner fanny about for 90 minutes . I've got dream team points to play for .!Shandy !ps random thoughts based on alcohol consumption

If he's fit I say play him against Wigan. Then bench him for the Carling cup match against Newcastle to give Hernandez a run out with Henriquez.

Dan

Lol what? We pay 24m for him, we should squeez every game from him until he can't do it no more.

We already know of his injury problem, we better off get as many possible.

And what if we play him and risk further injury, ud all be pissed off then! after all, wigan at home should be a banker

duggo

Yea Wigan at home is a banker just like blackburn at ho... Wait a minute

Definitely agree that RVP shouldn't be played. Yes we paid a lot of money for him, but squeezing every game out of him isn't the answer when he's carrying an injury. One of the reasons why he was injured at Arsenal so much was that they rushed him back into the first 11 because they never had as many options.

(First post by the way and love the site, read it umpteen times a day. Thanks Eds!)

Kid n play! Haha, god I'm getting older!
Hip hop dance duo of the eighties I presume.

Supasub

11 Sep 2012 13:41:34
{Ed002's Note -

The Demystification of the Financial Fair Play Rules (FFPR)
Introduction

I will try and simplify and summarise the FFPR and give examples where I can.

Putting aside all of the "mother country" fluff, the fundamental purpose of the FFPR is to:
(1) Ensure that clubs are operating within their means with transparent financial reporting. Example: Arsenal has debt which they can manage from the money they make as a club (good). Anzhi has a very low turnover given the amount of money they spend on players through donations from wealthy owners (bad).
(2) Protect creditors. Example: When Portsmouth went bust they owed money for players (the extreme case being Glen Johnson who had moved to Liverpool but Portsmouth still owed Chelsea for), money to local businesses (tradesmen who had worked at the ground, newsagents etc.), utility companies, the police et al (bad).
(3) Encourage responsible spending. Example: Liverpool under Hicks and Gillett borrowed money against the value of the club in order to buy players (bad).
(4) Protect the long-term viability of European club football. Example: They want to avoid the scenario of clubs entering administration or going out of business.

The FFPR apply to all UEFA club competitions and will actively come in to force from the end of June 2014 taking account of the financial monitoring period (the season just finished) and the two prior reporting periods (the two seasons before that). So when they first start, the FFPR will look at the 2013/2014 returns, and they will give consideration to the 2011/12 and 2012/13 figures.

I should make clear that it is not the full accounts of a club that are being considered, but just the "relevant" income and the "relevant" expenses. "Excluded" expenses are critical to the FFPR calculations. To this end, all clubs will need to effectively produce two sets of accounts. An audited set which are provided to Companies House and the relevant revenue organisations, and a second audited return laying out the "relevant" income and the "relevant" expenses for the purpose of the FFPR.

Relevant Income

(1) Match day gate receipts. Example: The money made by the club from paying fans attending games. This includes income from cup games when played away from home – where a proportion of the gate money goes to the away side.
(2) Broadcasting rights. Example: Television income for games, money provided for radio broadcasting.
(3) Income from commercial activities. Example: Sales of bobble hats and rattles, club shop income, licensed income (e.g. DVD sales). In the future you can expect to see income from other media (e.g. streaming of games on a pay-per-view basis to the web and phones) increase.
(4) Prize money. Example: income from the Premier League, Champions League etc..
(5) Sponsorship. Example: Shirt sponsors (Standard Chartered, Samsung etc.), shirt manufactures (Adidas, Warrior etc.).
(6) Advertising. Example: Companies who buy time on video screens during games or hoardings at the stadium.
(7) Other operating income. Example: Payments made to a club for playing friendly matches in the Far East.
(8) Income from transfers: Example: All income from the sale of a player regardless of payment being due to previous clubs, the player himself etc. as they are allowable expenses which will later be deducted.
(9) Excess proceeds on the sale of tangible fixed assets. Example: The money Arsenal from converting part of Highbury in to apartments and selling them.
(10) Other income: Example: Interest on investments.

Relevant Expenses

(1) The costs of running the business (confusingly referred to as "the cost of sales" by accountants etc.). Example: Wages, ground maintenance, lighting, telephones, IT equipment, travel costs, policing costs etc..
(2) Employee related benefits and associated costs. Example: Costs of providing insurance, dental care, medical, employer NI contribution, housing, loyalty bonuses etc..
(3) Other operating expenses. Example: Payments for advertising, legal fees, agent fees, accounting fees, payments to players in relation to transfers, payments to player's previous clubs, etc..
(4) Amortisation or transfer costs. Example: The total amount of money paid to another club to transfer a player or, if a club decides to do so, the amortised cost for that year (where a club is spreading the cost of the transfer out over the length of his contract for accounting purposes).
(5) Finance costs. Example: Bank charges, interest on loans etc..
(6) Dividends. Example: The owners may take a dividend from the profits a club makes as income.

Excluded Expenses

(1) Depreciation of tangible fixed assets. Example: The loss, if any, in value of the stadium, cars, IT equipment etc..
(2) Costs associated with the intangible fixed assets (other than player registrations). Example: goodwill, franchises, trademarks, copyrights etc..
(3) Expenditure on youth development activities. Example: All youth development expenses (housing, schooling, travel, medical etc.) are excluded from the calculations.
(4) Community development activities. Example: Outreach programmes, donations to the local community and charities, provision of equipment etc..
(5) Tax expenses. Example: Monies paid to the Inland Revenue, VAT etc..
(6) Finance costs related to construction of tangible fixed assets. Example: The interest on the £300M loan to build a new stadium.
(7) Interest payments on old loans (pre June 1, 2011). Example: Any interest due on a loan taken out for whatever purpose before June 1, 2011 is excluded from the calculations.
(8) Certain expenses from non-football operations. Example: This does not really apply to British clubs, but in other European countries clubs are often "sporting clubs" and have basketball, football, hockey team etc. all under one business.

The Calculation

FFPR calculates from a club's "relevant" income and the "relevant" expenses whether the club is running at a surplus (profit) or deficit (loss) within a Monitoring Period (e.g. 2013/14). From this the FFPR decides if a club has met the "break even" requirement or not. This is not met if the "relevant" expenses exceed the "relevant" income by more than 5M euros (an acceptable deviation).

If the club exceeds this acceptable deviation, the owners of a club may contribute toward correcting it to a maximum of 45M euro over a rolling three year period (30M euro from 2015/16 on). Example: If Club X made a loss of 50M euro in 2013/14 due to the purchase of players, the calculation will ignore the first 5M euro and assume an owner contribution of 45M euro and there would not be an issue. However, for the two years following, there would be no allowable owner contribution as the full allocation had been used. If Club Y made a loss of 30M euro in 2013/14 due to the purchase of players, the calculation will ignore the first 5M euro and assume an owner contribution of 25M euro and there would not be an issue. But in this case, for the two years following, there would still be 20M euro allowable as owner contribution to cover further losses.

The Punishment

The Threat: If a club has been determined to have violated the "break even" requirement for a season it may be excluded from the next season's UEFA competitions.

Likely Situation: If a club can show it has been moving in the right direction and doing what it can to overcome financial issues, perhaps brought on by a recession (e.g. in Spain) then I would expect a strongly worded letter as a warning. Perhaps by then end of the 2016/2017 season, If a club has been determined to have violated the "break even" requirement for several seasons then it may be excluded from the next season's UEFA competitions.

UEFA are willing to make some exceptions to the rule and have already said they will consider:

(1) The quantum and trend of the break even result. Example: Chelsea has spent a lot this summer rebuilding an aging squad, so even with considerable additional income from winning the Champions League it could violate the "break even" requirement. However, spending less next season will show the club moving in the right direction. Expect a strongly worded letter in a couple of years time.
(2) Debt situation. Example: A possible "get out" for Barcelona, Real Madrid and Manchester United should they have a bad season and need to violate the "break even" requirement. Consideration will be given to the existing debt and the ability of the clubs to service that debt. The trend of the debt reducing and an excuse of "one bad season" and "need to rebuild the team" would likely result in a slapped wrist.
(3) Fluctuating exchange rates. Example: All non eurozone countries need to report the FFPR figures in euros which could fluctuate due to the exchange rate, whereas a number of the UEFA figures are fixed amounts (e.g. the 5M euro acceptable deviation).
(4) Projected figures. Example: UEFA will allow clubs to show that they are moving in the right direction if they provide projected figures showing that the "break even" requirement will be met in the following season.
(5) Force majeure. Example: Any extraordinary events or situation arising that is beyond the club's control will be taken in to account.
(6) Until then end of 2014/15 only - Ongoing reductions in wage costs. UEFA will be flexible over the "break even" requirement if a club can show that their wage bill has been reducing and with the exclusion of wages of players signed before June 1, 2010 they would have met the "break even" requirement. Example: An escape route for the likes of Chelsea prior to this season with Drogba, Anelka, Bosingwa, Kalou, Cech, Terry, Lampard etc. wages excluded from the calculations. A possible future escape route for the likes of Barcelona.

The Issues

There are a number of matters that UEFA still need to figure out and a number of concerns that certain clubs and certain national associations have. Off the top of my head:
(1) Loopholes: Whilst UEFA has done what it can to block any potential "loopholes" it is well aware that exclusion of wages for players signed before June 2010 is one it has introduced itself, and one that will be popular with the higher paying clubs as a short term escape route through to the summer of 2015. The matters of excessive sponsorship will be addressed via a cap to thwart the concerns over the likes of Manchester City abusing the rules. The cap has yet to be finalised but will require ratification.
(2) Soft Sponsorship: UEFA are concerned at the aggressive approach to obtaining sponsorship some clubs are taking. Questions are being asked about the ethics in clubs having airline travel partners, photocopier partners etc.. The Spanish clubs have raised this as a concern.
(3) National Sponsorship Variations: As we have seen tobacco sponsorship leave Formula 1 UEFA would like to see alcohol sponsorship out of football. We already have a situation where sponsorship by alcohol related businesses are forbidden in certain countries. Wealthy breweries are now focussing their sponsorship in other countries thereby creating a perceived imbalance in what income clubs are able to obtain in sponsorship. The French and Russian clubs have raised this as a concern.
(4) National Financial Distribution Variations: Concerns exist in countries where different models are used for distributing prize money, contributing to the grassroots game and distributing income from television and other media broadcasting. This led to an original request (rejected) from a number of clubs to restrict the FFPR to only the wealthiest of clubs, those with a turnover in excess of xM euros.
(5) National Taxation Variations: There is a considerable difference across UEFA nations in taxation, and this is seen to be reflected in the wages paid to players. The Spanish clubs have raised this as a concern.
(6) Third Party Ownership: Countries that allow third party ownership of players are seen to have a distinct advantage in being able to keep the costs of transfer fees low as they are only paying for a proportion of a player. The English clubs have raised this as a concern.

The Great Fear

Without going in to too much detail: (a) A number of clubs take the opportunity a once or twice a year to discuss various issues including changes in rules, television rights, the power of UEFA, exploitation issues for new technology streams, etc.. These discussions, the last of which were in late August, also always turn to the possibility and structure of a breakaway pan European league. Several are ex-G14 clubs, several are not, and some clubs decline involvement in such discussions. (b) The plan is that at some point a number of clubs would break away from their national leagues and UEFA. They accept that they would be banned from all existing club competition and the players would initially be banned from all FIFA competitions as well, but know that FIFA would be looking to negotiate in any case. It would be the end of UEFA in all probability and UEFA are very aware of this. It would also result in a restructuring of many of the national leagues. (c) The clubs would renegotiate their television rights, rights of distribution via other streams etc.. (d) It remains the greatest fear of UEFA and all major national authorities that one day this will happen.

So it will not stop City, PSG and Chelsea etc from spending perhaps £50m on a top player or two every summer, but would 'probably' stop a club spending £200m (net) in one season. So for me it doesn't really make much of a difference although clubs will tend to be more careful which can already be seen at City. Chelsea are not far from breaking even anyway, City will keep getting 'friends' to sponsor them until they fall in line, clubs like United & Arsenal are easily safe anyway and clubs like Anzhi couldn't give a rats ass anyway.

Ed002, thanks for taking the time out to do this, much appreciated. I do think this will make things more competitive, but United and other self sufficient clubs are dreaming if they believe it will stop City or Chelsea from spending £50m on a player.

Sydney! {Ed002's Note - The fear remains it will actually make the "elite" clubs stronger. I have seen a number relating to what Chelsea anticpate to be the final income from the CL win with prize money, additional sponsorship etc.. It is a very big number. Anzhi have already said that really don't care about being excluded from competition. Potential remains for a legal challenge of course.}

Ed002, I do have one question and hope you can answer it. You said 11 clubs attended a meeting, obviously these teams would strongly consider a breakaway, but teams like Manchester United (I'd imagine) would want to stay where they are, so my question is what would happen a) to the EPL if it's split up and b) what would happen to the UCL for the EPL clubs that have remained in the EPL? Thanks.

Sydney! {Ed002's Note - Putting aside your view that MU would wish to stay where they are, the issue would be money. There is every likelihood that the big money from television, sponsorship etc. would go with a breakaway league. It would completely rupture the operations of UEFA and I would expect it would require national associations like the FA to restructure their leagues. Nobody wants this but it is the eventual consequence I would expect. If I had to speculate, I would think (a) you might eventually see something like five or six EPL teams leave for two-tier pan European league; (b) the Premier League would be disbanded as an organisation; (c) the FA would restructure in to two 20 team divisions with lower leagues regionalised as they were many years ago; (d) FIFA would ban all players from the breakaway teams from International football - perhaps rescinding that position to stop FIFA breaking up as well. I could also see many teams lose their professional status. I would think we are probably 10 years away from any significant move at this time.}

Great insight thank you.

Sween

Summary, you say?

Demystification, you say?

Not really achieved either i'm afraid.

RedMist {Ed002's Note - I'll let you know when the pop up book version is available.}

Thank you Ed, and that will be it as I do not want to take up too much more of your time when everyone on this site will want a question answered.

I fully expect United and Liverpool to be interested in a breakaway pan league at some stage with their huge worldwide fanbases, TV money would be huge.

Sydney!

A really good insight to FFPR.

Thanks Ed002, I'm not usually too interested on the background more of a fan of what's on the pitch but good to get an insight to what actually will be taking place.

Giants14

Not being able to play for their country will probably be a bonus for players in 10 years time anyway. It's already losing it's appeal with the pressures and rewards of club football. Not that I'm bothered really, but FIFA will need to think of a bit more of a stick than that threat, because to many players and clubs it will be a chocolate covered carrot.

Sween

I hope you copied and pasted that otherwise you have far too much time on ur hands

Ozwald II {Ed002's Note - Jerks like you are the reason I should not bother making the effort.}

Cheers Ed.
Been waiting for that.
You could let me know when they change the meanings of the words "summary" and "demystification" too.
Thanks.

RedMist

So Ed, might that be saying that it is beneficial for a club to spend a ridiculously huge amount this summer just so the came clain a positive B/E trend and get off with a harshly written letter?

Dan {Ed002's Note - Clubs will spend what they need to spend. Chelsea had an aging squad and needed to replace players efor example. Clubs don't spend money for the sake of it.}

How some people can moan after this insight is beyond me! Thanks ed

Thanks Ed002 - this answered a lot of questions. I don't know how much of an affect it's going to have on the sugar-daddy clubs. It all depends on UEFA's resolve I guess.
Also, how you put up with some of the c**p on this site is beyond me!

J Bones.

Thanks a lot Ed, that clears a lot of things up! Don't let the negative posters get you down!

MattL {Ed007's Note - I will pass that on Matt, thanks. Some people seem to think that having a lower than average intelligence is an excuse for being an ungrateful a$$hole. It's not our fault that people feel the need to draw attention to their own stupidity.}

Thanks Ed 002 now at least we the normal fans have more of an idea

We appreciate your effort and ignore dikks like ozwald II

Pardoe

The vast, VAST majority appreciate the good work and tremendous effort all of the Eds put it on a daily basis. I hope they realise that posts like this are not in vain and greatly appreciated.

APC

Thanks ed, i've just printed it for a friend who has no internet.

Thanks Ed002 great work! Been waiting for your explanation and cheers for all the examples, made it all (slightly) easier to understand lol

As an aside - I hope the above helps explain to those who say 'United have bought the league in the past just like City and Chelsea have done' - that there is a difference. I think the phrases 'good debt' and 'bad debt' help show what the difference in approach has been between United and those other clubs. Self-generated and built on previous success, not generated by an indirect, external source of money. Obviously the way City and Chelsea won the PL was totally legal and legitimate at the time so I don't take it away from them for a moment...but they got there in a different way to us. We didn't 'buy the league' in that sense IMO. We did it in the way which I personally believe is the right way (in terms of protecting the long term sustainability of the game and clubs involved) and the way in which I believe FFPR have been implemented to encourage. Sorry rant over lol - I'm not trying to belittle City/Chelsea's achievements as they had to build a squad capable of winning games afterall, I just never understood the argument that we 'bought' the league just like those clubs and I hope the above explains it

Gav

'No internet'

Where does he live? Rhyl?

Sydney!

Thanks mate, great insights, i was actually looking for this, great job man, great site too, cheers!

Interesting article thanks Ed.

I don't like the sound of a breakaway league though, no thoughts for the travelling fans and the expenses, just a money grab.

Gav, that's correct, the term "buying success" is clubs purchasing vast amounts of players with vast amounts of money that has not been generated by the club via the club's revenue streams. Manchester United being a self sufficient club have always used the club's cash to purchase players. Therefore United have never bought success. If using your own cash to buy players is buying success, then every club that buys players have bought or are trying to buy success.

Sydney!

Great stuff ed! Thanks!

kdevil10

Thanks for taking the time to do that ed! i like most fans thought that that FFP would be the end of the likes of City and PSG's big spending, i didn't realise how much time they had to get their house in order. It makes me think that a big clubs most important signing will be a creative accountant rather than a 30 goal a season striker!

Andy B

Thanks Ed, APC is spot on the vast majority of the sites readers really value your hard work. Keep it up and thanks again!

Exactly Syd! I didn't mean to get onto this topic but thought the above 'model' is just how fotball clubs should be run, just seems common sense to me

It seems there are many loopholes but if it is fully implemented hopefully it will at least reign in the spending a little. A club like City would find it difficult justifying a £500m spend on players over a number of years as a 'one off' excersise

I agree with the noname above that the breakaway league sounds a bad idea. Could spell the end for regional football. But to be honest I find it hard imagining it happening any time soon - the first clubs to do so would have to be very brave

Gav

Fantastic post. Very interesting

Thanks to Ed 002 for a fantastic post on explaining the financial fair play rules. I can't get over the negative comments, FFPR is brought up by several and when it is explained in a straight forward manner, there are gobsh***s giving out, unbelievable.
Thanks again eds for a great site

Barca Devil

Fantastic post. Greatly appreciated and a very interesting topic.

I did have a question actually about point 3 at the top ("Encourage responsible spending".) The former Liverpool owners hicks and gillette are cited here as having spent money that was borrowed against the club, and that this is in violation of the new rules. Does this mean the glazers will have a lot to answer to? They bought the club on debt against us, aswell as god knows what else they've been up to.
Or does this rule only apply to transfer purchases?

Also was curious what the rules might mean to the likes of anzi's and man city's who will have a huge sum of money loaned/gifted to them by their owners. If they have to balance out their accounts, does that mean they would have to deassemble half of their squad just to pay the owners back and balance the books?

Reading that has given me a much better understanding of FFP, and as a surprise to myself, I understood it all, cheers Ed002

Here is the serious question though guys is this going to be a feature on football manager? because if so breaking the bank to get messi and ronaldo to OT might be made a lot harder for me

Great post. This will help fans understand why internally generated income is really important, which inevitably will keep bringing us on to NAMING RIGHTS of OT. Huge income could be raised through this which will help the club grow .... we have to develop our thinking and not stay stuck in the past. We must also seek competitive advantage and ignoring the income from naming rights of OT in my opinion shows that we are LUDDITES. Mr Gill take note .... you must demonstrate more commercial flair and drive.

Manchester United are £53m within the FFP guidelines calculated using last year's accounts. Arsenal were £45m in the safe, Chelsea -£8m, City -£142m.

United do not need to sell the naming rights to OT, but perhaps selling the naming rights to the South Stand could be an option in the future. Carrington too? But OT doesn't need to be renamed.

Sydney! {Ed002's Note - Thanks for doing that Syd. I will likely try and work up some examples giving all of the figures. If you have done that it would save me time as I will likely be back on the road for a while.}

Ed002, it's not an exact amount as the youth development is an estimation. It's estimated that Arsenal, City and United spend £10m on youth development and Chelsea, Liverpool & Spurs spend around £8m. Does that sound about right to you?

Sydney! {Ed002's Note - I will think about it Syd.}

Wow. edds if you had b00bs i would marry you. syd your not to bad either ;-p

without sounding like a broken record with everyone defending you. you guys as far as im aware do an awesome job. it has been mentioned before but would love to see profiles of edds and some of the regulars for that matter

your passion feeds my addiction

cheers

muffinMan