UEFA Financial Fair Play Update

In June 2010, RTG wrote a piece about UEFA’s impending Fair Play Rules. Further details have since come to light which have clarified some of the rules. Firstly, we bemoaned the fact that the ‘carpet baggers’ like the Glazers, Hicks and Gillettes of this world, would still be allowed to continue to undertake highly leveraged buy-outs of football clubs. We now understand that this is not the case.

The amount of debt allowed by any club will be limited to the annual turnover of the club. Currently, both Chelsea and Manchester United fail this test. This explains United’s reported effort to make shares available on the Singapore stock market - a move that will turn that debt into shareholder equity but without the business restrictions that a London placing of the shares would entail.

Secondly, the ‘sugar daddy’ element, which up to now has seen Roman Abramovich and Sheikh Mansour financially dope their teams over the last few years, will also have restrictions in place. At the time of our first article, it was widely reported that any extra investment could be made as long as that investment was turned into equity and not debt. Again, this is not the case. UEFA have clarified the rule and there will be a gradually reducing level allowed, thereby progressively curtailing the ability of such sugar daddies to influence unduly transfer markets.

The real test, though, will be in the ability of UEFA to control and monitor its own rules effectively. Given how British football authorities have failed so categorically to enforce simple tests of ownership rules, RTG is really not confident. The real indicator will be to see how this summer’s transfer dealings go. If half the rumours that abound are true, then both Chelsea and Manchester City will embark on yet another transfer splurge. If so, you can bet that they are not the slightest bit worried by Financial Fair Play despite both failing by miles to meet the terms of the new rules.

It’s Official: Bryan Robson Agrees with Us!

“I disagree with people when they say football is a sport. Football lost its sporting thing when money started coming in and Sky TV and all that. Football’s a business”.

So said Bryan Robson as he was filmed secretly by Channel 4’s Dispatches program broadcast last month. But we don’t just need to take Robson’s word for it. This summer, without a major tournament for England to torture us supporters with, has provided further evidence of football’s interminable slide into commercialisation and, above all, the continuing shift of football’s focus from on field sporting prowess to off field business issues.

It’s been a summer that has seen legal challenges, a parliamentary investigation into football’s running, FIFA accusations and resignations, the initial phase of UEFA’s “fair play rules” implementation, and already its initial abuses, as well as further proof of the player tail wagging the club dog. Hardly surprising that you might have missed the fact that England put out teams for the European under-23 and World under-20 tournaments. Or, for that matter, that the two major tournaments for the Americas had taken place.

The season had not even ended when Swansea City were threatening a legal challenge to QPR’s promotion over their fielding of an ineligible player. The threat of action was only averted by Swansea bagging the Championship’s play-off promotion spot. Farcically, QPR’s fans were made to wait until just before kick off in their final match of the season to find out if their promotion was to go ahead. This is not the first time that legal actions between clubs have happened, as those who can recall Sheffield United’s successful compensation suit against West Ham over the Carlos Tevez affair, nor will it be the last – supporters had better get used to it as the financial stakes get higher.

Then, RTG’s favourite bête noire, FIFA, was mired in yet more corruption allegations. First Lord Triesman, giving evidence with legal immunity to a MP commons select committee, stated that England’s 2018 world cup bid was spoiled not only by desires from the usual FIFA suspects for cash bribes, but also by requests for knighthoods and UK state visits! Following that, in an astonishing mix of claims, denials and counter claims that brought to mind the phrase linking rats and sinking ships, Jack Warner resigned from FIFA, Mohammed Bin Hammam was forced to pull out of his presidential bid, Qatar’s 2022 world cup hosting was put in jeopardy and further FIFA Exco members were suspended. Out of the original 24 Exco members who were to vote on World cup bids, unbelievably, eight have now been suspended, resigned or been kicked out!

Sadly, Lord Triesman’s evidence appears to have come to nought and, worse, has illustrated the chasm that exists between the FA and the Premier League; the latter run by our other bête noire Richard Scudamore, who was quick to refuse to back up Triesman’s claims – despite being present when FIFA’s verbal “requests” were made. It also emerged that Scudamore effectively attempted to blackmail England’s World Cup bid in return for support for the Premier League’s infamous “39th game”. Proof, once more, that RTG’s assertion that the three separate governing bodies of football are all pulling in different directions. It is a subject that RTG will return to in the near future.

The reign of Blatter, therefore, continues without abatement and with the now customary smoke and mirrors of yet more lip service to “transparency”. Bizarrely, Placido Domingo, yes, that Placido Domingo, has been added as a resource to FIFA’s ethics committee, along with the octogenarian and eager recipient of FIFA freebies , Henry Kissinger. Yet again, it will be a subject to which RTG will return.

But don’t worry! UEFA’s initial phase of “football fair play rules” has kicked in this season. RTG has wholly endorsed the principles behind the rules – albeit with huge reservations given that it continues to allow highly leveraged club buy outs (à la Glazers at Manchester United) AND as RTG predicted, clubs would be bending the rules to fit.

I mean come on: Manchester City announce a $640 million, 10 year naming rights deal for the City of Manchester Stadium from City’s sister company Etihad, a ground not even owned by City. Compare that to the $300 million, 10 year deal announced at roughly the same time for the naming rights of one of the world’s most iconic venues, Madison Square Gardens. Clearly, this is a blatant case of, as Arsene Wenger put it, “financial doping”. Worryingly, the media, and Sky Sports in particular, seem to be ignoring the issue, apart from reporting the two objections raised by Arsenal and Liverpool. They’ve also ignored reports/rumours of Chelsea paying compensation to Porto over the “transfer” of Andre Boas Villas with funds drawn from outside Chelsea PLC – that is, it may not appear in Chelsea’s financial accounts. At the current moment, neither Chelsea nor Manchester City comes close to meeting the criteria for financial fair play. Yet, the majority of the media do not seem to feel this is an issue worth any significant comment. It will be interesting to see how UEFA responds to these issues.

Excuse us then, for not jumping for joy at the prospect of Sky’s claims that we are embarking (yet again!) on the most “exciting Premier League season ever” as the so-called sporting contest settles ever further into the grasping arms of financiers, lawyers and the world of cash stuffed envelopes being pocketed by fat cat administrators. It is after all your cash that is paying for all of this.

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