Financial Fair Play / Profit & Sustainability

[Abacus]

1 minute ago, The College Dropout said:

`That's fine.  My point is - we paid for a player at the peak of his value. We need to sign players that we could potentially double their value.

 

Only Bruno has done that. Gordon probably gone up 50% in value this season alone..

You could argue that Isak could well be in that bracket too. Obviously, we don't yet know about Tonali or Hall. Livramento looks to fit into that potential bracket.

 

So, in general, I'd agree, but you also have to recognise that it's a risk as they won't all work out, and some years maybe none will. So balancing that with a few more proven players should be a reasonable way to balance that risk.

[Ben]

This does not look good for us, we are maxed out now with our spending.

 

[Slim]

Did we vote for this?

[r0cafella]

5 minutes ago, Ben said:

This does not look good for us, we are maxed out now with our spending.

 

Wanted to read it but paywall. 
 

That being said, it has been discussed that the new rules would make things even worst for us. 

[r0cafella]

Just now, Slim said:

Did we vote for this?

Yes, we did indeed.

[Guest]

Just now, Slim said:

Did we vote for this?

Turkeys and Christmas come to mind 

[arnonel]

The only way we progress it to:

• Buy the best youth and get them bedded in early
• Invest in the best youth and training facilities
• Invest in the stadium
• Increase commercial income 

Buying for the first team will break us, unless we do a lot of trading

[Keegans Export]

The (potential) drop from 85% to 70% makes qualifying for Europa or Conference League a massive black hole.

 

You have to cut your outgoings but without the big boost in income that Champions League football provides.

[Ben]

3 minutes ago, r0cafella said:

Wanted to read it but paywall. 
 

That being said, it has been discussed that the new rules would make things even worst for us. 

all the story and info is in the comments 

[r0cafella]

3 minutes ago, Ben said:

all the story and info is in the comments 

Thanks Ben, I stubbornly refuse to sign up for Elons Nazi breeding ground. 
 

That being said, the new rules are even more revenue dependent and seemingly without the ability for any direct owner investment. 

[The Prophet]

36 minutes ago, Ben said:

This does not look good for us, we are maxed out now with our spending.

 

 

It's information from the 21/22 accounts.

[The Prophet]

31 minutes ago, Jack27 said:

Turkeys and Christmas come to mind 

 

Pick you battles innit. Alignment with UEFA is inevitable, particularly with 18 other clubs backing it.

[FLUMPO235]

1 hour ago, Abacus said:

There aren't many industries where owners aren't allowed to invest what they like in a business. It comes with the risk that it doesn't pay off, or that the company goes bust.

 

Going bust is sad for the employees and suppliers but a fact of life. Clearly football clubs are different, as they are cultural assets and important to communities too and as you'd affect the rest of the league.

 

So, normally, you'd think it would be enough just to ensure those owners can guarantee that they can cover any liabilities for the foreseeable future, and let them get on with it.

 

I do see the issue here which is this would allow the richest owners who could invest and provide those guarantees to dominate a league. But that's always been the case. It's just that right now the oil states are the richest of all and so could if they chose to financially dominate the league.

 

But again, I can't see how that is different to how it's always been or how you can effectively legislate to prevent one set of owners to financially dominate but keep another set where they are forever (who have got there themselves from previous spending and/or their historical reputation), due to the fear that a bigger fish will come along and threaten their dominance.

 

Whatever you think of the respective ownerships themselves, that can't be right. If gotten rid of, the fear could be that this  drives away existing owners who can't or won't compete (like the Glazers, what a shame), or dissuades anybody else from coming in and trying.

 

But FFP as it stands will also dissuades anybody else from coming in and trying, so I don't see what problem it actually fixes even if you are a neutral who supports it.

The problem is football isn’t really like other businesses/industries so it’s difficult if not impossible to compare.

 

If the owners of Man City decided they were going to do the same model they did with the football club but for Morrisons, I think they would have been stopped under various competition and flooding laws.

 

the equivalent would potentially be, buy Morrisons and decided to bring all the food quality up to and exceed M&S while reducing and undercutting the prices massively. Provide everyone with a personal shopper who carries your basket, free refreshments for everyone and have a limo pick up and return everyone to their house.

 

obviously I’ve dramatised that a bit. But the investment from Man City owners and their motivations and practices would not be accepted in pretty much any other industry.

 

A similar comparison is what the EU are going to do with Chinese cars. They are biding their time at the moment. But at some point they are going to step in as European manufacturers can’t compete on price with the Chinese state produced flood of basically slave built cars that are coming.

 

football can’t really be compared. 

[Colos Short and Curlies]

23 minutes ago, FLUMPO235 said:

The problem is football isn’t really like other businesses/industries so it’s difficult if not impossible to compare.

 

If the owners of Man City decided they were going to do the same model they did with the football club but for Morrisons, I think they would have been stopped under various competition and flooding laws.

 

the equivalent would potentially be, buy Morrisons and decided to bring all the food quality up to and exceed M&S while reducing and undercutting the prices massively. Provide everyone with a personal shopper who carries your basket, free refreshments for everyone and have a limo pick up and return everyone to their house.

 

obviously I’ve dramatised that a bit. But the investment from Man City owners and their motivations and practices would not be accepted in pretty much any other industry.

 

A similar comparison is what the EU are going to do with Chinese cars. They are biding their time at the moment. But at some point they are going to step in as European manufacturers can’t compete on price with the Chinese state produced flood of basically slave built cars that are coming.

 

football can’t really be compared. 

 

You're missing a bit here, buying a football club is not reducing the choice or reducing the market for customers in a way it would if Tesco took over Sainsbury. The comparison you would need to look at here would be the City owners now buying up the likes of Oldham, Blackburn etc and merging them all into the City umbrella so they become reserve teams or the grounds used for training purposes only.

 

What the City owners have done is come into an industry and offer a premium to purchase the best that is available. That would be fine in pretty much any industry. The problem is with the rules that the PL and UEFA have now put in place that restrict the ability of others to do the same. You can look at whether City have played by PL rules but that is a matter between them and not competition law.

 

The more I think about this the more I'm coming down on a FFP challenge never seeing a court room. If you look at cases on competition law they take forever to get through the system. The UEFA/PL lawyers know that there is at least a 50% chance the rules would be deemed illegal and operate them based on clubs voting them in. What will happen on a challenge is that they will make some quick changes that will soften FMV rules to allow a certain amount of related investment and will change the punishments to be a fine on first breach with an allowance of mitigating circumstances to be remedied within a 12 month period (so for example Forest would be let off by showing the value of player sales after the 1st July etc)

[The College Dropout]

42 minutes ago, FLUMPO235 said:

The problem is football isn’t really like other businesses/industries so it’s difficult if not impossible to compare.

 

If the owners of Man City decided they were going to do the same model they did with the football club but for Morrisons, I think they would have been stopped under various competition and flooding laws.

 

the equivalent would potentially be, buy Morrisons and decided to bring all the food quality up to and exceed M&S while reducing and undercutting the prices massively. Provide everyone with a personal shopper who carries your basket, free refreshments for everyone and have a limo pick up and return everyone to their house.

 

obviously I’ve dramatised that a bit. But the investment from Man City owners and their motivations and practices would not be accepted in pretty much any other industry.

 

A similar comparison is what the EU are going to do with Chinese cars. They are biding their time at the moment. But at some point they are going to step in as European manufacturers can’t compete on price with the Chinese state produced flood of basically slave built cars that are coming.

 

football can’t really be compared. 

Uber did this. As did Amazon. Making billions in losses over several years as they gained market share.

[FLUMPO235]

22 minutes ago, Colos Short and Curlies said:

 

You're missing a bit here, buying a football club is not reducing the choice or reducing the market for customers in a way it would if Tesco took over Sainsbury. The comparison you would need to look at here would be the City owners now buying up the likes of Oldham, Blackburn etc and merging them all into the City umbrella so they become reserve teams or the grounds used for training purposes only.

 

What the City owners have done is come into an industry and offer a premium to purchase the best that is available. That would be fine in pretty much any industry. The problem is with the rules that the PL and UEFA have now put in place that restrict the ability of others to do the same. You can look at whether City have played by PL rules but that is a matter between them and not competition law.

 

The more I think about this the more I'm coming down on a FFP challenge never seeing a court room. If you look at cases on competition law they take forever to get through the system. The UEFA/PL lawyers know that there is at least a 50% chance the rules would be deemed illegal and operate them based on clubs voting them in. What will happen on a challenge is that they will make some quick changes that will soften FMV rules to allow a certain amount of related investment and will change the punishments to be a fine on first breach with an allowance of mitigating circumstances to be remedied within a 12 month period (so for example Forest would be let off by showing the value of player sales after the 1st July etc)

I wasn’t comparing it to a supermarket buying a supermarket. What city did was not reducing competition like that. They have effectively used huge finacial flooding. Which in a lot of other industries isn’t allowed. 
 

the other observation that Amazon and Uber have done similar is a better comparison. All be it that they maybe did get away with it.  
 

 

[FLUMPO235]

8 minutes ago, The College Dropout said:

Uber did this. As did Amazon. Making billions in losses over several years as they gained market share.

That’s an interesting comparison. 

[The College Dropout]

9 minutes ago, FLUMPO235 said:

I wasn’t comparing it to a supermarket buying a supermarket. What city did was not reducing competition like that. They have effectively used huge finacial flooding. Which in a lot of other industries isn’t allowed. 
 

the other observation that Amazon and Uber have done similar is a better comparison. All be it that they maybe did get away with it.  
 

 

In what industry are you not allowed to enter the market, make tons of losses serviced by investment?

Nearly all tech startups operate on that model. 

 

Football has national monopolies and duopolies and everyone thinks that's fine. The rules are no other club can invest as much as Man City in England. In Spain no club can spend as much on wages as Real Madrid. Real Madrid are allowed something like 2x the salary cap as their nearest rival. It's awful for competition and wouldn't be allowed in any other industry.

 

Honestly, the fact we've not tried to play hardball, not tried to exploit loopholes, not landed major progress on the stadium or training group is disappointing.  As I've previously said the next 12 months will be key. If we are as aggressive and tenacious about our supposed ambition as we believe - we'll need to see some movement on these fronts.

 

 

Edited March 18 by The College Dropout

[ToonTastic]

1 hour ago, The Prophet said:

 

It's information from the 21/22 accounts.

Yep and that's the important part. The club said they were meeting what was necessary when we were in the CLs this season. Income will rise again this season with Sela money and CL cash so that's another bonus. Next season will be the first season of the Adidas money on the books as it starts after this seasons results. 

We'll definitely have space to expand with funds this pre season but we'll have to keep it manageable with lack of CL next season. The money will increase again next pre season and in the mean time we'll have to keep increasing our income streams. 

[buzza]

1 hour ago, r0cafella said:

Thanks Ben, I stubbornly refuse to sign up for Elons Nazi breeding ground. 
 

That being said, the new rules are even more revenue dependent and seemingly without the ability for any direct owner investment. 

Just go to the swiss ramble website, free to read...

 

[Miggys First Goal]

I have to admit, this isn’t how I saw things playing out back in October 2021. 

 

 

Edited March 18 by Miggys First Goal

[The Prophet]

 

[Keegans Export]

I've said this before but I wonder whether we are (mostly) playing along with all these new rules because we (or specifically PIF/the Reubens) think we can exert more pressure over a government-appointed "independent" regulator than Masters et al 

[Guest]

I’m absolutely sure this current government will get that appointment right 

[gbandit]

Chris Grayling will be receiving the call right now