New UEFA FFP

[WolfLing]

Just been approved by UEFA.

The headlines.....

• Will be known as the Financial Sustainability and Club Licensing Regulations (FSCLR)
• 3 pillars to UEFA’s new rules: Solvency, stability and cost control
• 'Cost control’ refers to what the FSCLR calls the “squad cost rule”, which means a club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenues
• ‘Solvency’ means clubs cannot have overdue payables, for example to tax authorities, other clubs or employees
• ‘Stability’, meanwhile, refers to UEFA’s “new football earnings requirements”. The “acceptable deviation” — how much clubs can afford to lose — has increased from €30 million over three seasons to €60 million over the same period. Clubs in “good financial health” are allowed to lose an additional €10 million
• Another difference between FFP and FSCLR is in “fair value” and related-party transactions. The old rules said only related-party transactions had to be fair value. The new rules, however, say all transactions have to be fair value. As such, there will no longer be as much emphasis and time spent on determining related party transactions, all must be fair value. This would stop a situation where Etihad sponsor Man City for way over the market rate, then argue because they are legally not related entities, that it is within the rules

Whether the Premier League will adapt its own rules more in line with UEFA's will be interesting.

The cost control 'squad cost rule' piece will basically knee-cap any club trying to break the elite who qualify for Europe. A club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenues.

Take us as an example. Latest accounts show a revenue of £133m and wages of £95m, roughly 71%. So we can spend nothing on transfers other than any extra revenue we may get from qualifying for Europe.

There are already 8 PL clubs in excess of 70% wages to turnover.

More to come on this, but not good on first viewing.

 

[Mile End Wanderer]

Just been approved by UEFA.

The headlines.....

• Will be known as the Financial Sustainability and Club Licensing Regulations (FSCLR)
• 3 pillars to UEFA’s new rules: Solvency, stability and cost control
• 'Cost control’ refers to what the FSCLR calls the “squad cost rule”, which means a club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenues
• ‘Solvency’ means clubs cannot have overdue payables, for example to tax authorities, other clubs or employees
• ‘Stability’, meanwhile, refers to UEFA’s “new football earnings requirements”. The “acceptable deviation” — how much clubs can afford to lose — has increased from €30 million over three seasons to €60 million over the same period. Clubs in “good financial health” are allowed to lose an additional €10 million
• Another difference between FFP and FSCLR is in “fair value” and related-party transactions. The old rules said only related-party transactions had to be fair value. The new rules, however, say all transactions have to be fair value. As such, there will no longer be as much emphasis and time spent on determining related party transactions, all must be fair value. This would stop a situation where Etihad sponsor Man City for way over the market rate, then argue because they are legally not related entities, that it is within the rules

Whether the Premier League will adapt its own rules more in line with UEFA's will be interesting.

The cost control 'squad cost rule' piece will basically knee-cap any club trying to break the elite who qualify for Europe. A club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenues.

Take us as an example. Latest accounts show a revenue of £133m and wages of £95m, roughly 71%. So we can spend nothing on transfers other than any extra revenue we may get from qualifying for Europe.

There are already 8 PL clubs in excess of 70% wages to turnover.

More to come on this, but not good on first viewing.

This only protects the clubs already in the competition??

 

[Bawtry Wolf]

Just been approved by UEFA.

The headlines.....

• Will be known as the Financial Sustainability and Club Licensing Regulations (FSCLR)
• 3 pillars to UEFA’s new rules: Solvency, stability and cost control
• 'Cost control’ refers to what the FSCLR calls the “squad cost rule”, which means a club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenues
• ‘Solvency’ means clubs cannot have overdue payables, for example to tax authorities, other clubs or employees
• ‘Stability’, meanwhile, refers to UEFA’s “new football earnings requirements”. The “acceptable deviation” — how much clubs can afford to lose — has increased from €30 million over three seasons to €60 million over the same period. Clubs in “good financial health” are allowed to lose an additional €10 million
• Another difference between FFP and FSCLR is in “fair value” and related-party transactions. The old rules said only related-party transactions had to be fair value. The new rules, however, say all transactions have to be fair value. As such, there will no longer be as much emphasis and time spent on determining related party transactions, all must be fair value. This would stop a situation where Etihad sponsor Man City for way over the market rate, then argue because they are legally not related entities, that it is within the rules

Whether the Premier League will adapt its own rules more in line with UEFA's will be interesting.

The cost control 'squad cost rule' piece will basically knee-cap any club trying to break the elite who qualify for Europe. A club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenues.

Take us as an example. Latest accounts show a revenue of £133m and wages of £95m, roughly 71%. So we can spend nothing on transfers other than any extra revenue we may get from qualifying for Europe.

There are already 8 PL clubs in excess of 70% wages to turnover.

More to come on this, but not good on first viewing.

I think the 70% rule is the end point in 3 or so years, it starts higher. But I agree it’s designed to stop any one breaking the status quo.

 

[WolfLing]

This only protects the clubs already in the competition??

Exactly.

There’s already a huge advantage to them by having existing revenue streams more than double the clubs trying to compete with them. It enables them to spend far more on transfer fees and wages already.

But to add wages into the mix too?! It looks like an attempt to create a Super League within existing competition structures.

Those closest to competing with the highest wage bills won’t be able to spend any money.

Our model probably the best to make an attempt!

 

[Wolves Heathen]

So thats the FSCLR for the bulk of Clubs now where is the FSCLR for the so called bigger Teams ?, either the Clubs trying to join the Elite need to be allowed to spend more or the Elite Clubs have to spend less otherwise the Elite will remain Elite and Challengers will remain challengers and its Super League by the back door.

 

[sc91]

And the closed off shop finally pulls up the last ropes.

 

[JonahWolf]

Yup, this is more cosy club protection under the guise of sustainability.

La Liga already implemented something similar, which is why Barca had such a short term crisis, but then as soon as they filled the massive stadium back up and refinanced the debt they’re good to go.
Too little too late in terms of financial doping like City and PSG, another nail in the coffin for those bumping the glass ceiling like us.

 

[Jawwfc]

I may be totally wrong on this but I'm really surprised that there has never been some sort of legal challenge by clubs to some of the FFP rules.

I doubt it any other business would it be acceptable for an organisation to implicated limits on smaller businesses and deny investment.

 

[wolvesjoe]

This needs the Bosman treatment. It clearly, more than ever, breaks anti-competition rules.

Time to ring that lawyer.

 

[wwfc9]

Surely this holds us in good stead with fosun trying to grow the brand rather than relying on an owners millions whilst your club actually stands still …

 

[wwfc9]

Would have thought this is very bad news for the likes of Newcastle and villa but not for us in the future as long as the strategy works …

 

[Deleted member drgr12429]

So thats the FSCLR for the bulk of Clubs now where is the FSCLR for the so called bigger Teams ?, either the Clubs trying to join the Elite need to be allowed to spend more or the Elite Clubs have to spend less otherwise the Elite will remain Elite and Challengers will remain challengers and its Super League by the back door.

This.... Like others have said it needs the other clubs to group together and take it to court under anti competition rules. No way this would fly outside of football.

 

[Wolf316]

I may be totally wrong on this but I'm really surprised that there has never been some sort of legal challenge by clubs to some of the FFP rules.

I doubt it any other business would it be acceptable for an organisation to implicated limits on smaller businesses and deny investment.

Absolutely. I’m surprised that the clubs that this will negatively affect haven’t joined together and mounted a legal challenge.

 

[Minimalist]

Can’t claim to understand it well.
As usual probably made over complicated with lots of grey areas and potential loopholes.

Why not just say clubs can’t be in debt? Can’t buy players or extend contracts if they don’t actually have the money? If Newcastle’s owners wanna “give” them a billion then fine. But don’t let them borrow a billion in the clubs name.
(Honestly I’m not just trying to f man united like...)

 

[JonahWolf]

I may be totally wrong on this but I'm really surprised that there has never been some sort of legal challenge by clubs to some of the FFP rules.

I doubt it any other business would it be acceptable for an organisation to implicated limits on smaller businesses and deny investment.

There was. Citeh did it. Tied them in knots, dragged it through CAS, timed out some of the allegations, bluffed through the rest with favourable appointments to the committee, and paid a fine.
Those without the frightening financial might to litigate them forever, like Milan and one of Turkish big clubs, caught UEFA bans.

 

[Ironfistedmonk]

Got to agree with the above, these kind of financial restrictions only seem to benefit the big clubs and protect their positions, football is going to become as bland and boring as most other media is these days

 

[JohnB]

So how does this differ from FFP?

Sounds like there is more scope to make a loss over 3 years (we were hamstrung on this by reaching Europe too quickly and losses being lower than PL). This sounds positive.

Introduction of 70% limit on transfers, wages and agent fees sounds negative at first glance unless we build up revenue. Alternatively it means we have to sell to buy as will Newcastle, Villa et al. I’d note that it is also phased in 90% initially, then 80% and 70%.

Needs someone brighter than me to actually conclude how much better or worse this is than current FFP which clearly favoured those with higher revenue over those with “new wealthy owners”. My sense is this is similar and we remain left with the scenario that we need to grow revenue.

Whether this accelerates the need to expand stadium or we have a window left to add players or actually we are in a good position and this cements us in Top 10 is unclear.

 

[hollo]

We may need to build a new stadium to generate more match day income.

Can we build a super stadium on the existing site or relocate to outside penkridge.

Alternatively fosun could find a new farm team partner who have fallen on hard times but have a great co efficient rating in the last ten years(automatic europa league entry). Then we trade like crazy with the partner.

 

[bigwolf]

FFP or whatever nonsense they now want to badge it now has been and will always be a tool to maintain the status quo and elite clubs at the top.

 

[Timberwolf]

Absolutely. I’m surprised that the clubs that this will negatively affect haven’t joined together and mounted a legal challenge.

So what do they say to the arbitration committee, “it’s not fair we’re not allowed to get into monstrous levels of debt?”
Of course these rules help the clubs with the biggest turnover but horses for courses, those with more money, spend more money…and not always successfully.

 

[Wolf316]

So what do they say to the arbitration committee, “it’s not fair we’re not allowed to get into monstrous levels of debt?”
Of course these rules help the clubs with the biggest turnover but horses for courses, those with more money, spend more money…and not always successfully.

No they argue that it’s an unfair competition. Manure are in a ton of debt but are still allowed to spend bucket loads. The answer would be to stop loans and if owners want to spend money then they have to give it to the club not lend it.

 

[Fenrir_]

So how does this differ from FFP?

Sounds like there is more scope to make a loss over 3 years (we were hamstrung on this by reaching Europe too quickly and losses being lower than PL). This sounds positive.

Introduction of 70% limit on transfers, wages and agent fees sounds negative at first glance unless we build up revenue. Alternatively it means we have to sell to buy as will Newcastle, Villa et al. I’d note that it is also phased in 90% initially, then 80% and 70%.

Needs someone brighter than me to actually conclude how much better or worse this is than current FFP which clearly favoured those with higher revenue over those with “new wealthy owners”. My sense is this is similar and we remain left with the scenario that we need to grow revenue.

Whether this accelerates the need to expand stadium or we have a window left to add players or actually we are in a good position and this cements us in Top 10 is unclear.

It's worse I think. As far as I know we had a wage bill of roughly £95m, and also amortisation costs of £62m. So that £157m can only be up to 70% of our income, meaning we'd need a turnover of roughly £225m to stand still

In terms of us against sides like Villa and Newcastle who are paying massive wages it's good for us, in terms of breaking the top six, it's closing the door on that

That's how I see it anyway

 

[WolfLing]

It's worse I think. As far as I know we had a wage bill of roughly £95m, and also amortisation costs of £62m. So that £157m can only be up to 70% of our income, meaning we'd need a turnover of roughly £225m to stand still

In terms of us against sides like Villa and Newcastle who are paying massive wages it's good for us, in terms of breaking the top six, it's closing the door on that

That's how I see it anyway

And we’ve never turned over £225m and won’t be any time soon.

 

[Timberwolf]

No they argue that it’s an unfair competition. Manure are in a ton of debt but are still allowed to spend bucket loads. The answer would be to stop loans and if owners want to spend money then they have to give it to the club not lend it.

I think the United example probably doesn’t help either of our points of view. They earn enough to outspend us five times over and their debt isn’t from spending, it’s from the leveraged debt the Glazier’s used to buy the club.
City on the other hand are a basket case of shady deals.

 

[Fenrir_]

And we’ve never turned over £225m and won’t be any time soon.

Yep

It'll require regular sales of our best players to keep the model going, and ours was run quite tightly! If ever there was a time for all those ventures carrying the Wolves emblem to start paying off, it's now

 

[Timberwolf]

And we’ve never turned over £225m and won’t be any time soon.

What about Wolves Records?



>throws grenade and runs away<

 

[beppe7619]

We may need to build a new stadium to generate more match day income.

Can we build a super stadium on the existing site or relocate to outside penkridge.

Alternatively fosun could find a new farm team partner who have fallen on hard times but have a great co efficient rating in the last ten years(automatic europa league entry). Then we trade like crazy with the partner.

You can see why they want fans to drink in the ground so the money goes to the club. Also by adding more executive boxes. We need molineux to be a 24/7 venue to generate income

 

[RMNottm]

FFP or whatever nonsense they now want to badge it now has been and will always be a tool to maintain the status quo and elite clubs at the top.

Grasshoppers

 

[Mugwump]

Isnt FFP basically a restriction of trade? I've always felt surely its not up to anyone like the Premier League to dictate what a club can and cant spend. IF they want to act like idiots and get into debt thats on them.

 

[Wolf316]

Isnt FFP basically a restriction of trade? I've always felt surely its not up to anyone like the Premier League to dictate what a club can and cant spend. IF they want to act like idiots and get into debt thats on them.

Wonder if the Saudis that own Newcastle will have the balls to challenge it?

 

[Minimalist]

Isnt FFP basically a restriction of trade? I've always felt surely its not up to anyone like the Premier League to dictate what a club can and cant spend. IF they want to act like idiots and get into debt thats on them.

As long as you then let the badly run ones go bust and disappear.
Problem is once a badly run club gets in a big hole they then go bleating to governments(tax payer) or rest of league clubs wanting to be bailed out.

 

[WolfLing]

Isnt FFP basically a restriction of trade? I've always felt surely its not up to anyone like the Premier League to dictate what a club can and cant spend. IF they want to act like idiots and get into debt thats on them.

I suppose in a way it is.

But it’s the Premier League, UEFA, FIFA etc. that own the rights to all the leagues, cups, competitions, etc.

So for clubs to be able to play in those competitions, the ruling bodies set the criteria those clubs must adhere to in order to compete.

So it’s not really the ruling bodies that are saying, you must run your club/business in this way. It’s the clubs wanting to compete in their competitions and therefore having to adhere to the rules of those competitions. Any club can still do what they want, but face expulsion from the competitions if they don’t follow the rules.

I suppose the rules themselves could be challenged as being unfair, in that they don’t offer fair competitive terms for those with lower turnovers.

 

[wolvesjoe]

I suppose in a way it is.

But it’s the Premier League, UEFA, FIFA etc. that own the rights to all the leagues, cups, competitions, etc.

So for clubs to be able to play in those competitions, the ruling bodies set the criteria those clubs must adhere to in order to compete.

So it’s not really the ruling bodies that are saying, you must run your club/business in this way. It’s the clubs wanting to compete in their competitions and therefore having to adhere to the rules of those competitions. Any club can still do what they want, but face expulsion from the competitions if they don’t follow the rules.

I suppose the rules themselves could be challenged as being unfair, in that they don’t offer fair competitive terms for those with lower turnovers.

Private arrangements don't trump general legal. principles. That's a very complicated area, but anti monopoly or anti trust principles are favoured in arbitration as a rule, otherwise the law has no meaning. The protection afforded the silicon valley giants, however, in recent years does not augur well for legal challenge to the football cartel.

 

[Deleted member 8455jwf]

There needs to be a salary cap in the Football League, particularly Championship but FFP does seem odd to be legal although I have no understanding of anything to do with that so I am sure it is fine. Maybe something like clubs aren't forced to play and they voluntarily sign up for rules? I don't know.

 

[Chris H]

There needs to be a salary cap in the Football League, particularly Championship but FFP does seem odd to be legal although I have no understanding of anything to do with that so I am sure it is fine. Maybe something like clubs aren't forced to play and they voluntarily sign up for rules? I don't know.

I suppose it’s because it’s not a stipulation on what you can do as a business, it’s a stipulation as to what you have to do to compete in their competition.

No one’s stopping a club doing what they like, but to sign up to a given competition they have to follow their rules.

The penalties for not following are specific to the competition too, points deductions or expulsions aren’t levied on the business itself, just on the right to compete or place in that competition.

Similarly I guess they’d say they don’t physically demand money off the clubs as such, rather they restrict what they receive from the competition they choose to sign up to.

Im assuming the legal standpoint is you can gladly do what you want, just not whist taking part in X competition and as it’s that competition that makes these clubs relevant and pays them then they have to adhere to it.

With the premier league specifically the clubs are all shareholders in the league, so it’s probably a stipulation of their shareholding too.

EDIT: The QPR situation is probably the best example of this, the EFL wanted to punish them but QPR stuck two fingers up at them as they weren’t in their competition anymore which they legally could do. Once they were relegated again they had to go back with their tails between their legs as the alternative was not re-entering the Football League leaving them with no where to go.

 

[Deleted member 8455jwf]

I suppose it’s because it’s not a stipulation on what you can do as a business, it’s a stipulation as to what you have to do to compete in their competition.

No one’s stopping a club doing what they like, but to sign up to a given competition they have to follow their rules.

The penalties for not following are specific to the competition too, points deductions or expulsions aren’t levied on the business itself, just on the right to compete or place in that competition.

Similarly I guess they’d say they don’t physically demand money off the clubs as such, rather they restrict what they receive from the competition they choose to sign up to.

Im assuming the legal standpoint is you can gladly do what you want, just not whist taking part in X competition and as it’s that competition that makes these clubs relevant and pays them then they have to adhere to it.

With the premier league specifically the clubs are all shareholders in the league, so it’s probably a stipulation of their shareholding too.

EDIT: The QPR situation is probably the best example of this, the EFL wanted to punish them but QPR stuck two fingers up at them as they weren’t in their competition anymore which they legally could do. Once they were relegated again they had to go back with their tails between their legs as the alternative was not re-entering the Football League leaving them with no where to go.

Yeah good points, also doesn't take into account stadium, training ground, women's team so they can point to that as another part of it not being competition related.

 

[Chris H]

Yeah good points, also doesn't take into account stadium, training ground, women's team so they can point to that as another part of it not being competition related.

Yep, basically we won’t tell you how to spend your money, but we will dictate what you can or can’t do on the things that materially affect being a part of our competition.

 

[Sussex Wolf]

So how does this differ from FFP?

Sounds like there is more scope to make a loss over 3 years (we were hamstrung on this by reaching Europe too quickly and losses being lower than PL). This sounds positive.

Introduction of 70% limit on transfers, wages and agent fees sounds negative at first glance unless we build up revenue. Alternatively it means we have to sell to buy as will Newcastle, Villa et al. I’d note that it is also phased in 90% initially, then 80% and 70%.

Needs someone brighter than me to actually conclude how much better or worse this is than current FFP which clearly favoured those with higher revenue over those with “new wealthy owners”. My sense is this is similar and we remain left with the scenario that we need to grow revenue.

Whether this accelerates the need to expand stadium or we have a window left to add players or actually we are in a good position and this cements us in Top 10 is unclear.

Because the existing big clubs have revenue at least 2x of clubs like us, they will be allowed to spend at least 2x on their squad. If you’re a top player, where do you go? It’s chicken and egg. To grow your revenue to their level you need European football, but the system is designed to restrict smaller clubs from spending on their squad to achieve it.

Let’s also not forget the other change to European qualifiers which will see “coefficients” used to give an advantage to clubs with more recent experience in Europe or recent domestic league position - essentially reserving spots for the establishment even if newcomers somehow navigate the FFP hurdles.

It all stinks.

 

[Deleted member 8455jwf]

Because the existing big clubs have revenue at least 2x of clubs like us, they will be allowed to spend at least 2x on their squad. If you’re a top player, where do you go?

How does that differ from now?

 

[Sussex Wolf]

How does that differ from now?

UEFA set to abolish FFP in move that could affect Man City, Newcastle and PSG

UEFA are set to ditch Financial Fair Play (FFP) after ten years and usher in radical changes to the restrictions placed on European clubs. The governing body are due to replace FFP rules and impose…

talksport.com

The current rules essentially are designed to prevent running up large losses, but that’s it. The clubs could manage their affairs within that as long as they don’t run up large debts. The new rules specifically link spending on the squad (wages, transfer fees, agent fees) to revenue and will limit this to 70% of revenue. Clubs like Wolves have revenues a fraction of the Sky Six, and the new rules will convert that into an absolute squad spending cap.

The 30 European football clubs with the highest revenue

Almost half of Deloitte’s Football Money League comes from the English Premier League.

www.consultancy.uk