[Archived] FFP in the Football League

[Paul]

This is how I see it being done, and very easily.

Paul, this is why I said (or related company). I've not yet seen a specific rule stating that an owner cannot sponsor their own club and I don't see how that would be legally enforceable. If this is all about avoiding debt then I don't see a problem with sponsorship anyway.

Do you have a link to where you have read this? Are you sure it wasn't just a journalist's early interpretation?

I'm no expert on this and I haven't been able to find the article I read, I may have dreamt it, but I did come across this while looking

http://www.danielgeey.com/financial-fair-play-and-psg/

Related Party Transactions

In Annex X(E) of the FFP rules reference is made to “related party transactions and fair value of related party transactions”. The specific provisions of this rule are to ensure that owners of clubs are not able to artificially inflate a club’s revenues in order to bolster the chances of passing the FFP rules by providing the club with a massive sponsorship deal from one of the owner’s other companies. In many instances it could be particularly difficult to measure concepts of fair value for an asset or a discharged liability but UEFA is keen to ensure that few loopholes are available.

Annex X(E.7) states:

A related party transaction may, or may not, have taken place at fair value…An arrangement or a transaction is deemed to be ‘not transacted on an arm’s length basis’ if it has been entered into on terms more favourable to either party to the arrangement than would have been obtained if there had been no related party relationship.”

I also found the website below which is generally interesting on the subject

http://www.financialfairplay.co.uk/

I think the question of what is legally enforceable is very interesting, and I suspect you are right, BUT this is not about legal enforcement it is about what the clubs agree to under Financial FAIR Play. The concept is, as I understand it, all clubs sign up to a set of fair rules. If it is allowable to bend those rules the whole point of FFP is negated.

To grab the first name that comes to mind, Richard Branson buys Rovers and the Virgin group of companies start to sponsor the shirt for £100m per season, its clearly unfair because no other Championship club has access to such a deal and it's highly unlikley Virgin would pay £100m to sponsor Rovers unless Branson owned the club.

I feel the answer to these questions must consider the spirit of FFP and not the legality. Any club that signs up and then challenges the legality is clearly not entering into the spirit of what they signed up to.

[Stuart]

In many instances it could be particularly difficult to measure concepts of fair value for an asset or a discharged liability but UEFA is keen to ensure that few loopholes are available.

This is the key bit for me. Who decides that sponsorship of Ewood Park can not be valued at £100m? It's unique. It's like player sales. How is it fair that a Spurs player can been "valued" at £93m? Or a United player at £70m? Yet a Crystal Palace player will be valued at £3m? That's not a fair valuation either and is skewed by the 'big club' spin generated by Sky TV hype.

So what if Branson wanted to buy Rovers and bankroll it? Why isn't that fair? It could happen to any club. Now if he was loaning money to the club that it could never hope to pay back - potentially jeopardise the clubs existence - then that would be wrong. Isn't that the main worry?

Why is it fair that a club like Stanley can NEVER hope to do better than League Two? That they can never compete above that level?

North West clubs are severely hamstrung by the number of clubs in the area, ensuring that the football fanbase will always be spread thinly over many teams (which is exactly what gives rise to the Lancs County theory).

So a rule which revolves around size of fanbase/catchment area is completely and utterly unfair. And seems more about putting (and keeping) town clubs in their place whilst championing the ambitions of city clubs. As the city clubs rise to the top, support for the nearby town clubs will dwindle further creating a self-fulfilling prophesy.

[Paul]

I do see your point Stuart but there is also the sentence prior to the one you quoted:

". The specific provisions of this rule are to ensure that owners of clubs are not able to artificially inflate a club's revenues in order to bolster the chances of passing the FFP rules by providing the club with a massive sponsorship"

Providing the massive sponsorship when the product doesn't warrant the price paid is unfair on the other clubs in the league.

Football has been fundamentally unfair for some time and this has been growing to the point that we now have 5-6 clubs with a chance of winning most most of the silverware, the rest just make up the numbers.

I'm not a supporter of FFP, it's just another UEFA plan to "improve" the game. There'll be another in a few years.

[Stuart]

we now have 5-6 clubs with a chance of winning most most of the silverware, the rest just make up the numbers.

Very true, and I don't see how FFP will change that. It is just goon to create a pyramid out of the ret of the league and us townies will be battling it out to yo-to between Leagues One and Two.

If they want to kill football, they just need to kill the dream. Unadulterated FFP is heading in that direction.

In protecting the clubs, they may just completely alienate the clubs' fans.

[Baz]

They should be making rules so that:

the fan base / Local community has a holding in the club for the benefit of openness and sustainability

Clubs major assets cannot be sold off (i.e grounds / training grounds) unless they are being replaced

owners can put money into a club, but not by debt (eg Glazers)

owners cannot take money out of a club (see B'Pool)

[rhodie]

It cannot in any way be called Financial fair play, until they also restrict the income of clubs in each division, with more money given to lower league clubs to enable them to readdress the balance. The whole concept that has been voted in, surely must contravene E.U and British monopoly laws, smaller clubs are no longer able to expand even if they have enough income available to do so, irrespective of how it is earned, or made available. Even if they did level the playing field in each division, it still would be unfair because they are restricting fair trade in the "lower" leagues, therefore restricting their growth to be able to expand and compete into the premier league. The practice that is being implemented sounds eerily similar to what is happening in the workplace in this country, where the lower classes are being blamed and stigmatised for all the ills of the economy by having their wages and benefits cut whilst the upper classes (Bankers etc ) are chuckling away, earning more money than ever before, cuban cigar in mouth, bathing in champagne.