Financial Fair Play?

On May 27th of this year UEFA’s Executive Committee unanimously passed the UEFA Club Licensing and Financial Fair Play Regulations (FFP). These new restrictions will assess the finances of all clubs competing in UEFA competitions ensuring they comply with the break-even requirement that comes into force for the financial statements at the end of 2012. The main aim of these proposals is fairness indeed Michel Platini (UEFA President) has said that ‘The philosophy [of these new regulations] is that you cannot spend more money than you generate.’ With that in mind, by the end of 2012 in order for a team to be able to compete in the Champions League or the Europa League they must present a dossier to UEFA with proof of the following: break-even requirement; no overdues payable during the season (towards other clubs/employees and/or social/tax authorities) and finally a provision of future financial information (to ensure clubs can meet future obligations).
For a club like Manchester City, spoilt by the colossal riches of the very wealthy Sheikh Mansour, the only problem that they will face with these impending rules is complying with the break-even requirement. It has been acknowledged by club officials to be a “huge challenge” because of the size of City’s task to reduce their losses of £121.3m in 2009-10, and expected losses of £130m-plus in 2010-11. These losses are problematic for the Blues as they are primarily caused by the excessive transfer fees. UEFA FFP rules state that initial losses averaging £19.6m per year will be allowed, but from 2012-13, they will be capped at £13m per year (averaged over a three-year period), and from 2013-14, be capped at £8.7m per year. After several hectic spending sprees since the Sheikh’s takeover in August 2008, City have amassed a grand total of approximately £325 million on transfers alone, an astonishing amount considering the club’s lack of high-level European action. With many players reportedly on large contracts, in particular the likes of Yaya Toure and club captain Carlos Tevez the highest earners, City will have to curb the money they splash out on their lavishly-paid stars in order to meet UEFA’s strict criteria. With a squad that is sitting pretty in the top four of the Premier League at the end of 2010, City Chairman Khaldoon Al-Mubarak is aware that only ‘finessing’ is required in order for the Blues to be the top dog in England. Consequently apart from Edin Dzeko, the man it is believed City will hasten to add to their armoury, big-name or rather big-money signings will not take place in January as the Blues aim to cut their losses on expensive flops such as Roque Santa Cruz, Wayne Bridge and Emmanuel Adebayor. Whilst the club aim to lower their wage expenditure by offloading certain players, in order to ensure that they do not ‘spend more money than they generate’ the Blues will have to find other ways of avoiding losses in order to keep Platini’s army at bay.
One way the club can do this is to increase its popularity by trying to sell themselves commercially. Manchester City “the brand” has to be sold worldwide, with the Blues’ hierarchy securing major sponsorship deals with Etihad Airways and Etisalat, as well as their long running partnership with shirt sponsor Umbro. Indeed, the long term benefits of their commercial success mean that City will rely less on Sheikh Mansour pumping money into the club, therefore meeting UEFA’s demands. This is a strategy which has been approached by most major clubs in Europe – Manchester United, Liverpool and Real Madrid are just three names which spring to mind. Those three are clubs which are engulfed in history and idolised by many from all parts of the globe. It is a simple fact that not many (if at all any) African or South American children grow up wanting to play for Manchester City, it is hoped however that major success on the pitch will impact the club off it.
Despite the heavy losses shown in the club’s most recent financial report, City officials are confident that the club will meet UEFA’s financial restrictions by the end of 2012. They argue that although a significant amount of money has been spent on players and wages, an equal amount has been spent on the regeneration of stadium and its surrounding areas, as well as City’s global academy. It is believed that the introduction of City Square, as well as the proposed plans for the remainder of the land around Eastlands will increase revenue and make Manchester City a major attraction, both on and off the field.
This season it is imperative that City finish in the Champions League places because of the financial implications it has. Television dictates football nowadays, shown by every single Champions League game being televised – the majority by Sky – resulting in massive television revenue and global publicity. To increase awareness about Manchester City, the Champions League is a competition they must start competing in before these restrictions come into place.
When the Abu Dhabi United Group took over Manchester City in 2008 they stated that they had a clear ten year plan. They wanted to wake a sleeping giant and bring trophies to a success-starved club and bring joy to its loyal fans. They knew it would not happen overnight, but they will be hoping that in ten years time, young children growing up in places like Africa and South America will want to play for Manchester City.
by Matt Hill

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Matt Hill

Hi there! I'm Matt Hill, a 22-year-old sports journalist and broadcaster. Welcome to The Rising Blue. A blog predominantly about Manchester City FC. Thanks for visiting my site. If you like what you read (or don't like) hit me up for a chat on Twitter or add your comments to the story. You'll find me here: @matty_hill Any questions/recommendations/queries for the site or myself can be sent to matty.a.hill@gmail.com

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