Clubs to Sue UEFAon FFP

[Misfit]

Well I admit to being cynical but all the FFP will seemingly do is to cement the current status quo. Just about the only 4 clubs who have a legitimate shot in the few yrs are us, the barcodes, Pool and maybe Everton (although they are seemingly always skint these day for some reason). And even then, the cards are marked.

 

[Casparian]

Apologies in advance to BC, just found a couple of posts elsewhere that I felt give a good insight on two topics I have noticed in the past that people on here are always seeking information on namely FFP and more recently yourself regarding the new TV deal.

FFP....

The Premier League Financial Fair Play (FFP) rules are based upon,but are more lenient than,those laid down by UEFA (to cover clubs wishing to participate in European competitions).These rules apply from the start of the next,2013-14 ,season.

There are 2 broad considerations of the FFP rules:

(1) FFP losses
(2) Wages costs

(1) Unless an excess is specifically funded by an owner,no club is permitted to incur more than £15million losses over a three year period.”Excess” losses will be allowed up to £105million (ie an extra £90million )if they are funded by the owner acquiring newly issued shares to that value in the club together with a written guarantee also given by the owner to the premier league that he will personally fund any further such losses in the same fashion in the next three years.If he wishes to sell the club he has to “sell” the guarantee as well ie any new buyer must acquire the guarantee as well.


All clubs must,on an annual basis,supply audited accounts and financial projections to the premier league.The premier league has powers under the rules to intervene in a club’s financial affairs,for example by imposing transfer spending limits.Clubs breaching the £105 million limit face the possibility of a points deduction.

It is important to note that the losses under the FFP rules need not be those shown in audited accounts because there are two “expenditure exemptions”:

(a) Spending on “youth and community projects”
(b) Spending on stadium infrastructure

Any losses incurred through any of these two items will be ignored for FFP purposes.

ALL “related party” transactions between the club and its owners must be explained in detail to the premier league who must determine whether they have been properly accounted for by the club.This is designed to prevent any “shady deals” by the owner in the calculation of the FFP losses.

Note that the UEFA FFP rules specify only E(EUROS) 5million losses over a three year period with again a further E25million allowed regarding the intervention of the owner as in the above.

UEFA in its rules specifies an “ascending order punishment table” regarding breaches of its conditions.Although not all of them will apply to the premier league as a body some will and can be utilised by them:
• A warning or reprimand
• A fine
• A points deduction
• The withholding of revenue from a UEFA competition
• A prohibition on registering new players in a UEFA competition
• A restriction on the number of players deemed eligible for a UEFA competition
• Disqualification from a competition in progress or a ban from future competitions
• The withdrawal of a title or award


(2) Wages costs

The FFP rules introduce a “soft salary cap” whereby certain clubs are restricted in the amount of EXTRA TV MONEY that they can allocate to wages.The initial rules cover the next three seasons and are set out as follows:

Cumulative wages increase Total wages

From “Day 1” Threshold

2013/14 £4m £52m
2014/15 £8m £56m
2015/16 £12m £60m


Clubs below the “total wage bill” threshold do not need to apply the rules.

Note that the extra wages costs requirement links only to TV Money.Clubs can finance extra wages via match day and commercial revenue and any profits earned on the sale of players ( subject to the “loss” rules above).

It is understood that clubs found to be in breach of the wages rules will incur fines of up to twice the “excess wages cost” incurred.

Note that using 2011/12 data,only Stoke Fulham,West Ham ,West Brom,Norwich ,Southampton and Swansea will be exempt ,together with the three clubs promoted from the Championship this season.Villa’s 2011/12 bill was £75million.

Now for the TV deal in more detail...​

This post looks at the impact of the new “Sky deal” on our finances as staying ( hooray!) as a premier club.I am going to do a separate thread to look at the new Financial Fair Play (FPP) rules because these,like the “Sky deal”,come into play (together with goal-line technology,lots of changes!) at the start of next season.So this post looks at the extra income I believe we can expect next season and the two after that while the FPP rules look at in part at least what each club can do with the extra money obtained.I think it would be too much to take in in one post.

First a recap of the “Sky deal”- in fact it is a combination of Sky and BT.For the three seasons commencing 2013/14 Sky has contracted with the Premier League to pay £760m per season for broadcasting rights to 116 games per season ( including 20 “first pick” games).BT at the same time has contracted to pay £246m per season for the rights to broadcast 38 games( including 18 “first pick” games).

The two added together amount to £1,006m per season,compared to £594m under the recently-ceased deal.In addition,£60m per season is received from the BBC for “Match of The Day” (this contract also has just been renewed at more or less the same amount,£180m over three years)so that the “true” broadcasting income received by the Premier League from the UK (see below) is £1,066m for each of the next three seasons compared to £654m for each of the last three seasons (incl 2012-13).

I have put together some numbers to show how the whole cake gets split and then to show Villa’s individual share.The “old deal” figures are for the 2011/12 season since this season is not quite finished.During that season we finished 16th and had 10 TV appearances on Sky.The “new deal” figures, to afford a proper comparison,are based upon the same position and TV appearances(although it is hoped that we will do better than this). Some of the figures are based on best guesses since part of the available data is unclear and if anyone can do better then I am “all ears” but this my best attempt and does mesh in with the other thread.


After reserving some funds for its own use (some of which is passed “down the chain” to the grassroots game)the premier league puts the remaining “Sky money” into its “central funds” ,the mechanism by which it is passed through to the clubs.

My calculations for the “new deal” are that £973m (£637m under the “old deal”) will be available through these funds which are distributed in the following fashion:

(1) 25% (£243.25m) is allocated on the basis of merit.For the new deal £1.15m ( old deal £755,000) is allocated per place climbed from the bottom of the table.So the club finishing bottom will receive £1.15m but the club finishing 16th will receive 5*£1.15m = £5.75m ( and the league champions £23m)

(2) 25% ( £243.25m) is allocated as “facility fees” and is based on the number of TV appearances
with each club guaranteed at least 10 such “fees” .The exact allocation is not completely clear but I reckon for Villa to receive about £9.3m from 10 TV appearances.

(3) The remaining 50% is allocated evenly once the “parachute payments” are deducted.Again not totally clear but I believe the parachute payments to be about £60m per season.

So the remaining money after (1) and (2) and the parachute payments is £973m-£243.25m-£243.25m-£60m =£426.5m which is divided between the 20 clubs equally so that Villa will get about £22m.

But in addition to the “Sky deal” the premier league also contracts with foreign broadcasters,with the whole of this money divided between the 20 clubs equally once an amount is set aside for (further) parachute payments to relegated clubs.For the season 2011/12 these “overseas rights” totalled £418m of which £43m was allocated for parachute payments leaving £375m to be shared by the 20 clubs so that each club,including Villa,received £18.8m.

There is a new deal with overseas broadcasters about to be announced but it is believed to be in the order of £450m per season.Assuming parachute payments to be the same,£60m, as under the “Sky deal” this leaves £390m to be shared by the 20 clubs so that each club,including Villa,receiving £19.5m.

So assuming the same 16th place and 10 TV appearances in 2013/14 as in 2011/12 then Villa will receive £5.75m in merit payments and £9.3 million in “appearance fees” and £22 million in “pot” money from the “Sky deal” and £19.5m from the “overseas rights” deal,totalling £56.7million.

The corresponding income for 11/12 was £3.8m merit payments,£5.8m “appearance fees” and £14m “pot” money and £18.8m from “overseas rights”,totalling £42.4 million.

So an overall increase of £14.3 million,which could be increased by £1.15million for every place climbed above 16th and by about £1 million for each additional TV appearance.

The FPP thread will look at the new financial rules agreed by the premier clubs on 11th April,interesting to note that Villa was one of 5 clubs who voted against the rules but they were passed by a two-thirds majority.

Read more: http://www.astonvilla.vitalfootball.co.uk/forum/forums/thread-view.asp?tid=53464&start=1#ixzz2TUpF4zeF​

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[beats1]

Well I admit to being cynical but all the FFP will seemingly do is to cement the current status quo. Just about the only 4 clubs who have a legitimate shot in the few yrs are us, the barcodes, Pool and maybe Everton (although they are seemingly always skint these day for some reason). And even then, the cards are marked.

I disagree slightly as look at ourselves we have been cutting that gap slowly but surely whilst complying with FFP. Whereas its better than a load of foreign investors and only 2 having the cash to throw a billion £'s.

It doesn't matter what the outcome is, FFP is doomed if you ask me.
Even if they wrestle it into effect, the delay caused by the legal challenges (which will come) will allow the mega rich to consolidate or get their houses in order just enough to continue. It will do nothing. Anything that affects that and the clubs will push it into further legal wrangling to buy time or have it thrown out completely.

At best I fear we will see some lame version of it that is FFP in name but not in real substance.
Money has utterly corrupted the sport and the fat cats will get fatter.

The legal challenges have to come now otherwise they would of implemented a while back, Uefa have given a very long fucking warning to these clubs to get their house in order. And if somebody does challenge them it won't make a difference what they do as FFP next season would have to be lower loss. The whole thing of £60mill loss over 3 years is for already to get these clubs houses in order.

Also if Malaga do get banned as they clearly are atm then it will set the precedent and i find it hard to see how people will make a legal case against Uefa for not inviting them to the party. They made the rules and if they have unbiased independent party that assess every application there should be no issue as Uefa have acted in the right way prior to the rules.

 

[Riandor]

I disagree slightly as look at ourselves we have been cutting that gap slowly but surely whilst complying with FFP. Whereas its better than a load of foreign investors and only 2 having the cash to throw a billion £'s.

The legal challenges have to come now otherwise they would of implemented a while back, Uefa have given a very long fucking warning to these clubs to get their house in order. And if somebody does challenge them it won't make a difference what they do as FFP next season would have to be lower loss. The whole thing of £60mill loss over 3 years is for already to get these clubs houses in order.

Also if Malaga do get banned as they clearly are atm then it will set the precedent and i find it hard to see how people will make a legal case against Uefa for not inviting them to the party. They made the rules and if they have unbiased independent party that assess every application there should be no issue as Uefa have acted in the right way prior to the rules.

Well I certainly hope you are right... Just think the top EPL clubs will fight it or find a way round it. Hope i am wrong.