Trying to Make Sense of Financial Fair Play

By: Homey | September 5th, 2011

This is really one of the biggest questions in the minds of Arsenal fans these days – what should we make of Financial Fair Play? As I wrote in my last blog, and as everyone already knew anyway, we most certainly don’t have a sugar daddy type owner. At the same time, we also know that our club makes a ton of revenue, and would compete pretty well with the giants in Europe if every club lived within its means. Before I get too far into this blog, I’ll simply say that this is a very complex issue to sort out, and we won’t really know if FFP has any teeth to it for another couple of years. But let’s see what we can learn, shall we?

OK, starting with the most basic principles of FFP, it says that UEFA clubs are supposed to spend within their means, more or less. There’s still some wiggle room, but the idea is to shut off “financial doping” by billionaire owners or other outside sources. Even if it’s implemented fully and completely, it will still be a far cry from some of the firm salary caps we see in North American sports leagues. There will still be “haves” and “have nots” no matter what. And in fact, FFP could even work to prevent the “have nots” from rising up, because it should be impossible for a smaller club to spend its way into the elite through a wealthy benefactor. Furthermore, a club like Real Madrid, which is a clear #1 in the world in revenues, has no FFP issues to worry about. Yes, you read that right. Despite their unbelievable spending over the last several years, their immense revenues are still larger than expenditures, so they will not be deterred by FFP at all.

Anyway, let’s move on to the next basic principles of FFP. Punishment for non-compliance can come in the form of a ban from European competition, so the penalties can be stiff. These penalties will not kick in until the 2013-14 season. So in theory, a club can spend whatever it wants for now, with no worries for the next couple of years. However, in that season, FFP will look at its first “monitoring period,” which will be the preceding two seasons. Therefore, FFP has already begun this year, for purposes of the first monitoring period.
FFP-accounting-periods
The chart that you see above was borrowed from a good source on this issue, Sporting Intelligence. I hope all their facts and figures are correct in that article, because I’m relying on them heavily. As you can see from that chart, clubs can continue to incur losses, but those losses are to be gradually phased down to reasonable levels.

The best source on financial data in UEFA seems to be Deloitte’s Football Money League, even though their most recent figures are based on 2009-10. In that listing, Arsenal ranks 5th, and trails only Man Utd among English clubs. That top 5, in order, looks like this, with all figures in millions of pounds:
Real Madrid – 359; Barcelona – 326; Man Utd – 286; Bayern Munich – 265; Arsenal – 224. Taking the Spanish giants out of the equation for the moment, there really aren’t any clubs in a different stratosphere than Arsenal, so that’s encouraging.

So ignoring the rest of Europe for a moment, let’s turn our attentions to our biggest three rivals in the financial department – Man Utd, Man City, and Chelsea. My first paragraphs on each will focus mainly on the “bad news” for each, but I’ll come back to various methods for each to comply in a later section.
Utd vs. Arsenal Financials
I’ll start with Man Utd. The chart to the left was borrowed from a Swiss Ramble blog on Man Utd’s finances (keep in mind it was from October 2010). I won’t pretend to understand all the line items in that chart, but it’s clear to me that they’re operating at a loss, due to massive interest payments. That tends to happen when the owners don’t have nearly enough money to buy the team in the first place. Overall, I’m not really sure how to sort out United’s future in a FFP world. On the one hand, their revenues are well beyond ours, and should continue that way into the future. On the other hand, interest payments are still a part of profit and loss, of course. So unless their loans are magically paid off in the near future, I could see them running into some FFP problems, as I understand it.

Next, let’s look at Man City, the club most people want to talk about these days when it comes to financial doping. The latest figures I found, which accounted for the season ending in the summer of 2010, state that they lost a whopping £121 million in just one year. Now of course their revenues are going to go way up starting this year, based largely on qualification for the Champions League. But still, there’s a long way to go before they’re “only” losing under £20 million per year, which is what they’re supposed to be doing starting this year.

Finally, there’s Chelsea, the club that still has the highest payroll in the Premier League, even if their recent transfer spending hasn’t quite matched Man City’s. In the same reporting year ending in the summer of 2010, they lost nearly £71 million. Yet if you asked their executives, they’re not particularly worried about the looming restrictions of FFP.

Ok, so that’s the bad news for our three biggest financial rivals in England. But if it’s all bad news, then why are we seeing no major changes just yet? This summer started slowly for both Chelsea and Man City, with very few new purchases. There was guarded optimism that FFP was starting to shut down the crazy spending we’d seen in previous years. But then both of those clubs made major purchases in the last month or so in the window, and we have to figure executives at those clubs have a reason to believe they’re still going to be ok. So let’s get to the loopholes, and there are many. I’ll list the biggest three that jump out at me.

1) Youth development does not count toward losses for FFP purposes. So, for example, Chelsea can deduct about £10 million of their losses just right there. Man City has also been pumping more money into their youth setup as well, and will continue to do so under their new agreement with Etihad Airways.

2) Clubs are trying to inflate their revenues through underhanded means, or at least that’s how it appears with Man City at the moment. After City announced their massive sponsorship deal with Etihad Airways, they were quickly criticized for trying to cheat FFP. The airline is owned by the government of Abu Dhabi, whose ruler is Sheikh Khalifa. Conveniently, Khalifa is the half-brother of Sheikh Mansour, Man City’s owner. This is what UEFA refers to as a related party transaction (RPT). The question is whether Etihad paid a fair market value for this sponsorship. Quite naturally, Wenger has condemned this transaction, and even Liverpool has chimed in against it as well. I’m not sure how this one will work out in the end, as Sporting Intelligence argued in a separate article that the deal actually looks fair for the current market. However, my guess is that if/when FFP starts to take effect in earnest, Man City’s deal will be adjusted downward somewhat for FFP compliance purposes. (Meaning City will still get the money, but some of the revenues won’t count in UEFA’s mind.) Surely there has to be an assumption that it’s not a fair market deal when you have half brothers making a deal that’s never been seen before, right?

3) Even taking into account the previous two points, it seems to me that the prodigal spenders still have a long way to go. This is where it gets a bit dicey. Swiss Ramble wrote a blog about Chelsea, and it listed various ways in which they can become compliant. But those are still more traditional means – selling players, generating more revenue through commercial and tv deals, and then factoring in the youth system write-off. As I’ve studied the issue, there must be something more. And I think I’ve hit upon the two major loopholes that have Chelsea and Man City sleeping well at night at the moment.

The first is apparently the fact that even if a club misses its initial target for losses, it can be excused if losses are trending in the right direction. This should be quite easy for Man City in particular, since they did a huge amount of spending before realizing any Champions League profits. So without any belt-tightening at all, they’ll be seeing reduced losses in the next couple of years anyway. However, if you look at things in the really long run, they’ll still have to become more fiscally responsible to either comply with FFP rules or at least continue to reduce their losses.

The other major loophole, which I’ve read about in two places, is a bit shocking to me. The Sporting Intelligence article, which I’ve already referenced earlier, has direct quotes from Andrea Traverso, the Head of Club Licensing and Financial Fair Play at UEFA. Amazingly, any money spent on player contracts signed before June 1, 2010 does not count toward FFP compliance. So if players like Terry, Lampard, Drogba, Cech, and so forth were signed to deals before that date, their wages magically don’t count. Now, any transfer expenses before that date would still count, as they are amortized over the duration of a player’s contract. In other words, if a player was signed on May 15, 2010 to a four-year deal after completing a £20 million transfer, then there will be £5 million per year counting toward expenses for FFP purposes. But none of that player’s contract will count. That’s quite a big exception, and I think that source I cited is credible. And I think that’s why nobody will be particularly worried about FFP for a couple of years.

In the long run, of course, all of the player contracts signed before 2010 will expire, so that loophole will vanish. And as already noted, clubs won’t be able to endlessly prove that their losses are diminishing. So at some point, there’s still hope that FFP will have some teeth to it. It just seems that it won’t really happen for real for a few more years. Jumping ahead a few years, the next question is whether UEFA would really kick a team out of the Champions League for non-compliance. I know we’re in uncharted waters here, but I actually think they would. They’ve already taken action on a smaller level against Real Mallorca, FC Timisoara, and most recently, FC Sion. Furthermore, I think Michel Platini sees FFP as his UEFA legacy. So I’ll be cautiously optimistic and think it’s going to straighten out the game at least to some extent (in the future, not now, of course).

Finally, let’s turn our attention back to Arsenal for a moment. Obviously, we’ve been turning a profit for a few years now. Some of those figures are listed in the chart above. When you further factor in the write-off for youth development, the loophole for player contracts signed before 2010, and the range of allowable losses, you quickly see that Arsenal could (in theory) spend about whatever it wishes to in January. I know this would never happen, but let’s pretend for a moment that Lille gets bounced from the Champions League by December, and they decide to sell Hazard to us for £30 million in January. And while we’re at it, we decide to bring in M’Vila for £20 million as well. As long as we didn’t continue to do that for the next couple of years, I think we’re still more than safe for FFP purposes.

Getting back to reality for a moment, let’s look at a few other aspects of Arsenal’s financial state. It’s pretty well-known that our commercial revenues lag well behind those of our closest competitors. While the long-term deals we signed years ago may have made sense at the time, we’re currently doing quite poorly in that department. When you compare our revenues from match receipts to those of Man Utd, they’re nearly equal. But when you look at their commercial revenues, they’ve nearly doubled us. Unfortunately, we’re largely stuck in this department until 2013/14, when our shirt and uniform sponsorships expire. At that point, there’s hope that while we won’t match United’s deals, at least we’ll be in the same ballpark.

This then takes me back to a theme I’ve touched on a few times before, and something Swiss Ramble has noted a few times as well. If and when FFP really does have some teeth to it in a few years, we need to do everything possible to maximize revenues. If our revenues remain ahead of Chelsea’s and Man City’s, then we ought to be able to keep up with them in spending as well. But to maximize revenues, we need to be making deep runs in the Champions League, among other things. In addition to that, I firmly believe that our sponsorships in 2013/14 will be vastly improved if we actually win something in the next couple of years. If we enter the bidding period on an eight-year trophy drought, I can’t see us getting much of a windfall there. So while it’s a delicate financial balance, I’d really love to see us positioning ourselves for the success that will bring more revenue, which will then bring more success. Or at least it will in theory.

Well I hope that explains a bit more of the complexities of Financial Fair Play, and what we should be hoping for. For the time being, I’m just hoping to slip into the Champions League for the next couple of years, and maybe eke out a Carling Cup trophy or something. After that, we’ll have to hope that our years of prudence will pay off in the form of major titles.

——————————————————————–
“Tis mercy all, immense and free, for oh my God, it found out me.” Taken from a hymn by Charles Wesley.

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Category: Chelsea, Manchester City, Manchester United

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H Hussain Jafferi

Wow....great read...

Somehow wenger doesn't seem half as bad.....:)
Ryan

Baah your posts are so long. Now, you Arsenal fans are going to stereotyped as the nerd fans.

But in all seriousness, I enjoyed your post. It was intimidating before I started reading, but you really did try to make sense of it all!
brenton

You northerners, intimidated by a bit of text. No pretty pictures of Stevie G bombing on to keep you interested.

I kid, I kid.
Andylowe14

Uefa boss Michel Platini is determined to tackle football's excess spending

Uefa will withhold prize money and issue transfer bans on clubs failing to meet the new financial fair play rules.

The ultimate sanction remains a ban from European competition
but Uefa told the European Club Association (ECA) it wanted other
penalties at its disposal.

that was today on bbc sport website. Its good that they have other penalties not just kicking you out of champions league cos this way they can punish even smaller offences without teams puching their luck, knowing that being kicked out of champions league is an extreme course of action
FredJacob

Samir Nasri breaks bone in hand on international duty with France - http://www.guardian.co.uk/foot...
Gigi_man

Am I a horrible person if I smiled when I saw the news?

Not for Nasri but for City.
FredJacob

and Man City says he going to play with that broken finger, wonder if he would have done that for us
Rohann Andrews

of course he would, he's a gooner unlike u whos a goner hahahahahahahahahahahahahahahaha
FredJacob

Wojciech Szczęsny's Performance in Poland vs Germany (2 - 2) - http://www.youtube.com/watch?v...
SJGgumby

Best comment on the youtube page:

"Imagine Chesney born in 1945.He could have stopped Hitler invading Poland!"
Homey_Mills

Funny comment, although the dates are a bit off.
SJGgumby

The dates being off is my favorite part.
Kxevin

This is a very good piece. Will throw up a link to it over at our place. In my opinion though, FFP is, like most UEFA regulations, toothless not because of any nefarious reasons but simply because UEFA doesn't have the heart to enforce it. Further, there are enough loopholes built in where a club or the governing body can weasel out of any real sanctions. I remain unimpressed.

--TV revenue deal. I posted on it the other day, and remain convinced that REAL shared revenue is the only way for the Liga to strengthen and move forward, a la the Premiership. The Big Two will never accede to real sharing, which is why a meeting has been called that doesn't include them. We'll see how it goes but in theory, the Big Two could reduce their percentage of a collective contract and still make much more than in the days of negotiations for individual negotiations.

--FFP is aimed at making some vague attempt to level the playing field, but until it goes much, much farther, it will be ineffective. Fans scream about notions of hard salary caps, big teams because it might make their team less competitive, small teams because almost any cap will be too high. If you look at the National Hockey League, there has been a different Stanley Cup champion in each of the last 6 seasons. Their salary cap is very effective, more so in revamped form. The Chicago Blackhawks won in 2010, but couldn't afford to keep 9 key players and didn't repeat.

A salary cap is a real, verifiable way to "level" things, but even that doesn't help football a ton. Should Arsenal have the same salary cap as QPR? Do you tie it to attendance/revenues/other variables? That means that the big keep being big, and smalls still don't have a shot.

UEFA has a mess on its hands, and this post very eloquently lays out some of them. Good comments, as well. Thanks again.
Perry S.

Actually a salary cap such as the one the NHL has in North America works reasonably well. Cap, profit sharing amongst the league, etc.
Homey_Mills

Yes, I'd love for that to happen in UEFA, or at least to some extent. A more realistic idea might be to have a lenient salary cap, and also a salary floor. Purely as an example, without much study, what if the maximum salary was £100 million for a team, and the minimum was £50 million. If a team wanted to exceed the £100 cap, it could do an additional £25 million, but only if it paid a "luxury tax" of that same amount over the cap. Then the luxury money would go to teams with low revenues, for them to be able to pay the salary floor. There would still be "haves" and "have nots," but not to the degree we're seeing now.
Perry S.

Definitely like this idea, not only does this create a more even playing field, the parity it would bring to the table would be extremely exciting for the fans. Every season, any given team could have a shot at doing something special.
Casimir

Much like, more so than NHL teams (which are all in pretty major cities
for the most part), how the Green Bay Packers can stay competitive in
the NFL - heck they won the most recent Super Bowl! Heck, if it was the
same economic system as the European Football system you would expect
the New England Patriots, NY Giants & Jets, and Dallas Cowboys to
win the championship every year, but that clearly doesn't happen.
Homey_Mills

I see Bendtner has two goals today. Somewhere, Martin is smiling.
Homey_Mills

I'm not sure if anyone has noticed this yet, but if you click on the Twitter link at the top right of this page, it no longer takes you to the Twitter account operated by Martin. He switched his to @MartinArsenalFC, but it's the same as it's been for a few months. Now we're just trying to figure out what to do with the official Arsenal Offside account, which is blank. I don't have a login for it, and I never have. I don't think any of us have the login just yet. Anyway, I'll keep everyone posted if there are changes to that. I didn't really mind the way it was, since it was less work for us to do. But if we start handling the Twitter account ourselves, maybe it will help things out for the readers a bit. Now if I could figure out the Facebook page, we'd really be rolling.
FredJacob

Tell martin to delete the account ant then creat one
Martin

No.
FredJacob

Well homie i tried
brenton

Martin and I are on it.
Casimir

Wow. If anyone is watching the Poland-Germany "friendly".... Szczesny made one of the most ridiculous triple saves to deny the two Polish defectors Podolski once and Klose twice in rapid succession. Wojo is ridiculous, absolutely spectacular this game.
Benjamin Dockter

Yeah, it's incredibly unlucky he hasn't kept a clean sheet. He has been absolutely incredible in goal even with a total shite defense in front of him (sound familiar?). Not his fault at all for the penalty.

On another note, I've been totally underwhelmed by Mertesacker. He rarely pushes up to the halfway line (goodbye our "high line" offside trap) and he is incredibly slow. He is good in the air though. I worry that against anyone but the Stokes, Boltons, etc, he will be found out. I really hope we snatch up Cahill in January...
Casimir

Yeah, Mertesacker got skinned the whole game by Pezko. Not quick at all. I'm disappointed as well. I remember him tracking back better.

Unbelievable that Wawrzyniak (the left back) slips and let's in a cross in the 94th minute for Germany to tie. It felt like an Arsenal game right? Down to 10 men, take the lead despite that, and then let in an equalizer with no time left. Unbelievable.
Benjamin Dockter

Yep yep yep. Wojo continues to be let down by his outfield players. With TV5 out for a good chunk of time I hope Djourou can get back his form from last fall, because he'll be playing a lot until PM4 is ready to step in. At least our fourth choice keeper isn't Squizz this season...
Casimir

It's sad that I've been conditioned into thinking this way: but when I saw Germany still have the ball after the clock passed 94 minutes when there was 3 minutes of extra time... I knew they were gonna equalize. I see the defender slip, and I get flashbacks of Gibbs, Eboue, Liverpool. Didn't even have much of a reaction - nearly laughed rather than curse.
Kas123

So, Kinda off subject, it appears we signed Benayoun w/o first having a medical, so in basically we didn't know what we were getting.
brenton

Deadline day medicals are notoriously difficult to arrange and certify. Guardian's Secret Footballer said clubs have to trust the selling club's doctors.
Arsenal Fan

Homey. Great article. Lot of information and pretty well researched.

Let me just point out one things. The exception you mention that player salaries contracted before June 1, 2010 will not count toward FFP compliance ( and the article information) is NOT CORRECT.

Basically the exception to the rule for clubs not meeting the breakeven requirement for the first two monitoring periods (+ factoring in the allowable equity funded losses) works as follows. It is really only a VERY Limited exception. If a licensee reports an aggregate break-even deficit that exceeds the acceptable deviation, it needs to fulfill both conditions:

1) It reports a positive trend in the annual breakeven results, and,

2) It proves that the aggregate break-even deficit in only due to the annual break-even deficit of the reporting period ending in 2012, which in turn is due to contracts with players undertaken prior to June 1, 2010.

So, it's only for the 6/30/12 period that player salaries can be considered, which is the first year in each of the first two monitoring periods.

Also, wanted to explain how the United interest payment of $106 million pounds is considered. Since the interest expense is not due to loans related to stadium development, the whole amount is considered an "expense" in calculating a breakeven. So, a simple way to think of it is to take United's $286 million pound revenue (turnover) and subtract the interst expense of $106 million pounds to get a "net revenue" amount of $180 million pounds. This $180 million pound "net revenue" is the budget united would have to work with for player salaries, etc.

But, as you probably know, United is in the process of floating 30% of their equity on the Singapore stock exchange for $1 billion dollars, which would value that club at $3.3 million pounds. This is almost double any of their previous professional valuations. And then they would retire 100% of their debt and eliminate the interst expense.
Andylowe14

wtf is a break-even deficit?? ..isnt the point of breaking even that you break even.. ie. make a profit not a defecit.. so less than breaking even is just called.. losses???
Arsenal Fan

Citeh and Chelski. But they don't speak English, so might not count.
Homey_Mills

Thanks for the comment and new info. You seem to have a good grasp on this stuff - better than mine. Your point #2 still makes my head spin a bit. It still sounds quite a bit like the point I used from the article, which is that contracts with players from before June 1, 2010 don't count. Perhaps a proper understanding is that they do count, but that they still have some sort of unique place in the list of exceptions. Hmmm... I'd like to clarify that in my mind though.
But if the FFP is as strict as you seem to think it is (and we all hope so for sure), then why are the big English spenders not slowing down at all? The answer to that, that I posted in my blog, seemed to answer it pretty well. But if that's not the right answer, I would be interested to know why the big spenders seem to continue on without stopping.
Arsenal Fan

The salaries before June 1, 2010 can only be eliminated from a SINGLE fiscal year - 6/30/12, when looking at the first and second monitoring periods.

The actual language is "It proves that the aggregate break-even deficit is ONLY due to the annual break-even deficit of the reporting period ending in 2012 which in turn is due to contracts with players undertaken prior to June 1, 2010 (for the avoidance of all doubt, all RENEGOTIATIONS on contracts undertaken after such date would NOT be taken into account). and

It reports a positive trend in the annual break-even results (proving it has implemented a concrete strategy for future compliance).
Arsenal Fan

Yea, makes my head spin a bit too. And is kind of confusing. But read the page 85 from the actual UEFA document, and you'll see what I mean. I first read it in an article and then looked it up in the actual document to confirm it.

There has been all kinds of crap written, and a lot of it from supposed legal professionals in the UEFA FFP arena that has been totally wrong. For example, I read (from a supposed professional) that transfer fees incurred in the January 2011 tranfer window (Torres, Suarez, Carroll) would not be considered in future break even calculations, since the transfer fee was paid (and hit the books) before the regulations went into effect. Then I saw in your article reference that all transfer fees would have to be "amortized" over the player contract period, irregardless when incurred, and would be included in future calculations. (Even though incurred in Jan 2011 before the regulations went in).

Then I looked at the regulations this evening (very quickly, so I don't have the answer yet) and it appears that clubs can select one of two alternative methods for accounting for transfer fees paid as long as the method is consistently applied. Either immediate expensing or amortizing over the players contract period. (Again, have not looked at this closely yet). But, I would guess that if clubs can select either of the two methods, most clubs would elect to amortize the transfer costs.

As to why the spending has continued. Your guess is as good as mine. But, in Manchester City's case, I expect them to bring in some significant revenues from "related parties", such as the $400 million pound reported deal with Etihad Airways. I think UEFA will have great difficulty in challenging it. City can probably show that it is in line with market value when you look at other international naming rights deals and kit deals. And, looking at the UEFA FFP regulations, I think that Etihad may not be shown to be a "related party" within the framework of those regulations. (Again, this is very fast cursory review). And City can raise funds by selling players. There is a report that Tevez may be sold for $40 to $50 million pounds. Not sure what the status of this particular deal is, but the idea is that they can sell players that they no longer need. So, the ability of City to riase significant $ from comercial deals from wealthy somewhat realted organizations gives it an unusual advantage.

When United eliminate their interst expense, they will have significant enough revenues to be able to afford significant transfer fees. And Real and Barca probably have big enough revenues to afford significant transfer fees as well.
Homey_Mills

Ok, I just looked some things over again. I should have been a little bit more careful the first time, but here's what I just read.
First, the article I referenced and relied on does quote the UEFA rules, word for word. And I did look at the UEFA rules, and I'm still having a hard time knowing what they mean in that second section. I think the writer of that article took a bit of a dramatic step in just making a blanket statement that wages don't count at all for players signed before June 2010. However, there does seem to be a special exception of some sort for just those types of cases. Now of course it depends on a club simultaneously showing a positive trend in losses.
Anyway, after looking at the article again, along with the UEFA rules themselves, I think the answer is somewhere in the middle. While wages aren't to be totally written off, there has to be some wiggle room there for those contracts as well. The bottom line for me is, after it's all said and done, FFP won't have much effect until at least 2014.
Arsenal Fan

Yea, I'm with you on the FFP probably not having much effect until 2014. And then I would expect the sanctions to be in the form of a reprimand or fine and not disqualification from competitions.

Don't forget these rules were in part drafted by the clubs not wanting harsh sanctions for breach of the rules.
Arsenal Fan

But the rules only allow the exclusion of contracts for pre 6/1/10 salaries from ONE year 6/30/12.
Arsenal Fan

This factor limits the exclusion significantly. You can not eliminate the salaries from 6/30/13 or 6/30/14!!
Homey_Mills

From an Arsenal perspective, I'd be just fine with City having to sell Tevez to balance their books. And if Chelsea had to offload Drogba and Lampard to do the same, then we'd at least be edging back to sanity and fairness.

Another thing regarding contracts before June 1, 2010... I didn't really attempt to look it up, but if clubs knew about FFP coming into effect, and they also knew about that loophole (assuming it exists), then there should have been a wide-scale rush to sign players to new contracts in May of 2010. Basically, clubs just going to their existing star players, tearing up old contracts, and extending them with new deals. I don't really know that this happened, but it would be a logical thing for clubs to do if the proposed theory were true. Anyway, I'll continue to try to monitor this stuff, and may blog about it at a future date.
Arsenal Fan

Meant, the 30% equity floated on the Singapore exchange for $1 billion dollars values the club at $3.3 million dollars (not pounds).
Arsenal Fan

$3.3 BILLION dollar valuation for United. I am typing too fast and trying to get the comment posted before Disqus eats it, and I really should be reading it before I post it.
Arsenal Fan

Homey, just go to page 85 of the actual UEFA Financial Fair Play Regulations posted on their website (UEFA website) and you will see the actual language I am referring to in the actual document.
Homey_Mills

I knew there were some regulations I could access online, but I wanted to go to other websites in hope that they'd tell me what the regulations say. Since I'm a simpleton and have a hard time with all the weird regulations sometimes. But I'll go look at it and see if I can sort it out. Thanks.
FredJacob

has anyone herd that TV5 might have to get surgery for his injury
Martin

http://www.thesun.co.uk/sol/ho...
Alexinho

You've gotta be f'in kidding me...
Homey_Mills

At least now we won't have to argue who starts between Mert and Kos. I could see this injury dragging on all season. Wow.
TK

And now look. Apparently, we, that's we the Arsenal, let Jack go on holiday for a month after he got a knock against Switzerland on his ankle which has had issues for 2 years now. A good example of that something being wrong at Arsenal with our physio team. Either it's incompetence or negligence or both, which is pathetic for a club of our stature to have hired someone who can't do their job. I know after Gary Lewin left, who did a great job for us for a long time, the job went to his cousin (pseudo nepotism perhaps?), who just seems unable to treat any of this and even the club seems to care more about being "state of the art," with our great accomplishment of having a medical facility on the training grounds now. What is going on?!
Homey_Mills

The word on the street is that JG will blog about injury stuff in the next couple of days. Not sure what angle he's going to take on it though.
brenton

I really wish you'd written "Not sure what ankle he's going to take on it though".
TK

Can't wait! =)
Homey_Mills

Yikes. Haven't heard that yet. Good thing we signed Mert.
TK

Something is definitely up with the way we do physio. In a recent article on guardian, I think it was David James while he was at our training grounds because England uses our pitch, he mentioned how we might over rely on sports science to inform our medical decisions. Like statistics and numbers determine if players are fit or not, rather than a medical professional making that call. And we've already seen the monitors on our players backs/necks in recent seasons, so maybe there's some truth to all of that. Without a doubt though, something isn't working.
brenton

The monitors that players are wearing are starting to be fairly common. They measure vitals, distance, speed, etc, nothing to do with injury recovery. Wenger's been using that info for years, it's just a more accurate way to collect data.
Homey_Mills

It would be a good topic for a blog. But since it doesn't really involve the use of my calculator, I think I'll leave it to another member of the blogging team. My usefulness only goes so far around here.
FredJacob

England vs Israel Under 21 Highlights & Reactions - http://www.youtube.com/watch?v...

But most importantly Alex oxtail contribution
Homey_Mills

I see that a guy named Mohammed scored for Israel. Maybe things are improving in the Middle East after all. Hmm...
ASDF

Hope he gives such performances for Arsenal this season!!
FredJacob

i think he will, when he came on the 8-2 drubbing by ManU i actually saw him trying to take on defenders the only thing when his crosses falls to theo and the like hope he would apply the finishing touch
Rohann Andrew

stop hating on theo fred, goodness!!! ur not a true gooner
Omar

excelente,,,, gracias
Alexinho

Homey, jg--

Thank you for the creative new content on this blog. I have always been a frequent visitor, but since you two took over (no offense to the wonderfully dedicated and thoughtful Martin), there are some very interesting questions being asked and written about.

My thought for the day--

Sack the medical staff, for God's sake. Wilshere out until November? Try Wilshere next available for 2012-2013, just like Vermaelen last year, and Rosicky the year before that. You read it here first. No other team in the Premier League, Liga, or MLS (the three I pay attention to) ever have an injury storyline like this--out for a day or two at first, and then one week later, we learn that (oops) our boy will be out until the weather is 20 degrees lower/higher. Happens all the time in North London.
ASDF

There's one thing that I want to point out; the three big clubs that Homey talked about have been very agressive in buying quality young players for their starting line up as well as for increasing depth. When I look at 25 member teams for EPL and CL for these three clubs, I feel that they are more or less set for 3-5 years in most departments (Utd might need some reinforcements in defense unless Jonny Evans steps up) and can go without having a big summer spending like the one that just happened. They essentially might not need to spend big during FFP monitoring periods and build up on revenue and then spend big again when they have sufficient wiggle room in terms of revenue.
Homey_Mills

Arguably, we could say the same thing though. We have very young, good players at nearly every position. Some are on loan, some are playing with the reserves, and some are with the first team. Our problem has largely been having to rely on inexperienced young players too much.
ASDF

The problem is that our addition of young/new players hasn't improved our team from last year (Martin has done a very good analysis on his blog today on whether our team has improved or lost ground in each department after the transfer madness). On the other hand, look what Utd, City and Chelsea (even Liverpool) added in terms of young and talented players. Nasri, Clichy, Savic and Aguero to City; Jones, Young, De Gea to Utd; Lukaku, Mata to Chelsea. These clubs already have talented young players and that's why I said that they might not have to spend a lot in the next 2-3 years.
I was also wondering what is the status of Liverpool in FFP? They didn't qualify for CL so lost a lot of revenue, sold Toress for big bucks but bought like a truck load of costly players (Caroll, Henderson, Adam, Downing, Coates, Suarez). I have no clue about their debts etc so don't know if they would have to cut down on spending when FFP comes into effect or not.
Homey_Mills

I did think about Liverpool, but decided against doing an analysis of their situation. I was trying not to spend all day writing, and they haven't finished ahead of us for a couple of years now anyway (not that I'm not concerned for this season). The other thing is that our revenues are ahead of theirs by a good bit, and that gap should only grow when we can finally get better sponsorship deals.
ASDF

Thanks for answering my question and as everyone has already complimented you, this blog is really very good.
Perry S.

RESPECT.
Kas123

There is an interesting article in Reuters about Real Madrid and Barcelona destroying La Liga as other Spanish clubs are finding it difficult to compete them on any level. In addition, it explains how there isn't any collective bargaining agreements or profit sharing in La Liga thus creating an sustainable system for other clubs. The unfortunate part about all this is that FFP won't fix these issues as they stem from television money, tournament money, and crazy sponsorship deals that other clubs can't attract. Like John Murray Hill said, it seems that football is in a state of disrepair and will take much more than a few FFP rules to fix. We need a total revolution from the top down. Does anyone here listen to BBC World Football broadcast?
brenton

The problem in La Liga is that clubs negotiate individually for television rights: Barca and Madrid get more than half the money from tv rights, and the other clubs languish.
Andylowe14

surely a provision for financial fair play should be that tv money is split, not necessarily completely evenly, but in a more equal way that encourages competition.. and fairness. If it doesnt address things like that then it isnt really following through on its promise to level the playing field
Kas123

Great article Homey, it's refreshing to read about the economic side of club football every now and then and see how Arsenal stack up. The links were on point and did a pretty good job of explaining everything. Like was said, clubs are starting to adjust to make themselves compliant with FFP rules by taking advantage of the many loopholes that exist within a young and new system. I'm sure as time goes on UEFA will tighten the legality of certain aspects of these new laws. One thing that stood out to me, in one of your links, is the price of our season tickets compared to teams like Man U or Pool. That indeed a is good bit of change when you look at everybody else's figures. 945 Pounds for cheap season tickets and over a 1200 pounds for the more expensive prices. Also looking at the commercial aspect of the club, Arsenal are lagging farrrrr behind. It's impractical that we did such a poor job of taking Arsenal to the world when the club experienced frequent domestic and european success i.e era of Invincibles and CL finals appearance in 2006. We have failed to tap into the largest markets in the world, the Asian and growing North American markets. However, I applaud our recent efforts to participate in these markets and hope it continues. Not to be negative, but I don't think we can get anything close to what City got for sponsorship. Etihad, who sponsors City, is a government owned Airline (Abou Dhabi) and is closely tied to Sheikh Monsour's family, so that kinda explains City's so called 340 million dollar good fortune.
Martin

Right, but the lack of commercial deals is largely due to the stadium. In exchange for money up front for naming rights and favorable financing, we entered into a long-term deal with Emirates over shirt sponsorship. Now that has come back to bite us, since a lot of teams, certainly all our competitors, make way more money in shirt sponsorship deals than we do. Hell, Manchester United makes money money from the sponsorship of their warm-up shirts than we make from our match shirts.

But if the team can stay competitive at the very top level until 2014, when that deal expires, we will hopefully be able to cash in and increase revenues dramatically.

And while the club is late to the game in strengthening its brand internationally, it at least seems to be realizing now that this is something that is needed. The preseason tour of Asia, plus the signings of Miyaichi and Park, will, I believe, make us a lot of new fans in Asia, which could be potentially very lucrative.
Kas123

I guess at the time it appeared to be a good deal with Emirates, but again you live and you learn. Hopefully we can re-negotiate something more lucrative with them or a bigger cash cow.
John Murray Hill

Basically, this is what's going to happen.

FFP will do nothing. Clubs will basically leave UEFA and form their own superleague if they uphold it. Man City's deal was nowhere CLOSE to market value. Even Manchester United could barely get a deal like that. And Man CITY, a club with ONE cup, getting that kind of deal? It's blatant cheating.

Remember, UEFA is corrupt as fuck. The corruption spreads through the whole industry, from the agents, to the FA, UEFA and FIFA. Do you really think FIFA will let UEFA mess around with Man City when their owners are part of the oil axis that purchased the World Cup for Qatar?

Man City have infinite money, that makes even FIFA look like nothing. Man City can buy out ANYONE they want with that money.

All I can say is I think Man City owners have ruined football. Destroying the transfer market to the detriment of other clubs. It's totally unfair, anyone can see that. So that's what kind of people their owners are. They don't give a fuck about the rest of the world's enjoyment, so long as they can ride roughshod all over everyone for their own interests.
Martin

I don't agree that clubs will leave if UEFA start enforcing it. Remember, this was an idea that came from the clubs themselves. Even the big clubs wanted this, because it helps them. If UEFA actually enforce this, it will basically be saying "Regardless of who your owner is, you can't spend as much money as Real Madrid." Which is great news for Real Madrid, and to a slightly lesser extent, the other big clubs.

I think UEFA will try to enforce it, but as the City deal shows, these clubs can find ways to put revenue on the books, so I doubt it's really going to have the desired effect. Better than nothing, though, I suppose.
brenton

Excellent stuff here, yo.
NKG_Bos

Very interesting piece Homey. Thanks for the research and putting it together. I find myself disagreeing with a lot of what you write, but this appears to reasonably thought out and supported. Cheers

I believe SwissRamble also had a piece talking about the Etihad sponsorship deal for City and I agree with him - I think it'll be hard to argue that they cheated. How do you assess the fair value of a sponsorship? These large companies spend tons of money on advertising and brand placement, and being linked to a team like City that is stocked with attention grabbing superstars and is growing into a recognized international brand has a lot of value to a sponsor.

We can only hope that by the time our current sponsorship deal runs out, we're able to leverage our international profile and tradition (and hopefully recent successes) into a valuable deal with Emirates/Nike/whoever. Who's to say we can't get something worth near City's deal?