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Fifa Financial Fair Play Rules

Discussion in 'Newcastle United' started by I want curly hair too, Mar 30, 2011.

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  1. I want curly hair too

    I want curly hair too Active Member

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    So from what I've read I think I understand that you cannot spend more than you make (without the help of rich investors)? Is that right?
    There was an article somewhere online I read that basically said Man City are in trouble with this (EDIT: http://blogs.independent.co.uk/2010...d-the-mountain-manchester-city-have-to-climb/) because of the massive amount of wages and the fact that they won't win anything this year, and they may not get CL football next season. A loss of 121 million last year, predicted to rise much higher this year!!
    Looking at the finances posted in the other thread, we lost about 22 million last year due to relegation etc. But it should be better this season, with TV deals and PL league football etc, and clubs can lose up to 19 million in the 2013/14 season so it looks like we're on track to being fit for these financial rules?
    I'm no finance expert here so correct me if I'm wrong, but it looks like quite a good move from fifa, making clubs be more self-sufficient and stopping massive takeovers like City which imo are ruining football.
    What does everyone think about the rules?
     
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  2. TheLittleGeordie

    TheLittleGeordie Active Member

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    It's all very good in theory but then when you delve deeper you find some problems
    How are small clubs ever going to find the money to upgrade or build new stadiums? all rising clubs need a cash injection at some point
    In my mind it will sepourate the clubs and get them stuck in the area of the football league their currently in making it very difficult to move up in the world
     
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  3. Colly NUFC

    Colly NUFC Active Member

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    Time will tell frankly, all depends how keen FIFA are to enforce them when some of their darlings don't pass the test.
     
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  4. u408379965

    u408379965 Well-Known Member

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    A good point, but isn't this being enforced by refusing indebted clubs entry into Europe? This wouldn't affect smaller clubs. Also Blackpool are doing the sensible thing and investing a large proportion of their promotion/Premier League money into their stadium and training facilities.
     
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  5. Gutierrez's Right Boot

    Gutierrez's Right Boot Well-Known Member

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    How will Real Madrid and Barcalona fair with this ruling
     
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  6. TheLittleGeordie

    TheLittleGeordie Active Member

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    I havent read the rules so i don't really understand what will happen so can anyone fill me in on the punishments for making a financial loss
    also whens this supposed to start
     
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  7. Donkey Toon

    Donkey Toon Active Member

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    Enforcement is going to be the key to how this works. Clubs who feel they are in danger of losing out by these rules or who want to gain an advantage will also try to get around these rules by any method they can and unless FIFA has both a very comprehensive set of rules and a body to strictly monitor the accounts of clubs together with all third party contracts signed by clubs. Without this clubs will succeed in gaining some advantages that are outside of the spirit of the rules.

    I know this because I have personally witnessed such techniques used in relation to fair play rules used by another sport in another country.
     
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  8. Colly NUFC

    Colly NUFC Active Member

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    I could be wrong, but I seem to remember reading that the regulations will concentrate on the ratio of wages to turnover, so investment on the likes of new stadia wouldn't be affected. Basically more popular teams (i.e. those with high ticket sales, merchandise sales, and of course the old TV money) will be stronger in terms of wages able to be paid to players. The likes of Man Utd and Liverpool will be fine in the long run as long as they keep wages under control, Man City will collapse. Yay!

    Of course this only matters if you're going into Europe, so we could end up with a weird scenario where Man City continue to spend a fortune on players, win the league and don't get into Europe. If this happens with a few teams we could sneak into the Champions League finishing 12th...

    All hypothesis and not based on any facts as I know sodall.
     
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  9. I want curly hair too

    I want curly hair too Active Member

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    I'm not sure about Real, but (and this is just an estimate) I think although Barca are in a lot of debt, they should be making a lot of money? I mean, many of their players are from the youth academy, they regularly sell out the Nou Camp and it's likely they will win at least 2 trophy's this season... so they may year by year make a profit and reduce the debt?
     
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  10. Donkey Toon

    Donkey Toon Active Member

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    You are correct, stadium and facility improvements would in any case be treated as capital outlays and wouldn't show up on the profit and loss in the first place except through annual depreciation. And that i believe is exempt along with a general overheads from the figures they have to calculate their ratio against. Wages however are the main problem as I see them as the biggest area for bypassing the rules with regard to loopholes.
     
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  11. Colly NUFC

    Colly NUFC Active Member

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    "Yeah Messi, so we're giving you £40 a week wages, and £200,000 a week in image rights."

    "Gracias Senor Abramovich!"

    See what you mean.
     
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  12. Donkey Toon

    Donkey Toon Active Member

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    Exactly! And the image rights, sponsorship or consultancy payments would be made by companies hidden behind a complicated organogram of trusts, sub-companies and holding companies spread over half a dozen jurisictions all over the world, most of which would have confidentiality legislation in place meaning ownership disclosure could not be demanded. And the payments themselves would end up in offshore bank accounts hidden within just as obscure webs. In addition with a bit of imagination they could also probably come up with structures to generate false income strings into the club itself, but that would be harder to get away with.

    Because of confidentiality issues i can't elaborate further but as I live and work in an offshore finance centre you can probably put 2 + 2 together to figure out the rest.

    I would suggest with great confidence that there are jurisdictions still existing where this sort of structure could operate and that the people behind teams like Man City would be fully up to speed on them.

    Like I said FIFA regulations and enforcement techniques are going to have to be very thorough.
     
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