Author Topic: Financial Fair Play - developments in here  (Read 176816 times)

Offline Ashburton

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Re: Financial Fair Play - developments in here
« Reply #560 on: May 6, 2014, 04:20:17 pm »
Just a thought.  Chelsea bought a load of players and sent a fair few of them on loan.  Some of them for years like courtois.

If they now sell those players it will count as a profit on their books and increase their available expenditure for ffp, Correct?

We all joke about how Chelsea have stockpiled players all across Europe but perhaps they've viewed that process as 'banking' future transfer funds in a way that ffp can't touch.

This is exactly what I feel, and sadly, it is quite smart.  The first stage is improving your youth facilities and the profile of the club, something which you are able to offset using FFP anyway.  The second stage is the creation of the profile of the club, win something significant, have the money for large salaries etc (up front expense), and the third is loaning them out to improve, and finally sell to use to fund transfers under FFP.  The large expenditure for this has already been made (youth facilities and coaches), the young players themelves are actually reasonably cheap for a top tier club.

Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #561 on: May 6, 2014, 04:23:04 pm »
Cheers Cantona and Craig. So it's more of a penalty than it looks at first glance. Especially with the home grown players who look likely to be leaving.

I think it is, and if they have to reduce their deficit for next year, buying top quality replacement homegrown players which usually come at a high premium wont help them achieve it.
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Re: Financial Fair Play - developments in here
« Reply #562 on: May 6, 2014, 04:26:30 pm »
So apparently the fine doesn't enter the equation regarding future FFP criteria and can be paid directly by the owner.  Ridiculous.
What's the point  of that ?

What if a club hasn't  a rich owner but has built debts to get into the trouble to get a €60m fine

Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #563 on: May 6, 2014, 04:28:20 pm »
The large expenditure for this has already been made (youth facilities and coaches), the young players themelves are actually reasonably cheap for a top tier club.

Not really, not if you want to sell them for a decent amount to make a profit.

If you look at Chelsea, Lukaku cost them something like £12-17m, Courtois was something like £8m, Zouma was £13m, etc.

Offline Zeb

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Re: Financial Fair Play - developments in here
« Reply #564 on: May 6, 2014, 04:31:25 pm »
What's the point  of that ?

What if a club hasn't  a rich owner but has built debts to get into the trouble to get a €60m fine

You'd hope the fine was part and parcel of how City and PSG's owners have been acting rather than it being a set punishment for being in breach. There's another 7 clubs who went into the settlement phase, and there's been not a peep about this level of punishment.
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Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #565 on: May 6, 2014, 04:31:26 pm »
Not really, not if you want to sell them for a decent amount to make a profit.

If you look at Chelsea, Lukaku cost them something like £12-17m, Courtois was something like £8m, Zouma was £13m, etc.

I'd say they are reasonably cheap for the quality they are. Probably made a fair bit from loan fees and would sell them at a big profit should they wish in the future.
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Offline ShayGuevara

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Re: Financial Fair Play - developments in here
« Reply #566 on: May 6, 2014, 04:37:36 pm »
Good news for us hopefully there's no appeals.

It's kind of ironic though that it's being brought in to create "a level playing field" when the reality is it protects the big clubs who are increasing revenues at a far higher rate than the competition. These billionaires give PSG, City, Chelsea etc the chance to catch up on the big clubs who've spent big for years. If anything the Sheikhs, Russian billionaires are creating a more level playing field by adding more teams into the mix and also pumping more money into the game, something Italian football has benefitted from in particular from PSG but really everyone has. Look at what Monaco have Porto this year whichll help them bridge the gap between themselves and the clubs in the big 5 leagues.

I do think the rules that a club can finance their own youth academy's/stadiums good though and maybe that's the future for billionaire owners which would be excellent for the game. Doubtful these people would have the patience to see it through though..

« Last Edit: May 6, 2014, 04:39:49 pm by ShayGuevara »
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Offline HighSix

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Re: Financial Fair Play - developments in here
« Reply #567 on: May 6, 2014, 04:41:09 pm »
Surprised deals are being struck & no appeals. Just seems unfair Chelsea can benefit as they were a couple of years earlier than PSG & City. Sure it will all fall apart under legal action when the next  club is taken over & the owners want to spend spend spend.

Offline Brian Blessed

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Re: Financial Fair Play - developments in here
« Reply #568 on: May 6, 2014, 04:49:26 pm »
I think it is, and if they have to reduce their deficit for next year, buying top quality replacement homegrown players which usually come at a high premium wont help them achieve it.
Even higher premium now, I would think. City could be over a barrel.
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Offline Cantona

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Re: Financial Fair Play - developments in here
« Reply #569 on: May 6, 2014, 04:50:11 pm »
Even higher premium now, I would think. City could be over a barrel.

Very true. :)
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Re: Financial Fair Play - developments in here
« Reply #570 on: May 6, 2014, 05:03:36 pm »
Not really, not if you want to sell them for a decent amount to make a profit.

If you look at Chelsea, Lukaku cost them something like £12-17m, Courtois was something like £8m, Zouma was £13m, etc.
right but once you amortize that expense they certainly will make a profit on their final book value. I'm assuming they made a lot of those purchases before ffp kicked in or during the champions league winning season to try and front load their books as much as possible.
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Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #571 on: May 6, 2014, 05:03:51 pm »
I'd say they are reasonably cheap for the quality they are. Probably made a fair bit from loan fees and would sell them at a big profit should they wish in the future.

I gave the good examples though, for every Lukaku there is an £8.5m Van Ginkel. For every Coutois there is a £10m Moses. Or £7m Marin.

Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #572 on: May 6, 2014, 05:05:42 pm »
right but once you amortize that expense they certainly will make a profit on their final book value. I'm assuming they made a lot of those purchases before ffp kicked in or during the champions league winning season to try and front load their books as much as possible.

I agree, but I really don't think they'll be getting the big numbers people seem to think.

Offline Zeb

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Re: Financial Fair Play - developments in here
« Reply #573 on: May 6, 2014, 05:15:15 pm »
I agree, but I really don't think they'll be getting the big numbers people seem to think.

It's also a limited resource which will only apply for a few seasons more before they start to become a 'normal' club in that regard. Torres is Chelsea's FFP punishment from karma.
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Offline rickardinho1

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Re: Financial Fair Play - developments in here
« Reply #574 on: May 6, 2014, 05:17:41 pm »
FFP just seems like the newest "flavour of the month" with the football bigwigs. Remember when all the talk was about imposing strict rules on having a certain number of homegrown players? Well since then clubs like Arsenal, Chelsea, City etc are still completely dominated from top to bottom by foreign players. FFP will get swept under the carpet in due time as well once clubs start to find loopholes. Chelsea are already laughing at it given how they've prepared all their loan players to be able to fund transfers.

Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #575 on: May 6, 2014, 05:18:32 pm »
Torres is Chelsea's FFP punishment from karma.

 ;D

Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #576 on: May 6, 2014, 05:19:25 pm »
FFP just seems like the newest "flavour of the month" with the football bigwigs. Remember when all the talk was about imposing strict rules on having a certain number of homegrown players? Well since then clubs like Arsenal, Chelsea, City etc are still completely dominated from top to bottom by foreign players. FFP will get swept under the carpet in due time as well once clubs start to find loopholes. Chelsea are already laughing at it given how they've prepared all their loan players to be able to fund transfers.

They really haven't though.

Offline Nessy76

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Re: Financial Fair Play - developments in here
« Reply #577 on: May 6, 2014, 05:28:37 pm »
I disagree. A financial penalty in a year of 'overspending' isnt really a penalty for someone who likes to spend more than he earns. Why not simply overspend every year and budget the fines into your overspending?

By imposing a fine which is fairly small relative to the size of the business - something like 60m euro over 3 years - and counting that against FFP they are not making it 'almost impossible for them not to overspend in the following year'. Each club controls its own expenses and UEFA is simply encouraging them to 'cut' theirs. In effect they are saying that if you overspend by FFP rules in one year, a degree of the overspend must be made up by underspending relative to FFP limits in future years.

It's a reasonable point, but it only really works if you then assume that there is a fixed penalty which would be the same year on year.

UEFA has indicated that this is not the case, and that repeat offenders will be more heavily punished. In fact the main reason for not simply suspending clubs from the off is that UEFA reserves the option for this as a harsher sanction in future. As there are degrees of overspending, there should be degrees of punishment, ranging from fines to an outright ban.

You are asking the club to cut its expenses (or raise revenues) already in order to comply. There is no provision for long-term non-compliance, clubs taking the piss like that will simply be booted out.

Given that the largest expense is in wages, and that clubs cannot simply stop paying players, you can't just shift the goalposts by as much as £20m a year and expect a club to absorb that loss without breaching the contracts of employment of the playing staff. That's very clearly not the aim here.

I'm not saying fines are a perfect solution, they aren't, but the sort of double-jeopardy punishment you support would never survive a legal challenge, as the penalty itself would make the rules significantly harder to comply with and thus be counter-productive.
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Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #578 on: May 6, 2014, 05:33:44 pm »
Given that the largest expense is in wages, and that clubs cannot simply stop paying players

You can sell them...

Offline TepidT2O

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Re: Financial Fair Play - developments in here
« Reply #579 on: May 6, 2014, 05:34:38 pm »
Are city still going to appeal this then?
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Offline Gegenpresser

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Re: Financial Fair Play - developments in here
« Reply #580 on: May 6, 2014, 05:38:56 pm »
You can sell them...

To who? PSG? They're not going to sell their best players and the rest aren't worth the wages they're on. They can offload some on loans, but they'll still be paying a big cut of the wages.

Offline Nessy76

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Re: Financial Fair Play - developments in here
« Reply #581 on: May 6, 2014, 05:40:16 pm »
You can sell them...

Not always (as we've seen ourselves all too often in the past). And unless the buying club is willing to match City's deranged wage structure, then they'll still be liable for a chunk of the players' wages.

In practice, it may be that City could sell enough to make the cut, if they wanted to, but there is nothing to prevent them claiming that they can't sell their players and are legally obliged to pay their wages. Having to adjust the budget so dramatically, so suddenly is not likely to create the sort of financial stability that FFP is supposed to promote.
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Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #582 on: May 6, 2014, 05:41:28 pm »
To who? PSG? They're not going to sell their best players and the rest aren't worth the wages they're on. They can offload some on loans, but they'll still be paying a big cut of the wages.

Then they'll be found to be in breach again and be punished accordingly.

They only have these players, and such a high wage bill, because they cheated when it comes to FFP. If they have to sell at a loss to bring themselves back in line with the rules they deliberately broke then so be it.

Now, who wants to go and collect Silva from Manchester and deliver him to Melwood?

Offline Nessy76

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Re: Financial Fair Play - developments in here
« Reply #583 on: May 6, 2014, 05:43:22 pm »
Then they'll be found to be in breach again and be punished accordingly.

They only have these players, and such a high wage bill, because they cheated when it comes to FFP. If they have to sell at a loss to bring themselves back in line with the rules they deliberately broke then so be it.

Now, who wants to go and collect Silva from Manchester and deliver him to Melwood?

It's tempting to see it your way, but it's just not realistic.
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Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #584 on: May 6, 2014, 05:46:26 pm »
It's tempting to see it your way, but it's just not realistic.

£15m a year is what, £290k a week?

I'm sure there would be more than enough takers for the likes of Aguero or Toure who are on around this amount, and they'd no doubt both be willing to move to some of the clubs who would be interested. Christ you could easily sell them both and wipe £30m off the bill and make a profit on them both given how long they have been there.

Offline Nessy76

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Re: Financial Fair Play - developments in here
« Reply #585 on: May 6, 2014, 05:48:31 pm »
£15m a year is what, £290k a week?

I'm sure there would be more than enough takers for the likes of Aguero or Toure who are on around this amount, and they'd no doubt both be willing to move to some of the clubs who would be interested. Christ you could easily sell them both and wipe £30m off the bill and make a profit on them both given how long they have been there.

Not the point though, Craig. City just have to say "No, we can't sell them" and the whole thing falls down. And it's a general principle, not a rule targetted at one specific club. You'd need to prove, beyond doubt, that any club in this scenario would be in a position to sell enough players to meet their FFP obligation plus the strength of the fine.

Good luck with that, I'm sure UEFA will pick their battles more carefully though.
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Offline TepidT2O

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Re: Financial Fair Play - developments in here
« Reply #586 on: May 6, 2014, 05:49:22 pm »
£15m a year is what, £290k a week?

I'm sure there would be more than enough takers for the likes of Aguero or Toure who are on around this amount, and they'd no doubt both be willing to move to some of the clubs who would be interested. Christ you could easily sell them both and wipe £30m off the bill and make a profit on them both given how long they have been there.
Real would buy Aguero for sure...
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Re: Financial Fair Play - developments in here
« Reply #587 on: May 6, 2014, 05:50:04 pm »
How were Zenit not touched? Surely the worst offender, purely funded by Gazprom. Russian league, small stadium, legitimate revenues surely minuscule.

Offline Zeb

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Re: Financial Fair Play - developments in here
« Reply #588 on: May 6, 2014, 05:51:11 pm »
I guess where double jeopardy comes into it is that there is an additional penalty of reducing the allowable overspend of PSG and City by 15m Euros in the first three year cycle of FFP. It's not really an issue as such because there should be sufficient revenue increase that it's not forcing firesales of players, but does prevent further spending. Withholding CL revenue would be even more damaging. It's about time frames as much as the size of things. Demanding unreasonably large cuts to budgets in the space of one year is one thing, demanding a club be in balance over a 3 year period is another. City have budgeted and projected and made much of how X will happen based upon the inflated Abu Dhabi sponsorship. If that is only counting at market rates, even if it's just the headline Etihad deal, then they've got a fairly large black hole in those projections now. The revenue increases from tv money will go a long way to filling that hole, but you can understand their squeals. They've paid for the finest advice possible to exploit loopholes and they've been placed on the naughty boy step with PSG for taking the piss. It wasn't meant to be like this.
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Offline Zeb

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Re: Financial Fair Play - developments in here
« Reply #589 on: May 6, 2014, 05:56:12 pm »
How were Zenit not touched? Surely the worst offender, purely funded by Gazprom. Russian league, small stadium, legitimate revenues surely minuscule.

Zenit have claimed in the past that their deals with Gazprom are only marginally above market rates (Gazprom have been throwing very generous deals to a number of clubs to make that so?), that this has been agreed with UEFA already, and that the bulk of their income is now coming from sources other than Gazprom (70% non-Gazprom). May still be one of the other seven clubs. Inter is another widely rumoured to be amongst the seven.
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Offline Abrak

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Re: Financial Fair Play - developments in here
« Reply #590 on: May 6, 2014, 05:58:38 pm »
It's a reasonable point, but it only really works if you then assume that there is a fixed penalty which would be the same year on year.

UEFA has indicated that this is not the case, and that repeat offenders will be more heavily punished. In fact the main reason for not simply suspending clubs from the off is that UEFA reserves the option for this as a harsher sanction in future. As there are degrees of overspending, there should be degrees of punishment, ranging from fines to an outright ban.

You are asking the club to cut its expenses (or raise revenues) already in order to comply. There is no provision for long-term non-compliance, clubs taking the piss like that will simply be booted out.

Given that the largest expense is in wages, and that clubs cannot simply stop paying players, you can't just shift the goalposts by as much as £20m a year and expect a club to absorb that loss without breaching the contracts of employment of the playing staff. That's very clearly not the aim here.

I'm not saying fines are a perfect solution, they aren't, but the sort of double-jeopardy punishment you support would never survive a legal challenge, as the penalty itself would make the rules significantly harder to comply with and thus be counter-productive.

Well I would agree that the fines can only be limited to so much. As I see it, qualifying for the CL is worth GBP35m. If UEFA feels you have overspent to qualify for CL then their ultimatum sanction is to ban you from the competition - at the cost to the club of GBP35m. So a 50m euro fine spread over 3 years is GBP15m a year (although it is for 3 years) which amounts to about 50% of what you will receive for qualifying. From that perspective I dont see it as unreasonable.

There is even a very sound underlying logic to it. Traditionally clubs in and around the CL places have overspent in order to achieve CL revenues and Liverpool overspent in the latter half of the 2000s in order to maintain their CL revenues (and try to keep the banks at bay.) And we all know what happened when they dried up. So imposing a fine for overspending that is a decent proportion of the CL revenue benefit that you will receive from overspending seems a reasonable disincentive to overspend in the first place.

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Re: Financial Fair Play - developments in here
« Reply #591 on: May 6, 2014, 06:00:55 pm »
So utd spending £200m in the summer is a rethink

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Re: Financial Fair Play - developments in here
« Reply #592 on: May 6, 2014, 06:03:12 pm »
You take the petrodollar, you live with the consequences. There almost has to be a sporting consequence, as the club can afford any financial one.
I agree. They breach the rules in order to gain a sporting advantage, so the punishment should be a sporting one.

Fining them 50m is laughable. As is limiting their CL squad to 21, seeing as that's what they used this season anyway.

This all comes down to money. They have the money to soak up any fine, and the money to engage UEFA in a lengthy and costly legal wrangle.
I hear they're in 'negotiations' with UEFA today over the punishment.
Negotiations? Who's in charge here? That suggests to me that UEFA are simply afraid to hit them too hard and that City will be glad to accept any punishment they think they can live with.

An if City decide they can live with these punishments, then they'll just keep on breaching the rules.

Offline ShayGuevara

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Re: Financial Fair Play - developments in here
« Reply #593 on: May 6, 2014, 06:06:17 pm »
Talk on twitter is that PSG are negotiating a deal and part of that means they'll be docked 20m per season by uefa in TV money and CL revenue (3seasons)

If similar happens to City they might be in real bother here :D

Edit:
-both have til Friday to agree deal if not it's sent to independent panel.
-squad size will be reduced to 18 for Europe if breach next season again
- presuming after that they'll start banning clubs
« Last Edit: May 6, 2014, 06:08:39 pm by ShayGuevara »
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Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #594 on: May 6, 2014, 06:09:13 pm »
I agree. They breach the rules in order to gain a sporting advantage, so the punishment should be a sporting one.

Fining them 50m is laughable. As is limiting their CL squad to 21, seeing as that's what they used this season anyway.

This all comes down to money. They have the money to soak up any fine, and the money to engage UEFA in a lengthy and costly legal wrangle.
I hear they're in 'negotiations' with UEFA today over the punishment.
Negotiations? Who's in charge here? That suggests to me that UEFA are simply afraid to hit them too hard and that City will be glad to accept any punishment they think they can live with.

An if City decide they can live with these punishments, then they'll just keep on breaching the rules.

It pays to read the thread.

The fine would have lasting implications on the amount they have to target for FFP (effectively -€20m a season for 3 years, or the wages of an Aguero or Toure). So whilst £50m is short change for their owners, the FFP implications are harder hitting.

They have only used 21 players this season but the ones they haven't used are pretty much home grown squad fillers so they meet the quota. It's not like they can just cut these players off for next season as still need to meet the home grown quota so will mean having to cut some of the ones who have actually played this season.

These aren't the punishments that would be implemented each and every year they breach it, this is the first year of punishments, the second would get worse, etc.


Offline Nessy76

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Re: Financial Fair Play - developments in here
« Reply #595 on: May 6, 2014, 06:16:00 pm »
Well I would agree that the fines can only be limited to so much. As I see it, qualifying for the CL is worth GBP35m. If UEFA feels you have overspent to qualify for CL then their ultimatum sanction is to ban you from the competition - at the cost to the club of GBP35m. So a 50m euro fine spread over 3 years is GBP15m a year (although it is for 3 years) which amounts to about 50% of what you will receive for qualifying. From that perspective I dont see it as unreasonable.

There is even a very sound underlying logic to it. Traditionally clubs in and around the CL places have overspent in order to achieve CL revenues and Liverpool overspent in the latter half of the 2000s in order to maintain their CL revenues (and try to keep the banks at bay.) And we all know what happened when they dried up. So imposing a fine for overspending that is a decent proportion of the CL revenue benefit that you will receive from overspending seems a reasonable disincentive to overspend in the first place.

Yes, I'm not objecting to the fine, I'm simply trying to explain why the amount of the fine won't be counted as a loss for FFP purposes moving forwards. I'd be very, very surprised if UEFA a) thought they could get away with that and b) did.
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Offline kennedy81

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Re: Financial Fair Play - developments in here
« Reply #596 on: May 6, 2014, 06:19:09 pm »
It pays to read the thread.
....


fair enough, yeah I should have, I just skimmed it.
was just listening to a news item on the radio and felt like a little vent.

cheers for the update.

Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #597 on: May 6, 2014, 06:23:19 pm »
fair enough, yeah I should have, I just skimmed it.
was just listening to a news item on the radio and felt like a little vent.

cheers for the update.

No worries mate, you weren't the only one  :P

Offline Brian Blessed

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Re: Financial Fair Play - developments in here
« Reply #598 on: May 6, 2014, 06:24:50 pm »
No worries mate, you weren't the only one  :P
What he really meant was, "you know-it-twat, Craig!"
Anyone else being strangely drawn to Dion Dublin's nipples?

Offline CraigDS

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Re: Financial Fair Play - developments in here
« Reply #599 on: May 6, 2014, 06:25:39 pm »
What he really meant was, "you know-it-twat, Craig!"

Did you mean know-it-all-twat?