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In truth Manchester United fear FFP

CT-Manchester_United_FC_crest.Manchester United have emerged in the media over the past year as one of the major supporters of the new Financial Fair Play rules, arguing that it will remove the advantages currently enjoyed by clubs with billionaire owners – such as Manchester City and Chelsea- and return power to those who generate the most cash through their own efforts.

Ex chief executive David Gill was a particular supporter of the plan, arguing earlier this year that the Premier League should operate, immediately,  what is essentially a salary cap for most clubs.  “The impact of the new TV money has clearly focused the minds. Seven or eight clubs are going to have to abide by UEFA’s regulations in any case.” he said.

Yet it appears that the positive view of the football club board is not shared by either the owners of the club nor its lawyers.

A little-known filing with the New York Securities Exchange, linked to the recent flotation of part of the club on the New York Exchange, was required to warn investors about foreseeable risks.

The club was clear that FFP was one of the more serious. It informed investors. “These rules are intended to discourage clubs from continually operating at a loss. However, the implementation of the financial fair play rules, and in particular the potential punishment for non-compliance, remains uncertain.

“There is a risk that application of the financial fair play initiative could have a material adverse effect on the performance of our first team and our business, results of operations, financial condition and cash flow.”

 

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Posted 8:41 PM Friday June 7, 2013. Filed under Manchester United FC,Premier League. You can follow any responses to this entry through the RSS 2.0. You can leave a response to this entry. Pinging is currently not allowed.

24 Responses to In truth Manchester United fear FFP

  1. wtf Reply

    June 7, 2013 at 8:57 pm

    Cant believe i just wasted my time reading that.. or typing this. Non-story.

    • beno.p.piddititti Reply

      June 7, 2013 at 9:14 pm

      disclosures are part of normal corporate law.If it was not significant it wouild not have been listed.You cannot lie to the NYSE and stay out of jail !

  2. Balls Reply

    June 7, 2013 at 9:17 pm

    What a load of rubbish. Where do some people get these delusions from? Stockport bitterness I would guess.

    • Mines_a_pint_of_fred_the_ red_bitter Reply

      June 8, 2013 at 11:56 am

      No doubt you dont even know where Stockport is you plastic.David Gill was the architect of FFP to ensure United retained their pre eminent position. Its about anything but fare play.

  3. WHD Reply

    June 7, 2013 at 9:30 pm

    Actually if I were a United fan I’d be a little concerned as to why the board and cheif exec are singing off a completely different hym sheet than the owners and ‘investors’. But I’m not, so hey ho.

  4. Wigan Blue Reply

    June 7, 2013 at 9:35 pm

    David Gill has moved heaven and earth to word the FFP rules to favour United, when anybody with a brain cell left knows that those rules were initially introduced to prevent clubs with massive debts (leveraged or not), from continuing to limp along accumulating more and more debt – Portsmouth was the prime example. And yet United – the most indebted club in the world, are doing precisely that. Not only are the club massively in debt, but their owners owe three times what the club does in their own right. United would be quite right to worry about somebody actually noticing this and saying “hold on a minute…”. But as it happens, it isn’t going to apply.

    The clubs themselves can’t object to FFP, because our corrupt to the core FA approved it (mainly following instructions from Mr Gill). But others can. The football agents are currently sueing UEFA (also corrupt to the core) for loss of earnings. It’s only a matter of time before the players do exactly the same thing. And while loss of earnings is the simplest thing to get a ruling on, if they fail in that, their next point of attack is liable to be on the grounds of restriction of trade. And any court in England would give a ruling in favour of that tomorrow.

    • Balls Reply

      June 8, 2013 at 12:44 am

      FFP was voted in unanimously by the ECA, of which City and Chelsea are members and has already been given a green light in terms of its compliance with EU law by the European Commission. How can there be a restriction of trade, it isn’t preventing them from being a football club and competing in competitions they’re eligible for? The suggestion of a club being likely to win a legal case against a ruling they voted for makes about as much sense as the team finishing 5th taking legal action because they aren’t in the Champions League. They didn’t qualify because of a condition of entry in exactly the same way, and any team doing that would be laughed at, but UEFA have every right to choose any criteria they wish for entry into their competitions.

      In order to receive a license to compete in UEFA competition all clubs need to make a declaration of their agreement that any appeal of a UEFA decision is the jurisdiction of the Court of Arbitration in Sport whose decision is final. There is no other legal recourse so all this talk of being dragged through the courts is playground nonsense, generally spouted by hopeful people on club forums, and just a case of wishful thinking. CAS has already found in favour of UEFA in a number of early cases such as Malaga, so the idea that UEFA aren’t going to take failure of compliance seriously is naive at best.

      In fact UEFA are more at risk of a legal challenge if they don’t act against a club who has failed to comply (particular teams who have had lesser punishments already and are showing no improvements in their spending control), because the team who finishes just outside the European places will have every right to ask why they aren’t in their rightful place as dictated by the Financial Fair Play regulations.

      • Simon Brown Reply

        June 8, 2013 at 10:45 am

        The ECA and European Commission and UEFA can say what they like. When it gets to the European Court it will be struck down as a very clear restriction of trade. It is not legal to prevent a business from attracting external investment and using that investment to grow. That is it. Most businesses run at a loss, at least for the first few years, while they grow to a size where they can make a profit. Any business wishing to expand often as not has to bring in venture capital or other forms of investment or lending and they make a loss while growing.

        Football may want to have one set of rules for football clubs and a different set for everyone else in much the same way as football wanted to prevent free transfers. Just as the Bosman ruling meant that players at the end of their contract move for free, the ruling from the European Court will strike down FFP or redraft it so it makes more sense.

        This is actually good news for United – with their debt – because although they operate at a profit despite that burden, there are no guarantees that they won’t at some point need investment. It’s good news for clubs who attract external investment (City, Chelsea, PSG, Monaco, the Russian clubs) and bad news for those who run at a continual loss without any kind of investment to support that loss.

      • Dale Reply

        June 8, 2013 at 11:02 am

        Manchester City have hired two people who drew up the rules for FFP. Now you’re not telling me, that a club like Manchester City with such successful businessmen and women, and so many executives and lawyers, are going to hire two people based on some fan forum? Of course not. So why have they hired them? I’m quite sure it’s not because they don’t understand the rules, they have lawyers to read through all the paperwork and rules to clarify exactly what is what. As for the agents taking legal action, it has already happened. A lesser known agent in a smaller European country has challenged FFP in court. The restriction of trade comes because not every club agreed to it. Over half did, yes, but not all. And in this situation the FA are changing the rules without full permission from everyone. For example, if they were to announce that the bottom nine teams in the premier league would be relegated every year, the top eleven might agree to it, leaving the bottom nine completely abused and ignored. This is much the same process. Manchester City will be fine with FFP. They have already cut their losses and extraordinary amount, reached several business deals and partnerships which will ensure their safety. But FFP leaves every other team completely useless now. This decision will eventually turn the Premier League in to the same mess that the Spanish League is in now. a handful of teams at the top who go unchallenged year on year, dominating cash income with their previously arranged big money deals and youth academy’s. I completely understand the idea and principle of it, but over time it has been twisted into a childish attempt to keep the top clubs where they are and leave the rest behind. Clubs need to spend big to stay in the Premier League, let alone challenge for it. There is no possible way a team can both develop their first team squad, and seek business deals and partnerships as well as renovating their youth system without spending more than they earn at first. When you start a business, you have to spend, and go out of pocket for a little while, just until you become successful and start making money.

      • Tantric tentacles Reply

        June 8, 2013 at 12:09 pm

        FFP places a restriction on investment by businesses. It takes no note whatsoever of debt simply encouraging leveraged buy outs. Debt ruined Rangers and Portsmouth not inward investment. There is every chance FFP will be challenged and ruled illegal. Can you imagine one of the big multi national being told in the EU that they are not allowed to invest more than they earn? It wouldn’t happen. Investment starts before returns and revenues increase that’s a typical financial model. What do you think a business case is?

        By the way your user name is very appropriate as you talk it.

        • Balls Reply

          June 11, 2013 at 12:13 am

          Touche about appropriate names Mr Testicles, but spoken, like the posts above yours, like a true City fan hoping for anything to allow you to continue running from handouts which is quite frankly a bizarre stance. If anything, City fans and similar should embrace FFP because it means that your owner has no choice but to pump more of his wealth into your club to allow you to run independently which will mean in a few years that you will be a club with one of the highest turnovers in world football, and in doing so making your club and its assets much more valuable and able to run without ever needing propping up. A real fan would want that every time, although I appreciate 5 years may be a it’s a little too long-term for the plastics.

          Debt isn’t a problem as long as the turnover of the club is large enough to be able to service it, and that is the only requirement of FFP. What is dangerous for a club though is to take on a financial commitment that their income couldn’t service. Debt did ruin Portsmouth and Rangers, and why exactly was that? Because they spent more than they could afford and couldn’t service it and ended up owing a fortune to the taxman which forced the issue. If you think those cases are remotely similar to United’s debt which is less than a years turnover, and solely the result of a leveraged buyout rather than overspending, then you’re just perpetuating a nonsense.

          As my first post stated, there is nothing so far that even suggests an English club is going to challenge financial fair play, in fact quite the opposite, City and Chelsea have both increased revenue and cut spending and are likely to pass the requirement, and everything the City hierarchy have said suggest that they intend to comply. The only legal challenge so far is from an agent who is worried about his percentage dropping which will be laughed out of court, when it eventually gets there (in a few years time probably).

          All the guff about restriction of trade is quite frankly absurd and makes no sense at all, as per the notion that the club finishing 5th could have a similar restriction of trade complaint. It’s a competition by invitation only, not an inalienable right.

  5. HeavyRiffs Reply

    June 7, 2013 at 9:51 pm

    Man City fan, I don’t get the point of this article either.

  6. seven seventy Reply

    June 7, 2013 at 10:32 pm

    TWOT total waste of time

  7. russtheblue Reply

    June 8, 2013 at 12:05 am

    Jump back 20 years and United were a bigger club than City but despite the extra trophies they were not that much bigger. Then came sky TV, the champions league the Premiership just as United knocked together a good team. Talk about luck! United grew massively over the next 20 years using the money sky generated for them to build on that success buying and paying players outrageous amounts of money.

    Were United worried about FFP then?????

    A huge stroke of luck has allowed United to get where they are today and thats why they can generate so much cash it is not some mega effort by United board that ” generate the most cash through their own efforts” It is Sky TV that has allowed United to grow from a club not worth 20 million quid to one worth a billion + in 20 years

    Having had that luck United now want to close the door on any other club having a similar stroke of luck, how selfish?

    Still hard luck United, within ten years Citys stadium will be as big as yours, and the Etihad campus will be amazing. City will own clubs around the world in countries like Mexico and China as well as New York and whats more City WILL have more fans and generate more money

    • Nathan House Reply

      June 8, 2013 at 2:40 am

      This post above me is a load of nonsense.

      United have managed to pay off 500+ million of debt since the Glazer’s takeover and compete with Chelsea and City. This despite The Arab’s and Abramovich’s chequebooks.

      The board at Old Trafford have totally exploited us as a business in an economically genius way, our sponsorship income is higher than ever with worldwide partners in abundance.

      • Stephen Bamford Reply

        June 8, 2013 at 10:47 am

        The 500 mill paid off was from putting you on the stock market in America. It did not go down to well did it. You still have to pay all those share holders.To keep up with CITY and CHELSEA you will have to spend big. Witch your share holder’s wont like. I can only see more loans being taken out making matters worst. A stock market crash and you are gone. And the state of the world today it is not far off.

      • Dagenham_Dan_Uniteds_number_one_fan Reply

        June 8, 2013 at 12:01 pm

        Talk about deluded. United debt has gone down by about 100 million. They are playing out 45 million in interest charges annually alone. If it hadn’t been for the Sky greed is good league United wouldn’t have been able to buy the many trophies they have won.

      • spray1969 Reply

        June 8, 2013 at 12:08 pm

        “our sponsorship income is higher than ever with worldwide partners in abundance”. That Nathan, is because you are a successful team. Wait till Moyes takes you down the Everton route.

      • GalileeBlue Reply

        June 8, 2013 at 1:10 pm

        Let your latent racism creep in their eh mate, you need to be more careful.

  8. Bob Reply

    June 8, 2013 at 3:22 am

    Bitter or what!

  9. CiTyBlUe Reply

    June 8, 2013 at 12:19 pm

    I’ve always said United will be crippled by the combination of the loss of Ferguson and his over the hill players along with the FFP.

  10. Jem Reply

    June 8, 2013 at 1:05 pm

    FFP will not allow a businessman clear a clubs debt, absorb future debts, invest massively in the club team, infrastructure and youth development (Man City) but it will allow a businessman to borrow 400 million or about, and place the burden of debt on the club, using most of the clubs profits to pay off the debt & shareholders (Man Utd). How the Fxxx is that fair? Surely what the Arab is doing for City is a lot healthy then what the Yank is doing for Utd, or am i missing something?

  11. raymond bamford Reply

    June 8, 2013 at 5:32 pm

    there goes them favourite words of united fans deluded delusions delusional ever since alex ferguscum came out with them the fans have to use them because they can’t think for themselves.the only deluded people are united fans get real ffp is a idea made in the heads of red clowns to help clubs like united and put a stop to clubs like city out spending united and cripple little clubs so united can bye all there players on the cheap but it will all backfire on them delusional reds

  12. Joe Reply

    June 10, 2013 at 2:14 am

    Every club should fear FFP as long as long it remains untested.

    The fact that Manchester United is well-protected against FFP compared to most other clubs does not mean FFP is not a concern for them too. Failure to disclose such a concern to prospective investors would be irresponsible.

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