Weak UEFA rules offer little protection

May 26, 2010 Tags: , , , Opinion 4 comments

UEFA will ratify its new financial regulations tomorrow, trumpeting them as a step forward in fair play. But the rules, which essentially outlaw the sugar daddy subsidisation of football clubs, will do little to prevent the kind of leveraged takeover that has placed Manchester United in more than £700 million debt.

UEFA will phase in the new rules after President Michel Platini finally found agreement on the long-standing proposals for financial fair play in European football. From 2012-13 onwards clubs must not spend more than they earn if they wish to play in European competitions, although the governing body will introduce the regulations over an extended six-year period.

UEFA denies that it is trying to create greater diversity in competition winners, rather to ensure better financial management in football, with no Chelsea or Manchester City-style subsidisation.

“We’re not trying to level the playing field,” a UEFA spokesperson told Reuters today.

“We want to make sure that the middle-ranked clubs don’t go spending millions which they don’t have as they try to compete with the big clubs.

“The underlying principle is that clubs cannot repeatedly spend more than their generated revenues.”

Between 2012-13 and 2015-16 total losses at any individual club must not exceed €45 million – effectively €15 million per season – unless club owners put money into the organisation as hard equity. In the following three years the total losses cannot be more that €30 million and by 2020 UEFA hopes all clubs will run on an even keel.

The rules do not cover infrastructure investment such as that in youth facilities, training grounds or new stadia, which leaves Arsenal in the clear over the Emirates Stadium but Liverpool in the red due to interest payments. Chelsea and City fall foul based on the continuing losses at each club, although Sheihk Mansour and Roman Abramovich have sought to convert debt into equity this season.

UEFA will preclude clubs that do not meet the rules  from European competitions.

Today a United spokesperson insisted that the club meets the new regulations, with pre-tax profits around £91 million during the last full accounting period and revenues rising sharply. But this is tempered bythe knowledge that the club’s parent company, Red Football Limited, would have made a huge loss had it not been for the sale of Cristiano Ronaldo last summer.

While the club itself is increasingly profitable, the mountain of debt interest has a draining effect on the books and the parent company will continue to lose money for the foreseeable future.

Moreover, the UEFA regulations seemingly do not cover Red Football Joint Venture Limited which holds the Payment in Kind loans that the club is now committed to paying down after the January bond issue. The Glazers can effectively milk the club with impunity despite the new rules.

“We support the financial fair play measures. We are confident that we pass them and that we will continue to do so,” a United spokesperson added today as part of the ongoing public relations drive by the club ahead of the 13 June season ticket renewal deadline.

Indeed the regulations are not designed to cut indebtedness per se but the subsidisation from rich owners that has resulted in massive losses at Chelsea and Manchester City. Around two-thirds of Premier League clubs and 50 per cent across Europe will fail to meet the regulations according to football analysts.

“The many clubs across Europe that continue to operate on a sustainable basis are finding it increasingly hard to co-exist and compete with clubs that incur costs and transfer fees beyond their means and report losses year-after-year,” Michel Platini claimed recently.

“For the health of European club football, those many clubs that operate with financial discipline and sustainable business plans must be encouraged

“This is why the entire football family requested and expressed full and unanimous support for the principles of financial fair play.”

Indeed, the football community now recognises that outside intervention will ensure clubs, such as Portsmouth, do not spend themselves into oblivion, while City, Chelsea, Real Madrid and Barcelona can no longer lean on wealthy benefactors or the banks without consequence.

It is perhaps ironic then that United’s position in European football would be strengthened by the new rules were it not for the Glazer family’s ownership of the club. Compared to leading domestic and European rivals, United is highly profitable but for debt interest payments. The same is true of the Premier League as a whole, which generates more revenue than major European rivals.

Platini’s is not an anti-English agenda.

But this is the UEFA regulations do fall well short of the over arching framework for football finances that many in the community have called for. United’s debt will likely reduce the club’s competitiveness over time, with transfer and wage spending only permissible once the club has made interest and debt payments.

In the longer term should the Glazers ever wish to pay off the bond, United must raise revenues, sell players or reduce spending in the transfer market to stay within the regulations.

Indeed, the new rules should only increase the anger of fans, with the £437 million wasted by the Glazer family so far dwarfed in the next seven years by interest, dividends and management fees.

Platini will obtain greater fair play in European competition but United will benefit little from it.

Prick in your eye, thorn in your side

November 17, 2009 Tags: , , Opinion 3 comments

It’s nothing new that fans who do not support Manchester United, hate United. But the sport’s governing bodies also have a long and inglorious history of biased treatment towards the club too. The newly imposed touchline ban on manager Sir Alex Ferguson is just another example of the justice the World’s biggest club receives.

Fact is, there’s been one rule for United and one rule for everyone else for over a hundred years now.

United initially became the prick in the FA’s eyes when mustachioed winger Billy Meredith paved the way for players to earn today’s £100,000 weekly wages. Football’s first superstar chaired the PFA – football’s equivalent of a trade union – at its formation in 1907. The PFA’s first victory, won in 1923, saw the FA forced to acknowledge footballers’ right to organise.

The PFA also won important victories in the sixties; the first a court case came in 1961 when the PFA challenged the League Association, who aimed to force players already under contracts to accept wage cuts. A test case, won on appeal, pitted Henry Leddy against Chesterfield.

The maximum wage – just  £20 per week – was abolished in 1963 after a campaign led by then PFA chairman Jimmy Hill. Players could not move freely between clubs when their contracts expired – incredible in hindsight – until the English ‘Retain and Transfer’ system found itself challenged by the union and ruled illegal in a 1974 High Court test case.

The succession of unfair decisions from sports governing bodies agaainst United since Meredith dared to challenge Soho Square’s power are all too regular.

Eric Cantona’s January ’95 attack on racist Crystal Palace supporter Matthew Symonds is a case in point. Sir Alex Ferguson revealed that the club’s self-imposed season-long ban on the player, deemed sufficient in private conversations with the FA, was overturned by the governing body. The FA increased The King’s ban to nine months rather than five. In contrast, Jamie Carragher received only a three match ban for throwing a coin into the crowd when the Dippers visited Highbury in the 2002 FA Cup fourth round.

Then there’s the 1999-2000 FA Cup, which United was not allowed to defend. The club, persuaded to withdraw from the competition in support of the FA’s desperate need to woo FIFA, was then left out to dry by the governing body. The FA believed that having United as standard bearers for their ability to organise a piss up in a brewery would win the body the 2006 World Cup. But Soho Square falsely claimed it was the club’s decision to withdraw from the competition, despite imploring United to play the inaugural FIFA Club World Cup in Brazil.

There are plenty of other examples.

Roy Keane, handed a five match ban and an astonishing £150,000 fine for writing a passage on the Alf Inge Haaland incident in his autobiography, for example. That Haaland played for Norway three days after Keane allegedly ”ruined his career” and that it was his other knee that forced him to hang up his boots was completely ignored. By comparrison, Alan Shearer stamped all over Neil Lennon at Leicester City’s Filbert Street just prior to the France ’98 World Cup but received no ban from the FA.

In 2002, Rio Ferdinand was daft enough to miss a mandatory drug test and received an eight month ban, whilst Mark Bosnich received a nine month ban for testing positive for cocaine. Adrian Mutu was then sentenced to a paltry seven month ban for failing a drugs test and in Italy both Jaap Stam and Edgar Davids tested positive for the performance enhancing drug nandrolone. Ex-Red Stam, initially banned for five months, and Davids who served less than four, both had sentences massively reduced on appeal.

The most infamous treatment from the sport’s governing body towards United – or any other club in history for that matter – came when UEFA offered United a ‘wild card’ to play in the European Cup after the 1958 Munich Air disaster. League Association chairman Alan Hardaker denied United the opportunity though, claiming the competition “a waste of time,” before founding the League Cup just two years later.

In fact,  the Airspeed Ambassador G-ALZU containing the precious Busby Babes cargo only attempted take-off three times in the Munich snow because the aforementioned Hardaker had insisted United return to English soil at least three days before playing in the league. The players simply had to get home or forefit the game to their opponents.

As the saying goes: ‘Our history makes us strong. Their hate makes us stronger.’