Following the freezing of Ramon Abramovich’s assets, Chelsea are in real trouble. In fact, there’s a significant chance that this will be an absolute disaster for them – I will explain why.

Before we dive in, we should understand that the football club is a limited company that is 100% owned by a Holding Company called Fordstam Limited. Forstam owe about £1.5bn to Abramovic – he uses Fordstam to fund the football club. Losses have been reduced in recent years but it often does not bre...

It’s not a popular view but; all credit to FIFA. It must have taken some guts to investigate and then impose transfer bans on Real Madrid and Atletico Madrid for contravening their rules on signing players aged under 18. The rules are in place to prevent clubs from hoovering up young, mainly impoverished teenagers, then transporting them round the world in the hope a few of them can make a profit for the clubs and agents.

Under FIFA’s Article 19, the only scenario that would permit a playe...

The announcement that FFP rules are to be 'eased' has left both critics and supporters of the rules wondering what this means for the European football.

The FFP rules and their concept of 'break-even' look set to stay, but crucially, the rule that prevents a wealthy owner from injecting cash into the club to fund losses appears about to be scrapped. In many ways this isn't hugely surprising; UEFA's 'sustainability' argument always looked the most vulnerable in respect of a wealthy benefactor ...

Although Championship clubs voted for new FFP rules on 6th November, QPR are still on a collision course with the Football League. The rule changes do not expressly alter any sanction applied as a result of the club's overspend during 2013/14.

Although QPR’s accounts have not yet been released, it is inconceivable that they would have been able to keep losses below the threshold for the 2013/14 season (£3m maximum loss, or £8m if the owners injected £5m equity). Looking the most recent ac...

With Championship clubs due to submit their Fair Play information to the Football League by 1 December, it is worth considering which clubs are likely to have breached the rules and the likely impact.

Looking at the Championship clubs, 9 are viewed as being ‘Likely’ or ‘Very Likely’ to receive a Transfer Embargo from January.

The Football League will look back at the season 2013/14 and determine which clubs exceeded the permitted loss limits for that season. During 2013/14 clubs were ab...

During the Summer 2014 Transfer Window we saw a number of deals where a player was loaned for 12 months, with the option to buy at the end of the loan. There were a number of reports that FFP was the reason for this type of transaction and it is worth exploring the issue.

There are a number of reasons why clubs might want to enter into a 'Loan&Buy' deal:

To get round a spending cap

Under the UEFA FFP sanctions, Man City and PSG were give a net player spending restriction (in addition to other sa...

Last week, the Championship clubs voted on a number of potential changes to the existing FFP rules. However, as none of the tabled amendments could muster the required 75% of the vote, the rules will remain as they are.  Huddersfield issued an excellent summary of the proposed changes and outlined their disappointment that ‘real-time’ monitoring of finances was not approved.

Under the current rules a ‘Fair Play Tax’ is levied on all clubs that gain promotion to the Premier  League but ...

Following recent press reports, we now have a much better idea about the sanctions that are reportedly being offered to Manchester City and PSG. It is now up to the clubs to decide whether to accept the terms or risk a potentially more severe punishment. The punishment reported in the press raises a number of interesting questions:

So, now we know that Man City (and PSG) failed the FFP Break Even test. However, this was no accident. Man City didn't fail the test because of an oversight - they failed because they chose to fail. The following analogy is helpful: 

I recently handed my son £5 to buy some sweets, telling him to spend no more than £1. Inevitably, he came back with quite a lot of sweets having spent about the £1.50. He didn't exceed the budget because he wasn't able to count - he just evaluated the pros and ...

The Football League has clarified an important aspect of how their FFP rules operate within League and League 2. Interestingly, the FL have confirmed that their Salary Cost Management Protocol (SCMP) rules permit 'benefactor' owners to finance a club's ongoing losses (something that is restricted within UEFA, the Premier League and Championship rules). 

The League 1 and League 2 rules require clubs to submit regular financial forecasts to the Football League. Only if a club is operating within...

Last Friday UEFA held an FFP update in Nyon which provided some excellent information about the current process – however it also gave rise to a number of interesting questions.

UEFA explained that the teams that potentially faced punished for an overspend during the first Monitoring Period are those professional teams that qualified for UEFA competition in 2012/13 and had a Break Even deficit in the 2011/12 season. Although the Monitoring Period looks at accounting performance over two seas...

On Friday UEFA held an FFP press briefing in Nyon. The 2 hour session provided number of interesting updates - only a few of which have been reported in the British press.

76 clubs referred for Break Even Deficit

As has been widely reported, 76 clubs were required to provide additional financial information to UEFA. Some media outlets probably not at the session seemed to sensationalise what UEFA were saying in respect to the 76. Essentially the 76 clubs are those that met all the following cri...

The European Commission has opened disciplinary proceedings against Spain for giving illegal State Aid to 7 clubs (Real Madrid, Barcelona, Athletic Bilbao, Osasuna, Valencia, Elche and Hercules). The proceedings could have a significant impact on Spanish football.

Independent journalist Sam Wallace originally broke this story. See his articles here and here and here.

There are three areas in which the rules may well have been breached:

Member status

Whilst all other clubs were obliged by the Span...

A study of Premier League club accounts shows that most paying fans effectively have their match-day-experience subsidised by club losses. The table below shows how much extra fans would have to pay for their match tickets if clubs worked on a Break Even basis, with fans making up any deficit.

At the weekend, PSG became the first french team to field an all foreign line-up in a league game (in England this first happened with Chelsea in 1999). Their opponents Lyon fielded 7 french players and were hammered 4-0. This triggered inevitable debates about whether the scenario was a good thing, with 63% of respondents in one survey finding it 'shocking. However it looks like something they are going to have to get used to.

Off the field it has been an interesting week for the club.  A sen...

Back in May I wrote an article about Arsenal's link with the deforestation company HAGL in Vietnam.

The pressure group Global Witness has increased the pressure on Arsenal to sever their links with company. BBC London's Sara Orchard produced a TV report on this issue:

http://www.youtube.com/watch?v=Uu1yQK17zIQ

On the face of it, this might appear to have been an expensive summer for Man City; they have just sold Tevez at a £35m loss and have recently spent £50m on Fernandinho and Navaz. Football fans might follow the narrative that says that Man City are 'laughing in the face of FFP'. However, owing to the way football finances operate, the reality is somewhat different.

When judging whether a team has made a profit or loss for the season, transfers fees are spread out over the duration of the con...

Following the initial legal challenge to FFP in May by Daniel Striani via sports lawyer Dupont, a second legal challenge has been raised.  I have attached the Press Release in full with attachments:

On the eve of the Champions League, Michel Platini gave an extended interview to the Mail’s Martin Samuel. Samuel has long been an outspoken critic of FFP and certainly put the UEFA head on the spot.  Platini was left to struggling to justify some elements of FFP (although, as Platini pointed out, English isn't his first language). The full transcript of the interview really is an excellent read – click here.

Following Bayern’s win, a number of football pundits suggested that FFP would m...

Jean-Louis Dupont, the lawyer who was successfully challenged football contract laws for Jean-Marc Bosman in 1995, has now challenged the Financial Fair Play rules with the European Commission. Football Clubs themselves are restricted from easily challenging the FFP rules (other than through the Court of Arbitration for Sport – CAS) because the rules were voted-in by the European Club Association. Hence Dupont is pressing the challenge on behalf of a Belgian football agent, Daniel Striani. ...

Italian site http://tifosobilanciato.it  has published an unusually candid  interview with Umberto Gandini, AC Milan Organising Director and Vice President of the European Club Association.

The European Club Association (ECA) is the representative association for Europe’s top clubs and is headed by Karl-Heinz Rummenigge, with Gandini as Vice President.  The ECA works with UEFA whenever rule-changes are being proposed and also petitions UEFA for change. The Financial Fair Play rules were prod...

Sunderland's contentious sponsorship deal with 'Invest In Africa' has hit problems. Amid some confusion, the club's lucrative deal has been cancelled, with the club suggesting the split is 'by mutual consent'. 

Back in July 2012 I wrote an article about Sunderland's new sponsor 'Invest in Africa' - a 'non-profit organisation' backed by Tullow Oil. At the time, many people were surprised by the size of the sponsorship deal which reported as being 'worth £20m a season'. This was a significant i...

French newspaper Le Parisien reported that Paris St-Germain have signed a huge sponsorship deal with the Qatar Tourist Authority. The four-year deal is said to be worth E150m this season, rising to E200m in the final year of the arrangement.  The deal is also reported to be back-dated so that the club will receive the full E150m this season, even though deal has only just been announced.

PSG are 100% owned by the Qatar Sports Initiative (QSI), which is in turn owned by the Qatar Investment Aut...

Premier League Chairmen met on Thursday to discuss implementing spending constraints into the Premier League.  Clubs have become noticeably more positive about the prospect of spending restrictions over the last two years and the Premier League executives (notably Peter Scudamore) have had to change their stance on the issue.

Although most club owners now believe some kind of restriction is going to benefit them, finding a single approach that will be acceptable to 14 of the 20 Premier League ...

As readers of this site will be aware, there are 8 available UEFA punishments.  However, one of the key FFP questions is whether UEFA will actually ban a an overspending club.  Important clarification has been provided in an interview with Alasdair Bell, UEFA's director of legal affairs.

Bell explains that he believes that any club that exceeds the Break Even limit by more than 20% will face the most severe punishments.  In practice this means that during the current two year Monitoring Period...

The internet is full of ‘crack-pot’ ideas, from personal jet-packs to underwater hotels (as proposed by Joe Cala, one of Pompey’s former prospective owners proposed).

Occasionally some of these ideas take root. Back in November 2011, Blogger Maracanazo proposed an alternative FFP punishment to the outright ban suggested by the rules. He suggested that overspending clubs could be docked points from the group stage of the Champions League or Europa League.  Perhaps Platini reads his site, ...

Atletico find there’s more to Financial Fair Play than just “Break-Even” 

The term “Financial Fair Play” is often used when talking about the need for a club to meet UEFA’s Break-Even requirements.  However, UEFA’s FFP rules run to around 90 pages and cover significantly more than just the need for a club to balance their debits and credits. UEFA have just announced that 23 clubs have had their UEFA prize money withheld under the banner of “Financial Fair Play”. One of the 23...

Inter’s owners, the Moratti family, have signed a deal to sell 15% of the club to China Railway in a deal that will raise E75m.  In a move that appears to be deliberately designed to work around the FFP rules, the club have announced that the funds will be used to build a new 60,000 seater stadium for Inter.  Inter failed to make the Champions League this season and had already been struggling to meet the FFP criteria.

Under the FFP rules, only specified types of income (termed ‘Relevant i...

Sunderland recently made a surprising announcement when they unveiled their new £20m-per-season sponsorship deal with a ‘charity’ called ‘Invest In Africa’.  However all is not as it first appeared; it transpires that 'Invest in Africa' is actually a ‘not for profit’ organisation with only one employee, accused of being a ‘PR front’ for a contentious oil extraction company.

Football clubs don’t usually have paid deals with charities or 'not for profit organisations'. Blackbu...

Premier League Chief Executive Richard Scudamore has announced the that Premier League is looking into the prospect of introducing its own Financial Fair Play rules. Appearing before the Commons Select Committee on Tuesday 10 July, Scudamore advised that they are setting up a Working Group and aiming to have proposals before clubs during February/March 2013.

With the Football League having introduced their own FFP rules, the Premier League has been criticised for growing levels of debt and for...

Any club or individual that feels aggrieved by a punishment applied by a League or footballing body is able to apply to take their case to the Court of Arbitration in Sport. Subject to certain criteria, CAS may to able to arbitrate on the case.  Recently two Turkish teams have been punished by UEFA for breaches of  FFP rules and have taken their case to CAS. The results have interesting implications for the implementation of FFP.  They also show how challenges to FFP punishments may be applie...

It isn't often that sporting journalists are genuinely shocked, but the new Premier League TV rights auction surprised many. The rights to broadcast the Premier League matches from 2013 to 2016 within the UK were up-for-grabs and had been expected to be sold for a similar sum to last time. Owing to the aggressive bidding from BT and the desire by Sky to hold onto most of the matches, the bidding closed at £3.018bn (a huge increase of £1.2bn from the last auction).  For an excellent in-depth...

Now that all clubs have finally published their accounts for last season (Liverpool being the laggards), UK newspapers are starting to produce their analysis of the finances of the Premier League clubs. 

Matt Scott in the Telegraph produced an in-depth analysis of club accounts, including net transfer spending (something that isn't easily identifiable).  It is highly recommended.

James Lawton in the Independent wrote a very interesting article about the lack of governance in the Premier League ...

The newly announced Championship and League 1 & 2 Financial Fair Play rules rely on the use of a 'transfer embargo' as the main sanction for overspending clubs in the Football League.  The first transfer bans for League 1 and 2 clubs under the new rules will commence from the start of next season (2012/13).  However the Football League have confirmed that fans may be kept in the dark about any transfer ban imposed on their team.

Championship clubs have voted 21-3 in favour of introducing strict new Financial Fair play rules.  Clubs that overspend will be punished with a Transfer embargo. The details are attached here.

Plans to introduce a model that restricted clubs to spending a percentage of their turnover have been abandoned in favour of 'breakeven' model that restricts the level of losses a club can make.  In the face of practical and legal challenges (outlined in my previous article), the first sanctions will not...

League 1 and 2 clubs have agreed to continue the Salary Cost Management Protocol (SCMP) and impose transfer embargos on overspending clubs from the start of next season (2012/13).

The fall-out from Rangers financial collapse continues. Scottish Premier League (SPL) clubs will vote on new rules at the end of April that would be applied if a club enters Administration or if it suffers liquidation and is replaced by a new club (or "newco").

In future, any club entering administration would be docked 15 points (or 1/3 of their points at the time of the insolvency event, if that is a greater number of points).

Significantly, any "newco" would also be docked 10 points from the...

There has been a great deal of interest recently in whether Manchester City will pass UEFA's FFP test for the first Monitoring Period. The debate merits an explanation of how the FFP rules will apply to City and the implications for the club.

The first UEFA Monitoring Period covers the two seasons either side of the 2012 Summer Olympics (the 2011/2 and 2012/13 season. Clubs have to report losses below E45m (or £38m) over this two year period (i.e. an average loss of no more than £19m a seaso...

Article published 5 April 2012

Football League proposals for the introduction of Financial Fair Play rules appear to have run into difficulty and a delay in implementing the rules looks increasingly likely.

In June 2011, the Football League (FL) announced that Financial Fair Play rules would be introduced into the Championship from the 2012/2013 season.  The FL set out a schedule that would have seen the proposals circulated and then ratified at their Quarterly Meeting of all 72 clubs in Februa...

Article published 4 April 2012

At the UEFA conference in Istanbul, UEFA ratified three more disciplinary measures for clubs that breach FFP rules.  As I outlined in my article on 7 Feb, five measures had previously been agreed at the Nyon Conference in January. The full menu of punishments now reads:

Article published 29 March 2012

Last week was an truly excellent week for Platini and saw him secure approval from the European Commission to the Financial Fair Play rules. Platini has been concerned that any excluded club may challenge the legality of the punishment (hence he recently bolstered his legal dept) (see article from 16 March).  Approval from the European Commission was essential for Platini as he has now closed the door on any legal challenge.  He must have been delighted to see t...

Article published 20 March

Last week, questions were asked in the Spanish parliament about the amount of tax that was owed by Spanish clubs to the government.  The government was forced to admit that it was owed  €752m in back taxes (including €48m owed by Barcelona and €155m owed by Atletico Madrid).  The issue was quickly compounded by the Sports Minister Miguel Cardenel brazenly announcing that they were looking at ways that debt could be written-off.  The reaction from German clubs w...

Article published 16 March 2012

David Conn of the Guardian is one of the most informed journalists regarding FFP. He has contributed to a particularly interesting article produced by CNN.  He outlines that UEFA are "readying themselves for legal challenges from top clubs and sending out a clear message they will be able to counter them," Conn points to the strengthening of the UEFA licensing and legal team with the appointment of top English lawyer Alasdair Bell."

http://edition.cnn.com/2012/03...

Article published 15 March 2012

Dan Storey at football365 has written an excellent article on the German footballing model. He makes some interesting points:

• A minimum of 51% of each club must be owned by the club's members
• Club members have the ability to directly affect the running of the club
• A season ticket for Borussia Dortmund costs £152 for 17 domestic home games and one European game
• Average attendance in the Bundesliga last season was 42,690 (7,000 more than the Premier League)
• Due to the...

Article published 11 Mar 2012 

With UEFA keen to ensure clubs' expenditure matches their income, we have carried out some high-level analysis of the subsidy levels that fans currently enjoy.   Looking at two clubs currently in the media spotlight (Man City and Portsmouth), we have calculated how much extra the average fan would have to fork-out if they were to pay the market rate for their ticket (based on the club operating on a break even basis).  

The results are fairly staggering. Man City ...

Article published 10 Mar 2012

Under FFP regulations the cost of acquiring a player's contract (i.e. the transfer fee) has to be written off over the life of the contract.  However, the same restriction does not apply to other contracts. The cost of acquiring a manager's contract (eg.  André Villas-Boas) can be written-off immediately as a one-off hit against that year's financial results.  When Chelsea sacked Ancelotti, they decided to write off the cost of paying up his contract AND the cost...

Rummenigge calls for City to be banned - Mancini takes the bait 6 Dec 2011

A public argument has broken out between Bayern Munich and Man City over the penalties for breaching Financial Fair Play regulations. In an interview with Austrian website www.90minuten.at Bayern CEO Rummenigge makes a stinging attack on City’s spending and expressly calls for UEFA to exclude them from European competion..  Rummenigge explains:

“I recommend that Uefa should think of harsh punishments, otherwise there...

Novel punishment proposed for FFP breaches 26 November 2011

With a UEFA committee due to meet in January to determine the punishment tariff for FFP breaches, an interesting suggestion has been proposed by a blogger at http://www.maracanazo.com/ .  UEFA's previous plan to impose a transfer ban for certain FFP breaches seems to have hit the buffers (due to restraint-of-trade issues and the fact that control of player registrations rests with FIFA and national associations, rather than UEFA).  Th...

UEFA shelves Transfer Ban punishment 24 November 2011

The Telegraph published a significant FFP article which maintains that UEFA have had to withdraw one of the proposed punishments for exceeding the Break Even deficit. The use of a transfer ban was put forward as a favoured punishment at the ECA in September (see article below). However it appears such a ban would fail the EC's restraint-of-trade rules.  This seemingly leaves UEFA with only three options:

1. Levy fines as a punishment (however t...