Football Finance
- Thread starter King Binny
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thanks for the serious reply. be interesting if chelsea are cleared and flogging things internally with a patsy investor becomes a ‘thing’. honestly i think newcastle would love one big hit at building a side without psr constraints.
I think there needs to be a rain check on PSR. It wasn't created to entrench the advantage of the existing big teams, but that has been its effect.
At the same time, it hasn't stopped the likes of Everton and Villa almost going to the wall because its bite wasn't hard enough, but also there are too many schmucks lining up for a piece of the action - no-one should have. touched Everton with a barge pole, but they are still here, not because PSR protected them, but because Friedkin bailed them out and Moshiri accepted he needed to take a big hit on his investment.
There needs to be some sort of relaxation to allow the likes of Newcastle the chance to have a go at breaking into the top tier of clubs, but it still needs to protect the likes of Everton and Villa from inflicting potentially massive harm on themselves (and more importantly, on their fan base).
And obviously it needs to give good, hard fuckings to the likes of City, PSG and Chelsea, who are all taking the piss.
At the same time, it hasn't stopped the likes of Everton and Villa almost going to the wall because its bite wasn't hard enough, but also there are too many schmucks lining up for a piece of the action - no-one should have. touched Everton with a barge pole, but they are still here, not because PSR protected them, but because Friedkin bailed them out and Moshiri accepted he needed to take a big hit on his investment.
There needs to be some sort of relaxation to allow the likes of Newcastle the chance to have a go at breaking into the top tier of clubs, but it still needs to protect the likes of Everton and Villa from inflicting potentially massive harm on themselves (and more importantly, on their fan base).
And obviously it needs to give good, hard fuckings to the likes of City, PSG and Chelsea, who are all taking the piss.
Do you use language like that in audit reports? 
Don't you dare call me an auditor!!!!!Do you use language like that in audit reports?
We've all got every faith in them getting that very delicate balance exactly right!
The audit-aciteh of JJ.
Do you have any insight into why Newcastle is not egregiously breaking the rules and is being somewhat cautious with its spending? I assume they have the largest wallets in all of football. They just wrote a billion-dollar check for CWC. Maybe they are focused too much on the Saudi league and the world cup?
I have to admit I'm pleasantly surprised to see how they've conducted themselves. However, it's worth bearing in mind that the bulk of City's abuse of the rules has revolved around the value of their sponsorships (and I expect that will be a major focus of the PSR decision if we ever get to see it). They initially claimed there was no connection and later that it was all priced above board. Neither of these things are true, but that value is essentially locked in unless the PL wins the 115/130 case. When the Newcastle takeover was already underway (if you remember, it was delayed for ages by the fit and proper persons test), the PL introduced the APT rules which specifically targeted them and prevented them from gaming the system the way City did (because it introduced a cap on the value of their potential commercial deals with connected parties which would have been lower than what City got away with, and also meant they couldn't take the piss by having PIF clubs bid astronomical sums for their players - Saint-Maximin was the major sale to Saudi, and went for what looked a fair price).
It's worth remembering, if you look at City's declared figures, they comply with PSR (they've only been done for breaching UEFA rules). If you look at Chelsea's figures and allow their intra-group sales, they comply with PSR (but I think they'll fail UEFA rules for last year and the coming season). The only teams ever found to have breached PSR were Everton and Forest (and you could probably add Leicester had they not got away with it on technical grounds). No-one has had the brass neck to really go for it without covering their tracks and making it look like they didn't cheat (which in City's case, I believe, means cooking their books). United managed to do a deal with the PL to get away with some of their losses due to an extended impact of covid (which was bullshit) and some clubs, including Villa and Newcastle, traded their way out of trouble by selling players to each other at inflated values and / or doing legit deals for players they'd have rather kept.
So Newcastle would have been really out on a limb if they'd gone for it. There is also the European dimension for them - as they have been in and out of Europe, they're also trying to navigate the much stricter UEFA rules as well (which Everton and Forest weren't too concerned about historically). This probably means they'll try to do things organically for a bit.
But if City don't get done on 115/130, then I expect them to throw the cash around however they like, especially if they are not going to be in Europe (or if they believe they can game the system with artificially inflated commercial deals a la City and PSG). But unless or until that happens, I expect they'll play nice. Hopefully that means selling Isak to us to give themselves some scope to spend this summer.
This is going to be worth the effort, trust me. It's delicious.
Just a little analysis on Chelsea and UEFA's FFP rules. This doesn't seem to have had a lot of exposure in mainstream sources but I thought it would be worth discussing.
Firstly, this is all public information.
A summary of UEFA's punishments can be found here:
Chelsea's settlement agreement can be found here:
Digging into the detail of Chelsea's agreement:
1. They have been fined a total of €80 million, of which €20 million is payable immediately. Some media outlets have been reporting €31 million of fines, as the lead press release refers to a squad cost rule fine of €11 million. It isn't clear that's in addition to the €20 million, but I think it might be, and I'm guessing those papers would have had €31 million confirmed by Chelsea.
2. They will be fined (up to) a further €20 million in each of the next three seasons if they fail to meet targets.
3. These targets are expressed in terms of "football earnings deficit". This is old-style FFP. Broadly, losses of no more than €5m over three years, but you can get away with losses of up to €60m if the owners put equity in.
4. Ha! I hear you say, Chelsea sold their car parks, hotels and women's teams so they have massive profits and will be fine. Well, here's the interesting part. Because UEFA's letter says that Chelsea have to "...provide financial information based on an appropriate reporting perimeter, in accordance with the CLFS" (CLFS is basically the FFP rules - it stands for "Club Licensing and Financial Sustainability" Regulations).
5. So what is an "appropriate reporting perimeter"? Well, firstly, a reporting perimeter basically means "which companies' results do you report". The rule is quite lengthy, but what it basically says is you report on the football club, plus any other entities carrying out significant football activities, generating revenues and bearing costs. I'm struggling to see how their holding company would fall into this definition. Want to guess which company made those big profits on selling stuff to other Chelsea companies? Yep, the holding company. Now bear in mind that UEFA also ticked off City for their intra-group transfers 10+ years ago. Fair play, they're being consistent. So my read is they need to get to break-even football earnings without counting all those dodgy sales about which the Premier League shat the bed.
And just a bit of further historical context here. When their current owners fessed up about the historic failures to disclose, their settlement agreement found that the club had given "incomplete" information on their reporting perimeter in 2018 and 2019, so they have form on this.
Beyond the financial sanctions, there are also prohibitions on registering new players for UEFA competitions unless their "Transfer Balance" is positive. That is defined as cost savings from sales, less extra costs from purchases. Which basically means, as I see it, they're going to have to make a profit on sales v additions (transfer fees in, less transfer fees out, less any difference in wages), otherwise Joao Pedro isn't playing in the Champions League next season.
Beyond that, if they breach the terms of UEFA's settlement agreement (and if feels like they're going to have to make serious sales to avoid that) then they'll be excluded from the following year's UEFA competition, if they qualify for one.
Chelsea are under monitoring for 4 seasons. Villa for 3. The only other team on 4 years was Lyon, just to put into context which particular naughty step they're on (the top one).
TLDR - they're properly screwed.
Just a little analysis on Chelsea and UEFA's FFP rules. This doesn't seem to have had a lot of exposure in mainstream sources but I thought it would be worth discussing.
Firstly, this is all public information.
A summary of UEFA's punishments can be found here:
CFCB First Chamber finalises the assessment of the financial sustainability requirements in the 2024/25 season
The CFCB First Chamber imposed disciplinary measures against 12 clubs in breach of the financial sustainability requirements.
www.uefa.com
Digging into the detail of Chelsea's agreement:
1. They have been fined a total of €80 million, of which €20 million is payable immediately. Some media outlets have been reporting €31 million of fines, as the lead press release refers to a squad cost rule fine of €11 million. It isn't clear that's in addition to the €20 million, but I think it might be, and I'm guessing those papers would have had €31 million confirmed by Chelsea.
2. They will be fined (up to) a further €20 million in each of the next three seasons if they fail to meet targets.
3. These targets are expressed in terms of "football earnings deficit". This is old-style FFP. Broadly, losses of no more than €5m over three years, but you can get away with losses of up to €60m if the owners put equity in.
4. Ha! I hear you say, Chelsea sold their car parks, hotels and women's teams so they have massive profits and will be fine. Well, here's the interesting part. Because UEFA's letter says that Chelsea have to "...provide financial information based on an appropriate reporting perimeter, in accordance with the CLFS" (CLFS is basically the FFP rules - it stands for "Club Licensing and Financial Sustainability" Regulations).
5. So what is an "appropriate reporting perimeter"? Well, firstly, a reporting perimeter basically means "which companies' results do you report". The rule is quite lengthy, but what it basically says is you report on the football club, plus any other entities carrying out significant football activities, generating revenues and bearing costs. I'm struggling to see how their holding company would fall into this definition. Want to guess which company made those big profits on selling stuff to other Chelsea companies? Yep, the holding company. Now bear in mind that UEFA also ticked off City for their intra-group transfers 10+ years ago. Fair play, they're being consistent. So my read is they need to get to break-even football earnings without counting all those dodgy sales about which the Premier League shat the bed.
And just a bit of further historical context here. When their current owners fessed up about the historic failures to disclose, their settlement agreement found that the club had given "incomplete" information on their reporting perimeter in 2018 and 2019, so they have form on this.
Beyond the financial sanctions, there are also prohibitions on registering new players for UEFA competitions unless their "Transfer Balance" is positive. That is defined as cost savings from sales, less extra costs from purchases. Which basically means, as I see it, they're going to have to make a profit on sales v additions (transfer fees in, less transfer fees out, less any difference in wages), otherwise Joao Pedro isn't playing in the Champions League next season.
Beyond that, if they breach the terms of UEFA's settlement agreement (and if feels like they're going to have to make serious sales to avoid that) then they'll be excluded from the following year's UEFA competition, if they qualify for one.
Chelsea are under monitoring for 4 seasons. Villa for 3. The only other team on 4 years was Lyon, just to put into context which particular naughty step they're on (the top one).
TLDR - they're properly screwed.
