Not OT? UM Prof dishes on Euro FFP ("soccernomics")
This article penned by Prof. Stefan Szymanski, a UM professor in sports management, who is an expert in "soccernomics":
http://espnfc.com/blog/_/name/espnfcunited/id/7687?cc=5901
It discusses the realities of European soccer's "Financial Fair Play" - basically, a set of rules to bar Steinbrenner-like behavior by the richest soccer teams. Announced in 2009 and set to kick in place in 2014, a team isn't supposed to spend on soccer more than it makes on soccer. I.e., if you spent $250M in transfer fees to buy top players, you better have made $250 in licensing, tickets, etc. Many uber-rich owners, like Qatari shieks, Russian oil billionaires, etc., just spend from their personal fortunes at will to assemble super teams (Manchester City, Chelsea, Paris Saint-Germaine, etc.) -- win at any price, basically. It's about the fortune, not the profit. (And why hasn't Dan Snyder bought an EPL team yet?)
But the reality is, spending continues unabated, and no one knows what penalties, if any, will be handed out next year. PSG might get spanked because no one likes their owners; but what if Barcelona or Manchester United violate the rules? Really, are those teams going to be banned from future Euro competitions -- and drive away the revenue they bring in?
Since the article is from a UM prof, I figure, it's fair game on the Blog.
Having been a ManU fan my entire life I can say that I don't think they will be in any danger with these new "rules". They will usually push the boat out for one signing every off season and then pick up a bunch of up and comers in their youth and build them up into superstars (or get rid of them if they don't show enough promise). I think the ones to watch would be Man City in the EPL and Bayern Munich in the BL. Perhaps Real Madrid in La Liga and maybe Barca, but I don't see Barca having the issue either as much of their talent is picked up when they are young and developed internally, rather than bought.
It's hard to say how it will effect soccer as we know it today, but I really don't think it will impact teams like ManU and Barca because as I said before, they tend to get talent when they are young and the price tags are low, then develop them. Their stars are usally poached rather than them being poachers.
That's just my 2 cents on the topic. I would be a little concerned if I was a Man City fan though, as they have proven they don't really have the capactiy or patience to develop their own players.
Bayern would be totally legit under financial fair play. They turned an 86 mil euro operating profit, or 11 mil euro after taxes in 2011-12. Imagine after winning the first German treble, their profit will be even greater this year.
Bayern has turned a profit every year for the last 20 years. If there is one "superclub" that FFP never would have affected, it would be Bayern. Link.
Impressive sextuple post.
admittedly I have no idea what the rules state because as I said, I am a ManU fan and just hearing what the rules involve made me pretty confident my club wasn't going to be adversely effected by it.
IIn regard to them turing more profit though, do you think that is a given? I mean you could be right but it isn't like the team is new or anything. Bayern has been one of the top teams in the world for decades and I wouldn't think what they did last year would add a lot to the club, only because they are about as big (and old) as it gets already. Again, you could be right but it would be hard to believe Bayern getting any bigger than they already are.
So how do these rules work anyway? Is it tied to your after t axes profits or what? I don't really know all the ins and outs of it.
as you could ever want:
http://swissramble.blogspot.com/2012/09/uefas-ffp-regulations-play-to-win.html
Bayern will never be affected by this. They're the most consistently profitable soccer team in the world. It's teams like PSG and Man City that are theoretically in trouble.
So really it is a plan that has no hope of actually achieving its intended purpose. I don't really know how I feel about its intended purpose either to be honest. I mean, I'm all for fair play but this isn 't the only sport where small market teams have trouble keeping up with the big market teams and to be honest, parity is a little overrated in my opinion anyway.
The top of the table in most european football leagues are pretty damn competitive and any given year there are multiple favorites. In the EPL you pretty consistently have 5 teams (MANU, ManC, Arsenal, Chelsey, Tottenham and Liverpool in the past) at least that have a realistic chance of winning the league. Then you have about 10 teams that are pretty consistently safe from relegation and every once in a while push for one of the champions league spots. Then you have the bottom group that pretty consistently fight for their EPL lives year in, year out.
Every now and again you get teams that make a push and dethrone someone in the above group and turn out to be a consisnt contender in the catergory above them (Swansea City for example). Those stories are great though they don't happen too often. My point is though, this isn't a lot different than other sports, some that even have salary caps.
Look at hockey for instance. Even in that climate with a salary cap in place you still have the small market teams having trouble to keep up with the big market teams. Each season there is a select few that would be considered favorites and the rest are left to fight for the leftovers.
To me, if some rich owner wants to spend millions (or billions) of his own money to buy a champion, whatever. There are some pretty recent examples of teams that have tried that and failed pretty badly despite all the cash owners have thrown at it. It still takes a good coach and team chemistry to actually win games and it makes it pretty sweet for onlookers when these teams fall flat.
Anyway, again, thanks for the info as I wasn't up to speed on all the goings on but in the end, I still don't know if trying to reel in some of these big spending owners is the right way to go (or even necessary in this sport).Just my opinion.
A quick summary would be: "what goes in, must come out".
From wikipedia:
"Only a club’s outgoings in transfers and employee benefits (including wages) will be counted over income from gate receipts, TV revenue, advertising, merchandising, sales of players and prize money is included in the assessment. Any money spent on infrastructure, training facilities or youth development will not be included.[53] The legislation currently allows for eight separate punishments to be taken against clubs transgressing the rules, based in order of severity"
http://en.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations
So it will theoretically prevent teams like PSG spending 100s of millions on Cavanni, Zlatan, etc if they have a deep-pocketed owner who gives two sh*ts about profit as long as he wins. Also, they better have a provision that team financed-debt is included in team outlays, otherwise guys like the Glazers can get financing through IPOs/etc to skirt the FFP regs.
Man City got a 400 million pound sponsorship from Etihad Airways, a company associated with City's owner. Under FFP, those types of related-party deals aren't supposed to count toward profits, but no one knows whether UEFA will actually refuse to credit the deal or not.
The deep-pocketed owners will just buy a million of their own teams' jerseys and call it merchandising revenue. And we know from the Big House example that you can sell out the stadium even if nobody shows up.
Being a medical dork, my first thought was European Fresh Frozen Plasma...
That being said, the downfall of the Fair Play rules in it's current manifestation will allow some teams to retrench at the top. Specificaly Real Madrid and Bayern Munich. Both are insanely profitable, on top of being able to field world-class teams.
And Bayern now has an absolutely insane midfield of Roos, Schweinsteiger, Javi Martinez, Mueller, and Robben, on top of adding Goetze and now Thiago Alcaterna. Adding Goetze and Thiago to a midfield that absolutely trucked Barcelona is just plain unfair...and completely legal under FFP.
I was a research assistant for Dr. Szymanski my freshman year at UM right when he was starting this project. Firstly, this guy's really really smart and hilarious to work with. As far as this stuff goes I think it'll affect the many smaller clubs that struggle financially year in year out much more than your ManU's and Bayern's and Milan's.
I wonder how this will affect the international transfer market. It seems like FFP in UEFA should bring down the transfer cost of players, so will this allow teams from other conferences a better shot at landing top talent? This might be what MLS needs to compete for top talent, as they wouldn't have to abide by these FFP rules. If I were a billionaire I would invest in an MLS team and build it into the next Man City / PSG / Chelsea.
... it's a coded term created by the most corrupt and racist organization in sports (outside of FIFA) for "we don't want foreigners disrupting the status quo."
Teams like Barcelona, Man U, Real Madrid, will continue to have a huge advantage given their brand popularity, size of the stadiums, television rights, etc... which means you really have no way to disrupt the status quo in the short term, and doing so in the long term is also next to impossible, because teams that develop their own players are a rare breed these days. Besides, if they develop them, the rich clubs can come and offer more for the young talent.
In my opinion this is nothing more than a corrupt effort to maintain a status quo driven by the big clubs. This is the last thing soccer needs, as leagues are already dominated by the same teams year in and year out.
it's not at all clear Chelsea will be in compliance with FFP. They made a small profit last year, but that was largely due to accounting stuff, and was also the result of huge purchases not hitting the books during that window (Hazard, Oscar). They lost like 67 million the year before.