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We Need To Talk About Financial Fair Play… Again

Editorial | Article posted on February 5th, 2014

We Need To Talk About Financial Fair Play… Again
By Ian on Feb 3, 2014 in Finance, Latest | 0 comments

Was it just a matter of striking coincidence or was there something more in the timing of a story in the Daily Mail which stated confidently that “Rivals” are “ganging up to ban City” with a challenge over the blue half of Manchester’s attempts to comply with regulations meant to limit the extent to which sheikhs, oligarchs and other ne’er do wells have started to pour money into some football clubs? After all, as these words are being written, the expensively assembled teams of Manchester City and Chelsea are preparing to take to the pitch at The City of Manchester Stadium for yet another testosterone-soaked Premier League “showdown.” The eyes of the world will be watching this evening – aren’t they always nowadays? – but the eyes of some will be focusing on annual accounts of Manchester City and how these tie in with UEFA’s much-vaunted (but seldom so far tested) Financial Fair Play Regulations.
On Saturday evening, Jose Mourinho added his voice to a powerful – if not necessarily particularly numerous – choir of voices within the game of the opinion that UEFA’s Financial Fair Play rules aren’t treated with the respect that they deserve. We have to remember, of course, that this is Jose Mourinho we’re talking about here, and that there is probably no level of eyeball-rolling irony that the Chelsea manager wouldn’t apply in the name of gamesmanship in the run-up to the most important Premier League match of the weekend. Even so, back of a cigarette packet ecomonics put Mourinho’s comments into some context. It has, after all, been calculated that Roman Abramovich has poured around £2bn into Chelsea since taking ownership of the club in 2003, money that has been rewarded, if that’s the right word, with unprecedented success for the club, both domestically and in Europe.
UEFA’s Financial Fair Play rules will be applied for the first time next season with the governing bodies having stated that they intend to prevent clubs playing in the Champions League should they lose more than £37m over two years. Manchester City recently posted losses of £51m, but it is generally acknowledged the enough leeway would be given for the club to continue to play in the Champions League having posted this sort of loss. Where the complexity falls in the case of Manchester City – and others – comes in terms of other financial arrangements that have been agreed which seem to offset other losses incurred. The club’s losses would have increased by a further £47m had it not been for two opaque transactions – selling ‘image rights’

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