tag:blogger.com,1999:blog-487486960623783530.post8399372194616601633..comments2024-02-29T09:58:18.342+01:00Comments on The Swiss Ramble: Is Manchester City's Strategy Fair Play?The Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.comBlogger38125tag:blogger.com,1999:blog-487486960623783530.post-23286679894629238832010-10-06T12:11:22.697+02:002010-10-06T12:11:22.697+02:00This comment has been removed by a blog administrator.Unknownhttps://www.blogger.com/profile/09817352420365176148noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-75551020774037333862010-08-17T15:33:30.003+02:002010-08-17T15:33:30.003+02:00Hey great blog. Just a random thought, what do you...Hey great blog. Just a random thought, what do you think about the way united are just sweeping through the market, not in transfers but signing commercial deals especially in Asia. Last year revenue from commercial deals has risen to something like a 220mil! And they have also announced new TV deal with hong kong based company for MUTV rights and mobile rights! The rate at which this revenue is growing , something like the chinese economy it may well surpass the two spanish giants without the individual tv deals, or at least get reasonably close to them. Also united's deal with NIKE will be up for renewal in few years' time, it ends in 2015 but they may negotiate a renewal earlier. And last time around in 2002 it was 302mil over 13 years. What increase do you expect on that this time? No Wonder MUFC is not for sale! As you said it could well turn out to be the best LBO in recent memory!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-29109592996119182262010-07-30T12:39:54.174+02:002010-07-30T12:39:54.174+02:00@Colly,
Thanks. You're absolutely right - I d...@Colly,<br /><br />Thanks. You're absolutely right - I do aim for a balanced approach. I have found that things are very rarely black and white, so prefer to lay out both sides of any argument and let people reach their own conclusions.<br /><br />Having said that, I'm sure that one day I will have a good rant about something!The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-52942797416946253612010-07-28T07:57:38.029+02:002010-07-28T07:57:38.029+02:00Best football blog on the net, a commendable lack ...Best football blog on the net, a commendable lack of moralisation of the issues for cheap hits, and always balanced. Still, wouldn't have minded a bit of judgement here as it is depressing reading for football fans.<br /><br /> The most frustrating aspect is the focus on smashing the 'top 4' and using the defence of promoting competition into what is a quadroply. But the fact is with an already disadvantaged tax system, the league cannot deal with the extra knock on effect of City's activity. You either go to City, or the two Spanish clubs if you want to earn 120k a week. <br /><br />The problem is Uefa are more concerned as the guardian of international football with promoting 6+5 rules, than curtailing Madrid borrowing 150m purely for player recruitment, and City taking the integrity out of the English league.<br /><br />The new fair play rules is complete lip service, City will have every interpretation stretched by legal and the effect will not be felt on the top dogs.Collynoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-69150784980652838142010-07-22T13:25:33.248+02:002010-07-22T13:25:33.248+02:00My pleasure,
I did not that ADUG was owned by Shei...My pleasure,<br />I did not that ADUG was owned by Sheikh Mansour himself i know there was a recent death in the royle family who was if i remember correctly in charge of the 500b+ money and was then taken over by Sheikh Mansour step brother i think.? Its very complicated with such a large family but its how they work i guess.<br /><br />Long live Sheikh Mansour!!!.ThankThaksinnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-54226116463473069192010-07-22T11:50:15.751+02:002010-07-22T11:50:15.751+02:00@ThankThaksin,
Thanks. City are ultimately owned ...@ThankThaksin,<br /><br />Thanks. City are ultimately owned by the Abu Dhabi United Group Investment and Development, but this company is wholly owned by Sheikh Mansour. I have seen the acquisition of City described as a private investment, but I'm not so sure that you can separate Abu Dhabi from the Sheikh, who is after all a member of Abu Dhabi's royal family.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-33279302611857418272010-07-22T11:22:42.090+02:002010-07-22T11:22:42.090+02:001st time on this site and enjoyed the read very mu...1st time on this site and enjoyed the read very much!! a few points i would like to make but may be irelivant?<br /><br />is our Sheikh financing us on his own or through the ADUG consortium?.. ADUG bought Barlclays and sold it 6 months later and got an estimated 1.5b (billion) profit and Dubia was recently struggling with a 50b (billion) debt which as far as i am aware was financed by Abu-Dahbi (ADUG) consortium and it hurts me to say this but my Man City is small fry now lets have a look at UTD for a laugh!ThankThaksinnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-41642179741575393072010-07-21T22:38:38.252+02:002010-07-21T22:38:38.252+02:00What an excellent post.
Interesting though that Ma...What an excellent post.<br />Interesting though that Man Utd was not for sale at more than £1bn. Making us even more good value.<br />I have long thought that the fair play rules would not affect us for all sorts of reasons. This though really kills the point and far more interestingly uses facts and figures rather than the supposition that i had. <br />Well done.grayfield18https://www.blogger.com/profile/13761944428756843832noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-12538286301828148922010-07-21T08:46:33.727+02:002010-07-21T08:46:33.727+02:00@Dave,
Agreed, but I think the issue for Man Utd ...@Dave,<br /><br />Agreed, but I think the issue for Man Utd fans is whether the return the Glazers make would be better used on other things like rebuilding their squad or lowering ticket prices.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-38925771236347539562010-07-21T08:44:12.794+02:002010-07-21T08:44:12.794+02:00@Anonymous (1:57),
It would be interesting to loo...@Anonymous (1:57),<br /><br />It would be interesting to look at how clubs could grow their non-football operations in order to comply with the break-even regulations, but I'm not sure how useful that would be, as I think that UEFA will ultimately have to look at the intention of such operations. A bit like the English common law principle of asking what a reasonable man would say.<br /><br />In other words, they would support City's development around Eastlands, as this brings benefit to the community and is clearly associated with the football club. However, such initiatives as a branded credit card or investment bank would be blatant attempts to get round the rules, so, in my opinion, should not be allowed in the definition of relevant income.<br /><br />People often say that the devil is in the detail, but sometimes it's worth stepping back and applying some common sense. I know that doesn't always work, especially in the legal world, but that's surely the intention.<br /><br />I also wonder how willing any benefactor, even if one as wealthy as the Abu Dhabi Group, would be to invest vast sums in bonds and the like to generate interest income. They don't normally like to tie up this amount of capital unless they generate a return.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-28220958340893333322010-07-21T08:29:18.120+02:002010-07-21T08:29:18.120+02:00@Tony,
Yes, it is the profit from such operations...@Tony,<br /><br />Yes, it is the profit from such operations, so the revenue and costs from the Sports City development would have to be included.<br /><br />You're absolutely right that it's not a given that City will make money from this venture, but my point is that there does appear to be a plan here that just might be enough to pass UEFA's Fair Play break-even regulations. When I first started looking into this, I thought there would be no chance, but it is possible.<br /><br />Although it's pure speculation, here's one potential scenario:<br /><br />2009 loss £93m<br /><br />Increased costs: <br />Wages £50m <br />Player amortisation £20m<br /><br />Lower costs: <br />Reduced interest payments £17m<br /><br />Increased revenue: <br />TV (Premier League) £20m <br />TV (Champions League) £30m <br />Commercial £30m<br /><br />Buying ground: <br />Gate receipts £20m <br />Stadium naming rights £10m<br /><br />Eastlands development: <br />Net profits £40m<br /><br />Estimated profit £4m<br /><br />PS. Thanks to Anonymous (5:35) for the clarification.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-42182893540598075512010-07-21T05:35:56.974+02:002010-07-21T05:35:56.974+02:00To Tony, costs will count.
Look in clause C (k)...To Tony, costs will count. <br /><br />Look in clause C (k)<br /><br />Relevant expense include cost from none-football operation like hotel and sports centres. <br /><br />UEFA Financial Fair Play PDF<br />http://en.uefa.com/MultimediaFiles/Download/uefaorg/Clublicensing/01/50/09/12/1500912_DOWNLOAD.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-57323400879753507782010-07-20T23:42:19.117+02:002010-07-20T23:42:19.117+02:00An excellent piece as always, and I bow to your kn...An excellent piece as always, and I bow to your knowledge and research. But could you help me a little...<br /><br />clause B. (k) in Annex X allows you to included revenue from certain operations.<br /><br />Is it really the case that there is no appendage to that clause saying that you also have to include the costs of such operations?<br /><br />If the costs also have to be included then what is being added is the profit from associated ventures akin to the club - which is different from just taking the income from the ventures.<br /><br />If UEFA really have only put in the fact that the income can be counted then that is a huge slip in the regs. If only the profit on the operations count then the first thing the firm has to do is to make a profit on these ventures, which does not always happen. Hotels and sports centres can make losses too.Tony Attwoodhttp://www.blog.emiratesstadium.infonoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-78948224143587410632010-07-20T22:40:34.820+02:002010-07-20T22:40:34.820+02:00Anonymous re Man U's finances>
I'm sur...Anonymous re Man U's finances><br /><br />I'm sure Swiss Rambler will correct me if I'm wrong, but I believe all you need to know can be summed up fairly simply:<br /><br />Since the Glazer takeover, Man U's non-performance-related share of Premier League tv revenue has increased by around £50 million per year. On a normal multiple, you'd expect to pay something like what the Glazers paid just for that £50 million per year. In hindsight, the price they paid looks low - low enough that they would have to seriously cock things up to get into any trouble now. <br /><br />Any problems they have - or had, with the refinancing - only impacted on the total profits they'll make. It's still a vastly profitable deal. Basically, in a period when world markets have crashed, and most investments lost a large proportion of their value and have not yet regained all of it, Man U has doubled in value. I suspect that in a few years, when all the fan-protests are long forgotten, this will be considered one of the greatest LBO deals of all time.Davenoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-45843219420965284782010-07-20T22:32:20.602+02:002010-07-20T22:32:20.602+02:00"The investment in City, which has largely be..."The investment in City, which has largely been spent on buying new players, may actually end up costing less than purchasing a ready made club."<br /><br />I entirely agree, since it's what I said when the takeover happened. Compared to the price asked for Liverpool - particularly given the further investment required there - there was an opportunity to buy a club like City, spend half a billion getting them into the CL, and still be ahead.<br /><br />With regard to the FFP regs, there are two points. One is simply that I suspect (perhaps over-cynically) that the main driving force in whether a deal is considered 'fair' by UEFA's Platini-appointed accountants is how closely the club has toed Platini's line politically. The other is that it's worth noting that the loophole you point out is more wide open to abuse than you stated - the subsidiary businesses' profits can be counted towards break-even, but they are not going to be subject to 'fair value' judgements. Nothing to stop the subsidiary hotel renting a room to the club's owners at above market value. At worst, though, the owners would have to build a hotel and rent every room themselves to pump money into the club.Davenoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-1471112784377194882010-07-20T14:18:31.453+02:002010-07-20T14:18:31.453+02:00forgot to add that it would need to be subtracted ...forgot to add that it would need to be subtracted from 'relevant expense'. So that hypothetical credit card company or hypothetical Bank relevant income will need to offset its relevant expense. <br /><br />Just curious, <br /><br />h) Finance income <br />Finance income is in respect of interest revenue arising from the use by others of entity assets yielding interest<br /><br /><br />Does that mean that if Manchester City has $500m (entity assets yielding interest) and put it in a bank (use by others) which arise in $50m "interest revenue", this $50m would be counted as relevant income????<br /><br />So if Sheikh Mansour put in $500m of equity so Man City can get $500m of cash. Man City lend that $500m to a bank from UAE. That bank in UAE pays interest. <br /><br />Or if Man City use $500m cash to buy a bond. Bond is a short-term asset that many business have. Dividend on the bond can be 'relevant income'?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-37022210106020685292010-07-20T14:05:55.785+02:002010-07-20T14:05:55.785+02:00continue with the above,
Annex X Part B (k): rel...continue with the above, <br /><br />Annex X Part B (k): relevant income includes:<br /><br />Operations clearly using the name/brand of a club as part of their operations.<br /><br />---------------------<br /><br />I guess that would work for a 'Man Utd credit card company' or a Chelsea FC Premier Bank. <br /><br />So yeah, there are ways to get around the rule, just need to be creative and think outside the box.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-83065999313598956972010-07-20T13:57:47.147+02:002010-07-20T13:57:47.147+02:00To Swiss Rambler (from an avid reader), is it poss...To Swiss Rambler (from an avid reader), is it possible that you could do a blog entry on ways that clubs could do to maximize their 'break-even' relevant income? (Section B of Annex X) <br /><br />Exclude the obvious <br /><br />a) increasing gate receipts<br />b) increasing sponsorship and advertising<br />c) increasing broadcast rights<br /><br />and focus on the more obscure 'relevant income' like<br /><br />e) revenue- other operating income<br />h) finance income<br />k) income from non-football operation related to the activities, locations, or brand of the football club<br /><br /><br />For example, h) finance income<br /><br />So if a club has $500m in the bank and as a result get $50m in interest payment, would this qualify?<br /><br />Also, what if a club set up a credit card (like Man Utd did in Korea), would that count as 'relevant income'?<br /><br />A club could set up a 'bank' and lend money etc...would that count?<br /><br />For example, Chelsea FC Premier Bank. <br /><br /><br /><br /><br /><br /><br />I'm sure you already have this UEFA Financial Fair Play PDF<br />http://en.uefa.com/MultimediaFiles/Download/uefaorg/Clublicensing/01/50/09/12/1500912_DOWNLOAD.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-38333276795550349102010-07-20T00:40:48.039+02:002010-07-20T00:40:48.039+02:00What a team that was and with amazing additions ov...What a team that was and with amazing additions over the 90s like Weah and Desailly they were THE team to beat for well over a decade.<br /><br />Any chance you could get an idea on how badly things are turning out for them? Purely out of curiosity because aside from the Emirates cup it's very unlikely we'll meet them on our way to the CL final this coming season...Matthttp://www.arsenalfootballclubnews.comnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-52319378058797405592010-07-19T23:18:18.613+02:002010-07-19T23:18:18.613+02:00Was waiting for the post on City and excellent stu...Was waiting for the post on City and excellent stuff as always.Danny Pugsleyhttp://bitterandblue.comnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-26835823536765416732010-07-19T08:26:53.379+02:002010-07-19T08:26:53.379+02:00@Matt,
That's an interesting point re United....@Matt,<br /><br />That's an interesting point re United. I wonder how much of City's strategy, at least on the commercial side, is aimed at becoming the top club in Manchester.<br /><br />I remember the early days of Berlusconi and "il nuovo Milan" very well, as I was actually working in Milan at the time. Him and Sacchi built the best club football side I've ever seen (I had a season ticket at San Siro): Van Basten, Gullit, Baresi, Maldini, Ancelotti, etc. However, as you indicate, they're not in great shape financially at the moment.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-71164281443819958892010-07-19T00:52:25.275+02:002010-07-19T00:52:25.275+02:00Forgot to thank you for this excellent article aga...Forgot to thank you for this excellent article again. I can't help wondering what the implications for United will be. While Citeh are on the up, United are (at best) stagnating so it's not too far-fetched to predict Citeh will finish above United before long. Already potential United buyers must have some second thoughts when comparing their fortune to the sheikhs'. The day United finishes behind Citeh it's going to be a really tough job pimping United for 1.5 billions...Matthttp://www.arsenalfootballclubnews.comnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-45667240811342026482010-07-19T00:12:47.019+02:002010-07-19T00:12:47.019+02:00Somehow it reminds me of the general feeling aroun...Somehow it reminds me of the general feeling around AC Milan shortly after Berlusconi took over in the 80s.It was even a bigger shock back then since he was the first "big" suggar daddy to bring success with money. But all good things come to an end as Berslusconi said himself a few days ago "If I look at the balance sheet I feel like fainting"<br />http://www.goal.com/en/news/11/transfer-zone/2010/07/16/2027933/ronaldinho-will-leave-milan-regardless-of-club-claiming-heMatthttp://www.arsenalfootballclubnews.comnoreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-32613257631057197842010-07-18T09:39:06.302+02:002010-07-18T09:39:06.302+02:00@Mike,
Fair point. It's obviously far from a ...@Mike,<br /><br />Fair point. It's obviously far from a fait accompli.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.comtag:blogger.com,1999:blog-487486960623783530.post-46427314767330387712010-07-18T09:37:53.348+02:002010-07-18T09:37:53.348+02:00@Rory,
Thanks. See you have started your own blog...@Rory,<br /><br />Thanks. See you have started your own blog - some good stuff there already.The Swiss Ramblerhttps://www.blogger.com/profile/11423088862174893998noreply@blogger.com