Don Garber thinks Financial Fair Play is just smart

Discussion in 'MLS: News & Analysis' started by vevo5, Aug 8, 2012.

  1. vevo5

    vevo5 BigSoccer Yellow Card

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    http://www.goal.com/en-us/news/1110...admits-that-an-emerging-league-in-china-could


    Financial Fair Play is a none parity salary cap. All it does is control overspending but it is a major fail when it come to parity. The rich clubs will still be the top dogs and the poor clubs will be relegation strugglers.

    It will be interest to see what the EPL does in the coming years (none parity salary cap with a % of turnover or a parity salary cap with a spend limit):
    http://www.espn.co.uk/football/sport/story/164078.html
    EPL club chiefs eager for financial controls




  2. Unak78

    Unak78 BigSoccer Supporter

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    I've been saying this over and over since I've heard the plan was first enacted. All it will do is make the current disparities worse. At best it will reinforce the status quo. Fortunately for me Chelsea's support has grown over the years to the point where they won't be hurt much by this but Man City has a bit to worry about. I hope to be proven wrong, but it seems more likely to protect the current big clubs from competition.
  3. Zxcv

    Zxcv Member

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    Financial Fair Play is the only thing UEFA can get away with that wont cause outrage among its biggest stakeholders. And really the idea is so simple that its genius.

    Its a choice between continuing as is, with big clubs overspending and smaller clubs overreaching trying to play catch up, heading towards financial abyss.... or limit spending power of both relative to their incomes to ensure that, hey, at least, we'll end up with the status quo except most clubs will remain solvent. Since a salary cap as we understand it is a non-starter in Europe, FFP makes a lot of sense. I think its a great move on their part, even if things will remain much the same.
  4. artml

    artml Member

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    FFP is not about fighting disparity. It is about saving clubs from bankruptcy and extinction.


  5. Unak78

    Unak78 BigSoccer Supporter

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    There are other ways that could have been accomplished without tying it directly to revenues in the manner that they did. The only reason that they did it in this manner was noted by another poster; this is the only plan they could get the big clubs to agree to bc it protected them.
  6. artml

    artml Member

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    Exactly. They are quite realistic them UEFA folks, and they know bloody well they can't afford an open clash with big clubs.

    But even when implemented as is, it could save many small and even not-so-small clubs. The ones from 52%-European-clubs-are-in-the-red pool. Sounds OK for me.
  7. vevo5

    vevo5 BigSoccer Yellow Card

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    http://www1.skysports.com/football/news/11688/7701878/Financial-fair-play-voted-in

    Championship voted for league-wide financial fair play back in April (20 out of 24 clubs in favor)

    It is also used by League One and League Two


    We are beginning to see a salary cap in part of Europe. Spending will be capped by revenue.
  8. LongDuckDong

    LongDuckDong Member+

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    I don't known about that. Sometimes, low spending teams have great runs. Look at what Dortmund has done in the last couple of years. Two years ago, Bayern was spending 4 times more than Dortmund, and Schalke was spending almost double what Dortmund spent, yet Dortmund have been the undisputed best team in Germany for the last two years.

    When you decrease the amount spent on transfers/salary, you potentially increase the amount spend on the academies, coaching, and scouting. In Germany, those factors are enough to create parody. Even with Bayern, a team that makes more money than City, Chelsea, or Arsenal, there's regular competition at the top of the table.
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  9. Mucky

    Mucky Member+

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    I know that this was just a brain fart and this comment is not directly aimed at you, your comment has validity, but this thread reads like a parody.
    I'll leave it at that.
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  10. AmeriSnob

    AmeriSnob Member

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    UEFA doesn't want a European Super League but with this we only move one step closer to that. If a team overspends, they eventually fail anyway. Now the teams that just move up into a first division like the Premier League won't be able to spend what they need to catch up with the rest of the league.
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  11. Black Tide

    Black Tide Member

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    Most of the teams that get promoted to the top league cant afford to spend what they need to catch up anyway. When was the last time a team that was promoted won the EPL or La Liga? The reality is without some Angel investor in a club that is willing to play real life fantasy soccer the bottom 70%+ have no chance anyway. On top of the fact getting promoted spells financial ruin for a lot of clubs as pointed out in a fantastic Swiss ramble article. (if you do not read it I highly suggest you do so as it has wonderful insight into the business of European soccer as a whole.)

    Also I have to think that UEFA has a little bit more to say about a super league than we give them credit for. It would seem that they would, much like fifa, just be able to ban any player playing for a super league team from playing in the Euros. And possibly by extension getting FIFA to extend that to all international competition as a way to cement power. Now they might not have the actual power to do that, but I would have to think they would try.
  12. Unak78

    Unak78 BigSoccer Supporter

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    This is not a salary cap. At least not the way we think of it.

    If UEFA really wants to fix their house they need to turn their attention to that cabal going on down in Spain. I refuse to pat Platini's back for this. He's a hypocrite.
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  13. ShevaDani

    ShevaDani Member

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    soccer will survive and will been a good product if only they apply the rule."spend as much as u produce."
    u cant spend like psg(150 millions in 2 momths) and u are a team which barely produce something from the open market.this is financial doping
  14. AmeriSnob

    AmeriSnob Member

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    Using my example of a team moving from the Championship to the Premier League, a team is able to spend significantly more on wages in anticipation of increased future revenues from TV, gate, merchandise sales etc. and make an attempt at staying in the league for a long time. Instead, they cannot spend more than what they did the previous year in order to match their competition on the field, and will immediately be sent back down (even easier than they already are in many leagues).

    The result is a team being allowed to spend a lot the following season but not wanting to spend that much because their anticipated revenues have gone back down again. Power is concentrated in the top leagues (especially ones that have broken away from the divisions below them such as the Premier League).

    The same applies for qualifying for the Champions League. A team that qualifies surprisingly one year cannot spend the money to make a proper attempt at winning the thing the next year.

    What this does is concentrate power in the select few clubs even more than it already is. 5-7 years ago, could you ever picture any of Man Utd, Chelsea, Arsenal or Liverpool finishing as low as 7th? I would argue that Man City's rise was a good thing; there is now more competition for the Premier League title and the 4 Champions League spots than there ever was before.

    If big clubs overspend, they eventually fail anyway. This rule just makes sure that they cannot fail with a cost that is too large to be tolerable.
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  15. vevo5

    vevo5 BigSoccer Yellow Card

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    Salary cap is a cap on salary.

    If a team can only spend 60% of its revenue on player salary and player transfer, it is a cap.
  16. triplet1

    triplet1 BigSoccer Supporter

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    It wouldn't be that hard to modify this to put more restraint on the bigger clubs, however. For example, let clubs spend up to 60% of their first EUR 50m in revenue on payroll and transfer amortization. (Remember, transfer fees are accounted for by dividing the fee over five years). For the 80 odd clubs in UEFA that have a higher annual turnover than EUR 50m, gaduate the scale and let them spend only 50% of EUR 50m - 100m in turnover and only 40% of every EUR above 100m.

    Here's what that would do:

    Say a club has a turnover of EUR 200m. The maximum salary and amortzation would be:

    0 - 50m -- 30m
    plus
    50 - 100m -- 25m
    plus
    100m - 200m -- 40m

    Which would give the club with EUR 200m in turnover a total payroll and transfer fee amortization cap of EUR 95m for the following year.

    Even if a club had 100m more in turnover than our example -- a 300m club -- it would only allow them to increase the wage/transfer cap another 40m, to EUR 135m.
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  17. QuibblingNonesuch

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    Just wait til the crooked financiers and libor hacks get involved.

    We'll find Chelsea has 5 billion pounds worth of credit default swaps against Peruvian carrot futures. They'll buy Messi. Then the CDS's will be suddenly devalued and sell for 35 cents, some lint and a fried cod - just moments after the financial assessment is concluded.
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  18. holiday

    holiday Member

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    'income' is very easy to manipulate for an owner with deep pockets. you just need to invent 'transactions' (such as 'sponsorship deals') that pump money into the club's coffers.
    and i think 'fair play' is a misnomer. even if applied to the letter, this system simply codifies the existing pecking order. in fact it pbl makes it more stark than before because now there's an official formula that fixes it.
    the relationship btwn a club like real madrid and big banks is almost impossible to make out. there are all sorts of financial engineering through which money reaches real madrid's vaults. all of them are legal in terms of ffp. does anyone think real madrid knows the meaning of the word 'budget?' real madrid might be worried about the health of certain banks, but i don't think it's concerned about the rules of ffp.
  19. AmeriSnob

    AmeriSnob Member

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    People can say "well look at Rangers, they failed and Scotland is now left with one club that dominates financially and otherwise." Well, that's Rangers' fault for overspending. Scottish football has plenty of other problems that caused this two-horse-race situation to occur in the first place. And as for all the other clubs that overspent and failed, that is their fault too.

    But I do have sympathy for clubs in countries that distribute TV rights unfairly or have clubs sell TV rights individually (Spain, Portugal, Greece, etc). Barca/Real get half the La Liga TV money and 16 clubs split the other half. It is ridiculous. And now UEFA want those clubs to be further limited in their ability to compete with the big two. Thankfully in Portugal and Spain things are close to changing on this front, because its really a shame.
  20. superdave

    superdave Member+

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    How is Man City supposed to overspend? It's owned by a family that owns a country. How is PSG supposed to overspend?
  21. superdave

    superdave Member+

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    This isn't what has happened in Germany.
  22. holiday

    holiday Member

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    as somebody once said about dealing with fcb, the orient begins in munich. :)
    anyway, ffp is supposed to work everywhere. not just in (parts of) one country.
  23. JasonMa

    JasonMa Member+

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    Didn't the SPL deal give more than 1/12 of the $$$ to Celtic/Rangers?
  24. AmeriSnob

    AmeriSnob Member

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    How are Barca or Real supposed to overspend?

    Neither your two examples nor mine have any semblance of spending limits. Teams, at least teams that plan on existing, limit their spending to what they believe will allow them to compete while not jeopardizing their existence.

    If the PSG owners think spending into oblivion is okay and that they will still exist then that's their prerogative. There comes a point where increased spending doesn't give nearly enough increased revenues to be justifiable, even for Man City and PSG and Barca and Real. If they want to spend more than that, that's their choice. Eventually they will all end up in administration. There comes a point where you can no longer throw money at the problem.

    And if you believe there should be a limit to spending, then why this mechanism instead of a hard cap or other means? Why not a higher percentage of revenue (one that only ensures teams don't spend themselves out of existence instead of one that ensures they can't spend enough to compete with their counterparts)? Why not allow the individual nations or the individual clubs to decide their spending?
  25. superdave

    superdave Member+

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    My point is, something very similar to FFP is already in place in Germany, and your fears have not been realized there. Do the FFP regs open a loophole that's not present in the German licensing system?

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