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Do UEFA’s Financial Reforms Unfairly Target Manchester City?

al mubarak lrg 03 Do UEFAs Financial Reforms Unfairly Target Manchester City?

In an exclusive interview for the Guardian, Manchester City chairman Khaldoon al-Mubarak criticized Michel Platini’s planned control of football club expenditure. He has a point.

Platini wants new financial rules by 2012. Under those guidelines, Clubs would spend within their soccer-generated income. Failure to do so would end in a European ban. Khaldoon argues that this calcifies the status quo.

“The argument that this is unhealthy suggests that the big clubs, which make the most money, must remain the big clubs, that the status quo must remain,” Khaldoon responded. “Is Mr Platini saying that only Real Madrid and Barcelona have the right to be competitive in La Liga?”

Clubs have a natural potential based on city size. A Madrid club will earn more than one in Tenerife. This is, however, too simplistic to explain why Barcelona, Real Madrid and Manchester United generate revenue.

“You have to spend money to make money.” It’s a cliche, but it’s true. Teams must invest in players to generate revenue. Superclubs – such as Real Madrid, Barcelona, Man U, Inter Milan – are established because they have spent more money than other clubs for decades.

Platini’s implication is that Manchester City’s spending is unnatural. It’s not. It’s a necessary step to catch up with competitors. City’s crime, seemingly, is investing at an advantageous time during an economic downturn.

The point of Platini’s proposal is to protect financial stability in the game. As Khaldoon points out, Manchester City are perhaps the most financially stable club in Europe.

“I could accept the argument if we were artificially building up the club through debt,” Khaldoon said. “That produces a destructive end result; we have seen that happen. But in our case, the club will be in the healthiest position because there is no debt. We have funded it through equity [permanent investment], including the signing of the players.

“I believe what we are doing is a fair way to inject competition into football, without debt.”

If debt is destabilizing, Manchester United and Liverpool, bought on debt transferred to the club, are more threatening. The clubs’ sales alone have amassed over $1.5 billion in debt. Abu Dhabi’s purchase of City, in contrast, did not affect the league’s financial climate directly.

City have spent £200m on players under Abu Dhabi ownership, but it’s not as though they are driving the market up. Elite players do not want to go to Manchester City regardless of money. Players they have spent exorbitantly on, Tevez and Robinho, were only realistic targets for a few clubs. Their lesser buys, if anything, are benefitting the rest of the EPL. Everton aren’t crippled by receiving twice as much as they should have for Joleon Lescott.

Platini’s proposal selects a scapegoat in Manchester City. Attacking City is convenient, but it does not address true problems of inequality and economic stability. To do so, Platini would need to take on established clubs on wage limits, transfer caps and a luxury tax. Pushing those proposals would solve the problem. Unfortunately, it would also hasten the inevitable European Super League.

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19 Responses to Do UEFA’s Financial Reforms Unfairly Target Manchester City?

  1. AtlantaPompey says:

    What Platini is saying is that he wants clubs to spend within their means as related to football generated revenue. That will maintain the status quo. Clubs in big cities and clubs with international reputations generate more football related revenue. Clubs like ManCity, with a lower international profile than their suburban neighbors, and clubs like Portsmouth, with the smaller city, can not generate the kind of revenue needed to compete at the highest level. The consequence of Platini’s proposal is that clubs won’t be able to aspire to be the best.

    Wage caps, transfer caps, spending caps, luxury taxes, etc, will all never be enforceable on an international level.

    • Tench says:

      Well said. Throw in the fact that the European Qualifying system rewards good teams with money, which for a person used to American draft rules, I’m flabbergasted by this. Is this plan for real? Might this actually go anywhere?

      • Huh says:

        It’s definitely going to be used, they just need to sort out things like different tax rates in each county i.e. English high end income tax 50% Spanish 25% Platini trys to make it look like this is good for football when the reality is its only any good for UEFA making more money, but he will be backed by the most powerful clubs who have it all to gain! hopefully it can still be stopped.

  2. Jeremy Poynton says:

    Platini is an idiot. He criticise City for not having a better academy, ignorant of the fact that we have produced more first team players from our academy than any other prem club in the past 10 years.

    He is also big mates with Abramovic, and clearly he, Berlusconi and the Ral bloke have had their noses put out of joint by us. They want a closed shop.
    They are running scared of us.

    • oliver says:

      Platini big mates with Abramovic? Are you sure? A few months ago he called Chelsea cheats for using money from RA. Look at the ridiculous punishments Chelsea have had from UEFA

  3. Tyson says:

    They are targeting City and for good reason too.

    What isn’t often mentioned is these arabs from Abu Dhabi and Dubai are in financial crisis.

    Numerous projects in both emirates have been cancelled:

    The independent reported on the collapse of the biggest project in Dubai:

    http://www.independent.ie/world-news/middle-east/extravagant-dubai-island-project-sinks-under-weight-of-the-credit-crunch-1884856.html

    There are dozens of buildings in these emirates that have practically stood still since the credit crunch began. Imagine 50 skyscrapers just not being built any further for the last year or so.

    To make matters worse the emirates oil supply will run out in the next two or three years.

    http://www.worldfinance.com/news/worldnews/middleeastafrica/article136.html

    Basically that place is a deathzone and these “rich” morons are in a crisis that makes the bankers in the US look competent.

    Manchester City is making next to nothing and cant pay its own players wages. When these arabs sink with their little oil monopoly City will pile up debt and go under.

    • Phil Lines says:

      Hello Tyson,
      Some facts for you mate…Sheikh Muldoon:
      Chairman of the 1st Gulf Bank – £555 billion
      Personal wealth £15 billion
      5% Ownership in Ferrari
      The family OWN the Chrysler Building in NY City (that is some landlord) worth $485 billion.
      9% of Daimler Corporation
      32% of Virgin Galactic
      Plus numerous hotels / resorts.
      So before we talk oil and certain projects on hold take a look at the list. So if he does leave City then it won’t be because of debt it will be because he is bored but they’ve been saying that about Roman Abramavic for ages.

      If you want to be a cyber terrorist and spew ill conceived, ignorant and pejoritive comments then you really do need to get your facts in order. They know that oil is passe so that is why they have used their assets to invest in other areas, look at the list matey…

      • Huh says:

        The funny thing about Tyson is that both the links this idiot has posted are saying he is dead wrong and has the opposite affect to his bitter rant than intended. For instance -

        ‘Abu Dhabi, Dubai’s oil-rich neighbour, is helping to support it through the crisis, so far to the tune of about $10bn. Another $10bn is likely to follow soon, and more may follow.’
        The story is about Dubai you fool and a rich Irish developer going under.

        Or how about this peach-

        ‘In Dubai’s case, the time when the oil runs out is not far away: when oil was first struck in 1966 it was known that, unlike Abu Dhabi next door’
        Did you get the word UNLIKE.

        Oh he added the 3 yr bit on to Dubai not Abu Dhabi because he is a genius and knows this to be correct!

        Doe’s any one actually ever think this massively bitter anti City plank has ever posted a good point, if you do I’ll be amazed!

  4. dave@shepton says:

    Tyson,
    My god, I have read some rubbish spouted on these sites but yours just about takes the biscuit. Abu Dhabi in crisis. They sit on 9%, yes 9% of the world oil and gas resources. The Sovereign fund is worth in excess of £97 trillion. The ruling family are worth just under a Trillion.

    They make wise investments, spread their portfolio, and have a habit of picking winners. God knows what they saw in City except maybe, the potential. The potential with their vast properly accumulated wealth, to challenge and take on the world’s “favourite Club” Man United with a team which perennially underachieves, but which everyone knows, has just about the most loyal, longest suffering and therefore deserving fans.

    Yes I will grant you that Dubai is in crisis and buildings are lying empty. But get real, look at our economy, look at the state of our roads, schools hospitals etc, and you say Abu Dhabi are on the verge.

    • Huh says:

      Dave

      Man City cost £119m, £220 Player and land development to bring in line with the top clubs, Ground and its land approx £200m Total = £539m.
      Man Utd Cost approx £870m,
      Liverpool £605m excluding its debts pos £219m total = £824m,
      Arsenal £670 plus debts pos £400m total = £1.0bn+
      Chelsea £750m? debts £? total =£750m+

      Now do you know what they saw in City?

  5. Jeremy Poynton says:

    Very funny, Tyson, but seriously mate – don’t give up the day job. Talking out of your arse is not a long term career prospect.

  6. tyduffy says:

    Any comment that starts with “These Arabs…” is bound to be amusing.

  7. fifthcolumnblue says:

    @ Phil Lines – You forgot to mention that our owners recently hauled Barclays Bank out of the mire by investing £2billion, and then several months later, sold the same stake for £4 billion. For the benefit of those who are somewhat lacking in the brains department (not mentioning any names TYSON), that’s a profit of £2 billion in just under a year. To put that figure into perspective, that is what Roman Abramovich’s personal wealth is estimated to be after the effects of the credit crunch.

    Stick to biting ears Tyson, you obviously aren’t up to anything else.

  8. Huh says:

    Platini’s attack is not on Man City think about it. In 3 years if City are not totally self sufficient and more, they can do very simple things like get the biggest ever shirt sponsorship deal with any of the other companies they own or have a majority share in very easy to dodge. The problem is that big business is being attracted to the EPL and this is no good for Platinis dream of a European Super League the more EPL teams have to spend the more Europe’s other Leagues lose their best players (just like other countries before them)and then follows the money. That means less money and power for the disgusting French piggy and his cronies. He only wants the strong to become stronger so he can say well there is no point in keeping these Leagues going because the same teams win every year (only because UEFA made it this way) so lets take the top teams from each country and make a supper league, too much interest in the EPL only means trouble for this long term plan. These Leagues each have turns at the top in the 80’s and 90’s it was Italy turn late 90’s early to mid 00’s Spain’s go.
    You see it’s not City he’s not happy about it’s the other clubs that might do the same. Sod Schalke 04, Bolton, Rennes, Athletico Madrid, and Vitesse Arnhem they can play but not win. I’m Sure you get my drift. Something needs to be done about UEFA and it’s money and power hungry little piggys. UFEA should always come second to the countries Leagues!

  9. cdoyle says:

    Punctuation, people. Jesus Christ.

  10. jleau says:

    Not that I don’t think Platini is lunatic, but I don’t see that this idea is really that bad. It seems to me that these regulations are aimed at protecting the long-term interests of the clubs and their supporters. The rules don’t say that a club like City of instance can’t grab a sugar daddy and get tremendous benefits from it. That sugar daddy is going to have to make a real investment in the club not just a temprary splurge on players. New owners can invest in new stadia, or any number of things that can increase the football revenue of the club and by proxy increase the long-term budget that can be spent on players.

    It’s not the quick fix that City is now enjoying but over the long-term aren’t clubs better off with that kind of investment? By the way, it’s seems to that the new City owners may be willing to do both.

    It seems to me that these rules are more aimed at Abromovich scenarios or even what is now in place at Liverpool. Roman hasn’t really invested anything in Chelsea except a big loan with a delayed payment. All the money was spent on players (short term). If he pulled out tomorrow Chelsea would be left deeply in debt and in a couple of years all of those players would be gone.

    Certainly this is slanted towards helping bigger clubs and that’s not ideal, but that doesn’t make it sinister. Hopefully UEFA will take a additional steps to correct the inherent imbalance between the varying clubs.

    • Huh says:

      If Abramovich left Chelsea he would have to sell the club which also includes his personal loans, therefore zeroing it’s balance (unless he is willing to take a huge loss)and whoever could afford Chelsea would have to be extremely rich leaving them where they already are, with not much disruption to the club.

      Platini’s plans are not just slanted towards the bigger clubs they are 99% vertical!

  11. Thomas says:

    I have to agree with the sentiment that there is a trully anti English bias in the world governing bodies.

    If French clubs were in the same position as many English clubs, there would be no problem. I don’t think Platini really has a problem with Madrid and Barca.

    He seems to be ignoring the fact that there is a difference between good and bad debt.

  12. brn442 says:

    What exactly is “soccer generated income”? Does that mean: per club – per league? As previous posters have asked; how is that NOT going to solidify the status quo? Is a heavily leveraged Manchester United, Liverpool, or a Real Madrid brimming with debt (and, yes – they still will be three years from now) be exempted because they can service their loans, while ” nouveau riche ” clubs like Man City and Chelsea get shafted. How will Clubs from Ligue 1 and the Eredivise who do not get EPL type TV money compete with their richer counterparts in the larger leagues in Europe? I agree that clubs should be punished if they get into self imposed financial distress, however, it should be none of Platini’s business where they get their money from.

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