Are big clubs using MLS to get around FFP?

Originally posted on YOUAREMYARSENAL.

It may seem odd to report on Financial Fair Play on an Arsenal blog without a focus or direct link to the club. But news this past weekend caused me and others to take notice and well, on first blush it presents the possibility of a worrying trend to circumvent FFP.

Reports have come out this past weekend saying that Bayern Munich are looking to support an MLS side at some time in the near future. This follows the news that Manchester City have formed New York City Football Club, who will enter the MLS in 2015.

A lot of people, especially in the states, will be delighted with these two potential link ups, as it supposedly highlights the growing popularity of the MLS and the possibility that more link up’s with some of Europe’s elite clubs will occur. These link-ups will see the European sides hopefully help the MLS sides financially, assist in improving the coaching and development of youth players, and lead to potential loan deals of youngsters from Europe to America. All of this having the knock on effect of increasing the level of quality on show. Perhaps most importantly, it will also see an increase of European sides playing in America against their ‘partner club.’

Whilst on paper, this looks all well and good – Manchester City for example have invested $100m into the league to ‘buy’ into their MLS franchise – I see it as a worrying danger to the future of European football, as clubs can potentially use the MLS clubs to circumnavigate the Financial Fair Play rules.

They way I see it working is as follows: Manchester City (for example) want to buy a player, lets call him Lionel Messi. Now Manchester City’s owners have the money to buy Messi, however, a £100 million transfer fee will put them in breach of UEFA’s regulation’s. So rather than buy him themselves, they buy him through their MLS franchise, who then immediately loan him to the European side for the length of his contract.

Manchester City then get a player of real quality, but at no cost, allowing them to balance the books when it comes to FFP.

I’ve provided an extreme example. Yes, MLS has stringent player contract and payment models but you get the point. A player of quality could be had and loaned to the bigger club without it violating any rules. Conversely, in England were the size of squads are being restricted, the MLS seems a great place for a club with unlimited fund to buy loads of talented young players and offload them without the club taking any hit.

The broader problem is that this has potential to expand to leagues outside the MLS, it can happen with any league throughout the world, outside of Europe. Whether it is a link up with an American side, an Asian side, an Australian side or a South American side. They would all act as the middle man, absorbing the cost of the transfer into their accounts – which is then written off by their owners – and allowing the European side to stay with UEFA FFP rules.

It’s not all too dissimilar to what already happens throughout the business world. For example, Starbucks use second tier companies based in tax havens to ‘buy beans’ to ensure their UK business does not make a profit, therefore avoiding UK Corporation tax. This method could work in a very similar method, with football clubs using sides outside of Europe to write off expensive transfer’s.

The MLS has very strict financial rules with regards to wages, however, these will also be circumnavigated as the European club will take the wage. I am also sure the MLS will turn a blind eye to being accomplices to this loophole if it ensures the League see’s a bit of the oil money currently in Europe. $100 million a franchise buys a lot of friends.

How these link up’s between European and MLS sides actually works will still be a case of ‘wait and see’ but the speculation of the scenario above, that European clubs will use them as an FFP avoidance scheme has real potential and should be a worrying sign. But we know it won’t – so long as everyone gets their palm greased.

This article was originally written and published by Keenos for our American friends YOUAREMYARSENAL.

Keenos

 

 

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8 thoughts on “Are big clubs using MLS to get around FFP?

  1. Harry Barracuda

    Man City don’t need to do this, they just get Etihad to chuck in another GBP100 million in “sponsorship” and they’ve met FFP requirements.

    And no-one asks how an airline can throw around that sort of dosh when they don’t pay for their fuel.

    Reply
  2. bobbyp

    If your theory ever happened, which I doubt very much, then it would be obvious to everyone and there would be uproar. it would soon be stopped.

    Reply
  3. Bilboblue

    wow you little Tarquins are really becoming very bitter people, are you all turning into spurs fans?

    Of course this would never happen, don’t worry, you’ll still be able to compete for your 4th place trophy every year.

    We were lucky we got in before you and the rest of the so-called rich clubs pulled up the drawbridge, all this FFP bollocks is to ensure your place at the top table remains just that.

    No other side will be able to have a Danny Fitzman or a Roman Abramovich or a Sheik Mansour.

    Face it, the game is all about money now, it went that way when Sky got involved and has only got worse since.

    Reply
      1. Bilboblue

        Maybe we would, but I’d still be there supporting them, just as I was for our short sojourn to division three (for us old folk!).
        Having witnessed the likes of Jamie Pollock, Darren Wassall, (the list of shite we had is endless) forgive me for being ecstatic right now. I prefer applauding my team having spanked the Arse 6-3 than having been hammered yet again (a joy it was to watch the players you had before, mind).

        What’s up, don’t you like competition?
        Oh, and what does that have to do with the issue raised?

  4. DK

    Everytime an article is written including City, even if it non-dirogotory like this one, their fans come out all defensive and attacking other clubs. It is as if they are guilty of something, and deep down they have that guilty conscience. Their fans must really struggle, praising the oil man on a saturday, then going to their BNP rally on a Sunday. City fans know they are wrong. And they are actually the joke of the PL. 500m spent and they have one title for it. And don’t even let me start on how they loved a human rights abuser in the Thai bloke.

    City – Fans carrying guilt.

    Reply
    1. Bilboblue

      Please carry on with your hypocrisy, it makes us all at the mixed BNP / AL Qaeda meeting giggle like little schoolgirls.

      Oh to be snow-white and controversy free like the vanquished Tarquins…..

      Arf.

      Reply

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