Tag Archives: Manchester City F.C.

Are big clubs using MLS to get around FFP?

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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

 

 

Ticket Price Rises, Andre Villas Boas, Bayern Munich and Luis Suarez

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Ticket Price Rises

Arsenal announced before the weekend defeat against Manchester City that they were planning to rise tickets in line with the rate of inflation – a 3% rise. Now under normal circumstances, I would understand this. Costs go up every year, so all companies have to squeeze their prices up a little every year. Either that or find additional revenue elsewhere. And that is my problem, the new Premier League TV deal will increase clubs income by 71%. The new Champions League deal is expected to double a clubs income, and the new Puma kit deal is a 428% increase on the old Nike one.

By my rough maths, once these new deals kick in, Arsenal will be increasing their income by around £83 million (£25m extra in sponsorship, £25m extra in CL money, £35m extra in PL money). This will see our revenue increase to around £335m, or around a 38% increase.

So why, I ask, are prices going up with the justification that it is ‘inflation’ when our increased revenue from other area’s far outstrips the inflation increase? As I have explained before, the club could have decreased prices to just £21.25 and maintained the same revenue as now. Where is all this money going to end up? Will it go straight to the players pockets? Will the board give themselves pay rises and bonuses? Or will they start paying out a dividend.

All I know is that with this 3% increase, the club have taken us for mugs. Will I continue paying? Yes, because I am a mug.

Andre Villas Boas

Tottenham, the gift that just keeps on giving. Just over a week until Christmas and they have already handed out their presents. A 5-0 loss at home to Liverpool was followed up by the sacking of AVB. To think, he spent £100 million and managed to get Spurs fans to think that they were title contenders, before a ball was kicked. They have been in a negative spiral since they beat Arsenal in March.

No matter what you might currently think of Arsene Wenger, it must bring a smile of joy to you that he has seen off:

  1. Francis (1994–1997)
  2. Hughton (1997c)
  3. Gross (1997–1998)
  4. Pleat (1998c)
  5. Graham (1998–2001)
  6. Pleat (2001c)
  7. Hoddle (2001–2003)
  8. Pleat (2003–2004c)
  9. Santini (2004)
  10. Jol (2004–2007)
  11. Allen(2007c)
  12. Ramos (2007–08)
  13. Redknapp (2008–12)
  14. Villas-Boas (2012–13)

Bayern Munich

So after finishing 2nd, we knew we were in for a tough draw, and for the second season in a row, we have been drawn against Bayern Munich. For me, this draw brings happiness and sadness.

The happiness is we have proved they are beatable, having won 2-0 at their ground last year. For me, Munich hold no fear, as I am of the honest belief they have gone backwards this year. They spent over €60 million on just two players in the summer (Thiago & Mario Gotze), 2 players who they did not need due to the fact they had many other similar players already in their squad (Kroos, Ribery, Robben, Shaqiri, Muller). They also let go Luis Gustavo, who was a defensive rock for them last season, and Mario Gomez, their only proper striker.

Guardiola is trying to copy his Barcelona style of play, but there is a problem, he does not have Lionel Messi. They might be top of their league, unbeaten, having scored 42 goals in 16 games, but this is more of an indication to how poor and uncompetitive the Bundesliga is, than how good Bayern Munich are. It is certainly a league currently on a downward spiral, and you have to wonder whether Munich will struggle to get up for the game competitively after playing so many easy games in Germany.

If we take confidence from our win their last year, and put in a better performance at home, we could win the tie, comfortably.

Luis Suarez

17 goals in 11 league games this season. We offered £40,000,001 in the summer, we will have to offer a lot, lot more now. The controversy surrounding the deal is up for debate. In my opinion, we were under the opinion we could sign him for anything over £40,000,000, hence the bid of £1 extra. Why pay more when £1 was enough to trigger the deal. And offering £40,000,000 is certainly not a derisory offer like same pretend. You have to think, however, after having that offer knocked back, should we have pushed further. Told Liverpool to name their price? In hindsight, paying £60,000,000 for Luis Suarez in the summer would have been a good piece of business. But I can imagine the uproar had we signed him for that price, considering he was due to miss the first half dozen games.

What he has shown is the importance of having the something special upfront. The difference between Manchester City and Arsenal this season could be Sergio Aguero. The goal scorer who can turn a draw to a win on his own. We do not have that. Is there going to be someone available in January of sufficient quality? Who knows. But if Lewandowski or Suarez are available, we should be leading the race to sign them.

Keenos

Mansour’s millions the difference for Manchester City

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Looking at this mornings league table, Arsenal still sit top of the league. 2 points ahead of Chelsea, 3 points ahead of Manchester City. There is still plenty of reasons to be optimistic about our title chances.

Yes, we might have conceded 6 against Manchester City, but it was one of those freak games where every shot on target went in. There were 13 shots on target in the entire game, and 9 goals. City had a converted 6 of their 7 shots on target. It was a freak result.

City deserved to run out winners, despite Arsenal having 2 goals chalked off incorrectly and being denied a blatant penalty. To point to those 3 referring decision as the reason Arsenal lost would be in denial of the overall performance. City seemingly being able to go forward and score highlights why they are averaging over 4 goals a game at home and have now scored in 58 consecutive games at the Etihad Stadium. Their home form in the league this season reads: Played 8, Won 8, Scored 35, Conceded 5. That last one was Conceded 2 before yesterday. With home form like that, City have to be everyone’s favourites for the title.

The difference between the two sides could be seen on the substitutes bench. £129m worth of talent on the bench. Arsenal’s starting line up cost just £97m and cost of their entire match day squad £140. When you take into account that £42.5m of those totals was Mesut Ozil, it shows just how far behind we are in City. Yes, we have money to spend, and should be spending more than it, but City, with their now settled side and spending money like it is going out of fashion, we should not be too downhearted.

When it comes to finance, what Manchester City spend is staggering. They have a wage bill £60m more than Arsenal’s. The majority of their squad is on £100k+ a week. Arsenal meanwhile have just 3 players over this figure. With Arsenal having a reported £100m sitting in the bank, were we to try to compete with Manchester City in terms of wages and transfer fees, this money would not go very far at all. Last year, we made a profit of just £6.7m. A £60m blackhole in wages would see us start to run up massive losses. Manchester City, remember, lost £97m in 2011/12.

Last summer, having finished 2nd to Manchester United in the league, and having made horrendous losses, Manchester City went out and spent £90m. They spent more on defensive midfielder’s than we did on Mesut Ozil. It highlights the financial strength they have that they were able to go out and buy long-term Arsenal target Stevan Jovetic for £22m without really needing him. It was perhaps and example of them signing a player who they do not need just to ensure other Premier League sides signing him.

Now I do not have an issue with Manchester City’s grotesque spending. If a man has billions of plans, who are we to tell him how to spend it. Remember, we did not moan in the late 1990’s when Danny Fiszman was bank rolling us – albeit on a smaller scale – enabling us to build the 1998, and eventually the invincible sides. What the financial difference does show is how much of a challenge winning the Premier League is for Arsenal. With both Manchester City and Chelsea having an endless pot of gold. Arsenal could go and spend the £100m they have sitting their, but Chelsea and Manchester City would then respond by spending £150m. Do we keep chasing them? Do we spend the most we can and still finish 2nd/3rd and say ‘at least we tried’ or do we spend sensibly, on the right players, and hope things, at one point, will become fairer?

The last option is we Alisher Usmanov. He is supposedly willing to put in similar amounts of money into the club as Sheikh Mansour and Roman Abramovich. Do we move to demanding to be bank rolled by an oligarch, with a questionable background, or do we say ‘We are Arsenal, we do things in the right way’. Having a sole owner leaves us in a precarious position. Yes, they could be and Abaramovich or Mansour, but they could also change the name of the club, change the club’s colours, or do anything they want…People have differing opinions, both are valid.

A few final points, Per Mertesacker showing he is the real captain of the side bollocking Mesut Ozil. It is a none story and as Wenger was quoted as saying;

“That is the Germans, they will sort that out between themselves.”

They are probably sitting around Per’s house this morning sharing a bratwurst. The second point is the laughable banner in the Manchester City ground ‘Manchester thanks you Sheikh Mansour’. A sign, perhaps, of a club who’s fans have sold out to modern football.

After 3 games in 6 days, travelling to both Naples and Manchester, Arsenal now have a 9 day break before the Chelsea game. It is time to rest the legs, re group and ensure we come out fighting once more. A defeat to Chelsea could see us truly enter a downward spiral, and if Spurs win their next two games, the gap that looked so large just a few games ago will be down to just 2. Let’s back the time.

Keenos