By Tony Attwood
Atlético Madrid recently beat Chelsea 4-1 in the European Super Cup. Unfortunately Atlético Madrid made a tiny error. They forgot to pay their bit of the tax bill owed by Spanish clubs to the Spanish government.
It seems that in Spain not paying tax if you are a football club is, well, just what you do. A Spanish Practice, as we used to say in the old days. Now that cute little habit means that Spanish football clubs owe the Spanish government €1,350,000,000 (that is 1.35 billion) in tax. And government want it back. With interest.
The European Super Cup holders haven’t coughed up, so now they are paying (according to El País), 4.5% interest, which in their case means €15 million a year.
Now most of the time we focus on the issue of the losses that Man City and Chelsea make when it comes to Financial Fair Play, but not paying your debts is also a crime. In fact I think Portsmouth got rumbled for this in April 2010 when they would have qualified to play in Europe after reaching the FA Cup Final. A joint statement from the FA and Premier League said at the time: “The FA and Premier League have confirmed to the administrators of Portsmouth Football Club that they shall not consider any late application for granting of a UEFA Club Licence for the 2010-11 season.”
In the Madrid case the statement read: “The [Uefa] Club Financial Control Body’s investigatory chamber has identified that important overdue payables towards other clubs, and/or towards employees or social/tax authorities existed in 23 cases. 23 clubs involved in 2012/13 Uefa club competitions have seen the payment of their prize money temporarily withheld pending further investigation. This measure will remain in force until all identified balances have been settled in full or until a final decision by the CFCB adjudicatory chamber is taken.”
But that might not be all for Atlético for elsewhere the Spanish press have said that they have failed to pay the instalments due on the transfer of Falcao from Porto. There is talk of Atlético selling the player on to raise the money to clear the debts.
Málaga, who I have written about so many times of late, also has debts, as they did not sell off enough players in the summer to clear the problems created by the sudden lack of interest in the club by Qatar. Although quite surprisinly they have had a good start to the new season and are fourth in the Spanish league. So they too are having their Uefa money withheld.
Many of the clubs on the list are not particularly well known, but tucked among the various Bosnian, Croatian, Romanian and Serbian clubs we also find Sporting Lisbon and Rubin Kazan.
So the next step is that the clubs have until the end of this month to give Uefa an update.
Withholding money from Uefa is of course the smallest of penalties – nothing like refusing to allow a club into the Europa or Champions Leagues. But given that these clubs are seriously in debt it will hit them much harder than it would ever hit a club like Chelsea and it is more than likely that some of them simply won’t be able to pay the debts as they have been living in debt for such a long time. This is especially true in Spain where the banks have seized up, and the local authorities are themselves trying to solve their debt problems.
But there is a significance here, for the fact is that the main problem for these clubs are the debts owed to government – and if you think of the central problem that tends to bring down English clubs it is the failure to pay VAT and PAYE. Ludicrously, in my view, the FA and Premier League cling to the rule that says if “football debts” are paid out everything is fine. Uefa is saying, no it isn’t.
Of course Uefa isn’t going to hurt the average lower league club that has been into administration several times. And remember Southampton of the Premier League were in administration as recently as April 2009. With the banks less and less willing to fund local teams because of the bad image such a removal of funding brings, some clubs really are struggling to find places to borrow money.
This is not the tidal wave that will sweep away all financial foul play but it is a very positive step in the right direction.
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The club that changed football
Making the Arsenal
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- You simply will not believe our review of Phil Dowd, referee
- Tonight it is something rather important.
- Ref Review Michael Jones. Double the normal away bias.
- It is not so much the transfer fees, it is the salaries that are the problem
- Ref Review: Martin Atkinson. Not good if you are Everton.
Sorry Tony,
this article says you are –
http://www.thisismoney.co.uk/money/bills/article-2148669/Premier-League-ticket-prices-gulf-reveals-hike-costs-slash.html
And so does this one –
http://money.aol.co.uk/2012/04/11/top-ten-most-expensive-football-tickets/
maybe the Arsenal isn’t the most expensive stadium to watch football in England, I can believe these reports are skewed to suit an agenda, but it’s not the cheapest either by a long shot is it?
Is that all you have to say about my posts, just picking up on one sentence? I’d love to hear your views on the business realities I’ve outlined, within the Football Association’s rules.
Walter,
having a mortgage, a big house loan if you will, is not illegal, or immoral, that’s my point.
Paying for a house with cash, upfront, isn’t immoral or illegal either, in fact it’s better on your bank balance in the long term as you don’t incur interest charges.
Same as football grounds, same as investment in playing squads.
Theft is immoral and illegal, setting up rules and regulations to suit your own position at the detriment to others is immoral, but not illegal.
City have not stolen anything from anyone, nor engineered rule changing to suit, they have so far competed with the FA framework, and in all likelihood within the European frameworks too.
Ask yourself, why the sudden need to change the rules? Who’s pushing it forward? Who pushed the last big shakeup ‘thru in the late eighties? Now who are the immoral ones? (as a caveat, I suspect City may well have been a willing partner in the formation of the Prem, if not the ringleaders – to which I am suitably ashamed if true).
None of us are completely safe from disaster, a giant meteor may well wipe out the planet next week, but all improbable (and some more probable) outcomes aside, City are a less risky business then the Arsenal due to said owner’s wonga, and sponsors are queing up to get a piece of the action – City are unquestionably on the way to the summit, Arsenal are stagnating at best, slipping behind the leaders in truth.
Business, as in football, loves a winner, fans are stuck with their lot, as I know only too well.
All I can go on are actual facts and trends as I see them, not woolly morality which ignores reality, and when my club is out of order, I’ll say so, but at this moment in time, they’re not (and when you learn of some of the misdeeds in our history, it’s not pleasant reading).
Let he who is without sin cast the first stone, and I believe the Arsenal are not as squeeky clean as some would have us believe.
So you send me a quote that says
Tottenham Hotspur actually have the most expensive price per game ratio
Oh come on Tony,
I googled “most expensive tickets in the premier league” and got two instant reports, both of which state the Arsenal, which backs up reports I’ve read in pre-season when new ticket prices were announced, you can’t deny the Emirates stadium is one of the most expensive places to watch footy for the average fan, and certainly for the fan who wants the best seats they can spend upwards of £1200 for a seat – if I’m not mistaken only Chelsea have broken the thousand pound season ticket.
Of course the cost of living in London is higher than elsewhere in the country, and in reality i don’t give a monkey’s about ticket prices at other clubs, it’s supply and demand, simple as that.
What I do care about is hypocrisy and ill informed moralising about my club, and a lot of it comes at us from North London seemingly, who are no angels either and should expect to get some reasoned debate back, with a little mild teasing to liven it up a bit I suppose.
At least no one has called me a Northern Cunt on this forum yet, but there’s time
Your silence on the rest of my ramblings is deafening Tony, I will take that to mean you mostly agree with me, or that you think I’m a twat (just covering all my bases there).
Walter you are getting very very confused. Football isnt cycling and Armstrong, it seems was breaking rules. Whereas Man City or Chelsea or come to that Blackburn havent broken any rules.
As for Mansor I think just about all of his money pumped into Man City has in effect been written off so wont be calling in any loans any time soon and whilst RA over at Chelsea hasnt quite fully done that yet the football club itself does not carry any real debt burden.
You asked Melon if it were wrong for anyone to buy a house with a mortgage, well of course its not just as it wouldnt be wrong if someone inherited one and as a result became a homeowner without having to pay for it.
What is sad is that in their attempt to stop Man City & Chelsea introduction of any form of FFP by the league will actualy work in these two clubs favour in that it will be near enough impossible for any other wealthy benefactor to come in and repeat whats happened at these two clubs.
A quick question how do you feel about the likes of QPR, Fulham, Wigan,Reading, Southampton,Newcastle, Aston Villa, Sunderland,Liverpool being in the EPL? All these clubs have benefited from large sums being pumped in by their owners and whilst I would agree no where near as much as Chelsea and Man City I think it would be safe to assune without their benefactors quite a few wouldnt be in the EPL their places being taken by clubs in the Championship like Middlesboro or Leicester or say Cardiff. Oh wait a minute!
As Melon points out take away any of the major revenue streams ,how about say Sky, from the EPL then many many clubs would go into freefall and that includes those with borrowings irrespective of what that money was used for.
Wont happen you may say but you only have to look at what happened to the FL and ITV to see that the TV company overstretched itself and as a result the whole lot folded like a pack of cards.
In other countries doing what City and Chelsea have done is impossible.
There are rules already there to prevent such things.
All bickering aside for a moment, I’m just watching the Hillsborough report on the Beeb, and I’d like to say I’m very glad our football stadia are being upgraded in the modern game.
My Daughter and her (now ex) boyfriend went to the Emirates to watch the Arse as he is a supporter, in a pre-season tournament, probably called the Emirates cup I think, and she had a great time, as I’m sure all visitors there do. (I also must confess me and the Missus have bought him two replica shirts over the years for his birthday, and still get the marketing bumpf regularly!).
I feel a lot safer going to the Etihad now, I remember nearly getting trampled in a back street in Moss side as a young lad after a City vs Spuds game, by galloping police horses trying to stop scrapping rival fans – Maine Road was special, but I prefer my young relatives to be safer in the Etihad – the seventies might have been fairer and less competitive, but there was always the chance of a random kicking and a dart in the eye.
Those poor families in Liverpool had their names blackened for 23 years, thank God the truth is finally out.
It maybe wasn’t a crime to use EPO when it wasn’t against the rules also you know.
In fact there was a time that they used it because there was no rule against it. But it still was/is cheating your way to victory. They then found out about it and said it was forbidden.
Just as is financial doping a form of cheating. And Platini wants to stop it. And not because of Arsenal as Platini hates Wenger more than he hates Mancini I think. But because of people seeing that in the end it will destroy football.
But Walter we arent in different countries. I cant quite follow your comment around EPO
As for financial doping, what a lovely phrase, means different thigs to differnt people.
One definition is that you borrow heavily to support the business.
The other is that the owner puts thier own money in to support the business.
I guess you have no problem with the first? But outrage at the second!
Irrespective nowhere does it say its cheating and as Melon has said neither Chelsea or Man City have broken any rules. I suspect when the results of the 3 year monitoring period for FFP comes out that neither Chelsea or Man City will have any problems. Platini is playing to the crowd on this.
Mike’s right, “financial doping” is a perjorative term for a business transaction which in all other areas of business is lauded as sound practice.
Only in football is this term used, by parties who have their own selfish agenda to pursue at the expense of others, to curtail freedom to invest.
As an example, when my dad retired from BT, he was in his early fifties, and needed to do something constructive to get out from under my mum’s feet. So he decided to buy a taxi, as my uncle was also a taxi driver.
However, my dad paid in cash for his taxi upfront, whereas my uncle leased a car from the company he works for. This gave him several advantages, which were that he could work when he chose to, usually days only, and he wasn’t under any pressure to work too many hours, only as many as he felt comfy with, due to low overheads re interest payments etc.. There were tax advantages too, which meant he could claim the initial costs back over the years.
He also had the freedom to stop whenever he wanted to, as he owned the car outright, no pressure to continue to work just to keep up with the payments.
This fits your definition of financial doping, but all it really means is he had an advantage over fellow taxi drivers ‘thru his own astute business decision.
Why is what Sheikh Mansour doing any different?
If his investment is causing the Arsenal to fall down the pecking order, then tough!
Do you think that when Arsenal were scrabbling around trying to raise the cash to compete with United’s revenues, steam rollering supporter’s groups and local residents, they gave a monkey’s for the clubs they would leave behind, like Spuds, Liverpool etc?
This is from wikipedia btw, makes a good read –
http://en.wikipedia.org/wiki/Emirates_Stadium
Is the way the Arsenal financially doped themselves right or wrong, or just business?
People you just don’t get it? These so called football organisations that are supposed to look after football, have deemed it necessary to do something for the good of football or go the way of my favourite sport Boxing. Fight’s are rigged to maximise as much financial return to who ever, and football is not untouchable.
It is only a matter of time when people get fed up of the same teams winning and interest will start waining then the TV companies start to withdraw?
Call all this hogwash, but it is an opinion of lot of people. You can slate me now?
elkieno September 12, 2012 at 8:57 am, Hi my friend ….I do not make up history neither do I use unsubstantiated rumours, I stated the TRUE facts and just a quick reply, regarding my comments regarding Henry Norris, if true facts are taken into account, Sir Henry DID buy the controlling interest in the then Woolwich Arsenal, Although it wasn’t proven it is a fact that Norris had connections on the FA and in fact he DID use all of his considerable influence (whether by honest or dishonest means) to get the vote in favour of Arsenal being promoted from 5th place!! Sir Henry was investigated by the FA in the 1920′s for making illegal payments,and he WAS finally banned from football in 1930. He WAS instigator and financiar of signing Herbert Chapman as manager in 1925, he was also respponsible for “negotiating” big name signings (the great Charles Buchan being one of them). Oh and by the way I am an Arsenal fan and have written 5 successful books on Arsenal History to date, so I think I have proven credentials, as I said people should check the facts before making statements.
To be honest at the end of the day it’s all a game for money men and no different for Arsenal, ut’s all like monopoly to them and we are all on the perifery watching without any way of affecting the outcome whatsoever
With Arsenal it is about the type of money men involved! The old board including PHill-Wood all made huge profit by selling out their shares to Stan Kronke, Hill-Wood is a buffoon, but he is no fool and he quickly back tracked from his criticism of Kronke once he saw the number of O’s he could make. He also engineered the block of Usmanov as this served his personal business interests elsewhere! Kronke is a profit maker he is not in this to see the football nor is he the least bit interested in success on the pitch, who has a history of taking his money out so will never invest lots of cash, Usmanov however is a man with the hunger to want to win at everything he is involved in and will spend as much as is needed to acheive his goal and to see trophies roll in, so Arsenal will play it tight and second fiddle until Stan Kronke decides he wants to cash in or bail out.
By the way FFP is already a dead duck as the likes of Mansour have had experts working on ways around the income v expenditure and trust me it isn’t that difficult!
Super Singh,
sorry, I don’t recognise the link between the farce which is modern boxing, and the football industry. I also used to love watching boxing, but frankly it doesn’t interest me, and i can’t put my finger on why.
Perhaps it’s my age, perhaps the fights are so one-sided until the last pay day for the best, I don’t know.
Football is less easy to rig, but of course the way the Champions League (mostly populated by teams who are not, in fact, the champions at all) is seeded to prevent newcomers progressing – twice now City have faced the dreaded group of death, how crap is that for us, how much entertainment, well loads I suppose. To face the reigning champions of Holland, Germany and Spain is a bit much in the group stages, but then again, we’re the champions of England, so let’s see how that works out.
The rewards for CL participation are morally wrong – I believe all teams under the European federation’s umbrella should be paid an equal share of the monies, regardless of division and silverware success, to be truly fair. Yep, Barcelona get the same share as Grimsby – not a percentage, the same amount exactly.
Under the current rewards the rich get richer, the poor get poorer.
I recognise this now benefits City especially, and I wish it were not so.
When money is in your eyes you get blind for reality outside…
“When money is in your eyes you get blind for reality outside…”
very true Walter, very true.
Melon Man,
Come on, it’s quite clear he is talking about the rigging of matched rather than the specific sport of boxing.
How come my comments go into moderation these days?
@Melon Man
Your main argument seems to be is that there is nothing wrong with Mr Mansour pumping cash into Manchester City to strengthen the club. But there is something very wrong with that, several things actually.
1) Price inflation for the rest of the league and the rest of the world of club football, in terms of salaries, transfer fees, etc. This is very dangerous for all clubs.
2) Unfair advantage in resources that are extra-club in nature.
3) The question as to why spend so much money? You say investment, others say marketing; I say it is a bit shady because return on investment is not guaranteed and there are so many more profitably ways to use half a billion in cash. I live in Australia and Mr Mansour could buy a mine that would basically give him license to print money – yet he uses the wealth in a loss-making enterprise that has a significant disadvantage against the established players in the industry. That’s opportunity cost.
Now before you get angry and think I am having a go at you, I am not. I don’t think any decent person begrudges the loyal Man City support their moment in the sun. I think it is just the nature of such large quantities of cash at such a fast rate. If Mr Mansour had built the club infrastructure slowly and minimised his losses and slowly built the club revenue, I am sure he would have gained success in the long term without the huge losses.
But here is the thing of it. Chelsea did it before you. And there was no big cry for FFP then. Do you reckon it is because your owner is Arab? Or do you reckon it is because their owner is Russian? Or a mafioso? Because you are right mate, the timing of it stinks of a conspiracy. Man Utd cheat their bloody guts out and still lose to Man City last season and immediately the FFP talk in England gets louder. So I agree with you there, there are definitely double standards.
Mr.Melon,
Let’s take your dad’s taxi buying example! When he and your uncle bought taxis, they were competing on an even playing field with rules in place as to how much they could charge etc. What Mr. Abramovich , Sheikh Mansour and the Qataris are doing is buying up all the taxis in the market. So now when your dad wants to buy a second taxi, the car company is asking for a premium that he cannot afford.However, he still has to earn his bread so what does he do? Takes a loan at a very high interest rate and buys another one just to stay and compete in the market as that’s the only thing he knows how to do. That’s how football is and this is why rules are being brought into place to ensure that competition takes place within a set framework.
Secondly, football involves trading with players being essential commodities. The kind of uproar we are seeing in terms of inflation is akin to one being seen in commodity trading. Instruments created for a set purpose were being exploited to make unreasonable profits. Hence, regulations were brought in there as well to control unscrupulous activity so that prices remain reasonable as well as sustainable.’Sustainable’ being the key word here. Certainly, the activities going on in clubs like Chelsea, Manchester City and PSG can be called anything but sustainable
Mihr
I love all this about taxis. I dont know if you know but when local authouities set the rates for fares taxi firms dont have to charge that figure they can charge less if they want. Not really a level playing field.
As or buying up players I have seen a well thought arguement that suggests that Arsenals policy of having a large number of top young players on good wages is in itself is as much of a concern.
http://www.sbnation.com/soccer/2011/9/12/2418817/arsenal-manchester-city-chelsea-financial-doping
Bet you dont agree with that view!
Now to player trading. Yes I see why its argued that players are commodities and Arsenal have benefited to a very very large extent by making a profit from trading players. Indeed some would argue that had it not been from selling players that Arsenal business model would fall to pieces.
As for sustainabilty football hangs by a thread.Quite a dramatic statement but as has been pointed out removal or even a disterbance to any of the main revenue streams then the EPL will go into meltdown. The dependance on Sky monies alone is more of a concern to far more clubs and indeed the FA than the possibilty of SM or RA of stopping to put in their monies into there two clubs.
Thanks for the considered responses guys,
I do recognise that City and Chelsea have contributed to player inflation, and that our direct competitors are struggling to keep up, but it has always been this way in football, especially in the Premiership/ Champions League years – fans of clubs like City, Villa, Spuds and Everton, all European cup winners in the past, have watched our best players going to the Sky 4, wages being paid from TV revenues instead of match receipts, and kissed the silverware goodbye.
How do these fine clubs compete when their stars have been poached regularly by your direct rivals? Spuds lost Carrick and Berbatov to United, City lost SWP to Chelsea, Villa lost Dwight Yorke, (and Barry and Milner to us now), Rooney from Everton to United, and the list goes on, I’ve missed loads out no doubt. As for buying the likes of Veron, skinny Ronaldo etc.. forget it. Georgios Samaras was City’s big buy one season for six million, whilst United were spunking £50 million per summer window of TV money.
Regarding wage inflation, Barcelona and Real Madrid are still the highest payers in world football, and despite the doom mongerers, City and Chelsea do not spend more in wages, despite plainly having the resources to do so, even in this country Man United seem pay the highest wages to Rooney and now RVP.
A prem squad can only contain 25 senior players, that’s your lot. Wage inflation as far as i can tell, hasn’t filtered lower than the Prem in the last ten years, and I’d love someone to prove it has.
City and Chelsea can only buy so many players, no more, and despite the haters, are plainly working to become sustainable in the long term.
The market will find a happy balance, as always, and probably there will be a new set of clubs at the top – that’s the way it works in life – no clubs will disappear forever, although some will go bust and have to start again.
Yes, a lot of the top players will go to City and Chelsea, but not this transfer window – City missed out on RVP, Eden HAzard, Danielle De Rossi and Daniel Agger, due to all sorts of circumstances I suppose, I would say this is because City are balancing the books, as they always said they would, not fear of FFP regs, although it looks good.
I hate the unfairness, but direct your anger at the root cause of the widening gap between the haves, and the have nots – the distribution of TV revenues, which demonstrably removes competition – the last twenty years has shown incontrovertably that as soon as you hitch a ride on the Champions League gravy train, you’re guaranteed an unfair spending advantage, not to mention the ability to attract those players from all over the world who will only play for a team in that competition.
This scenario plays out all over Europe, the same clubs every year – it’s ridiculous that teams like (until recently) City, Newcastle, Villa have never even appeared in the League, never mind teams like Spuds who’ve been in it once.
Scottish football has a window of opportunity for a shakeup now Rangers have relocated for a couple of years, thank God for bankruptcy I say, let someone else have a go.
Man what a debate I must say. I am working off a 8gb iPhone that I pretty much found, so I can’t really comment or read the links of ‘proof’!
That sucks man, I feel like I am the kid in the corner watching adults talk politics!
Now I know how a spurs fan feels!!
‘Boom boom tish’.
Fair play to you all, especially mike who replied to me, but I can’t go back up to read it again and reply, would have to the page again.
All that’s left to say is may the best team win!
Common you Mighty Arsenal!!!
Would you know if we are still owed any substantial amounts from transfer dealings with clubs or if we ourselves owe anything that could cause us to be penalised under the FFP rules?
Jax,
At a guess, Barca owe us for Cesc and Song, United for sicknote. I doubt City owe us anything, I would imagine they are cash buyers. It’s plausible we owe Everton, Southampton, Montpellier etc. as most clubs will extend credit to each other but the size of the transfers would be affordable to front load them – this is actually a persuasive transfer tactic, instead of £5 million a season for four years, they accept £10 million up front and £5 million the season afterwards, so whilst the total fee is lower, in the short term they are better off.
In a way that explains the inability to spend vast sums – club A offer £20 million over four payments, club B offer £18 million with £10 million up front and club C offer £20 million up front. A,B & C could be Barca, United & PSG, not necessarily Spurs, Arsenal & City, the principle remains the same.
Best debate ever. Both sides putting forth points for and against various points raised. When the final conclusions are drawn and we don’t arrive at a consensus, we’ll agree to disagree, wait for the next article from the lovely authors of this site to stir the debate once again. In the main time, Arsenal keep running as a sustainable business, cuz the benefits might have been delayed (in terms of silverware), but any sensible person will see that the club has remained a success i.e. being competitive enough to maintain a very high standard (something very few clubs can do consistently and with really good players leaving). And as for City, (I’ve always had a very soft spot for the noisy neighbors of United), I have heard the club has been run with decency. I won’t fault the current management for the injection of cash (with the hope of eclipsing United), but don’t do it at the expense of said decency.
Walter and Tony, thanks for Untold, I come here for enlightened debate and a reasoned argument. Used to enjoy Soccernet, but it’s pretty much rubbish now. Keep up the good work guys.
I have very much enjoyed putting my pointof view over, and the rejoinders from you guys
Thank goodness it didn’t descend into a slanging match, which certain fans on both sides seem to prefer
I feel comfortable in discussing the less salubrious episodes in City’s history, and I thank the Arsenal fans who reciprocated.
At the end of the day, we’re all rather partisan, football fans, but occasionally I would hope some frank discussions can take place.
Through this debate, I think I have become to realise, in my opinion, the root of all football’s evil comes from TV revenues, specifically the uneven distribution of them to the very top clubs.
Imagine if all professional clubs in Europe were given the exact same cut every season?
Maybe Crewe Alexandra could afford to attract and keep many of their young starlets, instead of flogging them off to keep going?
How much better would the academies and training facilities of the little clubs become?
How much better would our national team become from grassroots on up?
That’s my dream, doomed to fail I guess in my lifetime