Council of Europe Ruling against Etihad Sponsorship Deal

[StartingPrice]

Okay Chaps and Chapesses, I saw something on this earlier, and assumed it would be all over General Football. I've come back later and no-one seems to have picked up of it (I've gone back three pages). So, here's some info:

http://www.journallive.co.uk/newcas...l-clubs-improper-transactions-61634-30485682/

"Time called on football clubs' ‘improper transactions’
A COUNCIL of Europe committee has called on Uefa to outlaw “improper transactions” like the sponsorship deal which saw Manchester City’s stadium renamed.
The Council, a watchdog separate from the European Union, interpreted the estimated £400m deal between City and Etihad airline as an attempt to circumvent Financial Fair Play Rules.
The rules, championed by Uefa president Michel Platini, are designed to stop European clubs spending more than they earn, and will be phased in by 2015. Their wealthy benefactors make City one of the clubs most vulnerable.
“Clubs will no doubt try to supplement their income if possible,” said the report by the Council’s culture, science, education and media committee. “They could for example call on sponsors to invest more to reduce or eliminate their deficits.
“Care will have to be taken to prevent any circumvention of the financial fair play rules in this way.
“A case in point is Manchester City, which has entered into a contract estimated at £400m with the airline Etihad. Etihad belongs to the Abu Dhabi royal family, and the Abu Dhabi United Group ... owns Manchester City.
“To avoid improper transactions of this kind, Uefa should prohibit clubs from sponsoring themselves or using associated bodies to do so.


“There is also a need to monitor the ‘purchases’ of sponsors, who should not overpay for the rights they acquire.”
Many experts regarded City’s deal as far exceeding market value. In 2004 Emirates paid £100m to sponsor Arsenal’s new home until 2021. City’s is a 10-year deal.
Newcastle United have renamed their ground after Sports Direct. Both are owned by Mike Ashley. However, the deal is simply intended as a showcase to would-be sponsors, and no money has changed hands.
Financial Fair Play will allow clubs to make losses of 45m (£39.4m) over the next three years, falling to 30m the following season. Possible punishments mooted included fines, transfer bans, withholding prize money, and expulsion from Europe. Proposed transfer bans have been scrapped after legal advice.
The Council also raised concerns about Paris St Germain, owned by Qatar’s ruling family. Last month they announced a major sponsorship deal with the Qatar National Bank.
The report also warned against a salary cap, claiming it could lead to pay cuts for less well-known players “especially young players or players from Africa or Asia” and “secret deals or arrangements with sponsors”.


http://www.independent.co.uk/sport/...d-deal-improper-says-euro-report-7544605.html

"City's £400m Etihad deal 'improper', says Euro report

Manchester City's £400m sponsorship deal with Etihad has been labelled "an improper transaction" by a leading European body in a report that has warned Uefa to ensure that clubs cannot find ways of getting round the Financial Fair Play rules.
A committee of the Council of Europe wants clubs to be barred from agreeing sponsorship deals with companies that have links with their owners. FFP is to be enforced from 2013-14, with clubs only allowed to spend what they earn. They are expected to break even over a three-year period, starting from 2011-12, and are allowed an "acceptable deviation" of €45m (£37.6m) over the first two years.
The report, compiled by the Council's Committee on Culture, Science, Education and Media, highlights City as an example of a deal that Uefa have to keep a close eye on.
The report said: "Clubs will no doubt try to supplement their income if possible. They could for example call on sponsors to invest more so as to reduce or eliminate their deficits. Care will have to be taken to prevent any circumvention of the financial fair play rules in this way.
"A case in point is Manchester City, which has entered into a contract estimated at £400m with the airline Etihad. Etihad belongs to the Abu Dhabi royal family, and the Abu Dhabi United Group, which is led by Suleiman Al-Fahim, owns Manchester City.
"In order to avoid improper transactions of this kind, Uefa should prohibit clubs from sponsoring themselves or using associated bodies to do so. There is also a need to monitor the 'purchases' of sponsors, who should not overpay for the rights they acquire."
City last night rejected the report's description of the deal. "For the sake of credibility, the Council would do well to seek primary evidence through engaging with organisations rather than taking a position based on speculation," said a club spokesperson.
City, who have sent officials to Uefa's HQ in Nyon for consultations, believe that the Etihad deal is within the FFP rules. Paris St Germain have a similar deal with Qatar.
City's losses in the last two years have been £195m and £121m. Uefa have the option of banning clubs from European competition should they fail to meet FFP requirements, but it is likely that fines would be levied first.
The report also said Real Madrid's deal to sell their training ground to city authorities for €400m in effect constituted "state aid" and suggested such a practice should be banned.
As a watchdog separated from the European Union, the Council of Europe has no powers of enforcement.
The committee issued a draft resolution calling for Sepp Blatter's unopposed re-election as Fifa president last year to be the subject of an internal investigation into whether he unfairly exploited his position.
The draft resolution stated: "The Assembly specifically calls on Fifa to take the necessary steps to cast full light on the facts underlying the various scandals which, in recent years, have tarnished its image."

http://menmedia.co.uk/manchestereve...e-over-improper-400m-deal-with-etihad-airline

"Manchester City under fire from Council of Europe over 'improper' £400m deal with Etihad airline
Clubs such as Manchester City should be prohibited by UEFA from being sponsored by companies closely associated with their owners, a Council of Europe committee stated today.

The estimated £400million partnership deal between City and Etihad airline has been described as an "improper transaction" in a report by the Council's culture, science, education and media committee.

It also highlights Real Madrid's sale of its training ground to the city for more than 400million euros as possibly giving the club an unfair advantage.

The Council of Europe cannot impose any rules however - it is separate from the European Union and acts as a watchdog body.

Their report says UEFA will have to take care to ensure their financial fair play rules, where clubs must only spend what they earn, are not circumvented.

"Clubs will no doubt try to supplement their income if possible. They could for example call on sponsors to invest more so as to reduce or eliminate their deficits," says the report.

"Care will have to be taken to prevent any circumvention of the financial fair play rules in this way.

"A case in point is Manchester City, which has entered into a contract estimated at £400million with the airline Etihad. Etihad belongs to the Abu Dhabi royal family, and the Abu Dhabi United Group, which is led by Suleiman Al-Fahim, owns Manchester City.

"In order to avoid improper transactions of this kind, UEFA should prohibit clubs from sponsoring themselves or using associated bodies to do so.

"There is also a need to monitor the 'purchases' of sponsors, who should not overpay for the rights they acquire."

Manchester City are by no means the only leading European club with such a deal. Paris St Germain, owned by one of the members of Qatar's ruling family, last month announced a major sponsorship deal with the Qatar National Bank.

The committee warned that public authorities can indirectly give financial help to clubs - and that is part of the problem.

The report adds: "This poses the question at which point competition between clubs can significantly be distorted, and some clubs enjoy an undue advantage, as a result of the financing of sports infrastructure, its sale to sports companies or placing on loan to teams, the granting of subsidies, loans, tax breaks or other financial benefits, gifts, the purchase by public authorities of advertising space or, indeed, facilities belonging to clubs, or other measures to support sports companies.

"For example, in the early 2000s Real Madrid was able to sell its training ground back to the city for more than 400million euros.

"There is a need for strict application of the ban on state aid for professional sports companies."

The committee is against the introduction of a salary cap.

It says to do so would lead to a reduction in pay of less well-known players "especially young players or players from African or Asian countries" and the temptation for clubs to enter "into secret deals or to reach arrangements with sponsors to transfer part of the costs to them".

 

[miles_64]

Interesting stuff for sure. Sadly, I don't think anything will come of it.

 

[gilzeantheking]

I'm sure that City will find a way around this. Do UEFA have the balls to try to stop them, somehow I don't think so.

 

[Misfit]

I just don't ever see UEFA banning Citeh, Chelsea, RM, possibly Barca, a fair chunk of the Italian teams all from the CL. They are the money-makers. The mainstays. Not so much the Citehs and chelseas but the others.

They won't do it. The clubs, big enough to do so of course in terms of fanbase, "brand identity" etc, will call UEFA's bluff and UEFA will fold.

It's a nice idea but UEFA have put itself in a position where money is king and to follow through with this will be suicide in that respect.

All that will happen is probably stopping clubs overspending from this point to get into the closed shop at the top of each respective league - helped primarily by UEFA making the CL such a cashcow. That's great in terms of stopping multiple teams in leagues across Europe from spending themselves into near or actual oblivion but naff all use in changing the way the system has been for the last 15 yrs.

Unless UEFA bite the bullet and put their absolute financial dominance of the various world federations at risk by going back to a proper European Cup and UEFA Cup set up, this is the way it is and the way it will stay, bar the odd team in each league maybe popping their head above the water every decade or two.

Why would they? They set up the CL exactly for the purpose of making vast gobs of money. I'm sure one or two people in UEFA care about competition and trying to level the playing field but I sincerely doubt enough do.

All this will actually do, imo, is further cement those clubs lucky enough to be at the top when these rules weren't in place in staying there.

Hopefully all I've written is bollox and I'm a big fat doubting Thomas cynic.

 

[StartingPrice]

Interesting stuff for sure. Sadly, I don't think anything will come of it.

I'm sure that City will find a way around this. Do UEFA have the balls to try to stop them, somehow I don't think so.

When discussed at the start of the season these arguments (and yours, misfit) were made. As I understand it, Roman was a vocal mover for these regs...so I don't see Chelsea being an impediment - and, as I said at the time, I believe Chelsea didn't do what needed to be done over Modric, make Levy an offer he couldn't refuse, because they are trying to adhere to the regs.

The questions are these:
1) Can UEFA really afford to promulgate these regulations and then be seen as a bunch of gutless, spineless weaklings at the first challenge.

2) There are a lot of big clubs, well established leaders of the footballing World, who have a huge amount to lose by not seeing them enforced. What do United, for instance, in their comparatively weak financial position, have to gain from allowing Citeh to spend as much as they want on players :shrug: And what about Clubs like ourselves and the Goons. By my reckoning there are plenty of powerful clubs who have a big vested interest in seeing the regs enforced.

At the end of the day, Citeh may just get off the hook on that one, but it will show them and everyone else that they are being watched closely, and therefore seriously curtail their ability to parachute as much oil-money into the club as possible.

I could be wrong - time will tell.

 

[dn013]

As long as Platini and his mates at UEFA get some of that money then I can't see them complaining.

 

[Spurger King]

Interesting stuff for sure. Sadly, I don't think anything will come of it.

This. MansourbinZayedAlNahyan City will do whatever they please, regardless of the rules and regulations.

 

[StartingPrice]

As long as Platini and his mates at UEFA get some of that money then I can't see them complaining.

This. MansourbinZayedAlNahyan City will do whatever they please, regardless of the rules and regulations.

So, you think UEFA can afford to look so publicly complicitous and, basically, weak?

And you think all of the clubs who have so much to lsoe from Citeh being allowed to ride rough-shod over the regs will accept that?

And another interesting article, here:

http://www.footballfancast.com/2012/03/football-blogs/the-calm-before-the-ffp-storm-in-football

Reaches similarly pessimistic conclusions. The problem with these conclusions is that every club may as well ignore the regs, and get themselves as wealthy a backer as possible, surely :shrug:

 

[bigpalacios]

Surely this rule has come in because of city, why would they let them find a loop-hole in it?
I hope it is enforced so that city can stop playing football manager in cheat mode.

 

[StartingPrice]

I don't know that it has come in because of Citeh - unless you mean it has come in because of situations like that at Citeh, in which case you are spot on. And it is, in effect, playing FM on Cheat Mode.

So, yeah, how can UEFA bring in regs spefically relating to the situation at certain clubs, and then strictlyen force them for every club except those the regs were aimed at?

 

[bigpalacios]

I don't know that it has come in because of Citeh - unless you mean it has come in because of situations like that at Citeh, in which case you are spot on. And it is, in effect, playing FM on Cheat Mode.

So, yeah, how can UEFA bring in regs spefically relating to the situation at certain clubs, and then strictlyen force them for every club except those the regs were aimed at?

Lets just hope UEFA can end all this fake shit!

 

[AngerManagement]

The thing is, although City are the biggest example as they live so ridiculously beyond their means.....pretty much all the bigger teams breach the rules to varying extents but by some way.

To enforce these rules Uefa would have to be consistent across the board and punish all who are match the criteria that equates to punishment.

That would include the likes of Man U, Real, Barca....all the top guns of Europe really and I just can't see Uefa having the balls to ban them all or give them a punishment beyond the token to be seen to be acting.

It reminds me of the transfer embargoes Chelsea were supposedly going to get for their constant tapping up and general behaviour, nothing serious ever really came of it, nor are Barca ever punished.

I'd be surprised if anything much really happens, I doubt the fair play rules will do much good although they could make slow inroads and gradually lower the money spent on transfers and wages (I hope) but I don't think it will have any drastic or noticeable effect on the power hierarchy of football , if anything hopefully it will stop it continuing to get out of control

 

[StartingPrice]

The thing is, although City are the biggest example as they live so ridiculously beyond their means.....pretty much all the bigger teams breach the rules to varying extents but by some way.

To enforce these rules Uefa would have to be consistent across the board and punish all who are match the criteria that equates to punishment.

That would include the likes of Man U, Real, Barca....all the top guns of Europe really and I just can't see Uefa having the balls to ban them all or give them a punishment beyond the token to be seen to be acting.

It reminds me of the transfer embargoes Chelsea were supposedly going to get for their constant tapping up and general behaviour, nothing serious ever really came of it, nor are Barca ever punished.

I'd be surprised if anything much really happens, I doubt the fair play rules will do much good although they could make slow inroads and gradually lower the money spent on transfers and wages (I hope) but I don't think it will have any drastic or noticeable effect on the power hierarchy of football , if anything hopefully it will stop it continuing to get out of control

It wouldn't be easy for them.
But the arguments go both ways.
How ridiculous will they look if they institute these regulations and then do nothing to the most flagrant abusers, on those who try to fulfill the regs but fail - that will just seem like the most cowardly type of bullying.

In regard to the big clubs: I don't think it is quite that simple. Roman was vocalin support of these regulations, and, I believe, he is really trying to curb the big spending at the Bridge. United are not easy to call, they just plain flat-out cannot compete with Citeh if Citeh are given free-reign, so, theoretically, they would be in favour of Citeh's ability to spend being curtailed. At the same time, reputedly, they are not in good financial health, themselves. I'm not too sure where Liverpool fit into all of this, other than that I can't see them competing at the top without a sugar-daddy spending a hell of a lot of money, but, again, reputedly, they are spending way over their means, as it is - how long can they do that without actually getting to the top table.

Can't really speak about the situation in other countries.

But the important thing is, if UEFA do nothing, and this manouvre by Citeh is flagrant, as the Council of Europe have observed. Allowing them to ride roughshod will just, ultimately, not only justify every other team totally ignoring the regs, but actually encourage them to do so.

 

[Rocksuperstar]

I think people are missing the important part of this verdict - the fact that Citeh actually arranged this deal with the intention of bypassing the FFA rules. This isn't a deal that just happened to make things shiney for them, this deal was arranged specifically to circumvent this rule. It's the difference between being lucky and being a cheat.

If a club happens to find itself still outside of its means when the deadline passes, if they could be actively seen to be attempting to reduce their spending then i don't doubt they will get treated leniently. To go out of their way to avoid this rule will be hit hard, and so will any other club seen to be making self serving arrangements with sponsors so closely linked with the owners of the clubs.

I'm no financial wizzkid, but the more i hear about the deal and the people involved, the more crooked it sounds generally, not just as detailed in the football rulebook.

 

[AngerManagement]

It wouldn't be easy for them.
But the arguments go both ways.
How ridiculous will they look if they institute these regulations and then do nothing to the most flagrant abusers, on those who try to fulfill the regs but fail - that will just seem like the most cowardly type of bullying.

In regard to the big clubs: I don't think it is quite that simple. Roman was vocalin support of these regulations, and, I believe, he is really trying to curb the big spending at the Bridge. United are not easy to call, they just plain flat-out cannot compete with Citeh if Citeh are given free-reign, so, theoretically, they would be in favour of Citeh's ability to spend being curtailed. At the same time, reputedly, they are not in good financial health, themselves. I'm not too sure where Liverpool fit into all of this, other than that I can't see them competing at the top without a sugar-daddy spending a hell of a lot of money, but, again, reputedly, they are spending way over their means, as it is - how long can they do that without actually getting to the top table.

Can't really speak about the situation in other countries.

But the important thing is, if UEFA do nothing, and this manouvre by Citeh is flagrant, as the Council of Europe have observed. Allowing them to ride roughshod will just, ultimately, not only justify every other team totally ignoring the regs, but actually encourage them to do so.

I'd expect them to hand out fines which will be paid and the story put to bed

 

[PT]

I expect the leading clubs to throw up two fingers and at some point create a breakaway league with TV rights going to individual Clubs.

 

[StartingPrice]

I think people are missing the important part of this verdict - the fact that Citeh actually arranged this deal with the intention of bypassing the FFA rules. This isn't a deal that just happened to make things shiney for them, this deal was arranged specifically to circumvent this rule. It's the difference between being lucky and being a cheat.

If a club happens to find itself still outside of its means when the deadline passes, if they could be actively seen to be attempting to reduce their spending then i don't doubt they will get treated leniently. To go out of their way to avoid this rule will be hit hard, and so will any other club seen to be making self serving arrangements with sponsors so closely linked with the owners of the clubs.

I'm no financial wizzkid, but the more i hear about the deal and the people involved, the more crooked it sounds generally, not just as detailed in the football rulebook.

Which is how I see it.
I agree with the doubters that it will take more bollox than UEFA have hitherto shown, but we an't always go on precedent.

I'd expect them to hand out fines which will be paid and the story put to bed

I would expect certain quarters to be happy with that, but not others.

I expect the leading clubs to throw up two fingers and at some point create a breakaway league with TV rights going to individual Clubs.

This has been suggested before...but never happened.
Who would it include?
It is assumed that Barca and Real would be in for it, but that isn't proof positive. Bayern, technically. PSG due to their mega rich owners. The state of Italian football, I doubt they could compete just now in such a structure. Same for Liverpool. The Goons and us, we wouldn't want to be the best run poor-club whipping boys in such a structure, would we :shrug: Citeh, obviously - but, for reasons stated above, maybe not United. chelsea possibly.
Their options are rather limited.
Also, as stated in previous arguments, the mega-rich owners of such clubs may be up for such a blatantly revenue-generating exercise, but would the supporters :shrug: I think most supporters consider their national league to be sacrosanct. We are getting into the territory of franchises, here, aren't we :shrug: The owner's doing what they want, and the support forming a break-away club - so that the only continuity is stadium (at some point mutable) and name, with the majority of the match-day crowd being made up of the wealthy global fan-base.
Sounds a bit extreme, but it is possible, and even mega-rich owners who are used to doing whatever they want would have to think long and hard before putting such a plan into effect.