Would Hull City be allowed into the Europa League next season?

March 9, 2014

 Following today’s FA Cup semi-final draw, supporters of Hull and Sheffield United must feel there is every chance that they could secure a Europa League place next season. This could be achieved either by getting through to the final and beating Wigan, or simply by getting through to a final against Arsenal. Unlike the League Cup, the losing FA Cup Finalist will be rewarded with a Europa League place if the winners have already qualified for UEFA competition.  Arsenal would need to finish as low down as 7th to drop out of a Europa League place. The rules can be found here.

A month or so ago, I briefly posted a piece where I raised the question about whether Hull would comply with the UEFA FFP rules and whether this would mean problems for the club.  Hull have posted losses in each of the last two years and at the time, it appeared that there would be a problem because Hull’s owners had not injected equity (hard cash) to cover recent club debts. Based on 2011/12 and 2012/13, the owner would need to inject around £25m to comply with the requirements. However, since then we have had some clarification from UEFA.

Injection required if Hull’s compliance had been judged on two seasons. 

 The situation with Liverpool is relevant here. Liverpool’s recent poor financial results caused a brief flurry of media activity – their losses were so large that the question was raised over their compliance with the rules. UEFA confirmed that as Liverpool have not qualified for UEFA competition this season (2013/14), their accounts will not be assessed until next season – Liverpool like Hull will be assessed over three financial seasons (2011/12, 2012/13, 2013/14). As UEFA have seemingly ruled-out any mid-season sporting sanctions, Hull are therefore free to compete in the Europa League should they beat Sheffield United (and potentially Wigan).

There are still some issues for Hull in that their 2013/14 accounts are probably likely to show only a modest profit and therefore some significant equity injection will probably be required. The owner will need to inject some cash to ensure club debts do now grow by more than permitted. He will have until 31 Dec 2014 to convert the debt into equity.  If he does not do this, it is unclear what punishment UEFA will impose – they may withhold some of Hull’s prize money or alternatively impose a punishment for the 2015/16 season. However as Hull are by no means certain to qualify for UEFA competition in 2015/16, it seems more likely that some of the prize money may be withheld if the owner did not inject the equity.  However, there is no reason to think that he won’t inject the cash.

In the mean-time, Hull fans can continue to dream of a European tour. If they were to secure qualification, the only thing that could possibly stop Hull’s participation next season would be an issue with their UEFA licence application such entering Administration (as happened to Portsmouth in 2010 and prevented them getting a UEFA slot despite being losing finalists to Chelsea), or problems with auditing the accounts. Neither of these two scenarios is even remotely likely. Although there is at least one (potentially two) games to win, Hull fans can at least start to think about digging out their passports

 

Will Liverpool face any FFP punishment?

March 6, 2014

Since Tuesday's release of Liverpool’s annual accounts for last season (2012/13), fans have been asking whether they will receive a punishment for breaching the Break Even rules.  Unfortunately the FFP rules aren’t straight-forward and it is only when you produce a projection of this season’s finances that you can see how the land lies.

As I advised a couple of days ago, Liverpool will be assessed for FFP compliance over three footballing seasons - they will be able to compete in the Cha...


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Liverpool’s accounts raise interesing question of ‘fairness’ of FFP

March 4, 2014

Last Friday UEFA held an FFP update in Nyon which provided some excellent information about the current process – however it also gave rise to a number of interesting questions.

UEFA explained that the teams that potentially faced punished for an overspend during the first Monitoring Period are those professional teams that qualified for UEFA competition in 2012/13 and had a Break Even deficit in the 2011/12 season. Although the Monitoring Period looks at accounting performance over two seas...


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UEFA Financial Fair Play update – Nyon 28 Feb 2014

March 2, 2014

On Friday UEFA held an FFP press briefing in Nyon. The 2 hour session provided number of interesting updates - only a few of which have been reported in the British press.

76 clubs referred for Break Even Deficit

As has been widely reported, 76 clubs were required to provide additional financial information to UEFA. Some media outlets probably not at the session seemed to sensationalise what UEFA were saying in respect to the 76. Essentially the 76 clubs are those that met all the following cri...


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Manchester United unable to spend their way out of trouble

February 12, 2014

In December Martyn Ziegler wrote an interesting piece outlining the financial implications for Manchester United if they don’t secure a Champions League place at the end of the current 2013/14 season. As Ziegler pointed out, the club’s CL income will be reduced next season by around £35m, with the club missing out on a further £10m in gate-receipts. 

Given this probable fall in income, it is interesting to overlay the new Premier League spending constraints and see what impact this fairl...


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Man City release controversial accounts

February 3, 2014

Manchester City's long-awaited financial results were released last week. In many ways they raise more questions than they answer. 

As a number of journalists have pointed out, there are a host of Related Party Transactions, Inter-company transactions as well as a sale of Image Rights to a company that the City Press Office insists is outside the club. These obscure transactions have been designed to generate one-off income for the club during the final accounting year that will be covered by ...


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Deloitte's Rich List gives sneak preview of Man City's accounts

January 23, 2014

The annual Deloitte's Rich List reveals some interesting information about Man City's income - figures that have not yet been published owing to delays publishing the club accounts. 

Before we look at the figures, I should point out that  the income catergorisation used by Deloitte in their report is different to the one used by the Club accountants - however it does include all club income. Deloitte catergorise  some of the club's revenue as 'Match Day Income' whereas the club put more of the...


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Wage Spend versus points achieved

December 27, 2013

Article and table updated 3 Jan 2014

After West Ham lost to Manchester United just before Christmas, their manager Sam Allardyce remarked tha
“where you actually finish in the league depends on the money you’ve spent. It’s a statistical fact that”.  This raised an interesting point; clubs will spend money to gain a competitive advantage, but, how by much does a high spend influence results? And what kind of spending? It also raises the question of to what extend a team's performance a...


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EC to formally investigate Spain for providing State Aid to clubs

December 16, 2013

The European Commission has opened disciplinary proceedings against Spain for giving illegal State Aid to 7 clubs (Real Madrid, Barcelona, Athletic Bilbao, Osasuna, Valencia, Elche and Hercules). The proceedings could have a significant impact on Spanish football.

Independent journalist Sam Wallace originally broke this story. See his articles here and here and here.

There are three areas in which the rules may well have been breached:

Member status

Whilst all other clubs were obliged by the Span...


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Premier League clubs - 'Loss per ticket' analysis

December 9, 2013

A study of Premier League club accounts shows that most paying fans effectively have their match-day-experience subsidised by club losses. The table below shows how much extra fans would have to pay for their match tickets if clubs worked on a Break Even basis, with fans making up any deficit.

Obviously the big 'Loss per ticket' figures are the ones that stand out – there probably wouldn’t be too many Liverpool or Man City fans who would continue to go to the game i...


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