City fined 60 million euros by UEFA

 

NYON, May 17 (AP): Big-spending clubs Manchester City and Paris Saint-Germain were fined 60 million euros ($82 million) by UEFA on Friday and ordered to limit their Champions League squads to 21 players next season for breaching the body's financial fair play rules.

In the first series of sanctions handed down by UEFA over its new regulations meant to curb over-spending by wealthy owners, nine clubs in all were handed punishments — but those given to the Premier League winner and the French champion were by far the heaviest.

City said it will accept the sanctions and will not appeal, but insisted that the club has a "fundamental disagreement" with UEFA about its "interpretations of the FFP regulations on players purchased before 2010." PSG also accepted the punishment "in spite of the tremendous handicap they represent in terms of the club's ability to fully compete on an equal footing against Europe's biggest teams."

PSG also said in a statement that it "deplores the fact" that UEFA hasn't recognized "the full value" of its partnership with the Qatar Tourism Authority, which the governing body said was inflated.

The fines given to City and PSG are the heaviest ever handed by out UEFA. However, UEFA said 40 million euros will be returned to the clubs if they fulfil their financial obligations over the next two years.

Those obligations include limiting the deficits to 10 million euros in the financial year ending in 2015 for City, with PSG allowed a deficit of 30 million euros for that period before being obligated to break even by 2016.

City said it expects to break even by the end of 2014.
UEFA said both clubs have agreed to "significantly limit" their spending in the transfer market over the next two years. However, City said it is allowed to spend 60 million euros, plus whatever it earns for selling players, in this summer's transfer window. It said the UEFA sanction "will have no material impact on the club's planned transfer activity."

The reduced Champions League squads may not have much of an impact either. Teams are ordinarily allowed 25-man squads for the competition, but few end up using that many. City and PSG both used 21 players on the field this past season — not counting unused substitutes.

"Our ambition to build one of the best and most competitive European Football clubs will not be undermined by these measures," said PSG president Nasser Al-Khelaifi. "We will continue to invest in developing a highly competitive team and will continue our investments in our stadium and training infrastructures while at the same time remaining, as we are today "debt free."

The FFP rules require clubs who play in the Champions League and Europa League to balance their finances, and are meant to curb huge investments by owners and excessive spending on transfers.

The sanctions were handed down five years after UEFA President Michel Platini launched the program to tackle "cheating" by overspending. No club was expelled from next season's Champions League or Europa League, which had been billed as the harshest punishment available. The other clubs to have failed FFP were Galatasaray, Trabzonspor and Bursaspor from Turkey, Russian sides Zenit St Petersburg, Anzhi Makhachkala and Rubin Kazan, as well as Levski Sofia from Bulgaria.
Those were handed fines ranging from 200,000 euros — for Galatasaray, Trabzonspor, Levski and Bursaspor — to 12 million euros for Zenit.

UEFA was expected to rule against Man City and PSG, which far exceeded a limit of 45 million-euro losses over the first two seasons of very complex accounting rules for FFP assessment. Both clubs tried to balance their finances with inflated sponsorship deals linked to their owners in Abu Dhabi and Qatar, respectively. City was also scrutinized for booking tens of millions in revenue from selling image rights and consultancy fees to third parties.

Critics of FFP say it was effectively manipulated during UEFA's lengthy consultation with clubs who saw an opportunity to lock out emerging rivals whose new, wealthy owners wanted to spend quickly to join the elite.

Clubs such as Barcelona, Bayern Munich, Manchester United and Real Madrid, which have lucrative commercial deals worldwide, will all likely benefit from City and PSG now having to rein in their transfer strategy.

 

_______________________________________

 

 

Graham Dunbar
AP Sports Writer

Manchester City and Paris Saint-Germain received the heaviest sanctions Friday when UEFA announced the first set of punishments in its "Financial Fair Play" project to control spending by European football clubs. City and PSG were fined 60 million euros ($82 million) each and ordered to limit their Champions League squads to 21 players next season instead of the normal 25. Seven other clubs were penalized among the 237 clubs whose finances were assessed after qualifying for this season's Champions League or Europa League.

Here are five things to know
about Financial Fair Play:

WHAT IS FFP?
Since July 2011, UEFA has monitored the annual accounts of all clubs entering its two club competitions.
UEFA requires clubs to approach break-even on football-related business — television rights fees, buying and selling players, salaries, sponsor deals, tickets sales, prize money. The complex accounting rules encourage clubs to spend on long-term projects — stadiums, youth training — which do not count as losses for FFP purposes.
UEFA lets club owners cover losses up to 45 million euros ($62 million) in the 2011-13 assessment period just completed. Clubs judged to have broken the spirit or letter of FFP rules faced sanctions from a warning to being barred from UEFA competitions in the 2014-15 season onward.

WHY IT WAS INTRODUCED:
After being elected UEFA president in 2007, Michel Platini said he feared clubs which ran up huge debts chasing success were effectively cheating and risked ruin if banks or owners withdrew support. Leeds was often cited, a 2001 Champions League semifinalist then penniless and relegated from the Premier League within three years.

Debate intensified after the Manchester United-Chelsea final in 2008 featured two English clubs carrying combined debts of $1.6 billion-plus. Amid a global economic downturn, the 2009 offseason saw steep inflation in transfer fees and salaries, driven upward by a few elite clubs. Platini described Real Madrid's offseason splurge on Cristiano Ronaldo, Kaka and others as "excessive," while Manchester City's spree was "financial doping," according to Arsenal manager Arsene Wenger.

TACTICAL SWITCH:
Early on, Platini said "85-90 percent" of club owners supported FFP as a way to stop player salaries spiraling up. Allies included Chelsea's Russian owner Roman Abramov ich and AC Milan's Silvio Berlusconi, then prime minister of Italy. Over time, an aim of FFP appeared to shift. Spending only what a club could afford became spending only what it earned. The business model Abramovich followed in 2003 — buy a club with potential, spend heavily to improve fast, accelerate building a global brand — was, if not outlawed, certainly made tougher. However, Man City and PSG have both ended title droughts to win two league trophies each since being bought by sovereign wealth from Abu Dhabi in 2008, and Qatar in 2011, respectively.

JUDGING THE CLUBS:
Platini's first major hire for FFP was Jean-Luc Dehaene, a former prime minister of Belgium, who died Thursday — a day before the sanctions were announced. Dehaene led a panel including lawyers, academics, economists who assess accounts and, this season, asked for more information 76 of 237 clubs. In recent weeks, nine clubs negotiated with the panel to reach agreed sanctions. Platini has long said UEFA wants to help clubs, not hurt them. Man City was the most reluctant club to settle ahead of potential referral to a judging panel, led by lawyer Jose Cunha Rodrigues of Portugal. There, clubs have no bargaining position and more severe sanctions could have been applied in June.

GOOD GUYS
UEFA typically points to Arsenal and Borussia Dortmund as clubs growing their teams and businesses properly in the FFP era. Still, both have become selling clubs to national and Champions League rivals. Bayern Munich routinely takes Dortmund's best players who have picked up runners-up medals before joining the German giant. Bayern chief executive Karl-Heinz Rummenigge also leads the 200-member European Club Association, a key UEFA stakeholder shaping the FFP rules.

"We have some black sheep and these black sheep have to wash white," Rummenigge said in 2012 in a veiled jab at PSG. Bayern and Manchester United are front-runners in maximizing their brands and commercial strength, which makes both models of FFP compliance. An apparent contradiction of FFP is that more than $1 billion of United's revenue since 2005 has been used to service debt from the American Glazer family's leveraged buyout.

Man City, meanwhile, is the biggest FFP victim despite effectively having no debt, no prospect of bankruptcy and an owner who invested more than $1 billion of new money into the sport.