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It could/should have been Newcastle United and not Manchester City – Would we be fighting FFP?

9 months ago
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Lessons from the Citeh Affair.

The respective fates of Newcastle United and Manchester City.

With now FFP taking a hand in proceedings.

I wrote these words in posts to the Chronicle and The Times last week.

“As a Newcastle supporter I would like to convey my eternal gratitude to Michael James Ashley for turning Sheikh Mansour away back in 2008.

“The knowledge that all of those titles, Wembley finals, European trips and watching some of the world’s best players in the Black and White was illegal, would have driven me insane.

“Thank goodness that the two relegations, repetitive embarrassment both on and off the field, asset stripping, and lack of investment in a Stadium that was once the envy of most, while subsidising a tatty retail empire has all been done within the rules of the game and the law of the land (HMRC case notwithstanding of course).”

Almost two weeks since the news broke about UEFA’s proposed banning of Manchester City from European competition and after hundreds of articles, posts and thousands of words were written in reaction, the dust has settled, for the time being at least, and it is timely for a more measured reflection.

Firstly, it is worth considering the different perceptions that the member countries of UEFA have as to the purpose of the Financial Fair Play rules.

Financial fair play (FFP), in UEFA’s words, is “about improving the overall financial health of European club football.”

It was established in 2010 as an attempt to:

Prevent clubs from spending more than they earn and, again according to UEFA,

Help avoid clubs from falling into long-term financial problems as they pursue short-term success.

Back in 2010, then UEFA President Michel Platini, of all people, said “something must be done about the “financial doping” that is going on in European football”.

It is worth noting that at the time in England and Scotland, the high profile cases of Portsmouth, Leeds United and Glasgow Rangers, all of which fell into the second category, were foremost in the footballing public’s mind. Although clubs like Blackburn Rovers and Chelsea had been seen to buy success thanks to the funding of a beneficial owner this aspect was far lesser a concern, particularly as in most cases, the sugar daddy had quickly reneged and the status quo had been restored.

Likewise, the Italian and Spanish leagues had long been dominated by elite clubs all aided by external financial sources of one form or another, for example Juventus’ relationship with Fiat and Real Madrid’s with the Spanish and City governments. The Italians were also pre-occupied with their own match fixing scandal from which they were only just recovering.

In Germany on the other hand, clubs are genuine clubs owned and funded by their members and a diverse number of shareholders, and while the leading clubs attract shareholders like Bayern’s Audi, Allianz and Adidas, their total collective shareholding still does not exceed 25% and they still have to balance the books.

What was seen as the disproportionate financial advantage that clubs from other leagues possessed was blamed for the relative lack of success of German teams in Europe and the constant drain of home grown talent to foreign shores. Their perception was that the injection of massive amounts of cash not generated by the clubs’ own activities was unfairly tipping the advantage to opponents not governed by the same financial constraints.

There is a widely held belief that the FFP rules were introduced as a bulwark to maintain the exclusivity of the established elite clubs from attack by artificially financed interlopers., and to a certain extent why not?

In England, clubs with financial bases built up over decades of success like Arsenal, Manchester United and Liverpool had seen their dominance threatened by the likes of Blackburn, Chelsea and (whisper it quietly) Newcastle United, none of which had a recent history of sound financial management. Likewise, in Italy, Parma had prospered before its holding company, a dairy conglomerate, had collapsed in 2003.

However, it should be remembered that at the time the ownership of Manchester City had just transferred from one tycoon, whose attempts to gatecrash the European party had met with little success, to another whose impact was yet to be seen. That doesn’t mean that since the rules were introduced they have not been applied with the aim of protecting the status quo but more on that later.

Next consider City’s case. There is little doubt that they have been guilty of breaking the rules. Their defence appears to rest on:

A claim that the verdict was pre-conceived,

They have been treated in a different way to other offenders, PSG in particular.

That they did nothing wrong but exploited a loophole in the rules that any club could exploit and…

That the rules are stupid anyway.

This seems to be a little like a wealthy celebrity defending himself against being caught by a speed camera:

Yes, in the case of a speeding fine you are presumed guilty unless proven otherwise.

Other people may have got off because the camera malfunctioned on another day.

The warning sign was two yards out of place and…

A 30 mph limit is ridiculous on that stretch anyway.

Pay a top barrister to argue the case and you may get off with a fine but escape the penalty points that would have got you a ban. City’s tactics exactly.

Football authorities in Europe have a history of imposing punitive sentences on rule breakers, only to reduce them later when the offender shows some contrition or, more likely, when the overall financial impact becomes apparent. After an initial robust response City are already making more conciliatory noises.

When the Continental clubs realise that the hundreds of millions they (City) need to pump into their collective coffers to rebuild an ageing squad over the next two seasons may evaporate, that and other commercial considerations may come into UEFA’s thoughts.

In short, expect City to see their sentence reduced to a much more manageable one season ban with maybe a heftier fine.

What of the Manchester City supporters?

Here I have a confession to make. As a youngster growing up in the Leazes End in the Sixties there was one game every season when I absconded to the Popular Side to enjoy the crack between our own supporters and the travelling fans. You’ve guessed it – Manchester City.

Back then there was no segregation and with a few exceptions little in the way of violent confrontation between supporters. I always regarded the City supporters as amongst the most knowledgeable and amicable visitors to Gallowgate even though they had invariably stopped off on crossing the Pennines to sup a few pints of the Barnsley Bitter before carrying on to Tyneside.

Over the years I often travelled to Maine Road and eventually what was the City Stadium, often sitting in with the home supporters who while passionately supporting their team, always welcomed me and were as even handed as any when commenting on the match.

Until the arrival of the Sheikh they had endured a pretty common history with us. A large and loyal fanbase having experienced a glorious past with the odd flash of success in recent times accompanied by long periods of misery inflicted by rank mismanagement.

As I stated in my opening paragraph, if Ashley had not turned Mansour away in 2010 and Newcastle had been the beneficiaries of his endowments then none of us would have complained. Nor do I suspect would we have felt that the success was undeserved, after all we’d put up with enough garbage over the years even before Ashley came along to feel it was about time we got lucky.

The City fanbase does now inevitably include more than its fair share of glory hunters but the core of diehards is still around, as can be witnessed by the attendees at the midweek “Emptyhad” games. These supporters, who have seen it all, will grumble about the punishment but surely reflect on the fantastic journey of the last ten years and like all of us live in hope for the next season.

Will they feel that the success was “tainted” as some rival supporters have suggested? Well try asking that of Blackburn or Chelsea fans.

Do I feel that our Cup Final appearance in 1974 was tainted by the pitch invasion against Forest or that in more recent times the Rangers pitch invasion of 1969 would have caused the match to be abandoned and replayed? Why not likely man.

While achieving their success City have served up some of the best football since the days of the Entertainers and I for one begrudge their supporters not one jot.

They broke the rules, they’ve been punished, end of.

The wider question for Newcastle Supporters and Football Supporters in general is, what exactly is the role of the owner of a football club

Even who or what owns a football club?

An examination of the Football Authorities’ rules reveals that pretty much anyone – individuals, shareholders, limited companies et al – can own a football club in the professional leagues. The “fit for purpose” test applied to all owners, major shareholders and Officers of a club concentrate on previous misdemeanours, conflicts of interest and the usual conditions imposed on Directors of any type of company. Search as I might, I have been unable to find anything that defines the roles and responsibilities, codes of conduct or guidelines of Best Practice specifically applying to the owners of Football Clubs.

Amazingly the F.A.’s own guidance states:

“Please note that the definition of ‘Director’ under the Owners & Directors Test (‘OADT’, formerly the ‘Fit and Proper Person Test’) is wider than that under Company Law. Therefore this guidance is limited to the three types of director recognised by law and described in Section B below. It may be possible, for example, for an individual to be require to complete an OADT form under football regulations who does not fall under any of the categories of director listed in Section B.”

They then go on to what is in effect a copy and paste of English Company Law with nothing specifically applicable to Football!

The obvious conclusion is that owners are obliged to abide by general Company Law with a few minor additions and the only other constraint on governance is the FFP rules that vary between English and European Competitions. Is this really enough? It would appear not.

While the focus has been on the effect of the owners putting money into the club to give an unfair advantage, what about the many owners, Ashley included, who have taken money out of the clubs with often disastrous consequences. Bury is the latest in a long line of cases where the Football Authorities have taken nothing but a re-active line (points deductions, fines etc.) which in most cases has only served to worsen the situation.

Football clubs are not straightforward companies and cannot be run or regulated in the same way as “Retail, Property PLC”. The nearest comparison is that of a monopoly. Each individual club has its hardcore of customers who have nowhere else to turn. If House of Fraser eventually go bust and disappear then shoppers will just go elsewhere for their goods. Not so a Football Club, and owners like Ashley know it.

We may revile Mike Ashley at Newcastle for taking money out of the club (by all sorts of murky means) which has starved the club of any ambition or success, but we are way behind in the misery stakes compared to the likes of Bury, Bolton, Birmingham City. Surely there is a case for not only monitoring and limiting what owners put in to a club but also what they are allowed to take out? It is not enough to use the sledgehammer of FFP to crack this nut, regulation needs to be pro-active.

Let’s take the case of Newcastle United. For the last 12 years the club have been the beneficiary of a £100m+ (the quoted figures vary) loan from an individual (the owner) which has never been seriously addressed. In effect Mike Ashley holds this loan like the Sword of Damocles over the club. He can at any time, for any reason, call this loan in and effectively bankrupt the club.

If at some point he decides that the Club is more trouble than it is worth he can put the club into administration with first call on its assets and walk away with the money in his pocket. We need to remember that at some of the clubs who have suffered, the owners who ripped them off claimed to be lifelong supporters, something which Ashley has never done.

Desirable as the blueprint advocated by NUST and the national Supporters Trust is, that will be a long time coming and the current owners will fight it tooth and nail.

What should be enacted immediately is a Code of Practice limiting the capacity of owners to extract money from clubs by whatever means and a proactive system of health monitoring which prevents the supporters from being short changed.

FFP was not intended just to control the behaviour of the wealthy few but must be about protecting the interests of the many.

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