דוח שסוקר את היציבות הפיננסית בכדורגל האירופאי לשנת 2012

1. Financial Stability
is Financial Fair Play
Supporters Direct Annual
Meeting
London, June 12th 2010

2. 08/03/14 2
Structure of this presentation
1. Bundesliga: very popular and economically sound
2. Two main reasons
- strictly enforced licensing system
- restricted ownership structure (fans = members
= owners)
3. UEFA‘s Financial Fair play concept
4. Some learnings and implications for the English
model

3. The Federation: German Football Association (DFB)
5 regional associations
are
ordinary members
of the DFB
21 state associations
are
ordinary members
of the DFB
36 professional clubs
constituting Bundesliga and
Bundesliga 2
are members of the League
Association
Die Liga Fussballverband
e.V.
(league association) is the
27th ordinary member of
the DFB
Nearly 27,000 Clubs incorporated
as
associations (“Vereine”)
are ordinary members
of the respective
regional and state associations
Structural Overview: Football in Germany
08/03/14 3

4. 08/03/14 4
Booming Bundesliga
... attracting big crowds
Average Attendance per Match Season 2008/09
Ligue 1*
Primera
División *
* Bundesliga 2: 15,550, thereof 52,5 % season ticket holders
Source: www.weltfussball.de
Premier
League *
Serie A *Bundeslig
a
35,592
28,478
25,304
21,034
58,9% Season
Ticket Holders41,904
42,000

5. 08/03/14 5
Booming Bundesliga
... affordable
Average Ticket price per Match in €
Season 2008/09
Ligue 1 Primera
División
* Bundesliga 2: 13,35 €
Source: Simon Kuchler & Partner
Premier
League *
Serie ABundeslig
a
26,00 27,00
40,00
43,00
20,79
21,89

6. 08/03/14 6
... facilitate fantastic football feeling!
• 11 of 34 stadia classified „elite“, UEFA's highest quality
standard
• Average Bundesliga stadium capacity stands at 46,747
seats;
highest in Europe
• Exploitation of capacity above 90% (42,000 spectators)
• High comfort, high security standard, excellent
infrastructure
Booming Bundesliga
... with State-of-the-art grounds

7. 7
Still growing popularity
being reflected in increasing turnover
08/03/14
2008/2009
€ 2,036

8. 08/03/14 8
Bundesliga‘ s
well balanced Revenue Mix
Other,
i.e. Merchandising
Transfer fees
Media rights
Sponsorships
Gate Receipts
594
29%
573
28%
425
21%
168
8%
276
14%
1,715
84%
321
16%
Bundesliga
Bundesliga 2
2,036 bn €
come from

9. 08/03/14 9
Most clubs
constantly profitably
Clubs exhibiting a post-tax profit for
Bundesliga Bundesliga 2Total out of 36
2008/09 season 11 5 16
2007/08 season 15 9 24
2006/07 season 18 12 30
2005/06 season 12 9 21
but the trend doesn‘ t remain friend ...

10. 08/03/14 10
Apparently
Reasonable Salaries
Payroll costs to Total Revenue
Ligue 1*
64%
62%
Primera
División *
45%*
* Bundesliga 2: < 49%
Source: Deloitte & Touche 2008 – 2006/2007 season
63%
Premier
League *
62%
Serie A *Bundeslig
a

11. Licensing Procedure
A Success Story for the Past 40 Years
• No Bundesliga Club ever went bankrupt during a running
competition or was unable to complete the season
• Gives business partners additional appeal and security
• Fully supported and accepted by the clubs
• Guarantees the integrity of the competition
• Impetus for continuous professionalization
• Role model for UEFA’s licensing procedure
08/03/14 11

12. Club
DFL
(First Instance
Body)
Licensing Committee
( Appeal Body)
League
Association
Court of Arbitration of BL / BL 2
(Alternative to system of ordinary
courts)
Licensing
AgreementApplicati
on
Positive
Positive
Negativ
e
Refusal of
License
Negative
Licensing
Committee
(Appeal Body)
How it worksHow it works
Positive
Negativ
e
08/03/14 12

13. 08/03/14 13
Assessment of economic viability
1. Liquiditysituation positive at the end of the season to be
licensed
• Assets
• Receivables
• Cash and bank balances
• Liabilities/provisions
• Current account overdraft facilities
• Loan commitments
• Projected profit and loss statement
2. Net Equity positive (or sanction if further diminished)
3. Final verdict regarding economic viability
• Planned income from match operations
• Planned advertising income
• Planned income related to transfers
• Planned payroll costs for match
operations
• Cash inflows and outflows from
investing and financing activities

14. 08/03/14 14
It‘s all about...
Liquidity
The applicant's liquidity forecast for 18 months must exhibit that
• payment obligations can be fulfilled at all times
• regular match operations are guaranteed at all times
• financial distress can be countered
For that examination we employ a liquidity calculation
• starting with the audited balance sheet as of December 31
t-1
• and taking into account the budgeted p&l statements for
the periods
January 1 t to June 30 t and
July 1 t to June 30 t+1
• which must come up with a positive figure as of June 30
t+1

15. Sample liqidity calculation
short form
08/03/14 15
- Negotiations ongoing
- Empirical evidence of
planning bias
- Justification in doubt
„Prudence“

16. Content of audit report i
08/03/14 16
Balance sheet
item
Desriptio
n of
receivabl
e
Total on
31 Dec 08
Of which
due by 30
Jun 09
Cash inflow
since 31 Dec
08
Of which
due 1 Jul
09 – 30
Jun 10
Of which
due after
30 Jun
10
Availabl
e
Assigments/ple
dges/other
restraints on
disposal as at
31 Dec 08
Trade accounts
receivable
Transfer receivables
Receivables from
affiliated companies
and other investors
Receivables from legal
and/or natural persons
with a direct or indirect
affiliation with
members of the
applicant‘s executive
bodies
Other receivables
Securities
Cash and bank balances
Prepaid expenses
Total 0 0 0 0 0 0
Receivables aging report

17. Content of audit report ii
08/03/14 17

18. 08/03/14 18
Final Verdict
refering to economic viability
Possible decisions regarding financial criteria
• Option A: The financial criteria have been fulfilled - no conditions or obligations
• Option B: The financial criteria have been fulfilled - no conditions but certain
obligations apply
• Liquidity as of 30 June 2010 is expected to be positive but
• Equity as of 31 December 2008 is negative
• Option C: The financial criteria have been fulfilled - but conditions and certain
obligations apply
• Liquidity as of 30 June 2010 is currently expected to be negative (a condition is
imposed)
• Obligations will definitely be imposed
• Option D: The financial criteria have not been fulfilled - no licence
• The conditions have not been met - there are no signs that liquidity will be positive
as of 30 June 2010

19. 19
Cornerstones ofCornerstones of
German licensing systemGerman licensing system
• licence regarded as seal for good governance
• Quality assurance for clubs
• Benchmarking as side effect
Goal:
Sufficient liquidity
Goal:
Positive equity
capital
Goal:
Ensuring the
integrity of
competition
Action:
Fin. Forecast checked
Action:
Capital
requirements
Action:
Submission of all
essential contracts
08/03/14

20. 20
Implications for the Business modelImplications for the Business model
08/03/14

21. 08/03/14 21
Restricted Ownership in Clubs
„50+1“-Clause
• A football club (Verein) must hold the majority of voting rights of
the attached football company (Kapitalgesellschaft),
thus 50% + 1 voting rights in the General Assembly
(in case of a GmbH & Co. KGaA, the football club must hold
100% of the GmbH shares).
The football club’s determining influence on the course of
business,
especially the sportive competition, must be secured
• The issuing of non-voting shares remains unaffected;
major contribution of capital is therewith permitted
• There are two exceptions (grandfathering rights)
for Leverkusen - Bayer AG and Wolfsburg - Volkswagen AG
• Interlocking participations between clubs are prohibited

22. 08/03/14 22
Clubs incorporated as
Verein
• Schalke 04
• VfB Stuttgart
• Hamburger SV
• FSV Mainz 05
• SC Freiburg
• 1. FC Nürnberg
• 1. FC
Kaiserslautern
• FC St. Pauli
Company (AG = plc; GmbH = Ltd.; GmbH & Co.
KGaA = ?)
• FC Bayern AG
• Eintracht Frankfurt AG
• Borussia Mönchengladbach GmbH
• 1. FC Köln
• Werder Bremen
• Hannover 96
• Bayer Leverkusen
GmbH
• VfL Wolfburg GmbH
• TSG Hoffenheim 1899 GmbH
• Borussia Dortmund (stock market
listed )

23. 08/03/14 23
European Football
Some key figures
Big five leagues dominating European Football
Deloitte’s Football Money League exhibiting the turnover ranking 2008/09 with
Real Madrid (401 mio €) ahead of Barcelona (366), ManU (327), Bayern (290)…
7 English, 5 German, 4 Italian, 2 Spanish, 2 French Clubs in Top 20 (Newcastle 101)
…but Turnover doesn’t necessarily mean financial soundness
UEFA’s Benchmarking Report findings
Total Revenues of of 732 First League Clubs in 53 member associations 12 bn €
but 47% of these clubs disclosing losses in their annual financial statements
and, even worse,
22% of these clubs disclosing significant losses (>20% of total revenues)
According to the most recent, 2008-09 accounts, 14 of the 20 Premier League clubs made
substantial losses. In Spain, La Liga clubs have recently posted €3bn annual debts, and Italy's top
clubs, have long been addicted to financial fixes from owners

24. 08/03/14 24
UEFA‘s Fair Play Concept
Objectives
As approved by UEFA’s ExCo End of May and supported by key stakeholders,
the new requirements aim principally to
• Introduce more discipline and rationality in club football finances
• Decrease pressure on players’ salaries and transfer fees
• Encourage clubs to operate on the basis of their own revenues
• Protect the integrity and smooth running of the competitions
• Encourage investment for the long-term benefit of clubs
• Ensure clubs settle their liabilities on a timely basis
• Protect the long term viability and sustainability of European club football

25. 08/03/14 25
General Principles
of Licensing and Monitoring
UEFA and licensors
To observe the principle of subsidiarity between UEFA and assoc./leagues
To ensure equal treatment of all licensees
To guarantee full confidentiality of all information provided
License Applicants/Licensees
to meet deadlines
to submit complete and correct information in coherence with previous doc.
to promptly notify subsequent events that constitute significant changes

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Club Licencing and Club Monitoring
An integrated approach

27. 08/03/14 27
Principles
of Licensing and Monitoring
Since 2002, all participants in UEFA’s club competitions must undergo a
national licensing procedure according to UEFA’s Licensing Regulations
often extended voluntarily to all first league clubs and even more leagues
Financial requirements
- no concern about going concern
- Financial statements for the interim period (half of current season)
- no overdue payables towards employees and social/tax authorities
as of 31 Dec on March 31
- no overdue payables towards football clubs as of 31 Dec on March 31
All licensees having qualified for UEFA’s club competitions now
must comply with new monitoring requirements
- break-even rule
- enhanced overdue payables rules
- Submission of Future Financial Information

28. 08/03/14 28
Break-Even Requirements
Core Principles
• Cornerstone of the Financial Fair Play concept
• A club must not repeatedly spend more than its revenues
• Stabilize and rationalize club’s spending in Europe
• Club to « break-even » on a yearly basis,
means that football relevant expenses < football relevant
income
• A tailored approach with exemptions for small clubs and
more relaxed requirements for clubs not exhibiting warning
signs

29. 08/03/14 29
The concept of Relevance
Break-even calculation
RELEVANT EXPENSES
• Cost of Sales
• Employee benefits expenses
• Other operating expenses
• Player transfer fee amortisation
• Finance costs
RELEVANT INCOME
• Gate receipts
• Broadcasting rights
• Sponsorship & advertising
• Commercial activities
• Other operating income
• Player transfer income
• Finance income
• Excess proceeds on disposal of
tangible fixed assetsNO LIMIT for
• Infrastructure costs
• Youth development activities
• Community scheme expenses

30. 08/03/14 30
• The Break-even calculation is prepared for each reporting period
• Calculation is primarily based on a club’s profit and loss account
(as contained in the club’s audited annual financial statements)
• Risk-based approach (indicators: going concern, negative equity,
break-even deficit in either/both preceding seasons, overdue payables in June)
• Multi-year assessment of three reporting periods (T-2, T-1 and T)
• Introduction of an ‘acceptable deviation’ over three years
(€45 mio for the first two monitoring periods and then €30 mio)
• CFC Panel’s Discretion: Assessment of other factors (quantum, trend, budgets,
debts)
• A web-based IT tool to be developed for use by clubs, licensors and CFC Panel
Break-even analysis
Key Features

31. 08/03/14 31
• Monitoring Period
3 reporting periods (last season and the two preceding seasons)
Except first period assessed in 2013/14 which refers to financial statements
with closing dates June 30, 2013 and June 30, 2012
• Aggregate break-even result
addition of all “relevant” results within the monitoring period
• Acceptable Deviation
Maximum aggregate break-even deficit possible to be deemed in compliance
with the break-even requirement
- is € 5 mio (materiality!)
- can be exceeded to € 45 mio (2013/14 and 2014/15), than € 30 mio only
if such excess is entirely covered by contributions from equity participants
Key Facts

32. 08/03/14 32
In support to the break-even rule will be implemented
earlier
• Enhanced overdue payables rule (backward mechanism)
no overdue payables as of Dec 31, Jun 30 and Sept 30
• To ensure that clubs have honoured their commitments when
these were due
• Enhanced Future Financial Information (forward looking
mechanism)
• To monitor clubs’ projected results;
• To monitor that clubs will dispose of sufficient liquidity to
continue servicing their commitments in the future.
UEFA‘s Fair Play Concept
Further components

33. 08/03/14 33
May 2010 May 2011 May 2012 May 2013
• Creation of CFC
Panel
• Development of
enhanced
requirements
• Consultation
process
• EXCO approve new
Regs
• Implementation
improved licensing
criteria (except
supporter liaison
officer)
• Implementation of
break even
requirement
• Implementation
enhanced overdue
payables, enhanced
future financial
information, duty to
update subsequent
events and supporter
liaison officer
Next Steps
Gradual Implementation

34. 08/03/14 34
To Resume
Platini expressed alarm at the "danger to football" of debt,
overspending and "rampant commercialism“
Approval of UEFA’s "financial fair play" regulations means
there is an alternative to the game being just a plaything of the
free market
from 2014/15, clubs who wish to play in European competitions
must not spend more than they earn
ends clubs spending on players' wages beyond their income to
chase the dream of success,
An individual club must pay their players and other costs out of
the money they earn, from TV, sponsorships – and incresasing
ticket prices – not from "benefactor" owners.

35. 08/03/14 35
1. The principle to cut/ limit owner donations will decrease
expenditures for players and thus clubs‘ losses
2. Living within its means is a sound and stringent concept
which fully fits in sporting rules because a club‘s drawing
potential to generate revenues (not to raise equity!) results
mainly from sporting merit in the past
3. Football is and should be seen as a primarily public good.
Even if clubs have been privatisated or always were private,
at least in cases where economic failure occurs they should be
partly resocialised again, i.e. an obligation by league statues
to broaden ownership and to take new public owners (i.e.
supporters trusts, communities) on board who are not
required to inject equity
4. So you give „voice“ to the stakeholders who don‘t dispose of a
„exit“ and who are the most affected (can‘t switch the
supplier) by poor club managemement
To put this long story
Briefly