The document discusses financial stability and sustainability in European football. It summarizes the German Bundesliga model which features strict licensing requirements and fan ownership of clubs. UEFA is introducing new Financial Fair Play regulations beginning in 2014, including a break-even requirement where clubs cannot spend more than their revenues. The regulations aim to reduce debt, overspending, and protect the long-term viability of European football.
Just how broken is football's financial model (German Football Regulation)Supporters Direct
Christian Muller & Dr. John Beech of the DfL talk you through the issues.
We've now seen well in excess of 50 insolvencies at football clubs since 1992 compared to no insolvencies in the Bundasliga during this period, leading to most expert commentators on football finance now agreeing that ‘light-touch' regulation is at an end.
We heard from one of the most respected academics in his field, Dr John Beech of Coventry University, about what has failed and what he believes needs to change. and the DfL's Christian Muller on how they do it in Germany,
For Dr John Beech's presentation look on our main presentations section.
Just how broken is football's financial model (German Football Regulation)Supporters Direct
Christian Muller & Dr. John Beech of the DfL talk you through the issues.
We've now seen well in excess of 50 insolvencies at football clubs since 1992 compared to no insolvencies in the Bundasliga during this period, leading to most expert commentators on football finance now agreeing that ‘light-touch' regulation is at an end.
We heard from one of the most respected academics in his field, Dr John Beech of Coventry University, about what has failed and what he believes needs to change. and the DfL's Christian Muller on how they do it in Germany,
For Dr John Beech's presentation look on our main presentations section.
Issue1 covid resilience and mitigation final_12032020LTTSports
As the football industry has been realising very quickly, the scale and depth of the crisis
initiated by the health emergency due to the global impact of Corona Virus (COVID-19),
clubs, national associations and confederations have been working together with
governments and health authorities to map out the initial response.
Having witnessed an unprecedented programme of fixtures being cancelled and all
football activities put on hold for an as yet unclear period of time in the vast majority of
European countries, sports organisations, especially clubs, have had to deal with critical
questions related to their short-term operational viability.
Over the course of the next few weeks, as cashflow pressures begin to mount, major
solutions will need to be found fast in order to preserve the structural integrity of the
football industry. At the same time, clubs and other sports organisations will also need to
think about longer-term issues such as economic and business models, value chains,
social value and ways to protect themselves from future crises.
16 exploring capital markes final post malmo_6 sept 2018Antonio Boccia
The worldwide broadcasting of sport events by global media conglomerates and the rapid acceptance and development of sport sponsorship have changed the traditional business model of football clubs, which historically has relied on match day revenues. Football clubs now must commercialize in order to remain financially competitive and sustainable in light of increased costs. Reaching these objectives may require investment in new technologies, personnel, manufacturing, new or renovated venues and marketing initiatives. A primary question for many football clubs is where to obtain the additional capital needed for these specific investments? There is a variety of options available to clubs interested in raising capital, including those potentially offered by the capital markets, such as: (1) Issuing corporate bonds; (2) Initiating an IPO (Initial Public Offering); (3) Integrating a football club’s fan base into a shareholder structure.
Presentation by Pooya Hedaytinia, PhD at the University of Rennes 1 (France), at the FogGuru training Business Modeling and Development in November 2019.
Company Registration No. 4250459 ARSENAL HOLDINGS LIMITED LynellBull52
Company Registration No. 4250459
ARSENAL HOLDINGS LIMITED
Annual Report and Financial Statements
31 May 2021
ARSENAL HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2021
1
CONTENTS PAGE
Group Strategic Report 2
Group Directors’ Report 10
Directors’ Responsibility Statement 12
Independent Auditor’s Report 13
Consolidated Profit and Loss Account and Statement of Comprehensive Income 17
Balance Sheets 18
Statements of Changes in Equity 19
Consolidated Cash Flow Statement 20
Notes to the Accounts 21
OFFICERS AND PROFESSIONAL ADVISERS
DIRECTORS
E.S. Kroenke
J.W. Kroenke
T.J. Lewis
Lord Harris of Peckham
COMPANY SECRETARY
S. W. Wisely
COMPANY NUMBER
4250459
REGISTERED OFFICE
Highbury House
75 Drayton Park
London
N5 1BU
AUDITOR
Deloitte LLP
Statutory Auditor
London
United Kingdom
ARSENAL HOLDINGS LIMITED
STRATEGIC REPORT
2
The directors present their strategic report for the year ended 31 May 2021.
Principal Activity and Strategy
The principal activity of the Group is that of a professional football club playing in the Premier League. The Group
is also engaged in a number of property developments.
The Board’s long term strategy is to continue to develop Arsenal Football Club as a leading club on both the domestic
and global stages. The Board are committed to a business model which invests the funds generated by the business
back into the Club with the aim of achieving an increased level of on-field success with the ultimate goal of winning
trophies and using that on-field success to increase the Club’s engaged worldwide fan base.
Impact of COVID-19
The results for the financial year have been materially impacted by the Coronavirus pandemic which caused the
majority of matches for the 2020/21 season to be played behind closed doors. For matches played behind closed doors
there was a complete loss of ticket (and other match day) revenue.
The key components of the Group’s P&L, such as broadcasting facility fees and match day revenues, are highly
predictable and therefore the impact of the pandemic can be quantified with a reasonable degree of accuracy. For
2020/21 pre-tax losses (unaudited) of £85 million (2020 - £35 million (unaudited)) are considered to be attributable
to the impacts of COVID-19. The main components of this impact are lost match day revenues, deferral of
broadcasting revenues from the 2019/20 season into financial year 2020/21 net of the applicable broadcaster rebates,
reduced commercial revenues and the costs of refinancing the Group’s stadium debt together with the costs of
introducing additional protocols and safety measures and a staff restructuring exercise. These losses were partially
offset by savings of certain attributable direct costs, such as attended match staging costs, and cost reduction measures
implemented to mitigate the financial impacts on the Club which included a wage reduction ...
Issue1 covid resilience and mitigation final_12032020LTTSports
As the football industry has been realising very quickly, the scale and depth of the crisis
initiated by the health emergency due to the global impact of Corona Virus (COVID-19),
clubs, national associations and confederations have been working together with
governments and health authorities to map out the initial response.
Having witnessed an unprecedented programme of fixtures being cancelled and all
football activities put on hold for an as yet unclear period of time in the vast majority of
European countries, sports organisations, especially clubs, have had to deal with critical
questions related to their short-term operational viability.
Over the course of the next few weeks, as cashflow pressures begin to mount, major
solutions will need to be found fast in order to preserve the structural integrity of the
football industry. At the same time, clubs and other sports organisations will also need to
think about longer-term issues such as economic and business models, value chains,
social value and ways to protect themselves from future crises.
16 exploring capital markes final post malmo_6 sept 2018Antonio Boccia
The worldwide broadcasting of sport events by global media conglomerates and the rapid acceptance and development of sport sponsorship have changed the traditional business model of football clubs, which historically has relied on match day revenues. Football clubs now must commercialize in order to remain financially competitive and sustainable in light of increased costs. Reaching these objectives may require investment in new technologies, personnel, manufacturing, new or renovated venues and marketing initiatives. A primary question for many football clubs is where to obtain the additional capital needed for these specific investments? There is a variety of options available to clubs interested in raising capital, including those potentially offered by the capital markets, such as: (1) Issuing corporate bonds; (2) Initiating an IPO (Initial Public Offering); (3) Integrating a football club’s fan base into a shareholder structure.
Presentation by Pooya Hedaytinia, PhD at the University of Rennes 1 (France), at the FogGuru training Business Modeling and Development in November 2019.
Company Registration No. 4250459 ARSENAL HOLDINGS LIMITED LynellBull52
Company Registration No. 4250459
ARSENAL HOLDINGS LIMITED
Annual Report and Financial Statements
31 May 2021
ARSENAL HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
YEAR ENDED 31 MAY 2021
1
CONTENTS PAGE
Group Strategic Report 2
Group Directors’ Report 10
Directors’ Responsibility Statement 12
Independent Auditor’s Report 13
Consolidated Profit and Loss Account and Statement of Comprehensive Income 17
Balance Sheets 18
Statements of Changes in Equity 19
Consolidated Cash Flow Statement 20
Notes to the Accounts 21
OFFICERS AND PROFESSIONAL ADVISERS
DIRECTORS
E.S. Kroenke
J.W. Kroenke
T.J. Lewis
Lord Harris of Peckham
COMPANY SECRETARY
S. W. Wisely
COMPANY NUMBER
4250459
REGISTERED OFFICE
Highbury House
75 Drayton Park
London
N5 1BU
AUDITOR
Deloitte LLP
Statutory Auditor
London
United Kingdom
ARSENAL HOLDINGS LIMITED
STRATEGIC REPORT
2
The directors present their strategic report for the year ended 31 May 2021.
Principal Activity and Strategy
The principal activity of the Group is that of a professional football club playing in the Premier League. The Group
is also engaged in a number of property developments.
The Board’s long term strategy is to continue to develop Arsenal Football Club as a leading club on both the domestic
and global stages. The Board are committed to a business model which invests the funds generated by the business
back into the Club with the aim of achieving an increased level of on-field success with the ultimate goal of winning
trophies and using that on-field success to increase the Club’s engaged worldwide fan base.
Impact of COVID-19
The results for the financial year have been materially impacted by the Coronavirus pandemic which caused the
majority of matches for the 2020/21 season to be played behind closed doors. For matches played behind closed doors
there was a complete loss of ticket (and other match day) revenue.
The key components of the Group’s P&L, such as broadcasting facility fees and match day revenues, are highly
predictable and therefore the impact of the pandemic can be quantified with a reasonable degree of accuracy. For
2020/21 pre-tax losses (unaudited) of £85 million (2020 - £35 million (unaudited)) are considered to be attributable
to the impacts of COVID-19. The main components of this impact are lost match day revenues, deferral of
broadcasting revenues from the 2019/20 season into financial year 2020/21 net of the applicable broadcaster rebates,
reduced commercial revenues and the costs of refinancing the Group’s stadium debt together with the costs of
introducing additional protocols and safety measures and a staff restructuring exercise. These losses were partially
offset by savings of certain attributable direct costs, such as attended match staging costs, and cost reduction measures
implemented to mitigate the financial impacts on the Club which included a wage reduction ...
עמותת היציע ארגון אוהדי קבוצות הספורט בישראל נ' ההתאחדות לכדורגל בישראלIsrafans
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Belgium vs Romania: Radu Dragusin Prepares for Crucial Role in Euro Cup Germany
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Narrated Business Proposal for the Philadelphia Eaglescamrynascott12
Slide 1:
Welcome, and thank you for joining me today. We will explore a strategic proposal to enhance parking and traffic management at Lincoln Financial Field, aiming to improve the overall fan experience and operational efficiency. This comprehensive plan addresses existing challenges and leverages innovative solutions to create a smoother and more enjoyable experience for our fans.
Slide 2:
Picture this: It’s a crisp fall afternoon, driving towards Lincoln Financial Field. The atmosphere is electric—tailgaters grilling, fans in Eagles jerseys creating a sea of green and white. The air buzzes with camaraderie and anticipation. You park, join the throng, and make your way to your seat. The stadium roars as the Eagles take the field, sending chills down your spine. Each play is a thrilling dance of strategy and skill. This is what being an Eagles fan is all about—the joy, the pride, and the shared experience.
Slide 3:
But now, the day is marred by frustration. The excitement wanes as you struggle to find a parking spot. The congestion is overwhelming, and tempers flare. The delays mean you miss the pre-game excitement, the tailgate camaraderie, and even the opening kick-off. After the game, the joy of victory or the shared solace of defeat is overshadowed by the stress of navigating out of the parking lot. The gridlock, honking horns, and endless waiting drain the energy and joy from what should have been an unforgettable experience.
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Slide 4:
The Philadelphia Eagles are not just a premier NFL team; they are an integral part of the community, hosting games, concerts, and various events at Lincoln Financial Field. Our state-of-the-art stadium is designed to provide a world-class experience for every attendee. Whether it's the thrill of game day, the excitement of a live concert, or the camaraderie of community events, we pride ourselves on delivering a fan-first experience and maintaining operational excellence across all our activities. Our commitment to our fans and community is unwavering, and we continuously strive to enhance every aspect of their experience, ensuring they leave with unforgettable memories.
Slide 5:
Recent trends show an increasing demand for efficient event logistics. Our customer feedback has consistently highlighted frustrations with parking and traffic. Surveys indicate that a significant number of fans are dissatisfied with the current parking situation. Comparisons with other venues like Citizens Bank Park and Wells Fargo Center reveal that we lag in terms of parking efficiency and convenience. These insights underscore the urgent need for innovation to meet and exceed fan expectations.
Slide 6:
As we delve into the intricacies of our operations, one glaring issue emer
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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
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
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
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
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
Editor's Notes
Michel Platini expressed alarm at the &quot;danger to football&quot; of debt, overspending and &quot;rampant commercialism“
Approval of UEFA’s &quot;financial fair play&quot; regulations means
There is an alternative to the game being just a toy of the free market
From 2014/15, clubs who wish to play in European competitions must not spend more than they earn.
The idea is to stop clubs spending on players&apos; wages beyond their income to chase the dream of success, since 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&apos;s top clubs, have long been addicted to financial fixes from owners.
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 &quot;benefactor&quot; owners.