Newco FFP, it’s about “fair play” Uefa


A quick summary of Uefa’s Financial Fair Play regulations:

Under normal circumstances, Financial Fair Play (FFP) requires clubs to run at a financial break-even, with certain allowances and an acceptable deviation, over a three year period.  Money spent on youth or women’s’ football, as well as depreciation (which includes money spent on stadiums), are excluded from this responsibility.  A club, therefore, that makes a €10m annual loss while spending €11m on youth football, women’s football and depreciation, will have an FFP surplus of €1m.

The acceptable deviation is a €5m cumulative loss over three years.  However, if a club supplements its loss by “contributions from equity participants”, they are permitted to run an aggregate loss over the three years of €30m.

Due to the extraordinary nature of last years’ finances across football, the current monitoring period covers the last four years.  Clubs are also allowed to add back any lost revenue due to shutdown, playing behind closed doors, not playing at all, or for closed retail facilities.

See the graph below detailing a summary of Newco’s finances for the last four published accounts (year ending 30 June 2018 – year ending 30 June 2021).  Items on yellow are my estimates.  The Youth/Women add back figure is based on peer data from elsewhere and is generous to Newco.  The Shutdown add back is also based on peer data, adjusted for the number of cup games, absence of a refund programme and is also generous to Newco.

I estimate the Newco FFP loss at £40.235m.  At a (generous) £/€ conversion rate of €1.14/£ this gives an FFP loss of €45.868m, €15.858m over Uefa’s acceptable deviation.

So where is all this right now?  Clubs submit accounts to Uefa along with their claims for spend on depreciation, youth and women’s football, and for this year, a Shutdown add back.  Newco do not specify these add backs in their accounts, but page 11 of their Annual Report states, “Initial estimates are that the adverse effect on revenues was over £20m”.

“Initial estimates” are doing a lot of heavy lifting here.  You can be sure that where I estimates last year’s hit at £10m, Newco’s signal of “over £20m” was consistent the figure they submitted to Uefa.  My expectation is that whatever they have claimed, it will be high enough to get them through the first pass.

Newco have run an operating loss every year they have been in business.  Persistent loss makers who compete in European football have more onerous FFP reporting responsibilities, I expect Newco to be under this scrutiny.  Claims made for add backs can and should be scrutinised by Uefa, who are well versed on how clubs that work at the margins operate.

What is going to happen?  Under normal circumstances, Uefa would act with instructions to reduce spending, or face severe action.  These are not normal times, though.  There is red ink all over European club accounts, many are unable to raise equity capital, even where permitted under FFP.

Uefa’s special provisions for this year are published and make no indication that we are in a free for all.  Clubs have experienced an income shock, some are unable to raise finance as a consequence, but there is no cover for persistent FFP deviants.  For the sake of “fair play”, we have to hope they apply the rules.  Your guess is as good as mine on what will happen, though.

What does all this mean long-term?  Newco cannot run at a loss of the scale they do under normal circumstances.  They either have to sell for the kind of money Celtic did this year and do so regularly, or reduce spending on wages (their only significant expenditure, as transfer spend is always low).  The £4.5m for Gerrard & Co. will only scratch the surface, they could do with selling another three management teams before June next year.

Champions League football next season is all.  It is literally everything, and you thought last season’s title was important.  The additional income would not resolve Newco’s structural problems, but it would give them a short-term stay of execution while they try to transition to a sustainable model.  Without it, the prognosis is dire, whether this season is a Uefa free for all or not.

………and remember, irrespective of FFP, they still need to fund those losses.  None of this is about defending corner kicks or putting the ball in the net, but appropriate financial governance wins more trophies than any tactical formation.

Click Here for Comments >

About Author

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4

  1. Game tonight – chance to measure how far we have come. Europe not a dead rubber to me and we need to slowly step back into that arena and prove ourselves capable of punching beyond the confines of the OF business model.



    Unlike us fans, Europe is a big part of the proposition for attracting decent young players and a chance to progress your game beyond getting your ankles clipped constantly by the hammer throwers of the SPFL.



    We’ll score. I think progress should hopefully be about our ability to game manage from there.




  2. JHB and his racist band of brexit followers



    Was it not Farage advising rnli to refuse those in distress?



    That is virtue signalling.


    As you and your band of fakes know


    Immigration is uk policy



    Refugees are welcome

  3. Big Wavy



    I think our defending as a tactic has improved since the first game but we still seem to make individual errors (Ferenc away, Dundee) which loses us goals.



    With Turnbull and Bitton in the middle 3, we have slowed our play down in attack but maybe that will reduce the chaos when we tirn over possessio.



    If it was me, I’d play this team (4-2-3-1):-





    Ralston Vickers Welsh Juranovic


    Bitton McGregor


    Forrest Turnbull Jota





    Likely team:-





    Ralston Vickers Welsh Juranovic


    Turnbull Bitton McGregor


    Abada Kyogo Jota



    my subtle change is the formation and Forrest for Abada which is a bit more defensive

  4. Back to Basics - Glass Half Full on

    Absolutely tragic events in the English Channel.



    Real human beings died.



    Regrettably I only see this getting worse in the future.



    Like Covid-19, deaths will become statistics.



    IMHO, a complete failure of “globalisation”.



    Migration and asylum seeking typically driven by political (sometimes environmental) upheaval “somewhere” on a massive scale.



    That upheaval often either compounded or even instigated by intervention from Western civilization/First World.



    Peel back enough layers of the onion and it usually emerges that someone is making a buck out of it all.

  5. Coneybhoy,



    Game for McCarthy and if we trusted him, Soro, as midfield duo? Bitton continues to give me the fear. This is a good outfit and he is too slow (as is Turnbull I fear)…



    Here’s my “BW, I can’t believe I’m not the coach” line-up:






    Juranovic Welsh Vickers Bolingoli



    McCarthy Soro



    Forrest McGregor Jota







  6. Paul67


    About 3 years ago I had a new competitor enter my marketplace.


    His fees were way below what I could make a profit it .



    He started to gain traction in my marketplace.



    I made the decision that whenever I was in competition with him , I would undercut him .


    It meant that I made a loss on several transactions.



    But crucially.


    I had plenty in the bank and could afford the short term sporadic losses .



    Why did I do this ?



    Because I knew that my competitor needed income to survive .


    I deprived him of the Oxygen of cash .



    He went bust .



    In effect .


    I put the garden water hose to full blast and stuck it down the throat of a drowning man .



    Harsh ?


    Probably .


    But it was my family’s income or his .



    There are better brains than mine on the Celtic board .



    If we allow Sevco to get this season’s CL income .


    It is beyond negligent.


    Deliberate Hari-Kari.



    I will start to believe that Dermot wants them on a sounder financial footing.



  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4

Leave A Reply