Is FFP, now no longer valid

[H4usuallysitting]

after the UEFA, PSG investigation

[Logicalman]

For those not fully cognizant with the story, here are the general facts from the NYT article, published July 2019:

https://www.nytimes.com/2019/07/24/sports/psg-uefa-ffp.html

In P.S.G. Case, Documents Show UEFA Surrendered Without a Fight


Disputed facts and an investigator's calculations raise questions about European soccer's commitment to enforcing its financial fair-play rules.


Nasser al-Khelaifi is Paris St.-Germain's president and a member of UEFA's ruling board.Credit...Gonzalo Fuentes/Reuters

By Tariq Panja
July 24, 2019

To the judge, the math at Paris St.-Germain simply did not add up.

In one free-spending summer in 2017, P.S.G. made the two most expensive acquisitions in soccer history, paying more than $400 million to add the star forwards Neymar and Kylian Mbappé to the French champions' star-studded roster.

To outsiders, the signings — without offsetting sales of similar value or a huge infusion of sponsorship revenue — simply could not square with European soccer's so-called financial fair-play system. Those rules, created to reduce clubs' indebtedness and level the playing field in an era in which teams were being infused with cash by billionaires and nation-states, require clubs to balance their spending with revenue.

An investigation of P.S.G. was begun. A report was produced. When it arrived last June on the desk of José Narciso da Cunha Rodrigues, a former judge at Europe's top court and the chairman of the UEFA panel that penalizes teams that break the organization's financial rules, he discovered that the lead investigator had cleared P.S.G.

So after a member of his panel went through the report, Cunha Rodrigues sent the file back, demanding that the investigator, the former Belgian prime minister Yves Leterme, reassess the case. In doing so, he also raised questions about several of Leterme's conclusions.

"The decision to close the case," Cunha Rodrigues wrote, "was manifestly erroneous."


P.S.G.'s dual acquisitions of Kylian Mbappé, left, and Neymar caught the attention of UEFA financial investigators.Credit...Charles Platiau/Reuters

The details of UEFA's nearly yearlong investigation of P.S.G., and the fight over its conclusions, are included in documents obtained by The New York Times that in page after page eviscerate the decision by UEFA investigators to exonerate the Qatari-financed club, one of the biggest spenders in sports. But the documents also reveal how UEFA appeared to sink its own investigation, and how P.S.G. used a technicality to avoid the possibility of serious punishment and preserve its cherished place in soccer's richest competition, the Champions League.

P.S.G.'s victory also has implications for a current case — the Premier League champion Manchester City, whose rise has been financed by the brother of the ruler of Abu Dhabi, now faces a similar investigation over suspected financial violations — and even for the future of financial fair play itself, and UEFA's ability, and willingness, to enforce its rules.

"There are clubs who could not care less what their real incomes are when they want to sign a player because they receive incomes from a state," Javier Tebas, the head of the Spanish league, said in May. "It forces other clubs into an economic situation which is really living on the edge. It skews the balance of the entire European football structure."

P.S.G.'s defense in the 2017 case lay in its accounting, and its argument that rich sponsorship deals with Qatari entities like the telecom company Ooredoo, the Qatar National Bank and, most crucially, the Qatar Tourism Authority had made the purchases of Neymar and Mbappé — and other world-class players — possible.

But in words that barely disguised his incredulity, Cunha Rodrigues rejected the calculations presented by Leterme in his report, which favored the French club and allowed it to fall just within a ratio of UEFA's accepted losses.

It would be, Cunha Rodrigues wrote, "adverse to the interests of clubs competing in UEFA competitions for one club to maintain a substantial financial advantage from an erroneous application of the regulations by the chief investigator."

But there would be no further investigation, and no re-analysis of Leterme's decision. P.S.G. appealed the decision by Cunha Rodrigues's adjudicatory chamber to send back the file, taking its case to the Court of Arbitration for Sport. There, it argued that there had been a procedural error that required Leterme's decision to stand. UEFA sided with P.S.G., agreeing with the French club's interpretation of the rules. Its failure to back Cunha Rodrigues's committee meant the case was closed.

In a statement, UEFA said it had "full trust in the work" carried out by Leterme and Cunha Rodrigues, pointing out the committees they oversee are run independently.

"It is therefore possible that the views of the members of one chamber are not always the same of those of the other chamber," it said.

The details surrounding the decision to clear P.S.G. in 2018 have been shrouded in secrecy, but the documents reviewed by The Times suggest that, at the very least, the French champion had a narrow escape. But the outcome of the case is likely to lead to further scrutiny of the close relationship between the team's Qatari owners and UEFA. P.S.G.'s president, Nasser al-Khelaifi, sits on UEFA's executive committee and is also the chairman of beIN Media Group, the Qatar-based broadcaster that has committed billions to secure television rights from UEFA and other partners.

P.S.G. had been mired in mediocrity until it was purchased by Qatar's sovereign investment fund, Qatar Sports Investments, in 2011. Having secured hosting rights to the 2022 World Cup a year earlier, the tiny Gulf state was eager to create a superclub that could challenge established soccer royalty like Real Madrid, Bayern Munich and Manchester United. It immediately went on a spending spree to construct a team, and an organization, capable of overwhelming domestic rivals and challenging for Europe's biggest trophies. By 2017, it seemed to conclude that Neymar and Mbappé might put it over the top.


Reinforced by the lavish spending of its Qatari owners, P.S.G. has won six of the last seven French championships.Credit...Franck Fife/Agence France-Presse — Getty Images

Those high-end, head-spinning purchases came against a backdrop of UEFA's financial regulations, which had come into full force a few years earlier. How, critics and rivals asked, could P.S.G. surpass the world transfer record not once, but twice, and stay within the rules?

The solution the club reached — as did Manchester City, which was accumulating high-end players in England in a similar spending spree — was to sign a slew of sponsorship deals and associations with enterprises linked to its owners. One in particular stood out: a huge agreement with the Qatar Tourism Authority for a nebulous concept known as "nation branding" that was booked as P.S.G.'s highest sponsorship deal, more than 100 million euros ($111 million) per season.

It was those sponsorship deals that came under the microscope when P.S.G., already penalized for a financial breach in 2015, came under investigation again only a month after the Neymar and Mbappé transfers. Under F.F.P. rules, clubs cannot spend more than they earn, and if they do, they can only fall within a limit of 30 million euros across three years.

To assess the value of P.S.G.'s sponsorships, Leterme, the UEFA financial investigator, commissioned the sports marketing company Octagon Worldwide to analyze the agreements. He also told P.S.G. it could hire a different firm to conduct its own analysis.

The Octagon version returned a verdict that valued the Qatar tourism agreement, a sponsorship that had hardly any visibility, at less than 5 million euros; P.S.G. said its analysis, conducted for the club by Nielsen, came back with a figure close to the amount claimed by P.S.G. Rather than request a third study, Leterme determined, to the consternation of members of his investigative committee, that the Nielsen figures should be used.

When those higher figures were used as the basis to clear P.S.G., Cunha Rodrigues was incredulous. "The chief investigator took into account the value most favorable to the club as derived from the Nielsen report, and did not give any reasons the fair values reached in the Octagon report should be disregarded," he wrote. Cunha Rodrigues noted that in some calculations submitted by Leterme, the investigator had increased P.S.G.'s sponsorship income even higher than the figures proposed by Nielsen.

Yet the structure of UEFA's financial fair play organization meant Leterme had sole discretion in the cases presented to his committee. While some members of his panel vehemently disagreed with his decision to clear P.S.G. — one person familiar with the committee's work labeled his conclusions "absurd reasonings" — Leterme's decision was nonetheless announced on June 18, when the world's soccer media was focused on the 2018 World Cup that had kicked off four days earlier.

By Leterme's calculations, P.S.G. had, despite its record spending and with the help of its disputed sponsorships, incurred a loss of only 24 million euros over the three-year period — just within the mark that would have triggered a referral for penalties to Cunha Rodrigues's adjudicatory chamber.

"Contrary to the assertion by the chief investigator, this treatment of the fair value of the QTA agreement in reporting period 2017 was indeed of great advantage to the club," Cunha Rodrigues wrote. He also pointed to other agreements that also appeared to be overvalued, to P.S.G.'s benefit, in Leterme's final report.

This and a number of other findings led him to the conclusion that the decision to clear P.S.G. should be "vitiated," or scrapped, and that a new investigation should be undertaken immediately.

But before that could happen, P.S.G. announced that it was mounting an appeal, saying that there were no grounds for Cunha Rodrigues to scrap Leterme's decision, and that he had missed a 10-day deadline to conduct a review. Cunha Rodrigues described that as a "logical absurdity," given the amount of work needed to assess the documents and valuations in an F.F.P. case. The 10-day limit, he said, referred to starting a review, not concluding it.

Galatasaray, a Turkish team that had reached a settlement with Leterme that Cunha Rodrigues also wanted re-evaluated, filed a similar appeal to the Court of Arbitration for Sport a week later. P.S.G. and UEFA agreed to wait for the result in the Galatasaray hearing before resuming the case.

But UEFA, to the horror of Cunha Rodrigues and other adjudicatory chamber officials, sided with Galatasaray's interpretation of the 10-day limit, and didn't even mount a defense. A few weeks later, it did the same in the P.S.G. case, and on March 19, in a short news release, it announced Leterme's decision would stand.

"Following a legal assessment made, with support of external legal counsel, concerning the interpretation of the above-mentioned article, UEFA concluded that indeed there were strong arguments supporting the interpretation presented by the club," UEFA said in its statement to The Times.

There are no longer any active investigations into P.S.G. And Neymar and Mbappé, for now, still form one of the most potent attacking forces on the planet.

Manchester City's case is up next: Cunha Rodrigues is scheduled to deliver a verdict later this year.

A version of this article appears in print on July 25, 2019, Section B, Page 8 of the New York edition with the headline: In Financial Dispute, Documents Show UEFA Surrendered Without a Fight.

[Logicalman]

.. and Citeh get their ban overturned:

https://www.bbc.com/sport/football/53387306

[grandad]

If we were to fail FFP by £1 they would throw the kitchen sink at us. The top clubs, FIFA & the PL are so corrupt.

[Tempest]

Football is corrupt. It'll never change now, too many people enjoying financial/material benefits,  but please don't think any club that has been in the PL is exempt from breaking rules,  including our own.

Football is a money laundering cesspit

If we were to fail FFP by £1 they would throw the kitchen sink at us. The top clubs, FIFA & the PL are so corrupt.

Sent from my SM-N976B using Tapatalk

[Deeping_white]

We might as well get Shad to get Flex N Gate to sponsor Fulham for £100m a year for 5 seasons or something daft because it's what PSG essentially did and got away with it, plus with all the extra income we'd be able to spend a boat load more and technically not fail FFP

[Wolf]

FFP needs to go now.

[grandad]

Owners should be able to spend their own cash. Stop the huge borrowings from outside sources. There are too many loop holes at present. The principle of FFP is sound but the way it works in reality is flawed. It only helps the richest clubs while holding back the majority.

[Twig]

FFP needs to go now.

I know what you mean but I do think a set of financial fair play rules are needed. It's the corrupt, bribe taKing hierarchy at UEFA that need to go. So many sports have fallen into the hands of blatantly corrupt administrative bodies and football has to be the worst example.

I'm rapidly losing interest in many sports because their credibility is so low.

[grandad]

FFP needs to go now.

I know what you mean but I do think a set of financial fair play rules are needed. It's the corrupt, bribe taKing hierarchy at UEFA that need to go. So many sports have fallen into the hands of blatantly corrupt administrative bodies and football has to be the worst example.

I'm rapidly losing interest in many sports because their credibility is so low.

:plus one: 092.gif

[mrmicawbers]

Let owners spend what they like as long as is not a debt to the club itself.This is supposedly what they are trying to do anyway.This may have effected players salaries in recent years had they gone this route.Not a problem now in the current climate.Bring it on.

[Logicalman]

Owners should be able to spend their own cash. Stop the huge borrowings from outside sources. There are too many loop holes at present. The principle of FFP is sound but the way it works in reality is flawed. It only helps the richest clubs while holding back the majority.

However poor the rules surrounding FFP are implemented, and they are most definitely implemented in a skewed fashion, the alternate idea that "Owners should be able to spend their own cash" will not stop the flaws being used by unscrupulous owners to flout the very idea of FFP. It would simply mean that the richest owners get to spend the most, as they currently do, but with less paperwork I feel.

If they really want FFP to work, then make it as simple as possible, and introduce caps.