The shadow of UEFA's Financial Fair Play Regulations ("FFPR") continues to fall over European football. Whilst most commentators see the FFPR as being designed primarily to clip the wings of the sugar daddy financed Manchester City or Chelsea, the last few days has seen their practical impact on a club that should require no external financing; FC Barcelona.
On Saturday, new President Sandro Rosell and CEO Rossich Anthony not only persuaded Barca members to vote for court action against former President Joan Laporta but presented a budget for the current 2010/11 financial year which imposes breathtaking cuts on the formerly spendthrift club.
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| The Rosell revolution |
In some ways, the plans for 2010/11 contain the usual Barca swagger. Matchday and media income is projected to increase slightly implying progression to semi-finals of the Champions League for what be the fourth year in a row. What has gone however is the enormous spending of the Laporta era. Sporting salaries (84% of which relate to football according to the most recent accounts) are projected to fall 6.2% having risen 17% last season. Player amortisation (the cost of transfer spending recognised over the contract life of acquire players) is projected to fall 17% and other costs are supposed to fall a George Osborne like 24%!
Bringing costs back in line with income is of course just good practice, and Barca's need for an emergency credit line in the summer told us all we need to know about how overstretched the club had become. After all, Laporta's regime oversaw the ludicrous saga of Zlatan Ibrahimovic's transfers which the club claim cost €33.4m including no less than €8m to his agent, the lucky Mino Raiola.
What has not been mentioned in all the gnashing of teeth in Catalonia is the threat to Barcelona from UEFA FFPR. Without the full 2009/10 accounts (which are yet to be posted on the club's website) we cannot fill in all the details, but the table below shows my estimate of how Barca would have done on the regulations' "break-even" test last season, as well as how the 2010/11 budget stacks up (footnotes at end of post):
What has not been mentioned in all the gnashing of teeth in Catalonia is the threat to Barcelona from UEFA FFPR. Without the full 2009/10 accounts (which are yet to be posted on the club's website) we cannot fill in all the details, but the table below shows my estimate of how Barca would have done on the regulations' "break-even" test last season, as well as how the 2010/11 budget stacks up (footnotes at end of post):
On my calculations, FC Barcelona would have missed UEFA's "break-even" target by a staggering €48.5m if the rules had been in place last season. The "Acceptable Deviation" UEFA say they will permit each year is only €5m and of course Barcelona do not have a Sheikh Mansour to fill some of the gap.
The Rosell plan, shows the club squeaking in this year with a c. €10m surplus putting the club on a firmer footing for the first "monitoring period" for the new regulations, the 2011/12 season. Plans are of course plans and football is inherently unpredictable. Rosell and his board know all this of course which is why I think we can probably rule out the Catalans in any future bidding war for W Rooney esq.
Footnotes to FFPR table
* Only net finance costs provided by the club
** Non-football sporting revenue/costs assumed to be permitted for inclusion under Annex X B(1)(k) and C(1)(k)
*** 2008/09 youth teams costs assumed constant in 2009/10 and 2010/11
**** Estimated
The new UEFA regulations can be downloaded here.
LUHG
*** 2008/09 youth teams costs assumed constant in 2009/10 and 2010/11
**** Estimated
The new UEFA regulations can be downloaded here.
LUHG
