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How will these New Rules affect the Reds?

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Football fans around the world are bracing themselves for 2013, when FIFA’s Fair Play Regulations go into effect. We’ve been told it’s going to change things, and these changes will be bad for Premier League Clubs.
The concern is understandable. Reports last year indicated that four clubs – Chelsea, United, Liverpool, and Arsenal – were responsible for more debt than the rest of European football combined. That doesn’t even include Manchester City and their spending rampage.

Fortunately for English fans (except for one bunch), the new rules aren’t likely to have any impact until 2017, and could actually benefit the top clubs going forward, by restoring some financial sanity.
When you factor in allowances for contributions from equity holders, the maximum operating losses for 2013-15 are EUR 45 million, and the limit is still roughly EUR 30 million for three additional seasons beyond that point. These limits exclude spending on youth programs and stadium construction, so there are major exceptions to FIFA’s definition of a “break even” situation.

If FIFA somehow decides not to revise these by 2017, teams will be looking to quickly get under the upcoming EUR 5 million limit. They’ll do this partially by ensuring their players have long term contracts, to allow amortization of their transfer costs. They’ll sell veteran pieces for a few million a pop, and replace them with young talent. Instead of finding ways to minimize reported earnings (as any good business would), teams will find ways to inflate their sponsorship revenue without exceeding the “fair value of such transactions” as determined by FIFA.

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