It will require clubs to break even over a continuous three-year period within the next ten years if they want to play in European competitions. The UEFA rules state that clubs will only be allowed losses of €45m between 2012-2015 (meaning owners can pump in €15m per season in exchange for shares), and this will be reduced to €30m between 2015-2018 (€10m per season) . The figures will be reduced even further still after those years until a point when European clubs will have to break even, if they want to play in Europe. It is an initiative put forward by UEFA president Michel Platini to encourage clubs to spend wisely, and to prevent clubs spending their way to success despite accruing mountains of debt. It is designed to increase competition in Europe and prevent what UEFA sees as not playing by the rules of “fair competition.”
It effectively means that wage bills exceeding revenues will be a thing of the past, and this was crucial in attracting the interest of NESV to Liverpool. Former Reds Chairman Martin Broughton commented before the takeover by NESV was completed:
“We weren’t looking for an Abramovich or Sheikh Mansour, because we understand a rational commercial approach is the way forward in football now. . . A hugely important aspect for Liverpool is [Uefa’s] financial fair play rules. They come into effect pretty damn soon, and will have a massive effect on many, many clubs. I couldn’t help notice that Manchester City’s wage bill for last year was exceeding its revenue. That is going to be very difficult under financial fair play.”
You could certainly describe Henry’s business model at Boston Red Sox as a “rational commercial approach.” The Financial Fair Play rules are also why Henry & Co have been looking so closely at Arsenal’s business model and footballing philosophy. It is a sustainable profitable enterprise but also develops young players that are capable of competing at the top level in the Premier League. Henry’s three visits to the Kirkby Academy and his appointment of Damien Comolli are strong indications that he is already focused on preparing Liverpool for these new Financial Fair Play rules. It also tallies with his philosophy of developing youngsters with the values of the team; something they are developing at the Boston Red Sox.
Overall then, it looks as if John W Henry has a pretty coherent long term strategy for the club but it is predicated on UEFA’s Financial Fair Play laws being a success. Whether UEFA’s guidelines work, could be crucial to how successful Liverpool are in the next ten years.
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Yes, new rules should help clubs like Liverpool and Man. Utd. who have fans all over the world and they will not be good for Man.City who are just starting to compete with big clubs in terms of fan base.
Chelsea stopped getting money from Roman and they will be self-sustaining by the time rules come to effect.
But Liverpool new owners should not just wait for new rules to come as their aplication might be delayed and hard to enforce with wayes of bending the rules and finding a way around them.
NESV have bought the club and they need to invest in the squad as Liverpool has fallen behind in spending in transfer market and wasn’t too good at making young players in to first team players.
For Liverpool to gain anything out of theese new rules, club needs to be competing in CL and that will not happen without serius cash spending.
At least 2 players should be bought in January, a striker and a winger or a left full back.
Needles to say, more should come in summer.
The biggest problem LFC face at this moment is not the compliance with future UEFA rules. It’s it educating John Henry in the art and skill of football. Unfortunately, he has inherited a complete and utter idiot in Roy Hodgson, but he, as yet, doesn’t know it!! He thinks that because we won against Chelsea that makes Hodgson a “good” manager! Just wait till we lose at home to the bottom club West Ham and we continue to flounder in the lower reaches of the Premiership – he might then realise his mistake! He says he is listening to fans – frankly he isn’t. Liverpool fans are among the most knowledgeable in football and they KNOW Hodgson is completely out of his depth! Nevermind, the result against Chelsea, look at the results and PERFORMANCES against mediocre teams, Blackpool, Birmingham, Stoke etc etc – they have been absolutely dire. Remember, this current Liverpool team contains at least 7 of the team that “tonked” Madrid and Man Utd in the same week. So what has changed? The manager of course and it stupid tactics. It takes a genius to turn a average team into a great team. But any old idiot can make a great team into a mediocre one – step forward Roy Hodgson!
Got to agree with Stevie G. JH needs to talk with not at the most knowledgable football supporters in the world most of whom have forgotten more than He, Hodgson and Comolli will ever know.
If he wants to have all of the right people in place, then he must know that he needs a new manager. A look at his history quickly will tell you that THIS is all that can be expected of Hodgson – sometimes history is a good indicator of the future, and at present we are eerily replicating the trend of Hodgson’s managerial career in the major leagues.
The only thing that I can think of is that the board want to wait until a new Chief Exec is appointed before making any long term decisions, such as who shall be the manager of our club going forwards. Hodgson is just a sitting duck, the uncertainty around the club won’t go away until he is replaced and as such he should be moved on asap.