Luca Marotta Monday, December 27, 2010 23:33
"UEFA Club Licensing Regulations and Financial Fair Play Edition 2010 is the document , published May 27, 2010, which contains the rules governing the so-called "financial fair play" for the clubs that require a license UEFA.
The management philosophy, commissioned by UEFA, which should safeguard the game of football in future years, is "to not spend more than you earn '. It is this fundamental principle around which turns the whole system of rules of the "financial fair play". In sum, this system of rules can be explained by characterizing three statements:
1) obligation to balance the budget;
2) no debt due to the club, employees and / or social or fiscal authority;
3) provision of information financial future, to ensure that the club can meet its obligations thereafter.
analysis of individual provisions, despite the laudable intention, in the opinion of the writer, it is clear that we tried to determine an impact on "soft" system of the new rules, perhaps to allow time for some big clubs within the parameters. Just think of the obligation break-even in so-called "period of surveillance" or monitoring, which is expected derogabilità both temporal and quantitative. In fact, the years of monitoring may vary and you may meet the requirement of break even in situations that are not in balance.
For the applicant the license UEFA, Article 46 imposes the obligation to declare the structure of the group, the consolidation and the controller of last resort. As set out in Annex VII B, the companies that control of calcium or other companies are, in turn, subsidiaries are required to present consolidated financial statements. In addition, under Article 47 paragraph 2 of the Regulation Budgets must be certified by an independent auditor.
Article 48 requires the submission of a mid-term if, between the end of the year, referred to the last approved budget, and the date of filing the application more than six months have elapsed.
No overdue debts
March 31 before the season, for which you are licensing UEFA, according to Article 49, must show that he had outstanding debts to football teams, which relate to transfers that occurred before 31 December, including loans of players.
Under the provisions of Article 50, to March 31 before the season for which you require UEFA license, do not have debts due to employees of authorities or social security and tax arising from contractual and legal obligations to employees, which originated prior to December 31. This rule seems to go to a meeting as "physiological" that emerges from reading many accounts, that a three-month delay in the payment of salaries.
Annex VIII of the Rules provides us with the notion of debt has expired. A debt is considered expired if your payment is not honored within agreed deadlines. However, are not considered "expired" those debts for which an extension has been agreed terms with the creditor or for which there is ongoing litigation. Financial information for the future
Article 52 puts an obligation on the applicant's license to provide financial information for the future, to demonstrate the principle of "going concern". In essence you have to show that the club is able to meet its commitments for the season concerned with their license applications.
The second paragraph of that article considers the principle of business continuity as the first "indicator" fundamental and necessary to keep track of it in the auditors' report annexed to the budget. In this respect, as regards the last budget of FC Internazionale Milano SpA, but the same goes for the previous financial statements, the auditors, the recall of information, to the effect of the presence of "significant losses", stated that the Management Report and in the notes to the directors have confirmed that "the reference member expressed the usual commitment to support for the future, if necessary, economically and financially the company and on this basis has been written this financial statements on a going business. "
The second relevant indicator in assessing the club in order to obtain a license, is the existence of negative equity. In the presence of negative equity or a deterioration in net debt of the club the previous season triggers an obligation to provide additional financial information to demonstrate that the club is able to fulfill the obligations following. In this situation would, for example, FC Internazionale Milano SpA, whose shareholders' equity at June 30, 2010 was negative for € 7,365,451.
In practice, the club who are in the presence of findings about the principle of continuity and in the presence of negative equity, you must provide a budget for the period on the license that requires looking to prove their ability to honor its commitments. A reflection
imposes itself: part of the logic that the presence of substantial losses with negative equity do trigger a "warning" about the possibility of continuing business.
The requirement to tie a tie
The obligation is embodied in accordance with the requirement of the "break even" (Articles 58 to 63).
Pursuant to Article 57 paragraph 2, shall be exempted from the requirement of a tie, the teams in a division other than the top flight, enjoying a special permit be subject to Article 15 of the Regulation. An example could be a Serie B team which won the Italian Cup and acquires the right to participate Europe League. I
also released from the club in the two previous fiscal years have had both costs and revenues so-called "relevant" less than € 5 million.
As regards the requirement of a balanced budget, it must be said that not all budget items are considered relevant for that purpose. Indeed, Article 60 paragraph 1 provides us with the notion of the break-even point, determined as the difference between positive components of income "relevant" and negative components of income "relevant". Paragraph 2 of that article specifies, as it is obvious that there is a "break-even surplus revenues if" significant "excess costs" relevant ", otherwise si ha un “break-even deficit”.
L’articolo 58 comma 1 elenca i componenti positivi di reddito “rilevanti” da considerare per il calcolo del punto di pareggio, che sono: ricavi da biglietti; ricavi da sponsorizzazioni e pubblicità; ricavi da cessioni diritti radiotelevisivi; ricavi da attività commerciali; altri proventi di gestione; plusvalenze da cessioni di giocatori; plusvalenze da cessione di immobilizzazioni materiali; i proventi finanziari. Non vengono considerati, invece, i seguenti componenti positivi di reddito: proventi non monetari; ricavi da transazioni con parti correlate effettuate ad un valore superiore al “fair value”; proventi da operazioni non legate all’attività football or place or to mark the club. X Annex B of these positive components of income "relevant" are better explained. The UEFA regulations exemplifies what the non-monetary income excluding the
• revaluations of tangible and intangible
• revaluation of inventories;
• shooting devaluation or depreciation of non-current assets (including records of the players);
• Foreign exchange gains or losses not realized in practice.
Among the revaluations of intangible assets include the revaluation of the mark.
Examples of related party transactions that require the demonstration that have been made using the fair value are: •
sponsorship by a related company;
• the sale of corporate hospitality tickets to a related company;
• sale of goods and services related party transactions.
Regarding sponsorship with related parties could cite as an example Erg-Sampdoria or, in the past, the same Juventus with New Holland.
Examples of related party transactions that must always be excluded are:
- the amounts received as a donation from a related party;
- settlement of liabilities on behalf of the club by a related company.
In order for proceeds, not from the operations Football in the strict sense, can be excluded should be independent of places and also to mark the club. As a result, not an event organized within the structure of football clubs can generate revenue "relevant".
Article 58 paragraph 2, however, lists the costs relevant to the calculation of the breakeven point, they are: cost of sales, staff costs, other operating costs (eg costs of organizing events, rental facilities, etc..) , amortization and impairment of rights to sporting performance of the players and their losses, financial charges. Are excluded from the significant costs: the costs of related party transactions made at a price lower than fair value and the cost of activities the youth sector, the costs of activities of social engagement, non-monetary costs and expenses, borrowing costs directly attributable to the construction of tangible assets (eg stage), the cost of operations is not football related activity or place or to mark the club.
Regarding the cost of youth activities, the practice has arisen from some Italian clubs of adjustment of the operating costs and then allocate them as intangible assets through collection of an item of income: the capitalization costs of nursery " . This item, which is essentially a transfer of costs, and last budget of the total € 3.4 million and accounts for 1% of production value, should not be considered for the evaluation of the break-even, like the corresponding cost item and like any depreciation calculated on the mail allocated between fixed assets.
In accordance with Article 59, which gives the definition of the monitoring period, the club will be assessed by considering a "monitoring period" with an interval of three years.
This three-year interval will be considered only from 2014/15, while for the first year of implementation, 2013/14, will be considered a two-year interval. In other words, the UEFA club license applicants must apply to the 2013/14 submit budgets to "rule" for the seasons 2011/2012 and 2012/13.
The sum of the "break-even point" of each year make up the monitoring interval is the parameter to be considered for compliance with the obligation of a tie.
Under paragraph 6 of Article 60, if the sum of the individual results of the exercise is worth less than zero, is given the opportunity to use in calculating any "surplus" of the two years prior to "monitoring period" .
The obligation of a tie is not rigid, but provides numerical thresholds of tolerance.
These tolerances are set out in Article 61 of the Rules. Finally, a club within the parameters of financial equilibrium, if the algebraic sum between revenues and costs "relevant" to the "monitoring period", the limit is positive or zero. However, it can be, too, considered to be in balance, even where that difference is negative if, considering the two years prior to the period of surveillance, "not to exceed 5 million euro.
This prediction, however elastic, apparently not enough for some big clubs and have been provided for further exemptions to the principle of a tie, which will then expose themselves:
- for the first two seasons of application, 2013/14 and 2014/15, the threshold was fixed at 45 million euro;
- for subsequent seasons until 2017/18, the threshold was fixed at 30 million €.
to return within the limits of tolerance are possible contributions of the shareholders and / or related parties, only one of the budgets of the monitoring period, or alternatively until December 31 before the license application, provided that resulting from the accounting records. The club
the license applicant has the burden of proving that the financing transaction has been completed in all respects and that it is without condition. Think of a capital increase, in addition to being signed, must be fully paid. From the wording under the budget item "due to payments of capital should explain the amount still owed zero. In the balance sheet assets of FC Internazionale Milano Spa include loans to shareholders for capital due to 28,840,358. In the previous year, however, contained a credit to shareholders for € 21,372,203.
Article 62 provides that in the time and manner provided by UEFA club license applicant must provide:
- information about the break-even point for the second year of the monitoring period;
- information about the break-even for the first year of monitoring period, if not already provided;
- information about the break-even point for the last year of the monitoring period, if not complied with at least one of the four indicators of paragraph 3 of that article.
The indicators referred to in paragraph 3 of Article 62 are:
1) the principle of going concern;
2) negative equity;
3) the draw;
4) no outstanding debts.
Under Article 62 paragraph 4 of the Regulations, may be required further investigation and analysis of the clubs that have a cost of more than 70% of personal income and net financial debt over turnover. How
refers to Article 63 paragraph 1, the requirement is satisfied if no balance indicator, referred to in Article 62 paragraph 3, and the club is violating the license applicant has a "break-even surplus" for the first two periods in the range of the "period of surveillance." However, the requirement is satisfied with a draw, even if one of the four indicators is violated, provided that:
a) Applicants for a license, the club posted a net profit "aggregate" in the "monitoring period"
b) the applicant for a club license has a loss, "aggregate" for the years comprising the period of monitoring, within the limits of the limit, considering, possibly the two years immediately preceding the period of surveillance.
The requirement is not satisfied with a draw Applicants for a license if the club has an aggregate loss for the fiscal years of the reporting period, exceeding the limits set by the threshold are also considering the two years prior to that period.
A first reflection that we make is that despite the large "elasticity" regulations on duty to tie a club like FC Internazionale Milano SpA should still make a strong cost-cutting. In fact in the minutes approving the budget for the year ended June 30, 2010, concerning the "great" season of sports achievement of the three main objectives, President Moratti said: "Reaching the final of the Champions League and the excellent market operations made in the past year have pushed the company's revenues over 323 million euro. Production costs remained high due to the salaries of the players and coaching staff, which include prizes for the three victories have led to € 230 million and the amortization of the entitlements to players who are entered to 65,000,000. "It 's good to remember that 323 million in revenues are recompressed gains amounting to 72.9 million, easily recoverable in the future in that entity, and that the costs of the rose, which amounted to 295 million, are a very considerable cost structure in relation to turnover pure.
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