PwC presentation shown during the World Football Forum in Moscow 2014.

1. www.pwc.com
World Football Forum
Europe’s new reality: Financial
Fair Play regulation
November 2014

2. 1. Financial Fair Play rules overview
2. Challenges for Russian clubs in view of FFP
3. Is compliance achievable?
4. World Cup 2018 as an opportunity for development
PwC
November 2014
Content
2
World Football Forum • Oleg Malyshev

3. Financial Fair Play: achieving a balance of relevant income
with relevant expenses
“Decision tree” to determine relevance of income and expenses
PwC
Relevant, if
adjusted to fair
value
November 2014
3
Yes Is it related party
No
World Football Forum • Oleg Malyshev
transaction?
Not relevant
No
Relevant No
Yes Have a transaction
taken place at fair
value?
Yes
Relevant
Is it related to
activities, location
or brand of the
club?

4. UEFA Investigation process: based on the results of regular
monitoring UEFA may launch investigation
PwC
November 2014
Investigation
Settlement
Adjudicatory
chamber
4
World Football Forum • Oleg Malyshev

5. PwC
November 2014
Recent settlements agreement: overview
5
Break-even
limitations
World Football Forum • Oleg Malyshev
Fines
Player
A-list
limitations
Employee
benefit
limitations

6. Which challenges do Russian clubs face in terms of
FFP compliance?
Gate receipts in overall revenues, %
23%
England Spain
Broadcasting in overall revenues, %
PwC
November 2014
5
11%
23%
Germany
22%
World Football Forum • Oleg Malyshev
11%
Ø 18
3%
Italy France Russia
31%
49% 48% 47%
59%
Spain England Germany
Ø 47%
Italy France
9%
Russia
• Most of club financing comes from
sponsorship revenues and other
income;
• Most of expenses are short-term. Long-term
investments (youth,
infrastructure) are limited;
• Very few clubs have long-term strategy
and KPIs to increase commercial
income
• Ruble depreciation puts additional
pressure on clubs
• Some clubs are financed by regional
authorities and/or state companies
which is considered as a social
responsibility and not always as a
business

7. Average attendances and occupancy in
Russia and top-5 European leagues
50
40
30
20
10
PwC
Minimum ticket prices in top divisions
(2014/2015), USD
November 2014
6
92%
93%
43 36
79%
28 23
World Football Forum • Oleg Malyshev
51%
12
0
100
80
60
40
20
0
54%
Spain
England
Germany
Russia
Italy
Occupancy,%
Average attendance, ths
2
10
20
11
20
England Germany Spain Italy Russia
Driver 1: Match-day revenue
Source: PwC analysis

8. PwC
Potential CAGR 2013-2018 Potential CAGR 2013-2018
Potential growth by 2018
13
November 2014
Driver 2: Media market
7
3,4%
8 330 Market volume in 2013
7 041
1,6%
6 314
490
5 824
3,2% 1,2%
4 191
245
4 584
3 908 3 946
World Football Forum • Oleg Malyshev
10,3%
2 644
1 621
1 289
676
1 023
Russia
France
Italy
Germany
UK
Potential growth by 2018
Pay-TV market, USD mln
0,3%
474
7
467
0,7%
296
10
286
515
24
491
67
274
Russia
France
80
269
-5
Italy
Germany
UK
ARPU in 2013
Average Pay-TV revenue per user (ARPU),
USD
Source: PwC Media Outlook Source: PwC Media Outlook
0,9%
0,4%
3,8%

9. FFP compliance – a joint effort between clubs and leagues
PwC
Media strategy
November 2014
7
World Football Forum • Oleg Malyshev
Clubs League
Brand development
Naming rights
Infrastructure development
Sponsorship agreement
structuring
Youth development
Football TV audience:
• Football supporters: 17-19 mln
• RFPL TV audience: 8,5-9,5 mln
• Potential Pay-TV subscribers: 5,5-6 mln
• “Nash football” subscribers: 0,6 mln
Internal league regulation

10. World Cup – opportunity to improve infrastructure
By year 2017 Russian clubs will get 12 World Cup stadiums, and 3 non-World Cup stadiums (total 600,000
seating capacity).
Therefore, Russian football authorities and clubs should jointly work to maximize the effectiveness of use of World
Cup legacy.
PwC
November 2014
8
World Football Forum • Oleg Malyshev
Premier league clubs
FNL Clubs (1st league)
stadiums for 2018 World Cup

11. World Cup – opportunity to improve infrastructure
PwC
November 2014
8
World Football Forum • Oleg Malyshev
42 600
27 750
11 500
Germany
average
attendance
Average
attendaces
at new stadiums
Average
attendances
32 700
23 000
+42%
Average Premier
league capacity
2017/2018 (forecast)
Average capacity in
Premier league 2013/2014
51%
Average occupancy of stadiums
68%
92%

12. Thank you!
© 2014 PwC. All rights reserved.
PwC
Oleg Malyshev
PwC Partner
Tel.: +7 (495) 967 6138
oleg.malyshev@ru.pwc.com
This presentation has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this
presentation without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this
presentation. Unless otherwise provided for by Russian law member-firms of PricewaterhouseCoopers international network of firms, their members, employees and agents accept no liability, and
disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this presentation or for any decision based on it.