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Financial Fair Play was first brought onto the footballing landscape back in 2009, with Michel Platini and the rest of UEFA keen to avoid the biggest clubs in Europe from spending vastly beyond their means. The crux of the idea appeared both relevant and justifiable – the measures would encourage sustainable spending and, amongst other things, would prevent owners from injecting large sums of cash into clubs. Clubs would no longer be permitted to spend far more than they earned in revenue – caps would be placed on spending and sanctions imposed if they were not complied with. These plans were intended to create a level playing field across European football – but, now into its third season after being implemented in 2011-12, has there been any change to the footballing financial landscape?
As previously indicated, one of the crucial factors of the financial fair play regulations was the prevention of cash injections by owners of clubs – it was felt that whilst this benefited the bigger clubs in Europe, it would create an unequal playing field particularly for the smaller clubs. Furthermore, it was suggested by UEFA that such cash boosts would lead to a procession not dissimilar to Formula One, where smaller teams have absolutely no chance of winning and instead focus on simply maximising their sponsorship opportunities.
Unfortunately, it appears that this aspect of financial fair play has not been as successful as hoped. In 2011, Manchester City signed a new £400 million deal to rename their home ground as the ‘Etihad Stadium’. Notwithstanding the vast sums of money involved in such a deal, eyebrows were raised at the validity of such a transaction. Etihad Airways, as a form of comparison, were, at the time, a third of the size of British Airways, had only been in business since 2004 and had never made a profit.
To suddenly make such a bold advertising purchase was almost inconceivable, however, it was later recognised that the chairman of Etihad Airways was the half-brother of the owner of Manchester City, Sheik Mansour. This caused great suspicion around the footballing world – it appeared to many, including Arsenal manager Arsene Wenger, that Manchester City were attempting to circumvent the regulations being brought in by UEFA. Manchester City were never penalised for this deal, and the argument remains that they simply played the system to allow more of the owner’s money into the club without having to deal with the Financial Fair Play ramifications.
In June 2012, a new television deal was signed which threatened to widen the gap significantly between the Premier League and the Championship in England. Sky and BT signed a deal with the Premier League to pay £3.018 billion for the television rights, covering the period 2013-2016. This deal represented a cost increase of 71% over the previous rights deal. In short, this deal confirmed an extra £14 million for every Premier League club on top of what they were already earning per season in TV rights alone.
With such large sums of money suddenly in their pockets, smaller clubs began spending sums of money that only 5 years ago would have seemed inconceivable – Southampton spent £15 million on Dani Osvaldo, Norwich with £9 million on Ricky van Wolfswinkel.
Despite the seemingly unfair nature of both the TV rights deal and the extravagant purchasing of players, Financial Fair Play could do nothing about it – as an outside sponsorship deal, it was beyond the scope of the regulations. Therefore, a rights deal that will irreversibly change the face of English football has been permitted – instead of sustainable growth for the future, clubs will now focus on spending vast sums of money on big name players in the hope that they can secure Premier League status for another year. At the same time, the gap between the Premier League widens evermore – Championship clubs will now be encouraged to spend recklessly beyond their means in an attempt to reach the Premier League. Not only will this create even greater economic disparity between the two leagues, it perpetuates the danger of more and more clubs sinking into liquidation when their efforts to reach the Premier League do not succeed. It is difficult to see anything remotely ”fair’ about this.
Arguments were made by UEFA towards the end of 2013 that Financial Fair Play measures were in fact working. It was announced that, in the year 2012-2013, wages had gone up but, crucially, overall losses had been reduced by 6.9%. Yet the bigger picture must be considered before hailing the measures as driving football in the right direction.
The biggest clubs, such as Chelsea and Manchester City, still operated at a vast loss (£49 million and £46.95 million respectively for the year 2012-13). AS Monaco spent £110 million on three players in the summer window, bankrolled entirely by their new owners – it remains to be seen quite how Monaco’s spending will be able to match up to their revenue. AS Monaco have the second lowest attendance record in League 1 and a wage bill higher than most Premier League clubs – yet still they are freely spending money. The financial side of football awaits their latest set of published accounts.
In 2012, previously free spending Malaga, a club bought by Sheikh Abdullah bin Nasser Al-Thani in 2010, suddenly went into liquidation when he decided to remove any future investment of his in the club – without it, the club could not function. This was meant to be an occurrence that Financial Fair play would prevent, indeed, the measures were brought in to stop clubs being so reliant on owners; clearly, once again, those measures failed.
Financial Fair Play, has, so far at least, failed to make any meaningful inroads into the mass economic disparity that surrounds football. Whilst ‘Champions League’ clubs still continue to spend money in vast quantities because of inflated television deals, smaller clubs continue to struggle to make ends meet. UEFA may point to minimally falling losses in European football as a victory, but this simply misses the bigger picture – spending in football is spiraling out of control, and, at present, Financial Fair Play measures can do little to prevent it.