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​Financial Fair Play Regulations: Rules created to serve the rich

Barcelona waved goodbye to Neymar, pocketing over $300 million. (photo: AFP)
Roar Pro
8th August, 2017
5

​As a big believer in equalisation I will admit that I welcomed the introduction of UEFA Financial Fair Play (FFP) regulations with open arms.

Sick of watching Real Madrid and Manchester United spend without restraint, it seemed as though a new footballing world was on the horizon.

I could not have been more wrong in my assessment or understanding of the FFP regulations. Quite simply it seeks to maintain the status quo – keeping the rich at the top and preventing anyone else from ever joining them.

Neymar’s record transfer from Barcelona to Paris Saint-Germain has placed FFP back in the spotlight as poor Barcelona cry foul having had their darling Brazilian snatched from right under their noses.

If we look back a few years to 2003, the big clubs like Real Madrid, Barcelona, Bayern Munich, Manchester United et al were all sitting pretty being perennial dominators of domestic and European competitions. All was well with the world until Russian billionaire Roman Abramovich entered the fray.

He took primary control over Chelsea and went on a spending spree never before seen in world soccer. Appointing Jose Mourinho, he paid ‘squillions’ of dollars in transfer fees compiling a squad that went to win two Premier League titles in a row.

Next to follow were Sheikh Mansour (City Footballing group) and the Qatar Sports Investment group who subsequently did the same with Manchester City and Paris Saint-Germain respectively.

Manchester City were not so long ago sitting in the third tier of English football, never spoken about in the same breath as their more illustrious neighbours – a successful season was either promotion or a mid tier EPL finish.

PSG had perhaps more pedigree but had failed to win the Ligue 1 title for 18 years (before winning in 2012-13). Both clubs went on unprecedented spending sprees that as a result have now catapulted them into the top tier of European football. Both have won numerous domestic titles and cups and European trophies seem around the corner.

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With wealthy (understatement of the year) owners all three clubs but particularly the City and Paris Saint-Germainwere able to elevate themselves from mid tier mediocrity to perennial domestic champions and European contenders.

To understand how this occurred, we need to look beyond the exhorbitant amounts of money being spent in transfer fees and wages. The only way second tier clubs can attract the best players is to pay over the market transfer fees and wages.

Without this the best players would remain at the traditionally wealthy clubs who can promise both success and big pay packets. You then need to pay sufficient funds to keep enough players of this ilk for a period of years to achieve sustained success.

After a period of success, the brand of the club will change from a small mid tier club to a global giant and this is when the money starts coming in. Build an academy and you can then purchase the best young players who are relatively cheap – these players will join because of the quality of a global brand and academy.

The young players can be developed, loaned out or sold for a profit and the money continues to flow in. But the key to all of this is enormous up front investment and huge losses to enable this growth.

Manchester City's Argentinian striker Sergio Aguero

(AFP PHOTO / IAN MACNICOL)

In England, the City’s achievements turned the ‘big four’ into a ‘big five’. The best players on the transfer market were out of reach to most clubs (bar Real Madrid and Barcelona) until Man City and PSG had had their way. PSG and Man City shattered the mould and the next club was ripe for the picking by the next billionaire.

But just as quickly as it started, UEFA unveiled the FFP regulations that meant teams had to balance their books or keep a cap on losses over a specified time-period (previously a single season and now covering a three year period). It seemed music to our ears – no longer could the likes of Bayern, Real et al bully the transfer market.

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This was the era of equalisation or so it seemed. FFP has put to rest the chance of another club copying the Chelsea/City/PSG model. If you are not allowed to incur the huge up front debt due to FFP then you cannot replicate this model.

Who does this serve? The richest clubs of course. FFP has done little to stymie the spending of clubs like Real Madrid, Barcelona or Manchester United. According to Deloitte, over the last 16 years, ten clubs have repeatedly featured at the top of rich list (total revenue made from football operations).

They are of course familiar faces. They are global brands with enormous revenue and so their books will always be balanced which affords them the luxury of spending (both on transfer fees and wages) without suffering the consequences of FFP.

What are the positives of the FFP regulations? Sure, you will prevent a repeat of clubs like Portsmouth going into administration by promoting fiscal spending in the lower divisions. The regulations are an incredibly lengthy document but it does serve to increase transparency of all European clubs. But these positives in no way offsets the fact that you prevent any club from ever again climbing and entrenching itself into the upper echelon of European football.

Many would argue that I have no sense for football economics and you would probably be right. But I do feel that every team should have the opportunity to achieve sustained success and by that I mean compete year on year for domestic and European success. In European footballs skewed financial topography, FFP removes the very notion of this.

The FFP regulations are the ultimate comeuppance from the European footballing aristocracy.