Financial Fair Play could change football as we know it

Graph And Coins

Chelsea, Manchester City, and PSG, are among the big spenders who may have to rein it in, and sponsorship deals to get around it may not be enough to ward off FFP biting.

The planned introduction of Financial Fair Play by UEFA, capping club spending on an individual basis based on “fair value” in the market, aims to curb spending by cash-rich clubs. However, the initiative could be doomed from the start, and could only further put daylight between Europe’s wealthy elite and its cash-strapped majority.

In a bid to offset their hefty transfer fees as of late, Ligue 1’s Paris Saint-Germain have lined up an unprecedented €100m shirt sponsorship deal with the Qatar National Bank. The French outfit, owned by Qatar, is a fine example of why Financial Fair Play should be introduced in football – but will the team’s latest move be a nifty way of cheating the system, or one of line of crackdowns by UEFA to maintain equality in the game and result in sanction for the club?

In simple terms, the way Financial Fair Play works is through first assessing the value of a club, and from that deducing how much the team should be allowed to spend. If a deal exceeds the evaluated limit to spending by a club, it may be rejected. The problem is, with sponsorship deals ever-changing it would be hard for UEFA to impose a sanction against the Qatar-owned club, and perhaps the deal is one way the club can legally retrieve large sums of money from the government who own them without too many questions asked. This can then be pumped into further speculative transfers and inflated wages, and the cycle continues – much like Manchester City’s sponsorship deals with Etihad or Chelsea’s deal with Gazprom, formally owned by Roman Abramovich. Whilst all three clubs have recorded huge losses in the past three years, they are still all financially secure.

One of the problems is what constitutes “fair value” is shrouded in mist, and whilst thought to be subjective to each club there is no definitive guidelines that can be followed telling each club exactly how much they can spend, or earn, without breaching Financial Fair Play rules.

Clubs suffering from lower finances – in fact, any club that hasn’t got such generous deals in place that the likes of PSG, Manchester City or Chelsea may have – will be the ones really feeling like they’ve drawn the short straw. Whilst UEFA’s plan hopes to cap excessive spending by big-money clubs - working on the basis that large clubs will have a cap on spending based on their finances - so will smaller clubs, except with far lower limits.

Whilst the cap enforced on the Citys, Chelseas and Saint-Germains of Europe might seem unfair to them in relation to their wishes to fiddle in the transfer market with large sums of cash, the likes of Swansea, Queens Park Rangers, or Norwich will have a similar limit imposed on them too. A transfer of £150m (this figure purely speculative) to attract Ronaldo back to Manchester United may be blocked by UEFA and news greeted with glee by Premier League clubs not wishing to play against the threatening winger, but a similar refusal may be enforced if Southampton attempted to sign, for example, Adam Johnson for £15m and would look mightily unfair on a cash-strapped outfit attempting to inject fresh talent into a team flirting with relegation.

PSG’s search for a shirt sponsor may be an ongoing one for now, but a club to whose president has close ties with the Qatari Royal Family coming to an agreement with the Qatar National Bank being void of financial or political incentive just seems too coincidental. Proving this is a whole new point, and for this reason the deal might well just go through, defeating the point of Financial Fair Play.

With sanctions, including exclusion from UEFA competitions such as the Champions League, only being put in place from 2014, big-money clubs will still have a bit of time to stretch their financial budgets, and until then this saga of inflated transfer fees, wages and sponsorship deals will continue to surprise.

Fundamentally, whilst the deal aims to cap spending on Europe’s richest football clubs, using “fair value” assessment to decide individual constraints could in fact be doing the complete opposite, and purely fuelling the richer to spend up to a certain mile-high point whilst the less wealth clubs’ purse strings become tightened even further.

How do you think Financial Fair Play could affect European football, and who would be the key winners and losers?

image: © teegardin

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