Financial Fair Play, What’s It All About?

By on July 17, 2011

If you’re like me, you’ll know that the new Financial Fair Play (FFP) rules are probably going to be good for football… but you haven’t got a clue what actually it means for your club. Well, here is a football fans guide to the new rules, which in fact, aren’t all that hard to understand.

UEFA are well aware of the importance of summer and winter transfer activity, and this is not supposed to be a ruling aimed at curbing big spending on players (that is a clubs prerogative). Rather, it requires clubs to balance their books at the end of the season. In simple terms, clubs will no longer be able to operate at unimaginable losses every year while continuing to spend on inflated wages and transfer fees. Purity may very well be returning to the game.

A NUMBERS GAME

UEFA’s head of club licensing Andrea Traversco told MEP’s that the measure was of the utmost urgency – and it’s not hard to see why. The aggregate loss of Europe’s top clubs was £510million. Some 65% on average of income was spent on salaries and 47% of clubs reported losses. Traversco said that the core principle under the FFP was the “Break-Even” requirement, under which a club must not consistently spend more than its income. From 2011-2012, any club with serious long-term ambitions of playing in Europe should not be losing more than £8.7million a year.

VOdds

Let’s use Manchester City as an example (I know you wanted me to). Losses of £121million in 2009-10, projected losses of more than that in 2010-11 are quite incredible and a massive increase in income must be shown to be able to balance the expenditure. True, the recent bumper sponsorship deal and qualification into Europe’s premier competition will no doubt help their cause but in order for them to remain at “Break-Even” they will need a steady year on year increase in income and a dramatic reduction in spending. Income is pretty well fixed through match day revenue and TV cash so be sure to look out for an increase in overseas ‘partnerships’ and ‘sponsorships’ to boost the coffers.

LOOKING TO THE FUTURE

UEFA hope that FFP will help bring back a sense of reality to the game and, as the title suggests, make the European football business more ‘fair’. The changes come into force in the 2012-2013 season and UEFA is fully committed to enforcing these new rules. The measures will promote development and investment in youth programmes and facilities to negate the cost of buying superstars at crazy prices.

Gianni Infantino, General Secretary for UEFA said,’ the financial fair play concept has been launched to safeguard the long-term health of European football,’ he continues, ‘one of the project’s key requirements is to force clubs to finance their business activities with the resources they generate themselves’. That seems fair enough to me. If I know that I will get £2 spending money from my mum that day, I’m not going to pick up a £12 box of crispy crème doughnuts!

Michel Platini had described the current state of things as ‘anarchy’, and he isn’t far wrong – According to many football agents we’ve already had our first £100m football player (Cristiano’s total package apparently took the deal well clear of the one hundred million mark). We have hit a stage where wages of £200,000 are reported to be the norm and players like Emmanuel Adebayor are left to train with the reserves while taking home £150,000 a week.

Whatever happens in the future we can be sure that this current state of affairs will not carry on unabated. Hopefully the football business industry will be saved from ‘busting’ due to the FFP. What do these mean for your team? It likely doesn’t make much difference if you support say, Stoke City F.C. but if you support one of the main culprits in world football, expect a less exciting summer from 2012 onwards. How will newspapers get sold without relentless speculation and mind boggling numbers being tossed about everywhere?

At least they have one less competition to worry about… R.I.P News of the World.

Submitted by The Last Word of Football

 

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34 Comments

  1. Paul

    July 17, 2011 at 1:39 pm

    Good peice and pahaps Liverpool have got it spot on trying to buy young and British. City and Man U on the other hand are trying to spend massive now and get the assets in to the club because (a) they won’t need to spend big after 2012 and (b) if they decide to splash out they need only sell one asset to offset the difference. The big rich teams will always spend more but hopefully the wages will be tighter. How will it effect fans and ticket prices? It won’t they’ll still be expected to fork out small fortunes to watch the overpriced players half heartedly running around. Personally id love to see a rule come in to see only 4 foreign players in the first 11 but of course Euro puppetmasters wouldn’t allow this!

    • M.

      July 17, 2011 at 3:47 pm

      The hind side of the quota of 4 players in the starting/playing/on field XI might be even worse. From a very average English team, national/better players ‘ll charge 300K+/week (& the Spanish ones, but they are not average, so some justifications ‘ll be there),only for their clubs being rich.

      Quality English players are as rare as England’s better performance in a global tournament (WC, Euro, I don’t mention Continental Cup, as before 2029, that competition has no chance to be hosted by England, & that’s the only way for England to qualify).

      Already, English players are over hyped, over priced & over protected (Some joker said that the main reason for England not to do well is the fear/criticism of their players. True, nobody would ever dare to have asked Zizu, CRod or Messi on their salary or transfer fee; you know what I am trying to say).

      2000-01 was probably the last season when an English man won the Golden Boot in EPL. Among the few good English players that we have, see how they are blackmailing their club, just for the passport & “Home Grown” status. Roony, even after that WC, blackmailed Sir Alex, for how much, who knows; Terry is earning probably more than the 3 German forwards combined, giving him a good football lesson. Can anyone imagine what could have been the price for Phil Jones, Jordan Henderson, Andy Carroll & Downing?

      Had there been any restrictions, I doubt, how many of the English Internationals would have played in CL? (In their hay days, France had 20+, & now Spain has almost entire unit playing in top European teams).

    • M.

      July 17, 2011 at 3:48 pm

      The hind side of the quota of 4 players in the starting/playing/on field XI might be even worse. From a very average English team, national/better players ‘ll charge 300K+/week (& the Spanish ones, but they are not average, so some justifications ‘ll be there),only for their clubs being rich.

      Quality English players are as rare as England’s better performance in a global tournament (WC, Euro, I don’t mention Continental Cup, as before 2029, that competition has no chance to be hosted by England, & that’s the only way for England to qualify).

      Already, English players are over hyped, over priced & over protected (Some joker said that the main reason for England not to do well is the fear/criticism of their players. True, nobody would ever dare to have asked Zizu, CRod or Messi on their salary or transfer fee; you know what I am trying to say).

      2000-01 was probably the last season when an English man won the Golden Boot in EPL. Among the few good English players that we have, see how they are blackmailing their club, just for the passport & “Home Grown” status. Roony, even after that WC, blackmailed Sir Alex, for how much, who knows; Terry is earning probably more than the 3 German forwards combined, giving him a good football lesson. Can anyone imagine what could have been the price for Phil Jones, Jordan Henderson, Andy Carroll & Downing?

      Had there not been any restrictions, I doubt, how many of the English Internationals would have played in CL? (In their hay days, France had 20+, & now Spain has almost entire unit playing in top European teams).

  2. Stringy

    July 17, 2011 at 1:47 pm

    problem for me is that UEFA are naive and will achieve nothing with this..the recent critisicm that the Etihad sponsorship deal is nothing more than the owners using influence in their homeland to “fabricate” a deal that balances City’s books and is not a fair reflection of City’s ability to generate and income. this may or may not be true, but how can UEFA prove otherwise?

    Will it make competition fairer, just can’t see how, in the end you base this on a clubs turnover, so in the end, the bigger clubs can still spend more money on players and wages that the clubs with a smaller turnover, so don’t see how it “levels the playing field” in any way…its just another example and if you want to be hugely cynical, another example of the moron Platini and team of anti english idiots (William gaillard anyone!) taking another stab at English football and trying reign in its financial clout and influence…

    the whole thing strikes me as a waste of time and can you really see UEFA stopping Chelsea, City and Man Utd competing in the champions league and maybe more pointedly Real Madrid?…no didn’t think so!

  3. Rob c

    July 17, 2011 at 1:48 pm

    As a gooner for over 50 years this ruling is music to my ears but I am sure that the likes of Man City, Chelski and Manure will find ways round it. i know I am biased but all clubs should run as Arsenal do, spend within your budget and continually replenish the youth academy with potential stars of the future. Despite the enormous spending of several clubs we are still one of the main contenders on all fronts and have been for many years. The spuds are examples of how not to do it because they haven’t even had any major success. FFP, I will wait and see what difference it makes.

    • Yidango

      July 17, 2011 at 2:09 pm

      Spurs have less dept then your poxy club….

      • tomstoned

        July 17, 2011 at 2:23 pm

        Yidango mate..

        dont be such a bad loser mate,The Arsenal are run by far more decent than spuds…and hang on how is your economic situation going to look like when or even better if you’ll ever build a new stadium not that you lot need it…and oopss…do you need a dvd ?

        • Yidango

          July 17, 2011 at 2:31 pm

          What DVD? Oh the 2-0 and you f*cked it up directors cut!

        • COYS

          July 17, 2011 at 2:43 pm

          What the hell are you talking about?

          Spurs are already prepared for Financial Fair Play.

          We shouldn’t have any problem whatsoever when the ruling comes in. “Spurs are an example of how not to do it.”

          Oh really? According to accounting firm Deloitte “Spurs are ranked top in the country for effective cost management”.

          Get your facts straight before you allow biased and rivalry to cloud your judgement.

          • SpurredoninDublin

            July 17, 2011 at 5:35 pm

            Hate to say it, but the only club making real profits at the moment are Arse.

    • Vishnu

      July 17, 2011 at 3:17 pm

      And you are just being a sore loser bringing Man Utd into this. We are not even spending half of what we are earning. If Arsenal was half the global brand that United is, do you think they would have been so frugal?

      We sell nearly 20,000 more tickets every home game and bring in more than 100mil in cash than you do Live with it.

      • VanishVishnu

        July 17, 2011 at 3:49 pm

        When you say “we” do you mean Manchester United? Or are you Manchester United. Do you have any knowledge of how they run their finances? Or are talking out of your backside?

      • Reddies

        July 17, 2011 at 4:34 pm

        So how come your debt has risen every year since the yanks bought you. They paid £500 million debt now £700 million. I read the only time you made a profit recently was when you sold Ronaldo.

        • ChrisW

          July 17, 2011 at 7:37 pm

          Wrong, the long term debt hasn’t risen its still about £500m. It was never £700 million, that figure came from wrongly including some of the Glazers’ debt which has now been paid off in any case.

          United are currently above UEFA’s definition of “break even” (which does not include costs for depreciation, amortisation, tax or youth player development).

    • bubble9

      July 17, 2011 at 9:54 pm

      oh yes an you lot have been soooooooooooo succesfull lately eh, fool!!

  4. Harry Barracuda

    July 17, 2011 at 1:53 pm

    Am I the only one who remembers Real Madrid selling their training ground to Madrid council to pay off their 100m+ debts – and being given, free, a brand new one to replace it?

    Financial fiddling isn’t a concept invented by the oil barons.

  5. Mike

    July 17, 2011 at 2:17 pm

    Rob c….You obviously have no idea how well Spurs are run. We operate a very tight ship, to the extent that we are the richest club outside the champions league placings across the whole of Europe and not just the UK. Please refrain from making any comments that are full of shit, but then again you are a gooner

  6. Triffon

    July 17, 2011 at 2:22 pm

    @rob c
    Firstly, arsenal youth has only made wilshere
    And mancgester united have the best youth in England hence why they won the youth cup, giggs scholes brown o Shea and the up and coming Morrison pogba Ryan tunnicliffe larnell Cole and will keane back my statement up, if you think united will struggle, think again.

    • Bill

      July 17, 2011 at 3:48 pm

      Just shows the intelligence level of the Manure supporters, they can’t even spell Manchester.

      • VanishVishnu

        July 17, 2011 at 3:57 pm

        I find it hard to even say it! Make me choke

        • sal

          July 17, 2011 at 5:32 pm

          7 baren years… shows why you so frustrated.

          • vanishVisnu

            July 17, 2011 at 6:25 pm

            No it is not the baren (Japanese hand tool used in printmaking)thing that makes me feel frustrated but rather the manager, some of the players, some of the underclass fans and the press coverage that make me feel so.

  7. Alan Frank

    July 17, 2011 at 2:48 pm

    Typical biased piece. Platini and his fellow Eurocrats cannot stand the excellence of The Premiership compared to the rest of Europe and had to do something to try and stop it. And please don’t give me the La Liga example, it is more like the Scottish Premiership with two dominant clubs and the rest as also rans. English football has never been so dominant and only ONE professional league club has actually gone out of business in the last 15 years. The Gooners don’t spend money and hooray for them, its their choice but likewise they have won jack for years.
    Platini is an open Juventus fan and when he first bought this nonsense in Juve had gone and were history in Serie A. They have been sold this year to a new Italian American billionaire. You watch the Frenchman now relax the ruling come 2012 so the likes of Juventus can buy them selves back to compete with the Milan clubs. Without financial fair play in Italy they are reperesented in the CL by AC and Inter,Palermo and Udinese FFS! No Roma’s or Juve’s or even Napol’s or Lazio’s. In italy FFP will bring the Juve’s and Roma’s back (as Platini wants). In the Premiership clubs like Man City will no longer get into the top 4 and so it will be a dominant top two again and a couple of also rans miles behind. If my employer wishes to invest millions of his own money into the company and give me better wages for doing a better job than my counterparts working for competing companies that is his choice. The same applies to football. The ONLY thing that needed changing was the financial check on owners as fit and proper people and financially sound enough to cover all of their clubs debts if necessary. Not this draconian dictatorship introduced purely to blunt the Premiership’s runaway success!

    • Reddies

      July 17, 2011 at 4:48 pm

      Italy, France and Germany have had rules regulating finances for years, remember Fiorentina? The germans are especially tough. If your boss overspends in his business its more likely you’ll be redundant. When a big club hits financial trouble they lose 10 points and the little firms suppling them go out of business

  8. Bob Mali

    July 17, 2011 at 3:01 pm

    Yup, totally agree. I’m glay they finall put an end to this madness. But there’ll always be ways around it. Citeh showed us one.

    Plug that hole Platini.

  9. Fa

    July 17, 2011 at 3:22 pm

    Platini was eager to show its the premierships but Real Madrid and Barca are up to their eyes in debt yet it doesnt matter.

    Yes the likes of city, chelsea, liverpool and united have thrown in Millions but owners have always been around. Its not like Portsmouth where it was sold to some unknown.

    Arsenal talk about youth, yet they have clever scouts who rob the youngsters from clubs, such as Barca. Barca are annoyed at fabregas but also annoyed Arsenal have taken a couple more of their youngsters this year.

    Liverpool and even United have/had youngsters coming through. Even Chelsea are still pushing their youth squad who have done well in last couple of seasons.

  10. Indyfan

    July 17, 2011 at 3:25 pm

    That huge fee Etihad (would that be Sheik Mansour? I don’t know) has paid for the naming rights of the Man City Ground. Does that mean that if I fly Etihad I am contributing indirectly to Manchester City Football Club?

    • sal

      July 17, 2011 at 5:28 pm

      yes.. that is why i willl never fly them.. i was a frequent flier with emirates as well , stopped flying them 5 years ago..

  11. Jamali

    July 17, 2011 at 4:35 pm

    The thing is the top clubs in the world will never go bust. United, Barca, Real could over spend and whenever they can’t sustain anymore, they could easily put the club up for sale. You’ll get a queue of billionaires to start the bidding at 2billion for any of the top 3, easy. Football is now the new billionaire’s playground.

    Their global branding ensures that banks will keep on lending them money because at that silly level of debt like Real is experiencing, the banks will never allow them to fold, or the banks gets nothing. Barca is restructuring their debt well and United’s debt is definitely at a manageable level.

    Those without global branding and those without billionaire owners will have to play by the FFP rules.

    Basically the rule is a step in the right direction. It’s not perfect but it’s a start. But there’s no possible way of making the rules air tight. The big boys will always find a loophole around it.

    Just think, even the rules of football can be subjected to different interpretations, let alone the rules for the business side of football.

    But if you let market forces and capitalism reign without checks and balances, then the outcome would be….Greece.

  12. essexian76

    July 17, 2011 at 4:57 pm

    Can you honestly see UEFA banning Real or Barca from competition? Are they going to demand that Utd clear their debts before adding to them with high priced transfers in and low cost transfers out?. Of course not, anymore than Utd and Arsenal get away with fielding weakened sides, yet Blackpool and Wolves get punished for the same offence. Money talks, if it didnt, do you think Chelsea would be brazenly tapping up Modric if they felt the full weight of the authorities would come down upon them?, nope it’ll be a small fine in comparison to the offence, and they’ll get away with..AGAIN!

    • Jamali

      July 17, 2011 at 5:11 pm

      Yup. Agree.

  13. Reddies

    July 17, 2011 at 7:38 pm

    what exactly though will be the punishment?
    say Wigan win a place in CL after selling their naming rights for mega-millions getting shirt sponsorship for £20million/year and leasing their carpark for carboot sales at £5million/weekend. Then they’re found guilty of FFP, what then?
    Are they banned for 1 year? 2? the length of contract? fined?

    • Micah Stennett

      July 18, 2011 at 9:31 am

      They are banned from competing in European competition.

  14. Well, very funny article. You are right they are banned from competing.

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