Financial Fair Play, What’s It All About?
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.
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