Financial Fair Play and You

Posted on March 16, 2011 by


Anyone well acquainted with a family game of Monopoly will be aware that it inevitably descends into one, or perhaps more, players tossing the board away and proclaiming, often justifiably so, that another participant has indulged in some financial irregularities, i.e. spending money which is not necessarily theirs to spend. Contrived though the analogy may seem, it does successfully cram into a nutshell the essence of football’s monetary predicament and the role of UEFA’s imminent financial regulations. What isn’t yet immediately apparent is the long-term significance of the much alluded to UEFA Financial Fair Play concept or the magnitude of its impact on suspect clubs. Well, the document is readily available from so all that is left is to dissect, digest and discuss.

Though the reasoning behind the implementation of financial regulation is probably easily discernible to anyone familiar with the obscenity of the money in the game, UEFA felt compelled to outline the rationale of the rules via their website. ‘The regulations are aimed at bringing about a situation which curbs the excessive spending and inflated transfer fees and player salaries that have endangered football in recent years.’ The statement, you may note, is plagued by ambiguity. Isn’t ‘excessive spending’ something of a relative term? Certainly, there are those who would assert that an aptitude for placing a particular ball into a particular net at a particular time doesn’t exactly merit a contract worth hundreds of thousands of pounds a week but, on the other hand, someone needs to subsidise Ashley Cole’s rifle lessons. Moreover, it is difficult to define what constitutes an ‘inflated transfer fee’. Perhaps they are alluding to a certain Merseyside club’s recent £35 million acquisition of a player who sustained an injury by falling from one of those ever hazardous casino stools in the wee hours of the morning. In that respect, the proposed scheme resonates with those of us who have grown exasperated with the relentlessly reckless spending of the cavalcade of clubs who supposedly transcend the confines of any economic downturn.

However, commendable though their intentions may be, any plan which endeavours to address and resolve the abundance of financial misconduct in football in a matter of years must be regarded with great ridicule and suspicion. This process, in particular, seems overwhelmingly simple on the face of it. The plan will primarily consist of two three-year periods (2011-2014, 2014-2017) in which clubs will be obligated to abide by UEFA’s numerous financial guidelines, namely that in the first period, clubs must record a loss of no more than 45 million Euro and, in the second period, a loss of no more than 30 million Euro. And, in anticipation of any intervention from those pesky investors, another regulation strictly prohibits any investment which aims to temporarily absolve the debt. Having said that, should a shareholder wish to alleviate the debt with money from his own pocket, it will be regarded as a donation and, as such, shan’t be reimbursed. It will serve as a nice little test of compassion for those wealthy shareholders who assert that they have the club’s best interest at heart. Forgive the cynicism but, as benevolent a figure as Roman Abramovic seems, it is difficult to envisage him wilfully donating millions of Euros to an entity he regards as little more than a business asset. This is all in aid of achieving that idyllic scenario in which football clubs spend strictly what they generate and will be forced to adhere to such rules for fear of exclusion from UEFA’s coveted competitions. Say what you will, the measures are for many a welcome departure from UEFA’s conservative tendencies and staunch resistance to the prospect of drastic change. It seems that for some, money is the greatest of motivators.

Okay, damage assessment time. Flying the flag for debt in football is, somewhat unsurprisingly, the English Premier League which boasts a collective deficit of some £3.5 billion, a figure which almost makes La Liga (the second most indebted league) look affluent with a debt estimated to be around quarter of said amount. While the English Premier League as a whole looks set to awaken with something of a financial hangover following a spending spree that even Florentino Perez would be proud of, it is Manchester United who are primarily the most vulnerable to the prospective legislation. According to a BBC report released last year, Manchester United’s debt is around £1.1 billion but the Glazer family, who own the club, are not yet prepared to sell, much to the dismay of a growing contingent among the United support that has become disillusioned by the club’s fiscal mismanagement. Advocates of the Glazers (are there any left?) will cite the impressive seven trophies accumulated by Manchester United under their regime but perhaps such a statistic serves less as a legitimisation of the Glazer ownership and more of a condemnation of football’s status quo.

Indeed, in the modern game organic ascents to glory are unfortunately confined to being little more than tired clichés found in Hollywood sports movies. In real life, that heroic and charismatic star player often translates to a petulant prima donna who will likely cost upwards of one hundred thousand pounds a week and may be partial to some peculiar leisure activities sometimes involving what we will delicately refer to as a ‘lady of the night’. The casualties of this particular truism aren’t inconspicuous either. Following a loss of 77 million Euro in the 2009/2010 season, Barcelona’s debt, after an audit last summer, was shown to be around 442 million Euro. However, fans of the azulgrana can take solace from the financial dilemma of neighbouring heavyweights, Real Madrid who are confronted with a deficit of nearly 700 million Euro. Astounding though the figure may seem for such a commercially successful club, a forensic accountant is hardly necessary to explain the financial woes of a club who spent over £200 million in just one transfer window back in 2009. Needless to say, some of European Football’s most prevalent and dominant clubs have a lot of book-balancing to do before they meet the requirements of Financial Fair Play.

So naturally, you would assume that a wind of change has begun to spread across football. You would assume that the landscape of the game is set to be disrupted. You would assume that clubs at the precipice are bracing themselves for a drastic shift in the paradigm. Well, based on recent activity, the clubs, on a sporting and management level at least, are nonplussed by the supposedly extreme developments. The possible sanctions imposed as a result of prolonged financial irresponsibility has hardly halted Real Madrid’s increasingly lucrative offers for Sergio Agüero. Nor do Barcelona seem phased in their ongoing pursuit of Cesc Fabregas. Meanwhile Chelsea, never one to resist an impulse buy, parted with around £50 million to secure the services of Fernando Torres, a player whose intentions to leave Liverpool had already been well documented. Heck, even Rangers have moved some funds around to finance the no doubt obscene wages of El Hadji Diouf. As it transpires, the task of marginalising a philosophy that has become so deeply embedded in the fabric of the game in recent decades, is an arduous one. For many competitively flourishing teams, debt is to success what a hangover is to an enjoyable evening of drinking, or what Ryanair is to a thrifty getaway; a necessary evil. As such, we can only speculate the extent to which UEFA will even be inclined enforce the new regulations if Europe’s most renowned clubs refuse to conform to them. After all, how many of us would be as captivated by European competitions if they suffered the conspicuous absence of Messi et al?

And therein lies the essence, and indeed the paradox, of UEFA’s Financial Fair Play project: to truly be regarded as a legitimate step forward, the clubs that made the sport so commercially successful until now mustn’t be exempt from the penalties faced by the less accomplished entities. So, here we find ourselves in the genesis of financial regulation in football and it is difficult to subdue feelings of disorientation regarding the now precarious future of the game that we know. Is the status quo of football about to be thoroughly twisted beyond recognition? If so, can anyone assert that that would be entirely beneficial to the sport? Financial Fair Play may indeed resolve the disparity and linearity of European Football but it may also merely invoke a role reversal. However, perhaps we’d do better not to concern ourselves too much. After all, if all goes badly we can always throw the board away and play something else.

By Brendan Timmons

Posted in: Global