Designed to ensure that clubs spend within their means, the Financial Fair Play (FFP) rules were launched by UEFA in 2011 to stop European teams from running up huge debts and encourage them to be financially prudent. Now 11 years on, UEFA have proposed new spending rules that it hopes will replace their current Financial Fair Play regulations and prevent clubs from circumnavigating the rules.
UEFA hopes to phase in the plans starting in 2023, with the aim of limiting clubs spending on wages, transfer and agents’ fees to 70% of their revenue from 2025. The idea behind it is to address protests that the current system safeguards the biggest clubs by limiting additional owner investment.
What is Financial Fair Play?
FFP was originally brought in by UEFA in order to improve the financial health of European football after witnessing high profile clubs across Europe post huge losses. In 2004, Chelsea FC, posted debts of £295 million, while in 2002 Leeds United lost £78 million, and a player fire sale led to them spending several years in the football wilderness of the lower leagues as the club battled crippling debts.
The foundation of FFP regulations was the break-even requirement, which necessitates every team involved in UEFA competitions to keep losses at no more than €5 million over three years. However, this only takes into account income earned from normal football business activities, in order to stop wealthy owners from funding clubs. The hope was it would encourage clubs to be run prudently and spend within their means.
Does FFP Work?
UEFA’s new proposals suggest the current regulations aren’t perfect and opinions are divided on their efficacy – largely depending on which team you support. Manchester City are the most famous team to be under investigation for a breach of the FFP rules amid a long running dispute with UEFA.
They have been accused of clever financial accounting and inflated sponsorship deals, that allowed the owner Sheikh Mansour to bend the rules and use his wealth to boost the finances of the club. The club vehemently denied the accusations and the punishment handed out by UEFA of an £8.8million fine and a two-year European ban, was overturned by the Court of Arbitration for Sport (CAS).
Since their takeover in 2008, Manchester City have become one of the dominant forces in world football thanks to the investment by the Sheik Mansour Abu Dhabi Group. Their squad of star players and world class manager. Pep Guardiola, has seen them favourites in the football betting for the Champions League and Premier League title.
Manchester City Transfer Record:
- Jack Grealish – £100m
- Kevin De Bruyne – £68.4m
- Ruben Dias – £61.2m
- Riyad Mahrez – £61.02m
- Aymeric Laporte – £58.5m
- Raheem Sterling – £57m
- Rodri – £56m
- Benjamin Mendy – £52m
- Erling Haaland – £51.25m
- Kyle Walker – £50m
At the start of the 2021/22 season, City smashed their transfer record by paying the £100m release clause in the contract of England and Aston Villa midfielder Jack Grealish. They have recently spent a further £51m to secure the services of Erling Halaand for next season. The highly sought-after talent, is one of the most exciting and prolific young strikers in the world.
Previously a mid-table team and perennial under achievers, the vast investment has transformed not only the football club’s fortunes, but that of the city of Manchester too. Despite claims of FFP skulduggery, City are a club that operates with no debt and a healthy annual profit.
Teams that have fallen foul of FFP
The most high-profile clubs besides Manchester Coty to have been charged by UEFA are:
- Zenit Saint Petersburg
- Paris Saint-Germain
- Astana
- Dinamo Zagreb
- Fenerbahçe
- Trabzonspor
- AC Milan
Does Money Buy Success?
Regardless of the effectiveness of FFP, clubs spending huge sums of money on players can’t guarantee success. Manchester United, City’s local rivals, have spent £1.21billion on transfers, with a net spend of £854.4million since Alex Ferguson left and they have no league title to show for it. Arsenal’s transfer expenditure is £865.24million with a total net spend of £569.93million and no league titles either.
Perhaps the greatest ever Premier League story is Leicester City’s title triumph in 2016 at odds of 5000 to 1. The team had just avoided relegation the previous season and had little or no money for transfers, and yet, against all the odds, they lifted the Premier League trophy beating clubs with far superior budgets – including Manchester City, Chelsea, Liverpool and Arsenal.
Of course, having a healthy budget to buy the best players certainly improves clubs’ chances of winning silverware and Manchester City will start next season as one of the favourites for the title. Newly rich Newcastle United with their Saudi Arabian investors will also be expected to spend big in the summer transfer window, fuelling fans expectations of success. But as Leicester City proved not so long ago, money doesn’t guarantee success.
