At their headquarters by the banks of Lake Geneva, UEFA recently spent a day outlining the progress of their Financial Fairplay (FFP) rules, arguably football’s most significant act of governance in living memory. The rules require clubs in UEFA competition to have limited their losses in the two previous financial years to a maximum of €45million, if that is covered by an owner. If there is no rich man to bankroll a club, the total losses in the 2012 and 2013 financial years can amount to only €5m.
That represents a genuine culture change; a final “wake-up call,” as UEFAs general-secretary, Gianni Infantino, put it, from the free-spending years. UEFA’s report, a collation of the 2009-10 accounts of Europe’s top-division clubs, showed that across a game still phenomenally popular and commercially booming, the clubs cannot help but spend too much on players’ wages, and recorded a total net loss of €1.6billion.
A multi-coloured blizzard of graphs went on to illustrate the depth of these losses. Income across the top leagues has continued to grow to a new record every year – in 2010 the figure was €12.8bn, up by €800m from 2009.
Yet total costs, of which players’ wages are still by far the biggest element, increased, by over €1bn to €14.4bn. The top-division clubs’ losses deepened by almost €1bn in just two years since 2008, when the loss was €649m, to 2010’s glaring €1.6bn.
UEFA presented all this to demonstrate the need for a change; to show, Infantino said, that across European football there was “a potential crisis, like the crisis in the European economy generally”.
It was striking to see how assertively UEFA outlined this case, and its stated determination to enforce them firmly, with a range of sanctions, up to the most serious one of banning a club from taking part in the Champions or Europa Leagues.
Alasdair Bell, UEFA’s head of legal affairs, said that, having invested so much of the organisation’s time and reputation on introducing these rules, they will have “no credibility” if they do not enforce them with sanctions substantial enough to make clubs comply. There has been talk that clubs hit with sanctions will challenge the rules legally, arguing it is a restraint of trade for UEFA to prevent them spending and investing money as they wish.
Bell said he had spent a great deal of time trying to ensure that the rules are framed in a way which gives them the best chance of being upheld as legal. Principally UEFA believes that because the objectives of the rules are positive and constructive – that they “encourage responsible spending for the long-term benefit of football, protect clubs’ creditors, improve the economic and financial capability of clubs, increasing their transparency and credibility” – the EU will be inclined to uphold them as reasonable.
From an English perspective, where the combination of Premier League financial might and general anti-European sentiment has depicted the rules as a Michel Platini-inspired attack, it was enlightening to hear Infantino outline the positive vision behind them. The rules allow clubs, and their owners, to spend unlimited amounts on stadiums, youth developmentand infrastructure.
The idea is to move towards more stable planning, rather than lurch between transfer windows, desperately seeking new rich buyers to scoop up losses. As for the Premier League, in which competition has arrived to challenge Manchester United’s dominance only because of the sums sunk in by the oil-rich owners of Chelsea and Manchester City, UEFA argues that is not a sustainable way to make a league competitive.
How UEFA can do that – rather than find that their rules cement the dominance of the clubs making the most money – may be the greatest challenge.
By David Conn
