FFP in its present form is untenable – A Premier League assessment

Football is the most marketable sport out there at the moment and it has been for a while now.

In the Premier League, leading clubs and Manchester United in particular had recognised the ability of the club to attract supporters, sponsors and investors alike by being successful on the pitch.

With the help of a good business model, the club has now become the undisputed financial super-power in England in terms of a football club.

During the 90s and at the turn of the millennia, United under Sir Alex were breaking the British transfer record over and over again. However, that was halted after Roman Abramovich’s took over at Chelsea.

Up until that moment, most top flights clubs in England were held by several shareholders and the concept of absolute ownership of a club was not in vogue in England.

 

However, the frantic spending which ensued at Stamford Bridge served as an eye opener for prospective buyers at new clubs as well as existing owners who had to come up with new business models in order to still compete at the very top level.

Holding on to their best players had become extremely important now that players wanted to change their tops for money.

While there was a certain sense of Euphoria when Chelsea were bought by a Russian billionaire and the spending that ensued, the problem that arose in this country was the fact that up until that moment, clubs were run on the money that they generated – as a normal business would.

With Abramovich and later the Arab owners of Manchester City, the playing field was modified to a huge degree.

However, the men at both these clubs wanted success on the pitch. The players that were bought under their regimes and the success that these players had brought to the clubs point to a certain fact.

In plain and simple terms, both these owners threw a lot of money on the right players at the right time. The players fitted a system and with a good manager, they were able to deliver the success which their owner had wanted to experience.

Following financial fair play, the spending of all clubs who play in Europe have now been fixed. Clubs cannot spend more than what they make as of now, which was seen as a handicap for clubs which had owners who could dip into their personal fortunes to bankroll the club.

However, as some of the brightest minds in sports journalism have expounded, the handicap is a much bigger one for the smaller clubs who were not playing in the Champions League and aspire to get there.

Let us look at Southampton under Ronald Koeman. The club had been taken over by their current owners for a sum of under 35 million pounds less than half a decade ago.

The club were forced to sell some of their best performers from last season because they were not playing Champions League football and also because the club could not afford to pay their star players astronomical wages.

However, after a great start to the season, the Saints are looking at a possible appearance in the Champions League next season. Their owner will not be able to spend an awful lot of money to add to their squad though, should they make it because spending more than what the club is generating is prohibited by FFP.

Even if the club’s owners were to dip into their personal fortunes in order to fund a spending spree, it would draw action from UEFA.

In a way, it can be argued that Sheikh Mansour’s takeover of Manchester City was perfectly timed. The man has invested an astronomical sum of money on new players prior to this summer and he had also spent a princely sum of 200 million pounds on a state of the art training facility for his club before FFP kicked in.

 

Sure, City did pay a fine for FFP breaches in the summer and their Champions League squad size was cut.

However, if one were to look at the bigger picture, the club now boasts the best training facility in England, has won two Premier League titles since the takeover, and boasts some of the best players in world football on their roster.

Would this have been possible if FFP had kicked in prior to the Sheikh’s takeover? I guess not.

Financial Fair Play restricts teams from spending money that their owners can pump in personally by dipping into their personal fortunes. This is something that needs to be looked into if the men who run football are serious about their concerns.

It would seem that the primary concerns of the UEFA president and his counterpart at FIFA is that football clubs are run in a debt free manner which would serve to minimise risks.

As things stand, a club such as Manchester United, which is heavily in debt but generates record revenues by virtue of their commercial arms, can still spend more than the rest of the league.

If a club which has record debts to deal with is allowed to spend hundreds of millions on new players in the transfer window, what is wrong with letting wealthy owners spend out of their own pockets to build the team of their dreams? After all, these wealthy owners do not create any debt.

The current FFP model is aimed to favour the big teams in Europe, the teams which have experienced success in European competition and have a decent financial structure in place.

The system is a bane for clubs which are looking to rise from nothingness to become super powers. Hence, it is pretty clear that the present model of the financial fair play is greatly flawed.

The aim for football’s administrators should be to promote competition while removing debts and minimise risks. Does the current model achieve this? Well, no.

Author Details

Thomas Nielsen

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