Financial Fair Play (FFP)

(Getty)

 

How exactly will Financial Fair Play affect clubs? What exactly is Financial Fair Play? (FPP). TKTG has two articles which explains how FPP will work and how it affects your club.

The Swiss Ramble is an excellent source for all things financial in the football world. He looks in detail at FPP and clubs such as City, Chelsea, Arsenal, United, Liverpool and others too see the positive or negative impact of these rule changes.

Key Points:

At its simplest FFP is trying to encourage clubs to live within their means, i.e. not spend more money than they earn.

 All that UEFA are saying is that clubs will not be allowed to compete in their competitions (Champions League and Europa League) if they do not break-even, but clubs making losses could continue to compete in their domestic league. The first sanctions for clubs not fulfilling the break-even requirement can be taken during the 2013/14 season and the first possible exclusions relating to break-even breaches would be for 2014/15 season.

 The only club (from the top 6 in England) that looks vulnerable is Manchester City, whose loss for FFP is still a frightening £142 million.

 – (also) “FFP hurts Italy. There will no longer be patrons that can intervene. Until now people like Berlusconi and Moratti would be able to support us, but with the fair play it will no longer be possible.”

 – Revenue can be increased by various clubs but “UEFA tackle such deals by assessing whether they represent “fair value” and then deducting any excess (not the entire agreement) from the club’s income for the purposes of the FFP break-even calculation.

 Although English clubs have high wage bills, they are not actually the highest in Europe, an “honour” that belongs to Barcelona and Real Madrid

 – While the majority of clubs are in favour of FFP’s attempts to tackle football’s economic woes, there is a concern that far from making football fairer, all this initiative will achieve is to make permanent the domination of the existing big clubs: survival of the fattest, if you will. The argument goes that those clubs that already enjoy large revenue (like Real Madrid, Barcelona, Manchester United and Bayern Munich) will continue to flourish, while any challengers will no longer be able to spend big in a bid to catch up.

 Some have questioned whether the regulators will have the bite to go with their bark. Expelling teams from the Champions League works fine on paper, but would UEFA really risk damaging their main cash cow? If, for example, they banned Manchester City, Milan, Inter, PSG and Juventus, they would risk killing the goose that lays their golden egg and increase the prospects of a European Super League.

 ..but, as we have seen, they have cleverly built a fair bit of leeway into their regulations (and sanctions), so the vast majority of clubs should be just fine with FFP, particularly those in England.

It is an extremely long and complicated article but defiantly worth reading if you are interested in the understanding of Financial Fair Play – a long and complicated topic!

(Getty)

For a shorter read we recommend Gabriele Marcotti in ESPN.

“ There is still plenty of confusion around FFP in some quarters. Some of it can be cleared up rather easily; some of it requires some conjecture and guesswork. Here’s my attempt to shed some light.”

He answers questions such as

What’s to stop a wealthy owner from simply doing a bogus deal between one of his other companies and his club to inflate revenue?      

And the fact that Zenit is sponsored by the Russian conglomerate Gazprom, which also happens to be a major UEFA sponsor, or the fact that PSG is French, just like Platini, means it’ll get an easier ride from UEFA?      

OK, but surely Platini won’t have the courage of telling huge clubs with huge fan bases like City or Chelsea or PSG they can’t play in the Champions League, will he? I mean, the sponsors and broadcasters who paid good money for the rights would never stand for it, would they

Read “ Is Financial Fair Play Working?”

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4 Comments on “Financial Fair Play (FFP)”

  1. jobloggsexplains September 12, 2012 at 8:32 pm #

    I think their AIM was all with good intentions in mind but the outcome I fear will either force the hand of the top teams to break away into their own league or (which is what I think will happen) absolutely nothing will happen. The clubs will either find a way around the rules or rules will be lightened to allow all teams to compete anyway which begs the question why in the first place.

  2. Asfand September 13, 2012 at 5:37 pm #

    Your assessment is probably spot on. UEFA and the top clubs will definitely clash sooner or later. Meanwhile, Platini is certainly trying to flex his muscles through the sanctioning of teams like Athletic Madrid, Malaga and Fenerbache and are even considering suspending players in the future:

    http://soccernet.espn.go.com/news/story/_/id/1155932/financial-fair-play:-uefa-%27could-suspend-players%27?cc=4716

Trackbacks/Pingbacks

  1. Chelsea back in the black in time for FFP | TOKNOWTHEGAME.COM - November 11, 2012

    […] reading about Chelsea’s current financial situation at The Guardian. With Financial Fair Play (FFP) coming in soon, will this simple approach where debt is turned into equity serve to bail out the […]

  2. Man City halve their losses | TOKNOWTHEGAME.COM - December 15, 2012

    […] How exactly will Financial Fair Play affect clubs? What exactly is Financial Fair Play (FFP)? TKTG has covered these very questions, in our earlier article on the subject. […]

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