Clubs across Europe are gambling on the stringency of Financial Fair Play's enforcement, with several major teams betting on the side of prudence.With the exact stipulations and punishments murky, clubs are gambling on how stringently UEFA will enforce its Financial Fair Play regulations. Some, like the nouveau-riche Paris Saint-Germain or oil-powered Manchester City wager that enforcement will be lax, at least initially. Other clubs bet on heavy-handed ramifications and spent prudently, even miserly, this summer in anticipation.
The latter group might have cracked a smile this week. UEFA announced plans to strip – pending appeals – 23 clubs of prize money. That's one of four possible punishments outlined but never tied to specific financial misbehavior. The other three include limiting squad size in European competition, fines and exclusion.
The mechanism unfolds gradually, so that clubs have to tighten belts notch by notch until the 2013-14 season, when they must break even. UEFA has monitored clubs since the summer of 2011 as a bit of a dry run, with the finances of 2012 and 2013 counting against relaxed regulations.
Potentially, clubs could qualify for but sit out the 2014-15 Champions League and Europa League season. Even if it doesn't come to that – and UEFA will want to keep that ace up its sleeve initially – clubs face the loss of prize money (Europa League champ Atletico Madrid is one of the 23 set to lose out on last year's gratuity) and hefty fines.
Not all, but many clubs, especially traditionally and historically huge teams which have fallen on leaner times, have taken very keen notice.
Liverpool – a team eager to implement Brendan Rodgers' three-forward formation and which employs two recognizable strikers on the roster – reportedly couldn't/wouldn't rustle up the extra 1 million pounds needed to sign Clint Dempsey after very publicly pursuing him throughout summer. The joint-fourth-highest scorer in the Premier League last season joined Tottenham Hotspur, instead of the outfit with the EPL's worst shooting accuracy.
The Reds aren't broke. They're understandably gun-shy, having heaved over 35 million pounds of British currency in return for a pony-tailed mistake and another 20m on a winger who scored zero league goals and assisted zero league goals. But Fenway Sports Group scrounges together enough to fund the Boston Red Sox, one of MLB's economic heavyweights, so wilting bank statements don't account for the relatively timid summer. (I say timid, but Liverpool spent about 20 million pounds net, mostly on Fabio Borini and Joe Allen.)
"We are avowed proponents of UEFA's Financial Fair Play agenda that was this week reiterated by Mr [Michel] Platini – something we heartily applaud," owner John W. Henry said in an open letter to assuage fan concerns. "We must comply with Financial Fair Play guidelines that ensure spending is tied to income."
Each club may spend according to its means, meaning more revenue allows for more purchases. AC Milan took that to signal the demise of new money swooping in for mega-signings. So owner Silvio Berlusconi hawked his two biggest assets – Zlatan Ibrahimovic and Thiago Silva – to PSG in a deal that he claimed would save 150 million euros, including wages.
"We did not want to sell Thiago Silva or Ibrahimovic and turned down the first offer," Berlusconi told the official Milan channel. "We then thought about the Financial Fair Play, which would not have allowed the deal to go through next year, so we had to accept it with weeping hearts.
"The clubs that continue to spend a lot have owners who are outside the European system, the very rich from the Arab world or the Russian Federation. They will have to be part of the Financial Fair Play from next year, so they are investing more this year."
So Berlusconi cashed in on a deal that means Milan's "finances are secure for many years to come."
Next year will reveal if FFP curbs the most outlandish fees in soccer, but the former Italian prime minister correctly pinpointed the ones with money left in this financial climate: Qatari-owned PSG and gas-funded Zenit Saint Petersburg made the biggest signings of the summer.
With Spanish unemployment at nearly 25 percent, Barcelona spent suavely and Real Madrid brought in only one player. (Luka Modric cost 33m pounds, but still.)
"My club is prepared for this. Madrid has the history and the potential to keep the best players," Jose Mourinho said. "But the clubs who rely exclusively on the investments of their owners will not have it so easy."
The highest salary in the Serie A (formerly Ibrahimovic on 9m euros) dropped by a third, to 6m (Gianluigi Buffon, Daniele De Rossi and Wesley Sneijder). Milan trimmed its wages from 160m to 120m euros, though it still bears the highest payroll in Italy.
In England, even the most prodigal club of the past few seasons, Manchester City, tempered outlay this year to around 31m pounds net. (However, Roman Abromavic, the original sugar daddy, did find some extra suitcases full of crisp bills on his yacht and donated nearly 80m pounds toward new Chelsea players.)
Lyon built a dynasty in France on finances, winning seven Ligue 1s in a row, from 2001 to 2008. Now Jean-Michel Aulas is pushing high-earners like Cris, Hugo Loris, Kim Kallstrom and Aly Cissokho out the door and promoting youth. No one is bothering with trying to compete with PSG financially. Title rivals Lyon, Montpelier and Lille just hope Carlo Ancelotti will fail to make a coherent squad out of his collection of astronomical pay stubs.
Germany's wealthiest club, Bayern Munich, aggressively supports Financial Fair Play because it should help even the playing field in Europe, where financially-secure Bundesliga clubs have struggled to compete in recent years.
"We will build and grow from within, buy prudently and cleverly and never again waste resources on inflated transfer fees and unrealistic wages," Henry said, though it could have been any one of many owners.
Financial Fair Play has everyone gambling. Some just happen to be doubling down on financial prudence.
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