By Kris Voakes
It was brought into football amid massive overspending by billionaire club owners and the debt-ridden downfalls of some of the sport’s most cherished outfits, yet Uefa’s Financial Fair Play (FFP) model has been the centre of much controversy over recent weeks.
Arsenal manager Arsene Wenger claimed Real Madrid’s mega-money pursuit of Gareth Bale "makes a joke" of FFP, while others in the game have pointed to the huge outlays of the likes of Manchester City, Monaco and Paris Saint-Germain this summer as further proof that the system is flawed.
|UEFA WARNS CLUBS OVER FFP
"Big clubs as well as small clubs, the rules are there," Infantino told BBC Radio 5 Live.
"A year ago, we warned that this is the last wake-up call for the clubs and that the rules have teeth.
"The clubs know the rules. If they haven't generated enough revenue to perform these transfers, then there will be sanctions - sanctions which could be a warning or a fine or a restriction on registering new players or, finally, an exclusion.
"The Financial Fair Play rules have been introduced and implemented not to punish clubs but to help the clubs."
"We’re seeing evidence that clubs are starting to take FFP seriously and beginning to change their behaviour in response to the rules," Goal was told by Trevor Birch, a partner at BDO accountancy firm and former chief executive at Chelsea and Everton. "Our most recent survey of football club finance directors found that 83 per cent of clubs are planning to spend less or the same on payroll costs this coming season; of these, 42% revealed that their decision was influenced by FFP, and FFP was a factor for 86% of Premier League and 77% of Championship teams.
"It’s tempting to see high-profile transfers like those made by Man City, PSG and Monaco as examples of clubs flouting FFP, but the reality is considerably more complicated. For example, clubs typically account for a signing over the life of the contract, so the financial impact is spread over several years. Plus clubs are increasingly looking to offload players to make way for their marquee signings – look at Tevez leaving Man City or Higuain going from Madrid."
Uefa general secretary Gianni Infantino also insists that the positives of the system are already in evidence.
"FFP is working very well," claimed Infantino to AFP. "It has been in place for a while and has become the bread and butter of everyone in football. People in the game realise that we've got to do something to stop the spiral of losses. Payment arrears have already gone down by 40% between 2011 and 2012."
There was originally a common conception that it was due to the introduction of free-spending owners at clubs like Manchester City and Chelsea that Uefa had been moved to act, but Infantino is keen to stress that that was never the motivation.
"The FFP rules have been introduced and implemented not to punish the clubs, but to help the clubs. We said a year ago that this was the last wake-up call for clubs and that the rules have teeth, and the clubs are into it. They are implementing the rules not because there are sanctions, but because at the end of the day it is better for them as well to have a sustainable business model.
"Every club is free to act according to the revenues that it generates. The system has to be sound. Insofar as a club is able to make transfers and pay salaries while respecting the rules there's no issue. If they have not generated enough revenue to be able to perform these transfers then there could be sanctions, sanctions which can be anything from a warning to a fine, to a restriction on registering new or current players, and finally an exclusion."
However, Faye Bargery, senior associate and sports finance specialist at leading law firm Thomas Eggar LLP, is concerned that FFP may have significant negative effects for football.
"The various concessions in the rules, together with big clubs extracting as much money out of commercial opportunities as possible, may mean that the rules impact on the smaller clubs more than those they were designed to restrict," Bargery told Goal.
| TRANSFER TALK
|9/4||Chelsea or Manchester City are 9/4 favourites with William Hill to win the Premier League
"It seems the FFP rules may turn the football world into an even more uneven playing field, with the smaller clubs – with their restricted commercial income – struggling to compete against bigger clubs and their huge commercial potential."
So while Malaga, Rapid Bucharest and a number of other clubs sit out this year’s European competitions as a result of FFP breaches, Man City, PSG, Real Madrid and Monaco continue to spend heavily, knowing that their revenues over the length of their stars' contracts should be enough to cover their massive outlays. Yet Birch believes it is time to back the powers-that-be in their drive to rid the game of its previous boom and bust sensibilities.
"We have to give Uefa the benefit of the doubt and believe their actions were driven by the fact that the existence of so many clubs throughout Europe was at risk because of the losses they were incurring," says Birch. "The need to ensure the future sustainability of the football business drove the process as much as sporting equality and integrity."
This could, in time, force more clubs to look for creative ways to increase their incomes, whether that be through commercial avenues or by increasing ticket prices, in order to challenge at the top. However, the early signs are that the very threat of sanctions are forcing some notable names to fall in line with the new rules until such time as revenues are increased.
And, for now at least, it is the giants of the game with the biggest commercial pulling power who will reap the rewards of a system which puts the emphasis on spending only what you have.
Follow Kris Voakes on