What do the changes in FFP mean for England's top five clubs?

What do the changes in FFP mean for England's top five clubs?

Since the inception of Financial Fair Play in 2011, it has garnered a number of supporters and critics. In a radio interview earlier this week Michel Platini stated that while he felt FFP was working well – it would be eased in the summer. At first glance, it appears that FFP has succeeded in its aim of reducing the net financial losses for European clubs – as the losses peaked at 1.7bn euros in 2011 and have sunk to around 400m euros in 2014. However, critics argue that there are issues that need addressing with regards to structure, fairness, and increase competitiveness.

The main aim of FFP is to see clubs that are part of UEFA operate within their means and keep in accordance with the ‘break-even requirement’. It also aimed to maintain competition and stability across Europe as well as a more even market. On the face of it at least, FFP has achieved this as clubs can no longer spend huge sums of money as freely as they once could – and net financial losses have dropped significantly. However, many critics argue that taking away the free-will style of spending and investment has led to a new form of unfairness that will restrict sides wishing to break into the European footballing elite. In an attempt by those to become Champion’s League contenders and stronger sides within their own divisions many sides have encountered the sanctioning power of UEFA. For example, PSG and Manchester City were fined £49m, the likes of Nottingham Forest, Leeds, and Blackburn given transfer embargos. In a more extreme case, Malaga were banned from European competition following breaching the rules of FFP.

The current format of FFP has come under heavy criticism from many areas of the game. For example, many have argued that it is too inflexible and only truly benefits those that are in the very privileged position of sitting at the very top of the games financial pyramid –and reaping all the commercial and broadcasting revenues that come with it. This was illustrated by Jose Mourinho who lamented the point that FFP made it “easier for Manchester United”, but in typical Jose fashion; the self-declared Special One stated that it was “more fun” playing with the restrictions. This is turn links to a further criticism which points out that stopping clubs from spending beyond their means strengthens the position of teams at the top of the game as it means that owners of smaller clubs attempting to compete with the likes of Real Madrid and Manchester United cannot as they are unable to speculate with their own money. This means that the smaller clubs cannot compete for the best players in the world against the established elite.  This has caused a great deal of concern for sides such as PSG and Manchester City who despite their enormous financial backing; cannot spend as freely as they would like and this means that they have yet to fully break what would be considered Europe’s elite clubs. Furthermore, clubs such as AC Milan would not be a particularly appealing investment for foreign owners as opposed to in previous years where a club could be pushed into Europe’s elite in a very short period of investment – investors would have to build clubs up gradually through years of measured investment.

So what does the easing of the rules of Financial Fair Play mean? Well, one possibility could be further struggles for sides that attempt to adopt an economically stable and sustainable approach to footballing finance such as Liverpool and Arsenal. Liverpool owner John W Henry and the Fenway Sports Group would have hoped for stricter rules surrounding FFP and have previously stated that “the biggest challenge for us has been the ignoring of Financial Fair Play”. After falling out of the Champion’s League positions after just one season with talismanic captain Steven Gerrard heading stateside this summer and it looking increasingly unlikely that Raheem Sterling will be a Liverpool player next season – it could spell an uphill battle for the prudent Merseyside outfit to return to past glories. Furthermore, Arsene Wenger has openly criticised the fashion in which the likes of Chelsea and Manchester City have gone about their business. However, despite the groans coming from some areas of the English game – it is from the rest of Europe where a lot of the pressure for these changes has emerged. The emergence of the new £5.14bn TV deal struck between media companies and the Premier League would have sounded alarm bells across Europe as this lucrative TV deal would allow for English sides to spend more than their European counterparts as a result of the increased broadcast revenue streams. This was also alluded to by Wenger, who stated that he felt the new TV deal “has pushed some clubs in Europe to want this [FFP] to be more flexible for them so they can compete better”. However, for clubs that are slightly more aggressive with their spending the easing of FFP could spell good news. Juventus have dominated Serie A in recent years, but the proposed changes could lead to increased spending at sides such as Roma and Inter Milan as they now have the leeway to loosen the purse-strings should they wish.

Football is an ever-changing environment, so it is of vital importance that changes to FFP and other policies within football adapt to the modern game. As previously mentioned, there is a genuine fear from many within the game that the status quo which is so enjoyed by the football’s current elite may never be disturbed and that in my opinion clearly doesn’t suit one of the main aims of FFP which was to allow for more competition and market stimulation. It is clear that it is going to be very complicated for UEFA to find the correct balance that not only presents an equal playing field for clubs across Europe, but an environment where clubs can be ambitious and breaking into the higher regions of the game is not simply an unattainable goal. Although, with a number of legal cases being spearheaded against UEFA by Belgian lawyer Jean-Louis Dupont; the man who famously forced FIFA into overhauling its transfer system in 1995 with the introduction of the Bosman Ruling – these changes may be imminent. However, it is integral that UEFA figure out the solution to this particular issue in order for FFP to be remembered as a fair and balanced ruling – as opposed to a mechanism that caused more controversy than regulation.

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