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Manchester City

Financial Fair Play: The bane of modern football

Part One; The Problems

For a minute lets put aside our feelings about the ways in which the influx of money has the potential to ruin the game we love and take a look at how Financial Fair Play regulations introduced by UEFA could be the real killer to any clubs who are not part of European footballs high table.

The issue has been raised again recently with Vincent Kompany criticising the rules in a recent interview with the Manchester Evening News, ‘for me, it is protecting those few clubs who were already geared up to be successful.” He Said, ”It’s the clubs who were already able to generate the most revenue that wanted FFP the most. So I just look at it in terms of the established order protecting themselves.’’

I completely agree with him.

At this point I should make you aware that I am a Manchester City fan, and watched my team stumble its way from one crisis to the next with no financial stability in the 90’s and early 2000’s only to hit the ownership jackpot in September 2008. However my problem isn’t that my club is now restricted by FFP and are unable to use the seemingly never-ending financial power at our owner’s disposal.

I know how extravagant our spending has been at times, but since the takeover and subsequent investment I have witnessed matches, players and trophy presentations I never thought I would, and the thought of another set of supporters never having the opportunity to experience what we as a fan base have over the past few years doesn’t sit well with me.

That’s one my issues.

I feel sorry for fans of clubs outside the top six. Only consistent challengers such as Liverpool and Spurs have a chance of making the top four, as Liverpool did last year and should they miss out on Champions League revenue for a few years, they could fall a long way behind the income streams being generated by the current top four clubs.

Is it any wonder why big clubs, such as Aston Villa are struggling to find investment? Why would a potential owner, who is not a fan, want to buy a football club if the potential to challenge for trophies and ultimately make more money has been withdrawn? UEFA has ensured that aside from the elite, every club now has an achievement ceiling.

Don’t think for a second I’m suggesting clubs spend with reckless abandonment in order to catch up, not that these current rules would allow it. I’ve watched with great annoyance as clubs like Portsmouth and Leeds United have paid heavy prices for the failures of their owners. Incidentally the year Leeds made the semi finals of the Champions League they could have won the competition and enjoyed all the financial spoils that it brings and still would have only just broken even, as was the mess they found themselves in.

Another issue is the way in which it has been set up and deployed.

Michel Platini admitted that several chairman and owners contacted him asking for protection from the nouveau riche clubs like PSG and City. Bayern Munich, Chelsea, Inter and AC Milan all asked for a change of regulations to ensure their standings in European football. Ironically the very rules that were put in place to reign in the spending of City and PSG will now protect them in the future. Vice versa established clubs such as Inter and AC Milan, who have fallen out of contention for European football over the past few years, will now have to play catch-up and risk the FFP sanctions.

FFP was in part set up by Jean-Luc Dehaene, a man who was head of a bank when it required a £5.18 Billion bailout, (an ironic joke by Platini perhaps?) and been put in place to improve the overall financial health of European football. Clubs now need to ensure that they comply with break-even requirements, which in principle means that they can only spend what they earn.

No problems there, football has been living dangerously for quite some time, with a reported 20% of clubs participating in European competition in serious financial difficulty.

However, Real Madrid and Manchester United currently occupy first and second place on Deloitte’s money list in terms of revenue. They are also heavily in debt, with Real Madrid’s bank balance reportedly hovering around £500 million in the red. Yet this is deemed acceptable by UEFA.

Can anyone explain to me how Manchester City’s financial model is less stable than that?

Back to my original point. By putting such restrictions in place, it ensures that those clubs with the biggest turnovers will keep their place atop their respective leagues.

Lets take European footballs top five divisions for example. In England, Manchester City’s current form is poor, but they still sit four points clear of Liverpool and should they win the battle for the all-important Champions League spot, the four clubs with the biggest revenues will occupy the top four positions.

If Bayern Munich take advantage of the 10-point lead they currently enjoy at the top of the Bundesliga they will make it three titles in a row. It will also be their 11th title in the past 17 seasons. Bayern’s turnover is almost twice that of Borussia Dortmund, the country’s next biggest club.

Athletico Madrid have enjoyed success over the previous few years, winning La Liga and making it to the Champions League final. However they currently lie 9 points behind leaders Barcelona and 7 behind Real Madrid, whose turnover is over three times that of Athletico’s.

Juventus are easily the richest club in Italy and have won the previous three Serie A titles. They are currently 12 points clear at the top. In fact the only league of the five biggest that may not be won by one of the richest clubs could be France, where a rejuvenated Lyon are just a point behind leaders PSG.

I’m a football fan first and foremost and welcome competition. FFP has already started to form the establish elite. It is time these regulations were looked at with a fresh approach.

I will leave the final words of part one to Vincent Kompany; “Just because a club is part of the established order doesn’t mean they should be guaranteed success forever.