With UEFA’s most recent financial figures on European clubs’ finances showing that the monetary side of the game is deteriorating, and with expenditure on player wages up almost 10%, they have outlined the ‘Financial Fair Play’ rulings that must be adhered to by clubs or as UEFA President Michel Platini put it will “face the music.”
Under the new UEFA rules, clubs will face bans from European competition, beginning in the 2014-2015 season, if they spend more than their revenues in the three preceding years.
Explaining the new tenet, Platini said: “If a club doesn’t fall in line and follow the same rules as everyone else then it will be time to face the music.
“Certainly it is not something we want to see. Our objective is not to put clubs into financial difficulty.”
He continued: “Financial fair play is to help them escape from this devilish spiral and have a viable economic strategy in the long term.”
Almost by fate, while Platini and co were discussing the new guidelines, at their Carrington training ground Manchester City were unveiling their £27m striker Edin Dzeko, the latest addition to a playing squad assembled at huge expense by Sheikh Mansour since he bought the club in August 2008 and began a unprecedented spending spree that led to losses of £121m
This is because the majority of their money for transfers, wages and the general running of the club is coming from owner Sheikh Mansour, and is not being generated by revenues of the club; in terms of gate receipts, TV revenues and merchandising sales.
Platini also claims that Mansour had personally guaranteed him last year that City would abide by the rules, but Uefa insiders along with the majority of observers feel the club face a huge challenge.
The shocking reality is that 56% of the European top division clubs reported net losses in 2009, compared to 47% in 2008.
The Guardian reported last year almost three-quarters of Premier League clubs would fall foul of the new Uefa regulations, if they were applied tomorrow.
So what can be done in time? Tighten those belts.
Despite Manchester City being the richest club in the world and bitter rivals struggling with over £500m of debt, United would be allowed to continue to partake in European competition because of the money they generate and the profits made from various outlets so spending money isn’t necessarily the best way to go if you want to compete at the highest level. However, UEFA will give clubs a chance to balance their books because in the first two years clubs will be permitted to overspend by a total of €45m (£37.4m).
Over the following three seasons, the permitted losses will again be set at €45m over the entire period. That will then drop to €30m over three seasons, then €15m, then zero. This will give clubs like City who are currently spending beyond their means a chance to fall into line before being punished.
With wages of footballers constantly in the spotlight, it appears UEFA are also introducing what could be deemed as a salary cap to curb the inflated wages paid by clubs to keep their best players. At 249 clubs, more than 70% of turnover was spent on players’ wages and at 73 of those clubs more than 100% of all the club’s income went on player wages.
UEFA’s general secretary Gianni Infantino pointed to the success of Arsenal’s business model whereby more emphasis is put on a long-term investment in stadium infrastructure and youth development. Deterred gratification rather than immediate joy for fans as Arsenal fans may well tell you.
Infantino said: “A decade ago, Arsenal reported less income than Liverpool and Newcastle. In 2009, after a decade of investment, their income is more than double Newcastle and higher than Liverpool. It is possible for a club to come up with good management but it does it in a healthy way. That is what we want, long-term benefits.”
However, despite the new rules being welcomed by most, the pressure of being under constant review by UEFA and answering to footballing bodies about their finances has a lot of clubs running for the hills and there has been talk of a breakaway from UEFA from leading European clubs which could lead to the likes of Barcelona, Manchester United and Juventus competing in their own European club competition to rival UEFA’s Champions League.
There are also sceptics who believe there will always be a way around the rules which may yet change and some believe the existing order in which clubs are spending anxiously will also continue. But as it stands UEFA have set out their stall rather cogently for all to see and have made it clear that the kind of investment that once took Blackburn Rovers to a title and Fulham to the Europa League final will be impossible under their new system.
With the recent media allegations of FIFA officials not being too concerned with the state of the game, it is clear that UEFA are determined to change the game for the better and even out the playing field. Whether or not they will achieve their targets and the possible repercussions will most definitely shape the future of European football.
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