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The next step for Financial Fair Play

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It is fact that the gap between the “haves” and “have nots” in European football grows evermore larger. Last season in the English Premier League proved this adroitly when Manchester City midfielder Yaya Toure reportedly earned more per week than the entire Blackpool squad.

The same situation manifests itself in every league. Success breeds success: as results improve, sponsor and prize dollars (generally) increase. This allows clubs to spend more on improving their squad. Or it does so in theory. In practice, beneficiaries who see clubs as expensive playthings dump large amounts of money into teams according to their means: for some, a la Everton chairman Bill Kenwright. Others, like Man City owner Sheikh Mansour bin Zayed Al Nahyan, have deposited sums of money usually seen in the demands of Bond villains.

In order to make sure that all leagues don’t go the way of Scotland – or Spain – UEFA instituted their Financial Fair Play policy, which over the next two seasons will be enforced. This is ostensibly to cut down on the amount of oligarchs seeing their clubs as desirable holes in their pocket and cap clubs spending at a percentage of their incomings.

Sheikh Mansour Man City 200x120 The next step for Financial Fair PlayBut by having his airline Emirates Air sponsor City’s ground, the City of Manchester Stadium, Sheikh Mansour seems to have successfully circumvented these guidelines. That the deal was struck isn’t an issue but the figures involved – reportedly ₤400 million pounds – dwarf those spent on a similar sponsorship deal for Arsenal’s home stadium seven years ago. That sum covers the transfer fees spent on Carlos Tevez, Sergio Aguero, Yaya Toure, Joleon Lescott, Gareth Barry, Nigel de Jong, Adam Johnson, Edin Dzeko, David Silva, Vincent Kompany, Mario Balotelli, Kolo Toure, James Milner and Alexander Kolarov – and have ₤125 million in change.

A salary cap has again been mooted but is obviously unworkable given the implications of a continent-wide application. Apparently Financial Fair Play is a step in the right direction, but a step in the right direction at best. If equalisation is a process the football world is serious about then further steps must be taken. roman abramovich chelsea 146x200 The next step for Financial Fair Play

Means-testing billionaire team owners – there’s a phrase you don’t hear every day – would certainly equal out the proverbial playing field (say, cap owners’ private means at ₤1 billion), but would be as, if not more, unworkable as any proposed salary cap. While it would mean clubs would rely on business and football sense rather than just their position in the established order and well-disposed billionaires, it would prove very difficult to enforce. More problematically, it would also raise questions of what to do clubs already in the hands of the megawealthy.

Thus, the only way to strengthen these laws would be to investigate every sponsorship deal over a certain limit – say €1 million, policed by the individual leagues and required for registration of a team. Such deals – where a benefactor or his/her family simply reach into their pocket again as in this instance – would be judged invalid and clubs would risk point deductions. This way clubs could leverage their business sense and connections without actually receiving what amounts to donations.

This process, though it would take advanced forensic accountancy, wouldn’t undermine any established order and would force clubs to be more accountable for their money. As football has already gone the way of business, it makes sense to nudge it further along that road.

Matthew Wood contributes regularly to Soccerlens.  You can find more of his analysis and commentary at Balanced Sports or follow him on Twitter @balanced_sports

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Comments (23)

  1. The sponsorship deal is with Etihad not Emirates!.. Also this deal goes far far beyond Arsenal’s stadium naming rights and covers a huge area of East Manchester which will be know as the Etihad campus. The owners should be applauded for their willingness to pump a billion pounds of investment into this deprived part of Manchester…
    Blue Moony

  2. Very little research effort here I’m afraid. And the proposal to investigate sponsorship gets us nowhere. What the game needs is a debate about what its goals and objectives are in terms of social,economic,and environmental impact. Then work down from there. Everything so far is a pure knee jerk reaction to adding a few zeros to the system we have had since the game turned professional many years ago.

    • Excellent proposed framework. Well targeted. That’s exactly what the game needs. Fully agree.

  3. Financial fairplay ?
    Some sort of socialist utopia far beyond what is realistic or achieveable on Planet Earth.
    At least it gives some sort of living to people like Mathew Wood with a platform to expand thier barmier ideas on the nonsense.
    Suggest he comments on why a sponser will spend £40 million on a training bib and not on sly badly researched comments about Gods own Football club.

  4. Oh dear. Where to begin..?

    “Thus, the only way to strengthen these laws would be to investigate every sponsorship deal over a certain limit” – UEFA are already doing this.

    “Financial Fair Play is a step in the right direction… If equalisation is a process the football world is serious about then further steps must be taken.” – FFP = no chance for anyone to catch the top clubs. the very antithesis of your “equalisation” desire.

    Your article is at least a decade too late – City are a response to horrific financial disparity, not the cause of it. For that, thank the so-called big 4 and the G20.

  5. I wish people would get their facts right.

    1) Sheikh Mansour has no connection with Etihad. He’s not a shareholder nor is he on their board of executiuve or non-executive directors. Two of his half-brothers are but he has no control over Etihad’s affairs.

    2) The rules on reporting realted party transactions already exist and are not new to FFP. If City’s advisors don’t believe it’s a related party transaction and their auditors agree then UEFA can’t do anything.

    3) The Etihad deal is for shirts, stadium and the 80 acres near the ground that will comprise the Etihad campus. The deal is almost certainly hightly structured both on performance and over time so it’s going to come in at much less than £40m in the first few years. The going rate for shirt sponsorship is currently around £20m and Arsenal did a very poor deal over The Emirates. Similar stadiums in the US are attracting £10m per year.

  6. £400m – major investment in the community as well as the club. UEFA should take a look at United’s £40m training kit deal – for me this is more fabrication than City’s deal.

  7. You can see by the way you open what you’re all about! Why not say Ferdinand, Giggs, Vidic or Rooney earn more than the whole Blackpool squad? Because you’re lining City up for the usual dig.

    The £400m figure is not even know for a start but even if it was it would not ‘dwarf’ Arsenal’s deal as it is in part kit sponsorship and land development so my friend you’re talking what is known in some circles as bolloxks.

    ‘In order to make sure that all leagues don’t go the way of Scotland – or Spain – UEFA instituted their Financial Fair Play policy’
    What are you waffling on about. Do you think by making sure the top few teams in every country get loads of money that this is fair? The only thing that would bring real FFP is spreading the huge sums of money out a bit more evenly rather than dumping it all on the usual teams who just get stronger and stronger just like in Scotland and Spain doh.

  8. Another anti-City article by Matthew Wood.
    If you had done some research this article would never have been written.

  9. Mr Wood,

    once again you snipe without facts, and of course all the above posters have put you straight on most points – to address all your errors would take hours to do completely.

    Please read this from Sporting Intelligence, which also acknowledges Swissramble as a fine source of real football analysis regarding the Etihad sponsorship deal –

    http://www.sportingintelligence.com/2011/08/22/why-manchester-city%E2%80%99s-alleged-financial-fair-play-%E2%80%98dodge%E2%80%99-is-not-actually-dodgy-at-all-and-might-even-be-an-undervaluation-of-their-worth-220802/

    If you really want a fairer playing field, then you would be lobbying to scrap all financial rewards paid to teams for finishing places in the premiership – i.e. if you finish top, you get paid exactly the same as the club who finishes bottom – therefore success would not allow you to strengthen year on year, widening the gap.
    This would also have to appply to European competitions too, so the only money clubs could generate would be through ticket sales, merchandising and sponsorship.
    Of course big teams would still tend to dominate, but at least smaller teams would stand more than a snowball in hell’s chance of actually competing.
    If you think the Premiership has not gone the same way as Scottish and Spanish football you are sorely deluded – Chelsea and ManU have had it sown up for years, with the occasional cameo appearance from the Arsenal.
    But I suspect you don’t want real financial and sporting parity at all do you? You just want to keep your team in the cosy cartel rudely smashed by the likes of City and Chelsea – I guess you’re a Gooner aren’t you? Sore about becoming City’s feeder club, just like Southampton are feeder club to Arsenal – can you see the hypocrisy, or do we have to suffer more of your bile in the future?

  10. Apologies,

    should have done some research myself, according to the Soccerlens link on your name, we have –

    “Thirty-something. United. Context. Mostly.”

    Bafflingly vague, but I now take it you’re a Manchester United fan, so all that stuff I wrote about Arsenal being City’s feeder club still stands, but makes you no less of an example of a fan desperately trying to consolidate your club’s position in the face of intense rivalry – which as a sports writer is incredibly unprofessional.

    How a ManU fan can have the brass neck to complain about financial inequality is beyond me, they are the very embodiment of business dominating football over the last twenty odd years, even their own fans became sickened by the way their club bullies and steamrolled over allcomers – hence FC United of Manchester, and the Green and Gold movement.
    Try writing a balanced article about this aspect of your beloved reds, then we might have some respect for you.

  11. Anyone who says Uniteds training kit sponsorship deal needs examined… needs their own head examined, DHL are already a partner of United and so they know the value of what even training kit sponsorship will do for their business. United earn their money organically, with business savvy and using their brand wisely.

    DHL will get alot more out of that deal in the long run than United will yet Etihad are just a business frittering away money on a team that couldnt even sell out their ticket allocation for the community shield at wembly (doesnt sound like a wise investment for exposure does it, campus rights or no campus rights,) Etihad will be getting nothing from that deal therefore it was purely to give Man City a financial advantage against other teams… not that hard to think rationally is it?

  12. First of all, please let me apologise for the factual errors in the article – I wrote Emirates instead of Etihad. That is incorrect and brain-fart on my behalf.

    And without wanting to sound defensive (and even though it will probably appear that way) – did I mention that Sheikh Mansour owned the airline in question? Or that such a deal was illegal? My premise is aimed at further investigation of such deals in case there is a connection

    http://www.independent.co.uk/sport/football/premier-league/uefa-to-investigate-manchester-city-over-etihad-sponsorship-deal-2338555.html

    I’ve also read and enjoyed the commentary on Sporting Intelligence which says that City’s Etihad deal may even be a bargain. The key word in this article, though excellent, is “may”.

    As regards anti-City bias? The fact is City are, for better or worse, the club now most associated with ready cash (though Chelsea also has a strong claim). And the organization/community who profits most from this first-of-its-kind/out-of-the-ordinary sponsorship deal.

    Believe it or not, this article wasn’t set out as a “dig” at City, just comment that deals like theirs (out-of-the-ordinary/visionary/etc) should be investigated because of their unusual nature.

  13. Dodging my point I fear –

    “If you really want a fairer playing field, then you would be lobbying to scrap all financial rewards paid to teams for finishing places in the Premiership – i.e. if you finish top, you get paid exactly the same as the club who finishes bottom – therefore success would not allow you to strengthen year on year, widening the gap.
    This would also have to appply to European competitions too, so the only money clubs could generate would be through ticket sales, merchandising and sponsorship.”

    Do you agree Matt?

    “Megawealthy” owners are not the problem in football, in fact they are probably what stands between many clubs and insolvency in this economic climate.

    Sheikh Mansour, Roman Abramovich et al are personally injecting billions of pounds of fresh capital into football, whereas bad owners, like the Glazers, are milking their businesses to pay off their own debts.

    The knock on effect of the money City and Chelsea spend keeps clubs like Everton afloat, who in turn spend the money on lower tier players, and so on – this is only good for football.

    FFP is muddled and frankly deliberately designed to try and maintain the European Elite’s status quo, and all fair minded fans should hope it gets scrapped as hastily as it was conceived, which may well happen as City managed to get into the Champions league just in time, thus rendering the point of the laws redundant.
    Remember, FFP was designed specifically to keep City, and Chelsea, in their “place”, by English football haters Platini and Blatter – crooked fraudsters who don’t really care about competition. Not heard anything from them about Paris St Germain, but of course they’re French, and so that’s Ok then I suppose.
    Fifa should be encouraging wealthy business people into club ownership, not fly-by-night chancers looking for a quick buck – this is basic business principles, why should football be the only business model to deviate from these principles?

  14. It’s Grim Oop North

    You fail to recognise the fact that Man City and Chelseas spending has made the value of even mediocre players skyrocket in the last few years, this has a knock on effect on clubs like Everton who now cant afford to buy ANY players at all, which is what is actually happening now. Furthermore, clubs like Man City (for example) stockpile players, not letting them go to other rival clubs since can sell their players to whomever they wish and at whatever price, which would never happen under normal circumstances which gives them a further unfair advantage over other clubs.

    Malaga, PSG and Anzi (who have signed Etoo in a ludicrous deal, one which could never be sustained under normal circumstances) are all guilty of this too which makes it all the more important for FFP rules to be enforced.

    • Hash,

      top clubs have always paid top wages for the best players, and they always will.
      You only have to look at the various financial reports on sports to see this is the case.
      Market forces dictate which of these “businesses” a player will sign for, (wages, transfer fee, playing in the Premiership/Champions League, loyalty, sunny climate etc..), and always will.
      You grossly exaggerate the impact of City’s “stockpiling”, this has happened over the last year, maybe two at best, and involves realistically six players who failed the Mancini test, and even then several of them went out on loan to other clubs.
      Indeed, how could a club like Cardiff afford to play a class act like Craig Bellamy without the generosity of the Sheikh? Therefore City are perhaps weakening Premiership rivals, but strengthening others such as Sunderland, Cardiff, West Ham, Blackburn, Rangers and so on – surely this is helping to close the gap between the have’s and the have not’s more than flogging them all to Spurs?.
      You yearn for “under normal circumstances”, yet the reality is that someone, somewhere in world football, is heavily investing in their club to gain success, and this will always happen, to try and stem this activity is countrerproductive and naive – Liverpool are currently buying their way back into contention I notice.
      I would further argue that absolutely not one team in the lower half of the Premiership down has suffered as a result of City’s spending, in fact quite the opposite is the case. I couldn’t give a monkey’s if rivals become dislodged from their comfy perches – I shed no tears for Arsenal and Liverpool at all, they will get by.
      As for the value of mediocre players skyrocketing, now City are in the Champions League, they will only be signing world class players, therefore the only teams to suffer from the competition will be Barca, Real, Chelsea, Bayern and United.
      The mediocre players “stockpiled” so far will be sold off AT CUT PRICE DEALS, IF NOT FOR FREE – therefore benefiting clubs in a way they couldn’t normally afford – granted they have to pay reasonable wages for these players, but no-one’s forcingf anyone out of business are they?
      Show me one club who have gone out of business as a result of Billionnaire owners spending over the last decade – you can’t, because none have, and none will – the fear is exaggerated by City’s rivals to condemn normal business practice.
      I’d love to know who you support Hash, and how you think FFP will benefit your club if implemented as it is intended – my guess is you support a club already in the Champions League, or recently deposed by City, such as Liverpool.

  15. the naivety or just pure stupidity of some of the man city fans comments here is unbelievable. one guy said “sheikh mansour is not a shareholder of etihad” therefore he has nothing to do with it..:))) i mean get a life idiots, maybe you also believe that insurance companys doesn’t make any money?? this is one of those legends in which stupid people believe.

  16. Nope, United fan forever and always, so man citys cash really hasn’t affected my club ;) apart from there being two harder games a season. You seem to have convinced yourself that Man Citys lottery of cash injection along with a few other clubs is a good thing. Liverpool have had it too albeit not to the same extent, though you still haven’t answered my point about teams like everton who cant buy any players because theyve been priced out the market and dont give me the “prices will drop later” line because they wont as long as theres teams like psg, malaga and anzhi about (with more looking likey to come along if FFP isnt enforced.) Clubs like these punish the clubs that have earned their money fairly and with hard work and determination rather than being the “lucky few” with a sugar daddy donor behind them. You have to admit though that stockpiling of players is likely to happen, with cash rich teams using players that could easily be first team players of other rival teams being used as fringe or squad players to keep them away from rivals. Also Craig Bellamy was given to cardiff to keep him away from any rival premier league teams (highlighting my point of man city being able to send their players anywhere they want) just as long as they’re not anyone who will challenge them, when in reality its only teams around them who would have the money to take them on. Man United couldn’t even do that, look at ronaldo for example, whereas with tevez city can keep him for as long as they wish, they dont have to worry about paying out the wages or making a profit for him because they dont even run at a profit, which is something all football clubs should be obliged to do.
    Please dont give me the yarn about uniteds debt, its the owners debt and well managed by the clubs income and soon will be mostly eradicated by the end of the year, though on that note theres many clubs out there getting themselves into totally unsustainable debt trying to keep up with the big spenders out there which was also a problem before but its now only going to get exponentially worse.

    The cases of city selling their players or loaning them to rival teams such as tottenham are few and far between whereas the financial implications of such unrealistic spending has a much bigger effect and overall impact.

  17. Hash,

    United fan eh? So you are commenting on City from a point of intense rivalry, which is fair enough.
    Using Everton as an example of a club that City are adversely affecting is a bit rich considering United stole Rooney, a local boy and toffee nose 4 eva for a British transfer record not so long ago.
    If Everton take Nedum Onuaha on loan or buy him from City, as is rumoured, then that blows your argument out of the water doesn’t it?
    I actually don’t care about the way the Glazers use your club to prop their other businesses up, they’re business people and do what they have to, so good for them, same as the Sheikh and Roman Abramovich should be free to run their interests as they see fit.

    “theres many clubs out there getting themselves into totally unsustainable debt trying to keep up with the big spenders out there which was also a problem before but its now only going to get exponentially worse.”

    Who are these clubs exactly? Which clubs have actually folded for good, I ask again? Portsmouth, Leeds, both took a fall, both still in existence and building back up again with better management, it’s called market forces balancing out.

    City have bought what, six players this transfer window, and cleared out as many, perhaps more, Chelsea a similar amount. Thats a couple of dozen transfers at the top of the pile – the impact is not as great as you would have us believe at all, football is not in danger of meltdown at all.

    Over the years big clubs and rich owners have gone on spending sprees, “inflating” the market, but there have been NO CASUALTIES AT ALL as a consequence.
    New york Cosmos, Real Madrid, Blackburn, Man United, Chelsea, Man City, PSG, Spurs, Villa, Liverpool, Leeds, not one club has gone under as a result of sugar daddies spending to improve their businesses, and they never will, FFP is a smokescreen to keep clubs like United on top, destroying any chance of competition.
    No wonder you love FFP so much, you still haven’t commented on my suggestion TV and rankings revenue should be shared out equally – is it because you are scared this would actually stop United hoovering up all the cash and best young talent, like Rooney and Rio? We know now top players only go to United for the cash and chance of silverware, not the history, otherwise Nasri would be wearing a Red Shirt today, as would Silva and Aguero.
    United’s sky money allowed them and the other members of the “Sky 4″ to widen the gap between them and everyone else, such as to prevent any meaningful semblance of competition in the Premiership, so to crow about United earning their monies “fairly” does not wash with me or any other football fan outside of the Sky 4, so do not get on your high horse about your money being morally clean and fairly earned – the tables and history do not lie – cash injections on the scale of Chelsea and City are the only way to break the stranglehold CL money has on the Premiership and therefore Europe.
    Tell me this, how would Everton go about breaking into the top four on a regular basis?
    Then tell me they would do anything differently to City and Chelsea.

  18. @ It’s Grim Oop North
    You say that City’s hoarding of players is beneficial to “SMALLER” clubs, but what you do not realise is that would players on artificially inflated salaries want to leave for a club where they will most probably get lower salaries? Moreover, your point that most clubs would need a massive cash injection to compete for CL places is false. Spurs managed it, and they were nearly relegated the season before. City is run on an unsustainable model where results are more important than actually building up a club through youth. Simply buying whoever is hot property atm will result in a team full of unhappy stars, which is what you see now. In a few years, when the Sheikh is tired of his plaything, you will be left with a half empty stadium and players you cant pay.

  19. this has been going on for years. now man city are a threat to the sky top four and european eleat. something has to be do about it. but it is to late. next year the ground is being extended to 70 000 seater stadium.

  20. As a loyal gooner I have to defend Man City here. They may pilfer some of our players but when someone has an opportunity to double or triple their wages, with a similar chance at success (or better?), I wont hold it against them. We are more of a Barcenlona feeder club than for City, they are competitive new boys on the block that want our quality!

    In terms of the Etihad deal it is far from a family favour. The amounts involved are not that straightforward but the shirt and naming deals are in line with current levels. When Arsenal did their deals they were good value at the time but due to the stadium and the need for security and stabiliy we tied ourselves in to long fixed deals and they have since been left behind. When a traditional big club sign a new record sponsorship deal no one bats an eyelid, but city attract unwarranted stick. I can’t blame Wenger for moaning but I wish the board would up our commercial deals as we are a global brand.

    Man City are using and will continue to use the Galactico logic of more expensive is better value. Big transfers mean big exposure and likely long term competition at the top, as well as increased assests (top players). This leads to prize money, tv money, champs league money, increased merchandise and increased sponsorship. Risky business if it cant be maintained but I think Citys owners have made it clear they are here for the long term with the magnificent Eithad campus which should be applauded. I have to admit i can’t stand Chelsea for a number of reasons, respect united but not fond of them (i’m just bitter), however I cant help but like city and the owners and am happy they have crashed the party. Just the way they dealt with the gary cook affair shows their class. More competition is a GOOD thing and City’s approach is probably the only way it could happen.

    The FFP is going to be more about stopping clubs go bust rather than leveling the playing field.