Moneyball- Financial Fair Play

Last updated : 07 August 2013 By DSG

The 2013/2014 season will see new managers at a large majority of world football's richest and most prestigious clubs. These include; Manchester United, Chelsea, Manchester City, Real Madrid, Barcelona, Bayern Munich, PSG, Inter Milan, Napoli and Porto. Inevitably, a new manager signals new signings for a football club as they try to put their personal stamp on the squad and chase that 'last piece of the puzzle'. As predicted, the summer 2013 transfer window has been no different, as we have seen one of the most active periods of recent times with many of the worlds most high profile players seeking pastures new. In a period of global economic downturn and recession, it would seem that football remains unaffected, (albeit due to extremely rich owners in many cases). However, behind the scenes UEFA's Financial Fair Play is in full flow and it wont be long before many clubs start to feel the pressure.

For those of you that are unaware, Financial Fair Play (in lamens terms) is a series of regulations that prevent each and every professional football club from spending money that has not been directly earnt via its own activity. This includes; gate receipts, advertising, merchandise, television revenue, prize money and the sale of players. FFP was introduced in the 2011/2012 season in order to prevent damaging spending that had lead to major levels of debt in a reported 50% of teams across the world, as well as reducing borrowing against the club and the influence of wealthy owners. In recent years, many clubs had undertaken excessive levels of risk in the pursuit of success with the plan to pay off any debts with the financial clout that such achievements would produce. In England, two such examples are Leeds United and Portsmouth FC. Leeds assembled a squad including Ferdinand, Viduka and Kewell that achieved a Champions League Semi-Final place, whilst Portsmouth won the FA cup in 2008 with players such as Diarra and Muntari. However, following such success both plummeted out of the top flight due to financial instability with Portsmouth reaching as low as League two last season and narrowly avoiding liquidation. As a direct response to such instability, UEFA proposed Financial Fair Play in order to guarantee the survival and continued operation of many such football clubs, with those seen to be breaking the rules punished accordingly.

Financial Fair Play was met with almost unanimous support by clubs across the world, however whilst some may have believed it to be the best option at the time, in years to come they may not be quite so supportive. FFP will undoubtedly create a void between the richer and poorer clubs in football. For example, any Premier League team will attain vast annual income from sponsorship, Sky and BT television revenue, larger gate receipts and the sale of higher profile names that are already on the books. Such income will allow these teams to continually propel the club forward, whilst remaining within the rights of FFP. However, teams in the championship and below receive much lower annual incomes and therefore the ability to better themselves and compete at the highest level within FFP would be a very long and gradual process. This problem becomes even greater when you look into the finer details of FFP. As mentioned, any revenue attained via sponsorship or marketing is fully within the team's rights and therefore complies with regulations. As a result, the larger and more marketable teams in the world have begun to undertake vast levels of advertisements and sponsorship deals to balance the books. For a tangible example, have a look at Manchester United's latest embarrassing outing in a Japanese Tomato Juice advert or their ability to sell the sponsorship rights to their training kit. The less successful teams in the Premiership and below will not be able to attain such lucrative deals. As a result, a gulf in income and spending that already exists will continue to grow year on year.

In Spain, Real Madrid and Barcelona constantly compete at the highest level due to extremely biased Television Revenue income. The once righteous Barcelona who paid to wear the Unicef logo, have bowed to financial pressure and are now sponsored by Qatar Airways. Whereas the Spanish giants can afford to buy 'Galacticos' year on year, teams such as Valencia and Sevilla cannot compete in financial terms, and as a result must sell their best players (Mata, Villa, Silva, Soldado, Negredo & Navas) in order to survive. With Financial Fair Play, leagues such as this, which already exhibit elitist tendencies, will continue to be the case for years to come. Eventually, the continued spending of the richer clubs will lead to success whilst the rest are in a constant state of flux with those in the leagues below.

Michel Platini and UEFA have given us a solution that was necessary in order to remove success due to lavish ownership and achieve sustainability and growth via accessible means. Therefore although teams with extremely rich owners such as Zenit St Petersburg, Anzhi Makhachkala, Monaco, PSG, Chelsea and Manchester City may still be able to spend large sums during this summers transfer window due to 'sugar daddy' owners which Arsene Wenger has likened to "financial doping", it is only a matter of time before the playing field is made even. In direct antithesis, Arsenal FC have recently completed the full payment of the Emirates Stadium. After years of continuous profit and somewhat frustrating transfer market activity for their fans, they claim to have genuine spending power that abides by FFP rules. Although yet to acquire the services of any top name players this summer, a confirmed ?40 million bid (?23million more than their record transfer) for Luis Suarez may signal the intent of a club at the forefront of Financial Fair Play. As much as it pains me to say it, Arsenal FC are the model to which all teams must now look to, if they desire future success.

Source: DSG

Source: DSG