Financial Fair Play – Reality or a Show?

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It’s been four years since UEFA has introduced a set of rules to prevent professional football clubs spending more than they earn but we can see clubs breaking record transfers again. What has happened?
 
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Did you ever wonder why Manchester City fans alway boo and whistle during the Champions League anthem? One might think it could simply be the British being British but the reasons are originating from the 2012-13 season. The whistles are meant to be heard in Nyon, the birthplace of the UEFA Financial Fair Play Regulations (FFP).
 

7 Years Ago

The FFP were agreed to in principle in September 2009 by the Financial Control Panel of football’s governing body in Europe (Union of European Football Associations – UEFA). When announcing the new legislation to adress one of the biggest problems of modern football, the ex UEFA president Michel Platini said: “Fifty per cent of clubs are losing money and this is an increasing trend. We needed to stop this downward spiral. They have spent more than they have earned and haven’t paid their debts. We don’t want to kill or hurt the clubs; on the contrary, we want to help them in the market.”
 
The UEFA FFP Regulation has set the rules to force clubs to break even if they wanted to play in European competitions. UEFA was afraid that the huge amounts of money spent on transfer fees might threaten long-term survival of the clubs. But among all the big spenders there was only one set of fines and two clubs being hit the hardest: PSG and aforementioned Manchester City, whose fans think they were treated unfairly.
 

UEFA’S U-Turn

But the market didn’t respond like the leading men of UEFA had hoped for. Although the inflation of transfer fees and wages has cooled down from spending 1.7 billion € per year in 2011 to 400 million € in 2014, it became even harder for investors in smaller clubs to catch up. On top of that UEFA started to fear that investors were discouraged by the new rules and the decision has been made to change the rules and introduce them gradually.
 

So Why Is Everyone Spending Like There’s No Tomorrow?

Because the rules now say owners can invest freely as long as they offer a business plan that shows how they will eventually reach break even. The investors are returning and more and more clubs have new owners. On top of that a huge amount of TV money is flowing into Premier League fueling spending in Europe. Equal TV right share in the Premier League for the 2015/16 season was around staggering 55.5 million £. Cash may be changing hands big time again but the division between top clubs and your home team has probably never been greater.
 
 

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