Which Clubs Will Fall Foul Of Financial Fair Play?

Published: Apr 18, 2014 12:16pm EDT
By Jason Bardwell, Sports Writer for Konsume Sports

Please Note: This article was updated Apr 18, 2014 @ 12:16pm EDT

 

For those of you who follow the world of European soccer will no doubt have heard of Michel Platini’s Financial Fair Play (FFP) rules. Manchester City and Paris St Germain look to have the most to worry about with reports surfacing this week that these two were the 76 clubs under scrutiny as the rules kick in this season, with sanctions due to be announced May 5th.

 

WHAT IS FINANCIAL FAIR PLAY?

 

Initially it was proposed that UEFA feared that many clubs were putting their financial futures at risk and stamp out the ‘financial doping’ which, some say, is ruining the game as a whole. Skeptics would say it is nothing other than keeping the European elite safe from challenges from these upstarts like Manchester City and PSG.

When the accounts are looked at it will be the spending of the last two seasons which will be under scrutiny. In this period only losses of around $62 million are permitted, as long as it is proven that the club owners can cover the amounts. When you look at it in plain terms, Manchester City have recorded losses of $250 million, well over the threshold.

Even the sponsorship deal for a period of ten years of Abu Dhabi airline, Etihad, is being looked at as the company is owned by the City owners half brother. So that deal needs to prove to be a fair market price.

Chelsea, Arsenal and Manchester United are said to not be under scrutiny as, other than Chelsea, they have posted figures in the black. But what of Manchester United's huge debts that are always being reported? In 2012 Manchester United had a net debt of $615 million but since then have seen their stock on the New York stock exchange plummet after this bad season. Chelsea’s net debt at the same time was $1.5 billion (that’s Billion, with a ‘B’) and Arsenal had the least debt, reporting $165 million. Looking to Manchester City and you will see that their net debt was $97 million, the difference is the revenue Manchester City has generated each year has increased with the FA Cup win followed by the Premier League win, all the while in the Champions League.

 

EUROPE'S ELITE:

 

So what about the high contracts recently signed between Manchester United and Wayne Rooney, Real Madrids Gareth Bale transfer or Barcelona’s tax and other problems. How would that affect the FFP regulations?

There was a combination of concessions negotiated between UEFA and some of the biggest clubs and as a result of that, and the potential revenue these teams can generate, means they will be given some slack.

Liverpool, currently top of the Premier League right now have posted losses of $151 million and other European, big spending clubs, like Monaco were not in Europe this season and so will not have to justify the expenditure until next year.

 

SANCTIONS:

 

Manchester City are confident they will not be sanctioned by UEFA, citing that their debts are low and they are on course to break even in the near future. This may gain some leniency from the governing body but I do not think the Citizens will escape without any punishment. The clubs have the option to accept the sanctions, but if the club deems it unfair they can take it to the Court of Arbitration for Sport. Sanctions range from a warning or fine at one end of the scale to having prize money withheld, transfer embargoes and even being not allowed entry into next years Champions League, which could be great news for Arsenal.

You will have to decide yourself if FFP stands for 'Financial Fair Play' or 'Favored Friends of Platini'. Remember Manchester City have paid $500 million less on players than Chelsea have since the respective takeovers, although Chelsea’s totals are over 5 more years. What would really put credibility in the system would be if the clubs debt levels are also analyzed and not just posted profits.


 

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Jason Bardwell
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