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Has Financial Fair Play Been Worth It?

The recent CAS ruling that lifted Manchester City’s European ban has generated a whirlwind of controversy and debate about Financial Fair Play (FFP). Vishal Patel examines the arguments surrounding FFP.


Blackburn Rovers lifted the FA Cup in 1884, but that season’s competition is notable for a couple of other very important reasons. A spate of disqualifications marred the competition, with Preston North End, a leading team of the era, and Accrington being singled out by the FA for offering financial inducements to their players. The subsequent reaction and debate saw the legalisation of professionalism in football, and opened up a Pandora’s Box that seems to influence football even 130 years later. With professionalism, came money, and like a lot of other facets of life, the ability to succeed in football, tended to become a function of monetary investment. Which brings us to the present day, and the constant wrangling among fans, clubs, and authorities about football finances, a subject that is tangential to the actual game of football. Governing bodies across the world have sought to regulate the role of finance in football, and with that in mind, UEFA proposed Financial Fair Play. The concept was originally introduced by Michel Platini in September 2009 for the “well-being of European club football”, as well improving “financial fairness in European competition”. Has it achieved these goals? Is it on the path to achieving these goals? Are these the goals we want European football to achieve?

French UEFA president Michel Platini speaks during press conference on March 22, 2011 in Paris as part of the 35 edition of the UEFA convention. Platini was re-elected unopposed as president of European football’s governing body UEFA today. The 55-year-old former European Player of the Year will serve a second mandate of four years, having first been elected in 2007 when he took over from the veteran Swedish administrator Lennart Johansson. Since then his reforms have included the democratisation of the flagship Champions League tournament and new ‘financial fair play’ rules obliging European clubs to break even. AFP PHOTO PATRICK KOVARIK (Photo credit should read PATRICK KOVARIK/AFP via Getty Images)

FFP is not fit for purpose

Before getting into the mechanics of the FFP, and the effects this may have on the game and on clubs, let’s examine the general principles at play here. UEFA’s directive dictates that investments by a club on transfers and player wages are restricted by their turnover. The two questions that arise here are a) how does a club improve its turnover without investment? , b) Why does UEFA have the authority to dictate the investment patterns of different clubs? Perhaps looking at UEFA’s stated goals can illuminate the way:

“Financial fairness in European competition”: The first interesting point to note about FFP and its introduction is its timing. FFP was introduced barely a year after Sheikh Mansour effected his takeover of Manchester City. It also came a few short months after Real Madrid decided to go on a spending spree to dwarf any in football, signing players like Cristiano Ronaldo, Kaka, Xabi Alonso, and Karim Benzema in one transfer window, breaking the existing transfer record twice in the process. FFP was widely seen as a reaction to the large transfer spending that was becoming an important part of football.

So, in order to protect the long term solvency of clubs that over-spent on transfers and wages, UEFA decided to impose FFP. The idea was to ensure clubs would live within their means. While the proposition was clearly made in good faith, the pitfalls of this method, despite seeming fair, should’ve been immediately obvious. Linking transfer budgets to generated revenues automatically favours teams that already have larger revenue streams. This meant the bigger clubs of the time could continue to spend larger amounts on transfers and player wages than their relatively less successful peers. This in turn meant that rather than achieving “financial fairness in European competition”, UEFA ended up imposing a system that merely reinforced pre-existing hierarchies.

The Bundesliga is a good example of how this works. German clubs have traditionally followed a model that looks very similar to FFP. Nobody can dispute the financial health of their clubs, but the Bundesliga, as a competition to determine the best team in Germany, appears to be little more than a formality now. Bayern Munich have been able to win the title comfortably even in a season of transition and turmoil. They sacked Niko Kovac, probably their worst manager in a decade, less than 6 months after he took them to a league and cup double, a sacking that puts the achievement into perspective. Any competitor (like Dortmund a decade ago) is quickly put back in their place when the traditional giants hoover up talent due to their ability to pay top prices. A similar pattern is at play across Europe, with the homogeneity of winners across big leagues forcing us to reflect on the purpose of these competitions.

Proponents of FFP will point in the direction of clubs like Tottenham and Atalanta, clubs that have achieved relative success. They will correctly point out that these clubs have invested in the right young players, and the best managers to climb the ladder. However, they will also ignore the simultaneous decline of giants like Arsenal and AC Milan that has opened up the space for clubs like Spurs and Atalanta respectively. The model preached and professed with great pride and gusto across Europe appears to be one that is reliant on repeatedly beating the odds over a period of time, coupled with long term mismanagement from existing members of the elite.

This is apparently the right way for a club to grow. Even if you do manage to capture lighting in a bottle for a decade though, beware, because these bigger clubs still have large revenue streams acquired when FFP wasn’t in play, and they can still strip you of your greatest assets to win matches, while you compete for the prestigious Net Spend Championship (transfers like Hummels, Gotze, and Lewandowski all spring to mind).

Stories like Dortmund have become all the more notable due their exceptional nature, and time has taught us that the law of averages will catch up with them, making them a team that will have many nostalgic articles, but no dominance to show or, more importantly, build upon. Aside from the ineffective nature of these prescriptions, the fact that UEFA, or anyone other than the fans and owners of a club believe they have the moral authority to decide the ‘right’ way for a club to grow is pukeworthy in itself.

If UEFA’s intent really is to create a level playing field, clearly, FFP, in its current form, with its structural biases towards traditional giants, cannot be successful. If anything, it will only polarise the competition to an even greater extent. If UEFA really do care about having a genuinely level playing field, with a focus on doing the ‘right’ things, perhaps they ought to signal it through their actions. If youth development, and a focus on sustainable management really is supposed to differentiate the best teams, why not have a wage cap? Why not take up some version of the much derided 6+5 solution (although allowing clubs to pick from their country, as opposed to catchment area opens up the same problems)? These measures (although they are significantly tougher to control and implement) truly set up club competition as a test of sustainable long term development, with a focus on improving infrastructure and youth football. It drastically reduces the influence of skewed investment capacities, the effect of which the current FFP regime tends to exacerbate. You will also stop attracting fly-by owners, and only attract investment from those that have a genuine interest in the game, and their team.

Let’s deal with the question of owners – why does UEFA have the authority to control the actions of owners who are ready, willing, and able to invest? On the face of it, this appears to be in direct contravention of the principle of general freedom being accorded to a private individual in the disposal of their private property. Of course, clubs cede a degree of control to UEFA when they willingly choose to participate in its competitions. Equally, they also reserve the right to exist and function outside UEFA (hello European Super League), and given the increasingly likely nature of this scenario, perhaps UEFA ought to ease up its tough stance in order to retain the prestige of its competitions.

The above is an example of an extremely libertarian and market oriented approach that simply isn’t fit for football. The legitimacy of any competition lies in its open, inclusive, and meritocratic nature, at least in theory. It is also a fact that these values also mean that we need to be open to investment that will improve the merit of a football team. UEFA admits as much when it says that it wants FFP to “stimulate long-term investment (youth development and upgrading of sporting facilities) over short-term speculative spending”. So clearly, the issue does not lie with investment, but with the quality of investment. Limiting transfer and wage budgets seems like a strange way to achieve this goal. According to UEFA, ‘good’ investment is what you want to attract, and ‘bad’ investment is something you want desperately to avoid. The reasoning is simple: ‘bad’ investment can lead to the dissolution of entire clubs (like Bury), and therefore controls on investment are critical to maintain the health of these clubs. So at its core, UEFA and FFP don’t have an issue with investment per se, they have an issue with ‘bad’ investment.

LONDON – AUGUST 23: Club owner Roman Abramovich of Chelsea meets the fans during the FA Barclaycard Premiership match between Chelsea and Leicester City at Stamford Bridge on August 23, 2003 in London, England. (Photo By Ben Radford/Getty Images)

If the above is true, it begs the question: why should ‘good’ owners be barred from investing in their clubs? Why can’t clubs like Brentford, Chelsea, and Manchester City receive investments from their backers, despite clear evidence showing that these investments have benefitted not just the teams’ on pitch performances, but also their youth development and sporting facilities? The key seems to lie in keeping out ‘bad’ investment. If that is the problem, why not strengthen controls like the Owners’ and Directors’ Test? Why not tie long term investment (youth academies, stadium upgrades) to speculative spending (transfers and wages) as a positive incentive, as opposed to the restrictive nature of the current FFP regime? That would allow a passionate owner like Dave Whelan to legitimately improve Wigan’s on field performances immediately, as well as in the long term, whilst making it tougher for him to gain entry in the first place. It would also likely make the so-called “Money Test” that exists much tougher to pass, allowing only those above a certain financial bracket to gamble on a football club, should that really take their fancy.

But is football all about trophies?

FFP has clearly failed in its mission to create an equitable financial playing field for teams. But realistically, this is true only for the teams that are looking at winning the big trophies. Football, as it happens, is a much larger sport than the top divisions and the Champions League. The mathematical reality is that a very large percentage of football clubs will win absolutely nothing in any given year. Does this render their existence irrelevant? Fans of those clubs might disagree.

BURY, ENGLAND – AUGUST 28: Fans gather outside Gigg Lane Stadium the home of Bury Football Club who have been expelled from the English Football League (EFL) on August 28, 2019 in Bury, England. After an historic membership of 125 years the EFL have expelled Bury FC after a buyer for the club was not secured. (Photo by Christopher Furlong/Getty Images)

The removal of regulations like FFP is likely to attract ambitious owners that can back their vision with investment. However, due to the zero-sum nature of football, it is more likely that a majority of these owners and investors will meet failure in their quest for trophies. Realistically, as the experience of clubs like Portsmouth has proved, that results in a financially unsustainable club that is forced to wind down in a painful, humiliating, and overly expensive process. A simple test for whether FFP is a good idea is to ask yourself: would you be happier supporting a club that doesn’t win too many trophies, or happier supporting a club that simply doesn’t exist any longer?

So has FFP actually helped achieve large scale sustainability? According to them, it has. Do we have notable examples of FFP saving clubs from extinction? Of course we don’t, because we can’t have an example for something that hasn’t happened (although UEFA does cite 28 agreements with heavy loss making clubs). If UEFA’s data is true, we have to acknowledge FFP’s role in ensuring that football is a game that is still accessible to a vast section of fans and footballers. So while owners of clubs complain about the ceilings placed on their ambitions, it is important for fans to note that these ceilings may just be about the continued survival of their beloved football club.

So what now?

FFP is not a perfect regulation by any means. While it does do a lot to protect the existence of smaller clubs, we can legitimately complain about the crystallisation of traditional hierarchies that is has brought about. So FFP in its current form is certainly a step in the right direction, it certainly isn’t the great equaliser UEFA would like it to be. Are wage and transfer caps the way to create a more equitable football environment? League 1 and League 2 clubs are about to find out. Or do we focus on the distribution talent, rather than money? Limiting squad sizes, or creating an NFL style draft, could be the answer here. Either way, football, due its unique structure and geographical and political spread, will not really be able to impose a one size fits all solution. Until then, perhaps we can continue our arguing, and curse professionalism for bringing us here in the first place.


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Vishal Patel

Massive Chelsea supporter. Follow Mourinho and love Ronaldinho. Enjoy discussing tactics anytime, anywhere. Enjoy watching the Italian National team as well.
Vishal Patel

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