Image © Tobias Klenze via Wikimedia Commons

Does Financial Fair Play do the opposite of what was intended in football?

Financial Fair Play (FFP) is a skewed system that keeps the power in the hands of the richest clubs - that’s what I, and many people like me, think. It means that smaller clubs are unable to invest and grow.

To break it down, FFP is a ruling introduced by UEFA (European football's governing body) to ensure that clubs do not spend beyond their means. For example, if a club makes £50 million from ticket sales and transfer fees they will be able to reinvest that into future transfers which are vital for a club to grow.

I believe that football can be the most exciting, gripping and competitive sport in the world, bringing millions together to watch a ball being kicked around for ninety minutes. I’ve been following football for years and thoroughly enjoy the buzz around every single game. This has led to me becoming more interested in the economic and business side of football. After finding out more about the intricate rules, especially FFP, and seeing how different clubs benefit and suffer because of these rules, I realised that they are in desperate need of change.

The FFP rules were first introduced in 2011 and since then only a handful of Europe's elite clubs have managed to lift the biggest trophy there is - the Champions League. The lack of leeway given to smaller clubs to invest and get an opportunity to reach the top, which I believe is a  part of the beauty of sport, takes away from the game's core ideals.

This leads to a cycle where the top clubs buy the best players as a result they will get a larger slice of the TV money and then again be able to buy the best players. I think that this system provides an inherent advantage to the richest clubs removing the all-important competitive edge from the game I love.

It is also relatively easy for some clubs to create circumstances where inflated sponsorship deals allow them to have huge budgets to spend in the transfer window. For example, Manchester City was bought by Sheikh Mansour, worth an estimated £20 billion, in 2007 and he helped to create one of Europe's most powerful clubs. Some of their biggest sponsors include Etihad Airways, Etisalat (a telecommunications company) and Aabar (an investment firm). The Etihad Airways deal is worth £400 million alone.

I believe that they are inflated because they are all owned or run by the United Arab Emirates, where Sheikh Mansour is a member of the governing family. That means, it seems to me, they put more in than the investment is worth, giving the club an unfair financial advantage.

This has led to Manchester City spending £953.92 million since the 2016/17 season compared with Newcastle which spent £280.62 million with both clubs having very similar average attendance, 35,000 for Newcastle and 37,000 for Manchester City. This shows how both clubs have similar fan bases but due to the inflated sponsorship deals Man City have been able to massively outspend Newcastle and brush off any sort of punishment from UEFA.

Man City successfully appealed against a 2-year ban from UEFA competitions and a $30 million fine. In my opinion, this level of soft punishment will lead to other rich clubs with huge financial backing bending and breaking the rules.

The FFP rules were brought in to prevent financial disasters that happened to clubs like Leeds, where the owner spent more than they could afford which led to numerous financial issues as well as point reductions which led to them ending up in the 3rd tier of English football. Since then the money in football has risen at staggering rates with sponsorships and the rise of social media with some players like Cristiano Ronaldo having over 200 million Instagram followers. With this change in football, I believe it is time for the outdated FFP rules to change as well.

Positively, and looking to the future, UEFA is planning to change the FFP rules. This is mainly due to an estimated £7.5 billion loss in revenue due to the Coronavirus pandemic. They plan to introduce a new “luxury tax” on transfers and a salary cap is being considered. I hope that these new rules will be a step in the right direction by bringing more competitiveness back to the game we love.

Image © chanelpluscat via Twenty20

About the Author

Noah Ahmed is 17 and is studying for his A-Levels. He lives in London and loves football and rugby.

This article is part of our Voices of the Economy series. The project brings together the economic experiences and opinions of people from a range of different backgrounds and showcases voices which are not heard as often when we talk about the economy. To find out more and share your own story click here.

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