How many times have you read, watched or listened to something football-related and heard someone mention Financial Fair Play?
Financial Fair Play, or FFP for short, is certainly never far from the thoughts of those who run Europe’s top football clubs. FFP can determine which players the clubs can sign and which they have to sell. This can have a huge impact on whether clubs can truly compete.
Fans want to see their club be successful, and also to feel their club is a big fish. If you’re interested in European football at an elite level or want to understand how it may affect your team, there’s value in understanding FFP.
What is Financial Fair Play?
FFP has two main aims. Clubs are obliged to balance their books, and also to meet all their transfer and employee payment commitments at all times. FFP is designed to ensure that clubs cannot gain a competitive advantage by overspending or by failing to pay their creditors in doing so. Put simply, clubs should not spend more than they earn.
Why Was FFP Introduced?
UEFA, the Union of European Football Associations, felt action needed to be taken around football governance. Their Executive Committee approved the FFP concept to help safeguard the wellbeing of the game of football.
As their website claims, “Introduced in 2009, UEFA’s concept of financial fair play has helped to drastically reduce club losses over the last decade.”
At 116 pages in length, the regulations are lengthy and are reviewed periodically. Clubs were also given time, following FFP’s introduction, to address both of these things.
Is Financial Fair Play Good or Bad?
FFP has many pros and cons, depending on your perspective.
|Helps to improve economic and financial capabilities of football clubs.||Discourages investment into clubs, so ‘widening the gap’.|
|Ensures clubs settle their liabilities.||National legislation can mean rules are applied differently.|
|Encourages responsible spending.||Costs of monitoring FFP are arguably greater than the benefits gained.|
|Encourages clubs to operate on the basis of their own revenues.||Sanctions can prejudice performance on the field.|
A number of clubs have been found guilty of breaching the regulations, but it hasn’t curbed everyone’s spending, as Manchester City’s spending shows. The club have been fined under FFP regulations but fought the sanctions and eventually saw them overturned.
Who Benefits from FFP?
The theory is that FFP is supposed to benefit everybody. In 2017, clubs across the top divisions of European leagues recorded a profit for the first time, according to UEFA’s own analysis.
The 700 top-flight clubs in Europe’s 55 national leagues recorded a profit of €615m, quite a change from the position a few years earlier, when clubs’ total losses amounted to more than €5bn. FFP may have brought more awareness around spending, but neither has it eradicated debt.
Do We Really Need Financial Fair Play in European Club Football?
The moral argument says ‘Yes’. Clubs are no longer able to spend what they don’t have in pursuit of glory. If you’re a fan of a team trying to break into the elite, whose club can’t attract investment for fear of falling foul of FFP, the answer may be a very different one. When it comes to winning, it’s as true as it’s always been that some people are willing to bend the rules to finish first.