Essay: An Analysis of Financial Fair Play: Does it have a role to play in modern-day football?

Introduction and Background
“An athlete cannot run with money in his pockets. He must run with hope in his heart and dreams in his head (BrainyQuote, 2015)” These were the words spoken by the long distance runner Emil Z??topek. However sport and soccer in particular has dramatically changed throughout the last few decades with money becoming a critical part of the game. After entering the 21st century, the financial power of clubs has never been so strong. This increased spending has created major problems for football clubs located throughout Europe. The continuous financial doping that is present in nearly every major footballing country today is seen as the main cause of these problems. Over the last decade, the football world has become a playground for wealthy billionaires. There has been a significant injection of finance into the sport, some of which has capitulated teams on to success. We have seen Chelsea become one of the top clubs in the world due to continuous investment by Russian tycoon Roman Abramovich, whilst also witnessing the re-emergence of French giants PSG, after receiving strong financial backing from the Qatar Sports Investment group. However there is no greater example of this new fashion in practice than new super club Manchester City. ‘Over the period from the successful takeover attempt from Sheikh Mansour bin Zayed Al-Nahyan in 2008 to the summer of 2012, the club spent a total of ??930.4 million. A worrying statistic however is that of this total amount, only ??365.3 million was derived from club revenues with ??565.1 million coming from their new owners pockets’ (Scott, 2012). With this investment, the club went on to capture its first Premier League title in forty four years in 2012. The club has continued their spending, widening it to investing heavily in their grass roots and now can lay claim to two league titles in three years. This is an incredible feat for a club that no less than sixteen years ago, found themselves in the third tier of English football. And while looking at the success of these clubs, it can be argued that it was money well spent. But has this type of spending created an unequal playing field for other clubs? UEFA introduced their Financial Fair Play regulations which include the break-even rule, in an attempt to stop this financial doping. Many people hoped that this would restore competiveness in the sport. ‘During 2010, Manchester City’s spending compared to their revenues earned stood at 3.04:1, which would have been a serious breach of FFP’s break-even rule. Remarkably the club went on to win the Premier League title in 2012 spending more on just wages of ??390 million in the first three years of ownership under Sheikh Mansour, compared to their total revenue intake of ??365.3 million for those three years’ (Scott, 2012).
Some teams have tried to copy the same blueprint as the ones above throughout the years and had very different results. The pressure to keep up with the top clubs has become immense. Over the years we have seen teams such as Rangers and Portsmouth fall from incredible highs to now languishing around the lower tiers of English and Scottish football respectively after both teams entered into administration. The fall of these clubs highlights the severity of financial mismanagement in the current football climate. However there is no greater example of this than the case of Leeds United. ‘In 2001, Leeds United found themselves competing in Europe’s premier footballing competition, the UEFA Champions League. In an effort to remain competitive, the club spent significant amounts of money on player recruitments resulting in the creation of high debt levels. The club had spent beyond their means and they had also budgeted for the income they would receive from their continued participation in the Champions League. Unfortunately the club failed to qualify for the competition the following year and were forced to sell a number of important squad players to meet repayments and rid debts. The club were relegated in 2004 and still find themselves languishing in the English second tier, more than a decade since their relegation’ (Wells, 2013). This highlights the ugly side of finance in football and UEFA have decided to implement rules such as FFP to preserve the sustainability of all football clubs based in Europe. It is hoped that these news rules which will force clubs to live within their means will prevent another famous collapse similar to the Leeds United one.
‘UEFA implemented their new regulation called Financial Fair Play in 2011, in an effort to combat both issues raised above’ (UEFA, 2014). After many attempts to find a solution to the finance problem located in the game, it is felt that Financial Fair Play will prove to be the optimum solution. ‘FFP have two main criteria’s for clubs to meet in order for the clubs to be able to compete in UEFA competitions. The first is that all clubs must not be behind with any money due to their creditors and the second is the controversial breakeven rule which states that any expenditure for the club must be equal to or lower than any income derived from football operations’ (Szymanski ,2014). ‘It is thought that the first criteria which is that all clubs must have fully paid up on all due creditors by a certain period, will help bring financial stability to the clubs’ (Muller, Lammert and Hovermann, 2012). ‘The second criteria which is the break-even rule, was implemented to decrease the number of clubs entering into administration and to create a more level playing field, with the simple idea of not allowing clubs spend more than they earn from football operations. The balance between income and expenses is assessed over a three year period ‘(Rumsby, 2014: Szymanski ,2014). ‘This rule will not allow owners of clubs to spend in excess even if they are using their own finances’ (Edwards, 2014). ‘UEFA hope that every club should achieve a break-even financial position by the year 2018’ (Braslavsky, 2011).
It is of vital importance to examine whether football has become more sustainable again and if the competiveness of the sport has been damaged or restored through the implementation of FFP. It is also of importance to examine whether FFP can overcome obstacles such as European Competition Law to stop the serious problem that UEFA feel is financial doping. From this paper, I will conclude whether FFP has an effective role in modern-day football in its present form. This paper will firstly examine the effectiveness and some criticisms of FFP, while secondly focus on whether the implementation of the FFP regulation can overcome the obstacle of EU Competition Law and finishing this paper analysing alternative options to FFP.
Effectiveness and Criticisms
‘A worrying trend in football today would be the significant increase in expenses which include staff salaries and transfer dealings relative to revenues. Interestingly for many top clubs, total staff wages account for more than 80% of revenues. Worryingly in 2010, 65% of the competing teams in the Champions League and the Europa League were loss makers’ (O’Toole, 2014). ‘The level of debt in today’s football world is discouraging with the worrying fact that the going concern of some of the major clubs is not guaranteed’ (Muller, Lammert and Hovermann, 2012). While FFP has been met with some criticism with regards to competiveness, it has proved to be very effective in UEFA’s sustainability efforts. ‘Since its implementation, only five clubs have entered receivership in England. This compares favourably to before FFP was introduced, where a total of twelve clubs had entered administration’ (Becker, 2015). ‘Interestingly eleven out of the fourteen Premier League teams that have published their accounts for the 13/14 season have made a profit’ (The Swiss Ramble, 2015). This again highlights the strength of the impact of FFP, with most clubs getting their finances in order to meet the regulations set criteria, which again shows improved sustainability for the majority of clubs. And while this level of success in regards to sustainability is extremely impressive, the controversial break-even rule must receive the majority of the credit. It has forbidden clubs from spending money that they do not possess. If it wasn’t for the serious restriction on competition it causes, I feel it would be the perfect yet simple solution to a serious problem.
‘From the graph below its clear Manchester City has spent more than they have earned through football operations’ (The Swiss Ramble, 2015). However it is also evident that their investors can clearly afford and guarantee this outlay with their strong financial backing. Under the break-even rule, Man City will receive strong punishment but is this fair? The break-even rule is about protecting the sustainability of football clubs but Man City’s isn’t in doubt. Why should investor’s be punished for investing vast arrays into a club? It’s their money and so they should be free to do what they want with it. If one of the top clubs is trying to spend this much in order to remain at the top, how can smaller teams with less revenue be expected to challenge? While I feel the first criteria of meeting payments due on time is extremely warranted, I don’t think it should be used in conjunction with the break-even rule. While the break-even rule will rid the increased financial doping of clubs as well as strengthen the sustainability, it has come at a huge cost. Many including myself saw financial doping as destroying competitively, however I feel the break-even rule will cause even more problems, leading to leagues becoming even more predictable. ‘While the break-even rule encourages teams to plan for the long term and argues that this will lead to stronger competiveness in the future, it stifles competition in the present’ (Evening Standard, 2013). An alternative that succeeds in the dual aim of achieving sustainability and competiveness should be found and implemented.
(The Swiss Ramble, 2015)
‘Looking at the three graphs below we can compare Everton and Manchester United who both compete in the English Premier League. FFP’s main rule, the break-even rule states that teams cannot spend more than they earn. But is this fair? From looking below, Manchester United’s Commercial Revenue, Shirt Sponsorship and Match Day Receipts dwarfs Everton’s’ (The Swiss Ramble, 2015). With this additional revenue, Manchester United can attract a higher tier of talent and pay higher wages than Everton can. ‘Stefan Szymanski and Simon Kuper argue in their book Soccernomics that spending on salaries could explain up to ninety percent of the variation in final league positions’ (Szymanski & Kuper, 2012 cited in Altman, 2014). An investor can’t invest large sums into Everton due to fear of breaking FFP guidelines and so it remains unlikely that Everton can challenge Manchester United long term. Everton have finished ahead of Manchester United once in twenty years and it doesn’t look like FFP will change this any time soon. Instead FFP has restrained competition which will result in the top teams remaining at the top.
(The Swiss Ramble, 2015)
(The Swiss Ramble, 2015)
(The Swiss Ramble, 2015)
It is felt that the beautiful game has become all too predictable. ‘The current top five in the Premier League of Chelsea, Manchester City, Arsenal, Manchester United and Liverpool are the five biggest spenders on player wages in the league’ (Wilson, 2015). ‘The top two in Spain and Germany are also the two biggest spenders in their respective leagues’ (SoccerNews, 2015). Of course Atletico Madrid upset the established order in Spain last year but they have not sustained this feat and likewise for Borussia Dortmund in Germany. ‘In Spain, Real Madrid and Barcelona have control of the television rights market resulting in an unequal distribution of the funds. The ratio of distribution for these clubs compared to another club in the league is a massive 14:1’ (Harris, 2012). The smaller clubs who are already earning significantly less revenues in comparison to the top two are put at a further disadvantage. The top two have revenues that no one else in the league can come close to meaning they can spend a lot more than the others on acquiring the world’s best players without breaking FFP. Is Financial Fair Play really fair? A new investor for one of the other teams cannot come in and spend big on top players to upset the established order without failing FFP legislation. ‘However UEFA argue that the main aim of Financial Fair Play is not to level the playing the field by making all clubs equal in stature and financial wealth, but to motivate teams to build for success in the long term through investment in the grass roots instead of looking for a ‘quick fix’ through financial doping. They further argue that the break-even rule has been created as a means to help smaller clubs to grow and benefit from continuous investment in grass roots and infrastructure’ (UEFA, 2014). It seems that UEFA hope that competiveness can be restored some time in the future but their main aim now is that of sustainability. FFP feels very inconsistent. It penalizes investors in trying to create a more level playing field for new smaller clubs, whilst rewarding those who have already used it like Chelsea to help maintain their advantage over smaller clubs that can’t compete on the same level due to smaller revenues.
With regards to debt, FFP has some set guidelines. ‘Debt for expansion over a significant period such as investment in football academies is satisfactory for financial planning. Debt to account for the short term cash deficits and daily operations of the club including staff salaries are problematic and must be managed sufficiently’ (UEFA, 2014). While sustainability is at the forefront of FFP, these rules do allow smaller clubs to challenge in the long term by taking on debt to invest in FFP exempt areas like grass roots football. Perhaps the equity problem will be fixed in the long term, albeit putting some clubs at risk financially. It’s a tough position for UEFA and it seems almost impossible to satisfy both equity and sustainability, through the FFP model. Perhaps UEFA should consider a different approach if it wants to achieve both increased sustainability as well as a financial level playing field.
The Challenge of EU Competition Law
The implementation of Financial Fair Play faces no bigger obstacle than in the form of EU Competition Law. ‘Jean ‘ Louis Dupont who is representing football agent Daniel Striani, has argued that Financial Fair Play is not legal and infracts European Competition Law’ (Evening Standard, 2013). ‘The major rule of FFP that Dupont is challenging is the break-even rule. Dupont argues that this rule is not compliant with EU law and it causes a loss of freedom on competition’ (Edwards, 2014: Szymanski ,2014). ‘Dupont argues that the breakeven rule causes numerous restrictions of competition which includes a restriction on investments, restriction on player movements in the transfer market, smaller teams being unable to close the gap to the bigger teams and a decrease in playing staffs wages and football agents revenue’ (Szymanski ,2014). I feel that this rule is a serious breach of the free competition legislations of the EU, as it limits investors from spending their own finance as well as the movement of workers and in this case players from club to club. ‘He has argued that FFP has infracted article 101.2 of the EU Treaty. The treaty doesn’t allow agreements that could potentially stop or hinder free competition which would impact on consumer protection’ (Herbert, 2015). ‘However, UEFA has received the backing from the EC who believe that Financial Fair Play is ‘proportional’. This means that the risk of a number of clubs entering bankruptcies is proportional to the anti-competiveness which will result in less competition in the market because of the breakeven rule’ (Slater, 2013).
‘I don’t feel that the aim of sustainability is proportional to the loss of competitively within European Leagues or to the loss of freedom regarding player movements or restricting football agents business’ (Slater, 2013). The top leagues are already becoming predictable and while the break-even rule should provide a significant improvement to sustainability, I feel there are better options available to achieving both aims. I feel the break-even rule helps cement the current top order in European football and I view the lack of competitively that will result from this with the same importance as the future sustainability of football clubs. Why should a rule that is meant to create fairness put so many clubs at a disadvantage? It feels like UEFA are pandering to the biggest clubs. ‘The commissioner for competition has given his full support to FFP by signing an agreement highlighting that FFP doesn’t breach European law. 17′(Muller, Lammert and Hovermann, 2012).
‘UEFA have said that FFP will lead to a greater more balanced competition. They argue that although FFP doesn’t have financial equity as its main aim, more investors will be interested in investing in clubs due to improved sustainability. They also argue this improved sustainability will allow teams to challenge and compete in the long term. However Dupont feels that the European Court of Justice might not agree and argues that the biggest supporters of FFP are the bigger clubs because they feel FFP will help maintain the status quo'(Evening Standard, 2013). And while UEFA may be correct in saying that the break-even rule should help teams challenge in the long term, why should it come at the expense of competiveness at the present time? I don’t feel it should as there are many alternatives out there that would improve competiveness both in the short and long term. The resulting decision is yet to be made and the result could really go either way. ‘The restriction of Article 101 will not be relevant when the restriction gives rise to promoting economic development but only if all participants share in the gains'(Szymanski ,2014). ‘However Dupont feels that even if FFP is adequately permissible, UEFA would still have to persuade the EU that it is the least prohibitive way of succeeding in their aims. Dupont feels this is an argument UEFA cannot win’ (Evening Standard, 2013).
I find myself in agreement with Dupont as I feel that there is a number of more viable alternatives available to UEFA in achieving their aims of improving both sustainability and competitively. The status quo featuring the world’s top clubs will remain intact with FFP. ‘Stefan Szymanski has said that FFP will only lead to a reduced competitively and questions whether there is even a debt problem in football’ (Slater, 2013). This would bring into question the true reason for the creation of FFP and whether its creation only came about to protect the top clubs.
While the break-even rule is a great idea with regards to sustainability, it’s fundamentally flawed. It results in a massive restriction of competition, where smaller teams are not allowed to compete with the bigger ones financially as well as infringing upon investors rights while not letting them spend the money they have. FFP will be ruled illegal in my opinion as the lack of competiveness caused by the rule is clearly not proportionate to the future sustainability of clubs. I will look at two alternatives to FFP now and see if either could act as a stronger idea with regards to financial equity, whilst still offering a viable option to improve sustainability and thus disprove UEFA’s theory that FFP is the least restrictive means of achieving their aims. I feel UEFA should consider other options at this present time.
Alternatives to Financial Fair Play
There seems to be many alternatives available to UEFA, however none of these alternatives are perfect. I will now discuss the two strongly mooted options which are Salary Caps and a Luxury Tax system. ‘Jean Louis Dupont argues that the best way to implement a financial level playing field is to get the teams with the greatest spend to pay a ‘10% luxury tax’. Dupont feels that although FFP is a valid legislation to stop clubs spending money they do not have, it shouldn’t stop clubs spending when they have got the finances to do so. However he suggests that an even more efficient way to stop clubs from overspending is to make them guarantee the money they want to spend by putting it in the bank in the June before the season starts. These two ideas together would be a fairer system and would help promote both competition and sustainability. Teams like Chelsea and Manchester City could continue to spend whatever they want whilst also giving the opportunity to other teams to benefit from strong financial investments. These teams would then have to pay a certain percentage of tax on the amount they are over the threshold. UEFA would collect these payments and could divide it amongst the teams that have not exceeded the threshold’ (Edwards, 2014: Daskal, 2015).This would help create a more balanced competitive environment, encourage spending and not act as a restriction in any form. This would stand the test of EU Competition Law and would offer all the benefits FFP offers through the break-even rule which helps to improve sustainability, whilst also not acting as a restraint on competition. ‘Failure to pay these taxes could lead to UEFA excluding teams from their two main club competition’s, The Champions League and The Europa League’ (Olsen, 2009).
‘The luxury tax system could be similar to the one that is currently implemented in the National Basketball Association. This regulation operates by taxing teams that spend above a certain tax threshold. While this does not stop teams from signing up all the available top talent, it does put the onus on these teams to lessen gap between the biggest and smallest spenders. This is done by the NBA dividing up these tax payments amongst the smaller spenders who have not exceeded the limit. This idea has received the backing of the European Union. Back in February 2013, the European Commission asked for a luxury tax system to be implemented, in order to level the playing fields financially. The KEA who published the article on behalf of the EC, argue that although there has been an increase in transfer dealings due to the now famous Bosman Rule, there is nothing in place to stop these increased transfer fees. They feel that a luxury tax system would be beneficial, where there would be tax paid on transfers over an agreed limit with the proceeds of this tax going to the clubs with smaller resources to help re-establish a level financial playing field'( Daskal,2015). I feel this is a more realistic option to FFP as it will not necessarily restrict teams and investors from doing whatever they wish with their finance, but will also help to strike a competitive balance. I feel financial doping is acceptable if the money is there and can be guaranteed. The alternative that is the break-even rule favours those with the highest revenue streams and will even create more damage to the competitively of the leagues than what this financial doping trend has.
‘A similar system to the luxury tax idea is being implemented across the English Football League in a regulation called Fair Play Tax. The rule will be for any club that overspends and is consequently promoted to the Premiership. The tax to be paid will be calculated against losses suffered due to not spending within their means during the clubs promotion campaign. These rules have been greatly welcomed by Championship clubs with twenty one out of twenty four voting in favour of immediate implementation of the rule. The faith of this new idea lies in the Premier Leagues hands. QPR who were promoted last year, ran a loss of ??25.4 million and would have been taxed at least ??17.4 million. These taxes would then be divided up between all the Championship clubs that are cooperative with these rules’ (Thompson, 2015). This seems to be a very positive initiative and one which should help reward those who follow the rules and help level the sporting playing field. It might set a precedent if the Premier League or UEFA want to move away from FFP to luxury tax. A luxury tax system will provide both the benefits of competition and sustainability without prioritizing one over the other and for this reason alone, it is clearly a superior option compared to FFP. The playing field will be levelled with the smaller spending teams receiving this taxed amount to spend as they want, while sustainability of these clubs will remain safe as they can only spend what they have guaranteed in their bank accounts at the start of every year. These two ideas combined are perfect and would truly suit the needs of European football.
Salary caps on player’s wages could also be a viable alternative. ‘An agreed amount between all competing clubs and the league would be agreed’ (Daskal, 2015). It is thought that this would stop the bigger clubs from attracting all the top talent and strengthen the competitively of the leagues. A cap would also have a sufficient limit that clubs can spend on wages which would have a positive effect on sustainability. However I feel there are reasons why this system would not be optimal.
Studies of the salary caps in American sports strike a shocking result. ‘It was found that the introduction of a Salary Cap in the NFL, NBA and NHL had no effect on the level of competition within each sport. With regards to the NBA, studies show that the difference in in player wages between the bigger spenders and the smaller spenders has grown. Along with this, the cap has not shown to help level the sporting playing field proved by the fact that there has been no clear decrease in the standard deviation of victory percentages in the league. A worrying statistic is that only two teams from a total of thirty NBA teams were under the cap in the 08/09 season. Since 2005, at least five teams annually were hit with different punishments due to exceeding the cap limit’ (Kahane & Shmanske, 2012). Perhaps the punishment for exceeding the limit is not strong enough and if UEFA implemented stricter penalties, the salary cap would work better in European soccer. ‘Richard Sheehan (1996) said that there is not one economic argument in support of the salary caps as a means of offering a competitive balance. He also says that it ‘distorts incentives’ and that there is no proof that a cap actually performs its duty of promoting competitively’ (Sheehan 1996 cited in Kahane & Shmanske, 2012). From the above, it seems that the salary cap is not as effective as one would have thought in providing a financial level playing field and improving competitively. And while it does offer a viable means of providing sustainability, as an agreed amount would be determined that all teams are capable of affording, FFP seems to provide a stronger legislation with regards to sustainability, which will truly limit total spending to what clubs can afford and not just on wages. While it would seem that both areas fall short in regards to competitively, FFP offers a much strong viable option with regards to protecting the long term future of clubs.
While the FFP regulation is currently being challenged as a restriction of competition by Dupont, the salary cap would prove to be an even greater restriction. ‘As FFP restricts clubs from spending money that they don’t have and allows them to spend what they earn, the US salary caps restricts the spending on wages at about fifty percent of income earned. The salary cap makes FFP look like a lot more lenient form of restriction on competition. Setting the salary cap in relation to all European leagues would prove very difficult. How would UEFA go about setting a fixed cap limit when there are bigger leagues like the English Premier League and smaller leagues like the Irish Airtricity League? If UEFA were to set a uniform cap that helped strike a competitive balance in Ireland, the bigger teams in Europe would flee UEFA and form their own competitions. A cap figure to promote competiveness in England would have minimal impact on competiveness in smaller leagues like Ireland. If each league were to set a salary cap level relative to the needs of their own league, the result would be teams competing in Europe against other teams that play with a higher salary cap’ (Franck, 2014). ‘This would reduce the competiveness of European competitions and deter some teams from taking part in them. The only solution for this problem would be in the form of the creation of a European Super League’ (Franck, 2014). However this would leave a damaging effect on the current national leagues. It seems like the salary cap idea is one only suited to US sport and does not offer a better alternative to FFP. The salary cap idea would prove to be extremely restrictive and would definitely fail all EU Competition Law challenges.
‘The Union of European Football Associations contemplated the salary cap idea back in 2009 but felt that it could not be implemented successfully within the continents football leagues due to the open nature of European football involving promotion and relegation of clubs’ (Olsen, 2009). I find myself in agreement here that salary caps just won’t work in European football. The Salary Cap idea is only suited to a closed league set up and I feel the perceived benefits of the idea doesn’t outperform the benefits that a luxury tax system or even FFP would provide and so I feel the salary cap idea has no place in the game at this time.
Conclusion
While FFP has created some friction amongst many, it has proven successful in its primary aim of preserving the sustainability of football clubs. This is no more evident than with last season’s financial results, where eleven out of fourteen Premier League teams posted a profit. In England, only five teams entered administration since it’s been implemented. With these new measures I do feel that the long term future of Europe’s football clubs has been secured. The break-even rule has proven to be a marvellous inception with regards to sustainability and one that should have been introduced years ago. The simple thinking behind it of teams not being allowed spend more than they earn is extremely logical and one that should prevent a future Leeds United situation. And while I do agree that FFP is one of the strongest options available to UEFA to counteract club bankruptcies, it has come at a serious cost to the sport.
The second ‘F’ in FFP stands for ‘Fair’, but how can a rule that keeps the top teams at the top and the bottom teams at the bottom be considered fair? UEFA argue that financial equity is not the main aim of FFP, but it’s something that I feel should not be ignored. There is no scope for lower teams like Everton to topple the bigger teams like Manchester United in the long term. The break-even rule states that all teams are only allowed spend what they earn through football operations. But Manchester United’s revenues including sponsorship and match day receipts dwarfs Everton’s. This allows Manchester United to secure more talented players than Everton which will result in a loss of competitively in the league. It’s a rule that I feel protects the status quo and will lead to many European leagues becoming all too predictable. Clubs in Spain competing against Real Madrid and Barcelona receive only one fourteenth of the television revenue that the big two receive. How are these teams meant to overcome such insurmountable odds on a consistent basis? It’s a rule covered in contradiction. New investors can’t come in and supply these smaller teams with the funds to compete against these bigger teams, which include teams like Chelsea and Manchester City who have already benefited from this form of financial doping. Of course UEFA are worried that these new investors can’t guarantee the money and will instead default on their clubs but it’s not a fair proposal for investors that are in it for the long haul.
Jean-Louis Dupont has suggested that all investors should be made guarantee any money that they want to spend for their clubs at the start of every season. I feel that this is a much stronger proposal as it won’t act as a restriction of investment like FFP does whilst also making sure that no club will spend money they haven’t got. Clubs are free to spend what they want as long as it’s guaranteed and it will help increase competitively. He further suggests that a luxury tax system would prove more beneficial than the current FFP regulations. This is something I find myself in full agreement with. This would encourage spending while also helping maintain a level playing field if UEFA were to redistribute the taxes to teams that abide by the rules like in the NBA. It would also prove not be restrictive and would not face any competition from EU Law.
Financial Fair Play is here to stay if UEFA have anything to say about it, but there is no guarantee over its long term future. In fact I feel myself siding with Dupont, when he argues that the break-even rule of FFP is too restrictive and that it doesn’t stand up to EU Competition Law. UEFA’s main defence is that its ‘proportional’, but again this is something I don’t find myself in agreement with. I don’t feel that the number of restrictions and the loss of competitively is proportional to the future sustainability of clubs. UEFA have to argue that it’s the least restrictive means available to them in their pursuit of increased sustainability of football clubs and this is an argument I feel they cannot win. There are many stronger and more valid options available to UEFA like Dupont’s ideas and I feel FFP will not be deemed legal when it’s heard in court. For now, the FFP regulations are clouded in doubt.
I feel that if FFP fails, UEFA should attempt to put Dupont’s ideas into reality on a trial basis and that future research should focus on the idea of a luxury tax being introduced to the game. Further alternatives should also be considered so that UEFA can find the optimum solution to both the sustainability and competiveness problems In European football. Areas of future research should also include a discussion with a top EU Competition Law solicitor to see if there are any loopholes that UEFA could exploit to save FFP or if there is any way UEFA can tailor FFP to meet legal requirements. If FFP is to remain as it is, research should be carried out again in regular short term periods to see if the sustainability of clubs is actually improving and whether there still remains a competiveness problem.
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