Financial Fair Play was brought in by UEFA in 2011, but now it’s being scrapped in favour of a new financial monitoring system for clubs. What will the changes mean?
On Monday, the European Club Association supported a decision to remove UEFA’s Financial Fair Play rules, and instead introduce a new soft spending cap.
Paris Saint-Germain owner Nasser Al-Khelaifi is the new chairman of the ECA. He said the new rules would ensure that European club football stays at the top of sport and entertainment.
The Qatari businessman said the system – which should be rubber-stamped by UEFA next week – ensures a “stable, sustainable, and inclusive” structure.
Because the old FFP rules have had their fair share of critics.
“And in real terms, a lot of these clubs can plan for fines. They can essentially say, OK, we’ll set aside 50 million for a rainy day because at some point we’re going to run foul of FFP and they can sort of factor that into their spending.”Euro Football Daily
But what is the difference between the old FFP rules and the latest set of changes?
Financial Fair Play was introduced in 2011 with the aim of preventing European clubs from spending beyond their means.
It meant that clubs had to make their accounts available to ensure they didn’t build up unsustainable levels of debt, and that they were using money that had been legitimately earned.
In theory, wealthy owners could no longer pump unlimited cash resources into their clubs. They could spend a maximum of €30 million more than they earn over a three-year period.
The first clubs to be issued fines by UEFA’s Club Financial Control Body were Manchester City and PSG in 2017.
“PSG had made 167 million from the Qatar Tourism Authority. Essentially the CFCB said this was massively above market rate for what could be expected. They used deals like the Azerbaijan deal that Atletico Madrid had to say actually, we think they are spending more than they need to for this deal and essentially putting money into your coffers that shouldn’t be there.”Euro Football Daily
In response, PSG said that it “deplores the fact” that UEFA hadn’t recognised “the full value” of its partnership with the Qatar Tourism Authority.
But the thing is, PSG president Nasser Al-Khelaifi is a minister in the Qatari government. The Qatari Investment Authority is government owned.
The Qatari Investment Authority owns PSG and runs the Qatari Tourist Board. It’s essentially one and the same.
In 2017, PSG had paid £200 million for Neymar. And the following season they bought Kylian Mbappe for £130 million.
So when they signed Lionel Messi last summer, Nasser Al-Khelaifi was asked how they could stay within the FFP parameters.
“There’s a lot of people wondering how you can afford to have such an amazing squad and stick within FFP. Can you tell us please?
“For us, always as we said, we follow the Financial Fair Play regulations from the day one that we started until the end, we’re always gonna follow the regulation of the Financial Fair Play. Before we do anything basically we look at it with our commercial people, financial people, with legal people. So as soon as you see that we’re signing Leo, that means we did have the capacity to sign him.”Daily Mail
PSG – and others – were still spending vast amounts of money. That’s why many said FFP wasn’t fit for purpose.
“In terms of teeth and being able to punish clubs that have done wrong, it hasn’t worked has it? Which clubs have been on the wrong end of an UEFA punishment apart from you know a few Turkish clubs and a couple of Italian clubs that have had their knuckles rapped rather than properly punished? Man City and PSG are the two big clubs that UEFA have struggled with over the years and they’ve come through it unscathed!”
“They both got away with it, and I’m even saying that as a PSG fan myself.”ESPN UK
The new system will see spending on wages, transfers and agent fees capped at 90% of revenue from 2023, incrementally reducing down to 70% by 2025.
Clubs will be allowed to spend more if they sell players.
The key difference?
Breaches will lead to fines and points deductions, and repeat offences could lead to exclusion from European competitions altogether.
So, this clearer, more simplified system doe s allow clubs to spend more, but equally it should close any loopholes and allow UEFA to see its punishments through.
Nasser Al-Khelaifi and the European Clubs Association are in favour of the change, for now at least.
Can they stay within the new rules? We’ll have to wait and see.
Today’s story was written by Chloe Beresford and mixed by Hannah Varrall.