UEFA head Michel Platini continues to insist that he will be enforcing the so-called financial fair play rules starting this summer. Many fans rejoice at the idea of giving free spending clubs like Manchester City their comeuppance and look at these new rules as a levelling of the playing field.
These rules are, at best, a hopelessly misguided and naive attempt to pander to fans’ fears. More likely, it’s an ineffective attempt to look like they are “doing something” or, at worse, a cynical attempt to protect the interests of the established clubs.
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Platini might be the last honest man in world football, so I’m inclined to believe that his motivations are sincere. However, the end result of these rules will not be to make it easier for all clubs in Europe to compete, but rather to make it difficult for upstarts like City to break through.
The need for a “sugar daddy” like Roman Abramovich or Sheikh Mansour bin Zayed al Nahyan is an unfortunate side effect of the reality of the game at the highest level. Although we all understand there is a social contract between clubs and their supporters that says that they should not financially ruin them (i.e. Pompey) you have to wonder what the motivation of a wealthy investor would be if they knew going in that their hands are being tied.
Would the good Sheikh have bought into Eastlands if he wasn’t able to lead the club the the highest level? Or, would he have just held out until an established club became available? If it’s the latter, you do nothing but ensure that the gap between rich and poor widens.
UEFA has moved to a three year rolling target and has placed lots of loopholes (more on those in a minute) into these rules. Doing so was a recognition that a little bit of debt is sometimes necessary to advance a club. Like you or I taking out a mortgage to be able to move into a better neighbourhood, football clubs sometimes need to bleed a little red to get somewhere nice.
There is also an inherent difference between money from a benefactor and debt. The former may seem “unfair” to those that don’t have the benefit one, but it’s only the latter that has the potential to crush a team. If an owner wants to sink billions of his own personal fortune into a club why should they be stopped? It might seem tacky, but it’s not endangering the future of the club, which is what Platini claims his motivation is for implementing the new rules.
A simple way to allow that type of investment would be to require club owners to protect the losses. Establish a threshold of over-spending that is acceptable and if an owner wants to put more money in he or she must then put a bond in escrow that matches the overage. That way if the owner bails on the club, there is money available to balance the books.
There would even be an opportunity to use that escrow payment as some sort of luxury cap, which could be redistributed to smaller clubs. If they were really serious about evening the playing field that’s the type of set-up that would be implemented.
Above I mentioned there are loopholes that have been put into the rules. Despite the assumption of many, this new rule will not be enforced in a black and white way.
A club can be £37.29 million in the hole over the next three years and still play in European football so long as that expense is written off by the benefactor. Additionally, the crazy expenses that clubs like City have made up until June 2010 don’t count in the equation. There is little doubt that £37.29 is a much smaller number than City’s current £121.3 in loses, but there are few clubs in the world that could match that type of loss. It's unclear how this levels anything. It's more of an accounting exercise.
Also, the first penalty period won’t be until 2014-15, so there is three full years of Champions League football to be played (and money to be made from) before anyone has to worry about any of this. Keep in mind that it’s estimated that a Champions League spot is worth about £60 million to English teams. And you wonder why Roberto Mancini talks about finishing in the top four so much.
But here is the real kicker: There is a provision for subjectivity in the rule! So long as there is positive movement towards getting to the breakeven point a club can be spared. I’m sure there would be a big show of a meeting and some wrists would be slapped, but don’t expect Real Madrid to miss the '14-'15 Champions League. City could have more difficulty. They might make an example of City as they are not part of the established order.
Most likely is that 2014-15 will come and it will be business as usual. Clubs will find the loopholes they need to still spend, but stay within a loose definition of the rule. Instead of doing something tangible to protect the sport, UEFA will simply be able to say they doing something.
It will be good optics, but terrible policy.