Football And Equality Before The Law

“The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread” – Anatole France

 Last week, I offered an examination of why the Financial Fair Play (FFP) regulations may run into trouble when the big clubs, specifically the ones run as Socio’s decide not to abide by restrictions on what they can spend. Sadly even if the big clubs decide that they do wish to play by the new rules the problems don’t stop there. FFP is the first step on the road but UEFA’s desire to restore some sense of normality to spending in football will is likely to increase the wealth divide between the elite and the rest.

  The basic principle of the FFP is that no club will be allowed to spend more than it receives through its various revenue streams. This attempt to curb spending is undoubtedly a positive. In 1979 Trevor Francis became the first million pound player. In the last few transfer windows crazy figures such as £80m (Cristiano Ronaldo), £56m (Kaka) and £50m (Fernando Torres) have been tossed around. Without regulation the price is only going to rise. Each major purchase has a ripple effect through the entire market. When Yaya Toure earns £212,000 per week at Manchester City you can bet that agents everywhere are telling clubs they have to cough up a little bit more because more is available elsewhere. When Manchester United received £80m you can bet other clubs add on a few noughts to any asking price. This is not to throw stones at any particular club, every one of them has contributed to these spiralling costs in some way. The entire system has contributed. UEFA is taking a very necessary stand and should be applauded for doing so.

 However, admirable though the work of Platini and his minions has been, it seems like the problem of clubs acting like it’s the last days of Rome will merely be replaced with another problem; the entrenchment of the status quo.  The quote from Anatole France neatly encapsulates the quandary facing football if (and it’s a very big if) everyone accepts the FFP rules. Imagine a hypothetical scenario where UEFA’s FFP plan has been in effect for a number of years. Almost all the clubs in European competitions have abided by the rules and are now becoming virtually debt-free. The likes of Manchester United, Real Madrid and Chelsea all have rather healthy looking balance sheets as opposed to being sporting versions of Enron.

  According to the 2009/10 figures, provided by the ever-superb Swiss Ramble Manchester United’s revenue from last season stands at £286m. Put into perspective that is 6.7 times higher than Wigan. Now Manchester United will have to pay wages out of that money but it’s not hard to imagine the financial clout that they would have at their disposal. Clout they would have today had the Glazer takeover never happened. Put simply, United have a level of funds that is never going to be available to the Fulham’s or Stoke’s of this world, despite them being established Premier League sides. They just don’t have the fan base. And a club’s fan base is about to become more important than ever before.

  Currently a number clubs rely on billionaire owners and huge debt burdens going unnoticed to carry on surviving. When the FFP regulations are brought in clubs will have to clear their debts. Given that Manchester United bring in £286m but have a debt burden of nearly £600m they are deeply in the red. Wolves meanwhile have virtually zero debt but generate a fraction of what Manchester United can. Currently, Wolves are in a much better financial position. But when United pay off all that debt, the gap between the two clubs will get wider due to the enormous comparative advantage United have in terms of fan base.

 With the power of owners curtailed by the FFP rules, the fans become the major source of income for any given club as well as determining other revenue streams. Companies sponsor football teams in the hopes of getting their product seen by as many people as possible therefore sponsorship deals depend largely on fan base. No longer will an Abramovich be able to underwrite Chelsea’s losses from not moving from Stamford Bridge. The 40,000 fans the Blues get each week cannot cover the cost of paying for Drogba et al to strut their stuff in London each week. The maths just doesn’t hold together.

   Clubs will be able to break the FFP rules to build new infrastructure, something many clubs desperately need such as Liverpool and almost any Italian club you care to name but finding the fans to find a shiny new stadium will be the hard part. Chelsea and Manchester City are establishing themselves as top level teams and have done so through vast owner expenditure. The influx of better players will draw in crowds and, in theory, allows to club to become self-sustaining. They are creating proud histories for the club through success on the field.

  But once the FFP regulations come in, no more splurges will be allowed and therefore the likelihood is that very few clubs will be able to attract new fans. The current elite group of clubs will monopolise the new generations of fans as has been the trend in recent years. Without more fans coming to see the games, clubs cannot hope to purchase better players and therefore win over more fans. The cycle becomes self-fulfilling and the status quo is preserved ad infinitum.

  This is not to suggest that the efforts of UEFA have been misguided over preventing the amount of money being spent spiralling ever higher, but the FFP merely represents the first step in trying to create a more perfect league where genuine competition is possible. Reining in the lunatic spending is a good thing but it should not obscure the problems that the FFP might well cause.

Comments

[paul]

lets see how well city do without all that money

[pauldaboi]

what gives fifa the right to introduce this!