Why the FFP will not make a difference to the EPL clubs

As seen in recent years, money has become one of the most important factors that makes a club successful. From Chelsea and Manchester City to PSG and Malaga, they are owned by mega-rich owners that have proved their power in the industrial world and want to continue doing that in the world of football as well. Buying a club and financially supporting it gives owners more then just fame and glory. With it follows criticism from people who tend to hate you even when your own fans see you as the Messiah.

Supporters of Manchester United, Arsenal and other such clubs are ready to pounce on the financial mistakes made by these owners and often regard them as using their clubs as toys to have fun with and, when bored, will throw it out and get a new one. To handle such complaints, UEFA designed a system to keep it fair for the financially handicapped clubs. The system today brings fear to the minds of the fans that support clubs heavily backed by financial support from industrial tycoons. Financial Fair Play (FFP), introduced by UEFA, is set to be implemented this year and states it’s primary objectives being :

• to introduce more discipline and rationality in club football finances;• to decrease pressure on salaries and transfer fees and limit inflationary effect;• to encourage clubs to compete within their revenues;• to encourage long-term investments in youth football and infrastructure;• to protect the long-term viability of European club football;• to ensure clubs settle their liabilities on a timely basis.

Or in Michael Platini’s words :

Fifty per cent of clubs are losing money and this is an increasing trend. We needed to stop this downward spiral. They have spent more than they have earned in the past and haven’t paid their debts. We don’t want to kill or hurt the clubs; on the contrary, we want to help them in the market. The teams who play in our tournaments have unanimously agreed to our principles…living within your means is the basis of accounting but it hasn’t been the basis of football for years now. The owners are asking for rules because they can’t implement them themselves – many of them have had it with shovelling money into clubs and the more money you put into clubs, the harder it is to sell at a profit.

If you ask me, they are very good targets, even though it would affect the club I support. Inflation is affecting not just the world of football but countries as well. The points above puts every club into the same standard and would see a much more interesting Champions League campaign from weaker teams. Basically the rule states that clubs can only spend money on transfers and salaries if they make a “profit”. Profit here means if you win silverware and any revenue that you generate from sales of tickets, apparels and other accessories. But a club would be able to sell tickets or shirts only if they can maintain their popularity by winning consistently. To keep it simple, if a team wins, they can spend lavishly till the money they earned finishes. If a team loses, they can’t spend and if they do, they could face some consequences from UEFA. Profit can also be made by all teams that get money through TV-viewership rights.

So why won’t it have a huge affect on the Premier League?

The news that caused an internet sensation earlier this week was when the Premier League announced that they had sold the TV rights to BT and Sky Sports for a lucrative amount of £3.018billion. This shows an increase of at least £1.245billion on the current partnership with Sky and ESPN. This also shows the end of ESPN showing Premier League matches on TV, something that will be hard to swallow for Indian fans. When the English players at the Euro’s received this news they must have definitely been happy as now their salaries are increased with more money available and more signings.

From the next season, every Premier League team will earn £75 Million per year for TV Rights. Rewind a bit-back. Financial Fair Play Rule states that if you attain profit, you can close your eyes and spend. With 75 Million to clubs like Manchester United, Manchester City, Chelsea, Arsenal and Liverpool, they could still spend more if they do attain success. This would somehow see them spending more than they usually do. A huge backfire, isn’t it? But with some clubs in huge debts, it looks like they will opt to clear them and then think about huge signings to improve on their club’s squad.

The buying of viewership rights has it’s pros and cons. Once again, we see Platini and UEFA make a mockery out of themselves but this shows that football is becoming more and more commercial.

Only time can tell how it reflects on the beautiful game.