It looks like the Financial Fair Play rules that are being introduced by UEFA President Michel Platini do have some teeth, with the news that 23 clubs have had their funds from last season’s European competitions withheld, due to their financial siutation.
Michel Platini – there’s no going back
When Michel first talked about Financial Fair Play (FFP) rules a few years ago, he always said that if clubs didn’t balance their books, and only spend what they bring in with their revenues, then they would be barred from European competition.
And it seems the withholding of funds from last season is the first step by UEFA in clamping down on clubs who keep spending money like it’s going out of style, and often have wage bills which are even bigger than their revenues.
And it seems that some clubs now don’t have the money to pay their players, or to pay other clubs for players they have purchased, and Atletico Madrid, Malaga, Fenerbahce and Sporting Lisbon are some of the clubs who have until September 30th to settle those types of debts.
If they don’t do that, they will be hauled in front of UEFA to explain what they are doing – which seems just fine with us.
Atletico are the current Europa League champions so Michel Platini is not holding back on who he goes after – and that’s very good to see.
Clubs in England that are probably going to get a call from UEFA include Manchester City, Chelsea and QPR, simply because they are nowhere near balancing their books, but also show no signs of cutting back on their expenditures.
And as an example of that, City lost £197M in their last financial year for which records are available – the 2010-2011 season.
FFP is a long overdue control on clubs’ spending, and between 2011 and 2014, no club is allowed to lose more than £39.5M in one financial year, and between 2014 and 2017 that figure is reduced to £26.3M, and after that clubs are expected to break even – so it’s not as if clubs haven’t had ample warning or time to get their books in order.
Some clubs have not taken Platini’s initiative seriously, and Qatari-backed Paris Saint Germain are another club who are spending money like it grows on trees, and at some point they will need to be confronted on what they are doing.
Last summer PSG spent £120M on players like Zlatan Ibrahmovic, Thiago Silva and Ezequiel Lavezzi and Russian club Zenit St Petersburg have spent around £75M on just two players in the summer – Hulk and Axel Witsel.
As a reminder this is what Platini told Gazzetta dello Sport a couple of weeks ago:
“These rules were unanimously approved by all clubs, politicians, judges and the European Union. There’s no going back from here on.” “FFP is a hard rule for any team, regardless of whether we’re talking about PSG, Juventus, or any other team.”
“I have spoken with directors from all clubs. They have all stressed that they would follow the new rules. It seems that some worry a bit more about FFP than others, though.”
“Financial Fair Play does not stop clubs from buying players. Clubs can still spend as much as they want as long as their budget accounts for it.”
There have also been discussions in UEFA of high sponsorship deals such as exists for the Etihad Stadium with Manchester City, who are getting £400M over 10 years from Etihad Airways for the naming rights.
Etihad are owned by the Abu Dhabi government and the Manchester City main owner, Sheikh Mansour, is a member of the Abu Dhabi royal family, and there certainly seems to be an unfair link there.
And £40M per season is hardly the fair market value of such a deal – it’s a sweetheart deal in other words, and we’re surprised UEFA haven’t yet done something about this.
As an example of other naming rights deals which currently exist, Arsenal struck one with Emirates Airlines back in 2004, to name their then new stadium The Emirates Stadium, and those naming rights are worth just £2.8M per year for 15 years – so you see what we mean.
We have no idea what Mike Ashley and Sports Direct s paying Newcastle United for the naming rights to St. James’ Park – and it would be nice to know what that figure is – with Newcastle hoping to get up to £10M a year off the naming rights, but no company seems to interested, with the fans dead against it.
But the good news is Michel Platini is putting teeth into the FFP rules for European clubs, and that’s got to be good news for Newcastle, since we only lost £3.9M in the financial year 2010-2011.
You can also reach Ed at firstname.lastname@example.org