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Kicking the Habit
Financial Fair Play Regulations and the fate of European football
[ Issue 108 Page 6 ] Wednesday, September 14, 2011, 21:12:47 Geunhong Park geunhongpiuspark@kaist.ac.kr

“England 5, Germany 1, Michael Owen’s number 1!” goes a song by The Business, an English rock band. Europeans are not at all secretive about their love of football (“soccer”), or “the man’s game.” Naturally, it should be no surprise that the market has become an internationally profitable one. Even billionaires from countries such as the United States, Thailand, Russia and the Arab Emirates have thrown in their investments with European teams. The financial scramble has vamped up the competition for players, infrastructure and coaches. This has resulted in a Darwinistic scuffle that the less extravagant teams have found more challenging over the years.

It is perhaps natural that the Union of European Football Associations (UEFA) has sought to impose guidelines on how football clubs should keep their books. UEFA and its president, Michel Platini, had long been concerned about clubs that continuously make losses and accumulate debt. UEFA’s Financial Fair Play Regulations (FFPR) has thus come into existence with a phased implementation period from 2010 to 2012. The new rules range from break-even requirements to the compulsory provision of financial information to authorities. According to UEFA, all this is to promote “rational financial behavior from clubs.”

The big question is: how will this affect European football? On one hand, the world-famous Manchester United Football Club’s troubles allude to the importance of keeping one’s finances in appropriate order. The team’s unmistakable popularity has ensured an impressive income. Nonetheless, the debt that its owners Joel and Avram Glazer suffered from buying the team are still dragging it down, despite the sale of some of its star players like Cristiano Ronaldo. Although Manchester United represents a case of extreme mismanagement by the owners, the FFPR will only exacerbate the problem by barring such teams from entry into profitable European tournaments to recoup their losses. Fair Play or no, management of football clubs is all about income and profit.

The importance of finances is exemplified by the other Manchester team: Manchester City. Under the sponsorship of Sheikh Mansour of Abu Dhabi, the club incurred massive losses in 2009-2010. Most of this has gone into the acquisition of famous players that have proven themselves in other teams, such as Robinho and Carlos Tevez. Perhaps it was money well spent, in that Manchester City was able to do well in the English League. Yet Manchester City’s relatively limited fame and its (until recently) meager sponsorship, coupled with the burden of paying for its athletes makes the likelihood of achieving break-even requirements and applying to the European leagues anytime soon quite slim. If the costs were not mere pocket money for the owners, it is quite possible that Manchester City’s good fortunes would have come to a sudden end.

The FFPR’s “austerity measures” may go some way towards avoiding the debt problems that have plagued many clubs. Yet the two Manchester teams reveal the sheer significance of profit and finance in the sporting industry, regardless of the FFPR. A few people – or clubs - with financial capability will always project their powers onto the pitch. Indeed, the UEFA regulations only reinforce the notion that profit is paramount in sport. This could have numerous repercussions; clubs may decide not to put charities on their players’ shirts, instead opting for sponsorship deals. Ticket prices may rise, and it will be unlikely that smaller clubs will ever challenge the supremacy and popularity of well-established teams. The few cases like Manchester City are only keeping the balance in the stratified domestic leagues.

The quest for financial fairness in football is not unjustified. However, the current Financial Fair Play Regulations will not enhance the experience for viewers and fans. For the average person, the biggest impact of the FFPR could well impact their own pockets, and make matches between the hierarchies in domestic leagues predictable and one-sided. The shady financial dealings of UEFA’s parent organization, the Fédération Internationale de Football Association (FIFA) - the system of bribes and corruption headed by its President Sepp Blatter - make UEFA’s arguments for “financial transparency” ring all the more hollow. It seems that in trying to solve the issue of “financial fairness” in football, UEFA may have created a host of other potential problems for clubs, owners, players, sponsors and fans.

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