The Number One Criticism of Financial Fair Play is Wrong

Financial Fair Play is a burden on those poor suffering clubs that were bought up by billionaire owners who have poured money into them. It’s a heartbreaking story of UEFA oppressing some of the world’s richest people and most successful football clubs.

Right? Wrong.

FFP will have a number of results, but keeping the pitiable Roman Abramovich from spending as he would like is no tragedy. Yes, it will prevent massive injections of cash from outside investors. Shrewsbury Town or Fortuna Köln won’t be able to rocket up the divisions and join the elite clubs in the Champions League courtesy of a wealthy backer. And that’s good.

The idea that an owner bankrolling a relatively less successful club is a great story of self-improvement is simply stupid. It isn’t. Winning the lottery can happen regardless of one’s personal qualities. You can be responsible with money or not, you can work hard or be shiftless. In football, clubs could spend recklessly or be responsible, put time and investment into developing players and engaging with their fanbase, or ignore these areas – it doesn’t matter, either way a club could be the beneficiary of an external capital injection.

What is common to most of the clubs that have benefitted from these owners is that they are clubs in big markets: Chelsea, Manchester City, PSG, and (to a lesser extent) QPR. (The main exception would probably be Wolfsburg.) Well-managed? Sometimes yes, sometimes no. These aren’t clubs that worked hard and made good. They got lucky, and are happy to join with the pre-existing elite in removing the route they took to the top.

While it is true that FFP may ossify the elite of European football, its critics ignore three facts. First, the top clubs have been entrenched for between twenty and fifty years, and barring colossal failures of management, most of them will retain their current lofty position. There is an element of kicking away the ladder (of external investors injecting capital) in FFP, but no mention of the self-perpetuating system for distributing television money. Why should a sugar daddy owner be the only way for clubs to be transformed?

Second, FFP begins to address some of the rampant inflation in transfer fees and wages of the last five to ten years, and this matters for fans. Keeping up with the sugar daddy clubs requires maximizing revenue, which is a further impetus for clubs to increase their ticket prices. It also encourages them to use leverage in order to compete with clubs that have benefitted from rich owners. Reining in the spending of the top clubs should, over time, lead to a reduction in wages as a percentage of costs, and keep top-flight clubs from suffering significantly due to relegation (especially in England, where the financial drop-off is steep). It almost certainly won’t reduce costs for fans, but it may relieve some pressure on clubs to keep pushing prices up, and it should reduce the incentives for clubs to place themselves in perilous financial situations.

Finally, the system does not close off the one route to the top that we should be encouraging: managed, sustainable growth over time. Clubs can still build up academies, find, shape, and train players, create good teams and grow their fanbase, and make sensible capital investments. Is it a quick route to the top? Absolutely not. Football is a peculiar business in this way; it just isn’t possible to smash the market open with a new innovation or product. At the same time, football fans are very loyal customers and it is possible to cultivate a large following over a long period of time. This isn’t as sexy as the meteoric rise of Manchester City, but it is financially prudent.

FFP is flawed in that it doesn’t account for leverage. Manchester United, Atletico Madrid, and others should be punished for taking on excessive debt without a legitimate economic reason (e.g. building a new stadium or training ground). However, to pretend that it unfairly targets certain clubs who have been driving inflation in football is just wrong. It targets one aspect of football’s financial problems – excessive spending on medium-term investments in players – and is a step towards making the game a bit more fair for all clubs.


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