On 13th July 2020, Manchester City – who had already sealed 2nd place in the Premier League – received the decision they had been hoping for. Despite being banned from European football competitions for two years for allegedly breaching Financial Fair Play rules, The Citizens, Premier League champions for two years consecutively prior to the 2019-20 season, were told they would indeed be allowed to play in the UEFA Champions League in the 2020-21 season after having qualified via their league position. They also had their €30m fine reduced to €10m.
There has since been a massive uproar about whether the rules in place, instigated by UEFA to stop the rich clubs from simply buying their way to the top and keeping the game ‘fair’, are just that – fair. But in order to really understand this, we need to understand the rules themselves.
What is FFP?
Financial Fair Play was introduced around 10 years ago, with the intention of reducing debt and creating a fairer game. The intention of FFP, then, is great – Premier League clubs at the time of the introduction of the rules had debts amassing more than £3bn, according to Deloitte.
The rules seem on the surface quite simple: spend no more than £3.9m more than you make in any three-year assessment period, as well as not reporting losses of over £25.5m (as of a few seasons ago) and you’re safe. On top of this, keep up with payments on time (transfers, for example).
There are many ways to make money in FFP restrictions: television, ticket income and commercial income are all acceptable. Spending money on stadiums, training facilities, youth development or community projects is fine, but other expenditure like wages and transfer fees all count to your overall FFP ‘score’.
It is believed that Manchester City were originally accused of having breached these regulations by “overstating its sponsorship income”.
How are City not banned?
The Court of Arbitration for Sport (CAS), who ruled on the appeal, have argued that Manchester City were not “disguising equity funds as sponsorship contributions” and therefore UEFA’s original decision has been overturned.
Whilst the fine remains in place as a result of the Etihad side “obstructing the UEFA Club Financial Control Body’s proceedings”, CAS believed it wouldn’t be fair to uphold the ban in light of the reduced punishment.
In any case, Pep Guardiola’s team would have been allowed to see out the 2019-20 UEFA Champions League campaign, which ended with a 3-1 defeat at the hands of Lyon.
Should City be happy with the decision?
Yes. Manchester City missing out on the Champions League would be calamitous in more ways than one. To put the financial benefit of playing in Europe’s elite competition into perspective, if you win every game in the competition, assuming you start by playing in the group stages, a club stands to earn €82m just from UEFA. That is before you account for ticketing, sponsorship, television rights and more.
The Champions League also carries such weight in terms of the reputation the competition has. Missing out on the Champions League and perhaps playing Europa League or even no European football would be disasterous for City’s best players – would Kevin de Bruyne, Sergio Aguero and Raheem Sterling really want to take pay cuts (inevitably, if City lose so much money from not competing) to play with no chance of winning European medals? And if they were to leave, who would replace them? It would be incredibly difficult, whilst staying in FFP regulations, to attract the best players to the club if they were achieving 5th-, 6th-, 7th-placed finishes (or indeed, were removed from the competition).
How does FFP look?
FFP has always been scrutinised. It doesn’t really level the playing field in football: Liverpool still managed to spend £300m in two seasons (prior to this campaign, which had an admittedly very low spend), in order to secure their first Premier League title in 30 years – though the caveat to this example is Liverpool were way, way better than anyone else this season.
Where FFP really stands out to me is that so many clubs are barely surviving. Wigan Athletic were FA Cup winners and playing Europa League football not long ago; Portsmouth the same. Sunderland were regularly having huge attendances. Bolton were competing for Europe and now they sit in League 2 after a heartbreaking season that saw them rooted to the bottom of the League 1 table. Rules or new strategies should be put in place to protect clubs like this. I fear Aston Villa, who spent millions yet have been relegated this season, will struggle with reduced ‘parachute’ payments.
What would these new strategies look like?
I’m not sure of the solution as all potential proposals have their flaws. Firstly, greater scrutiny and a shorter assessment period for FFP for the biggest clubs (i.e. those competing in European competitions) so greater regulations can be imposed. This would be great as it would mean clubs could not just break the bank for a few years and then go quiet in the final year of the assessment period to balance the books. This isn’t a financial decision as such but more to implement a fairer football environment, and we should be promoting a fairer field which also sees better training for homegrown young talent; without transfers in the 2019-20 season, look at how much Chelsea’s young squad has thrived under Frank Lampard – Mason Mount, Tammy Abraham, Fikayo Tomori, Andreas Christensen, Reece James – all players who in ‘normal’ circumstances haven’t been given such opportunities.
A net transfer fee cap may help too. It would stop clubs from overspending but mean that homegrown talent could be sold in order to make money. The specifics of this are hard to detail without proper planning, but it could vary based on the division – the Premier League net spend could be £20m, the Championship £10m, League 1 £5m and so on. (These are arbitrary figures just to demonstrate the point.) Exceed this net spend and impose point deductions, fines, limits on squad sizes or whatever else may hammer home the point. The same with wage caps – there is absolutely no way a footballer should earn, as a base salary, £200,000 a week.
There are ways of making football fairer for all – let’s not forget the huge wage gap between men and women, which is a whole article in itself – and FFP simply isn’t enough.