UEFA’s Financial Fair Play Proposals Up for Approval

UEFA

UEFA’s Executive Committee meets next week to consider recommendations that could change the face of European club football. “Financial fair play”, as UEFA calls it, is the key item on the agenda, as the recommendations of the Professional Football Strategy Council (PFSC) made last month are up for approval (the PFSC was created in 2007, and consists of UEFA’s vice-presidents and representatives of clubs, leagues and the players). It’s expected, given Platini and UEFA’s role in driving the initiative in the first place, that the recommendations will be approved.

These recommendations have already received support from the UEFA Club Competitions Committee and, crucially, have approval from the European Club Association Board (ECA), the key body representing the 137 leading clubs in Europe.

So lets take a look at what these “financial fair play” recommendations consist of. They were summarised by UEFA as “a set of measures [that] will be put in place including”:

  • the obligation for clubs whose turnover is over a certain threshold, over a period of time, to balance their books, or “break even”, (i.e.  clubs cannot repeatedly spend more than the generated revenues)
  • to provide guidance on salaries and transfer spending
  • to provide an indicator on the sustainability of the levels of debt
  • the obligation for clubs to honour their commitments at all times

Clearly, the devil is going to be in the detail. Platini made a splash when the PFSC approved the recommendations with the headline news spreading that clubs would have to break even or face exclusion from the Champions League, but so far the wording is extremely vague. It’s going to take some tortured negotiation in the coming months to see just how far this requirement is fudged. Over what “threshold” will this obligation apply? What “period of time” will be put in place? What does “repeatedly” mean exactly?

UEFA says these measures, to be implemented from the 2012-13 season on, “will stimulate long term investment (youth development and upgrading of sporting facilities) over short term speculative spending and adherence to the rules will be assessed by the recently formed independent Club Financial Control Panel.”  The latter body will surely be crucial to these measures actually having any significant application. The Panel was created in March of this year, with its main task to conduct financial audits on clubs (along with possible spot checks or investigations to ensure UEFA’s rules are being followed). Will it turn out to have real teeth?

Another key body involved is the ECA. Only formed last year, the ECA has quickly established itself as the establishment centre for clubs across the continent to interact with UEFA. Some may find it somewhat ironic in the wake of the summer’s controversy over spending and poaching by some of the biggest clubs that the ECA is behind these recommendations towards “financial fair play”. Indeed, only today it was announced that Real Madrid’s freespending president Florentino Perez had been elected to the executive board of the ECA, along with debt-laden Manchester United’s chief executive David Gill. The ECA will have considerable say in how these “financial fair play” measures are implemented in practice (one English club not a member of the ECA, Manchester City, have not surprisingly come out against the proposals).

Once UEFA gives the recommendations the stamp of approval next week, we’ll begin to see just how the balance of power plays out between UEFA and the ECA over the details to actually achieve anything like “financial fair play”.

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