It was in 2009 when a term made the rounds for the first time in top European football that should occupy him quite a bit afterwards. “Financial fair play” was the new magic formula that should help to get the excesses in the foosball business under control. A year later, the European Football Union decided to introduce it: “We’re going to be tough,” said then-Uefa President Michel Platini.
Now, twelve years later, the Financial Fair Play System (FFP) is coming to an end. The Champions League season that starts this Tuesday will probably be the last in which the regulations apply – or what is left of it. Due to Corona, the requirements have currently been suspended or adjusted anyway. But by the end of the season, a new concept is to be created, the precise design of which is currently a battle raging within European football.
In any case, the FFP in its current form goes down in football history as a failed project. Because the excesses continued, and the implementation of the regulations, which were intended to limit the excesses, promoted the very clubs that, like Paris Saint-Germain or Manchester City, were able to afford particularly irritating excesses thanks to princely alimony from Qatar and Abu Dhabi.
No club can spend more money than it earns, the basic rule is: so simple, and so easy to get around
In theory, the idea sounds as simple as it is convincing. No club is allowed to spend more money than it earns, that is the basic rule. A maximum of five million euros minus is allowed over a period of three years and an external investor is only allowed to fill a gap of 30 million euros. According to the general statistics, the request was even successful: In the season before the introduction of the FFP, the deficit of all European first division clubs totaled around 1.7 billion euros. In the year before Corona there was even a plus of several hundred million euros.
However, the system generally offers clubs many options for keeping records in their favor. The gigantic redemptions, for example, can be stretched over the contract period of the obligated player. So when PSG tied Neymar for the previous record transfer of 222 million euros in 2017 and provided him with a contract until 2022, the expenditure statistics for this transfer were “only” 44.4 million euros per year.
The total sales amount for a player, on the other hand, can be booked in one year. Against this background, some bizarre transfer constellations arise, for example a player swap between two clubs with two amazingly high transfer fees. In addition, the investor clubs can also be tricked on the income side in that companies from the investor’s environment step in as sponsors and pay the handsome sums that the investor is no longer allowed to pay according to the rules.
In addition, the Uefa torpedoed the reputation of the system itself through the concrete handling of violations. For a long time, Uefa only sanctioned smaller clubs, especially under the leadership of Platini and his general secretary Gianni Infantino, who rose to become FIFA boss in 2016. Clubs like ManCity or Paris got away with it without major sanctions – also thanks to the help of Infantino. It was only under its new president Aleksander Ceferin that Uefa took the regulations more seriously, even at larger clubs: In 2019, they excluded AC Milan from the European Cup and also banned Manchester City from the Champions League, which the International Court of Justice (CAS) in an unusual process corrected.
ManCity and Paris, but also Manchester United, were able to pile up a transfer deficit of around one billion euros in the transfer area alone and apart from the lavish salaries in the past ten years without this having had any consequences. This summer, the clubs had even more leeway than usual. Because of the corona consequences, the Uefa is handling the financial fair play rules less strictly: For example, the balance sheets for 2020 and 2021 may be combined.
Accordingly, Manchester City turned over 115 million euros for Jack Grealish, Paris signed almost half a dozen outstanding players from Messi to Wijnaldum, Hakimi and Ramos to Donnarumma. A club like Barcelona, in addition to its own mismanagement, has suffered in the past from the fact that Spain has stricter requirements for the level of player salaries; these may only amount to around 70 percent of the income.
A kind of luxury tax is under discussion, but many details are still unclear
But at the same time, the pandemic has now accelerated the debate about a fundamental reorganization of the system. “It’s about limiting the expenditure of the clubs,” said Uefa boss Ceferin recently Spiegel – and in particular the introduction of a so-called luxury tax.
In principle, it should work like this: Player expenses should be capped at a certain percentage of income, for example 70 percent. Against violations, the clubs should be able to buy their way out with this luxury tax. Uefa boss Ceferin already brought a tax rate of 100 percent into play when he recently calculated an example: If a club were allowed to spend 300 million euros, but would exceed this amount by 200 million euros, they would have to pay a further 200 million euros fine, which would then be redistributed to other clubs.
Many details of this reform are still unclear. Clubs like Paris might like the general thrust because their owners would then invest more and, in case of doubt, would just take the taxes on themselves; PSG boss Nasser Al-Khelaifi sits as a member of the Uefa board and president of the club association ECA at a crucial point in the discussions. On the other hand, many critical voices come from the Bundesliga because they fear that investor money will flow almost without limit. In general, they would like the financial rules to be strengthened and advocate limiting these donations – and for non-monetary sanctions such as exclusion to continue to apply.
However, that is precisely the great lesson from the failed financial fair play system: sanctions such as exclusion from the competition are not only needed on paper – this requires the will of sports politics to enforce these sanctions in case of doubt.
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