Why financial fair play doesn't work
This is a contributed article by Daniel Clyne and takes the form of an open letter in response to recent comments by senior Uefa official William Gaillard about the rationale and benefits of financial fair play:
Whether this open letter will be read by the people at whom it is targeted is unlikely but maybe with the support of a few well-connected, intelligent football lovers, my impassioned tirade can find its way to the eyes of a few leading proponents and implementers of UEFA’s Financial Fair Play Regulations. If not, i am always grateful for anybody who takes the time to indulge in one of my rants.
I am of the strong opinion that overall, the outcome of the Financial Fair Play Regulations will be an unfair one in relation to the competitiveness of the Premier League, by employing a “wall” securing the dominant position of the teams who generate the highest revenues. I addressed the reasons for this in a World Sports Law Report Article in May which can be found on my “asportinginsight” blog. Read it if you are interested and feel free to disagree.
The Regulations do have some merits. Of course they do! To argue that the rules are 100% bad would be inaccurate. So, whilst it is perfectly legitimate for people to look favourably upon the regulations, it is infuriating to hear intelligent, influential individuals talking patronising nonsense in an attempt to convince people of their merits.
I recently listened to a great podcast put together by, “The Spirit of Shankly” - a Liverpool Football Club supporters group. It includes a range of insights into Financial Fair Play by a variety of professionals with expertise in many areas. The podcast, obviously, focuses mainly on its impact on Liverpool Football Club and is a good listen for those looking to understand how the regulations affect a club of Liverpool’s size.
However, the podcast includes a mind-numbingly patronising, uninformative attempt by one of Michel Platini’s advisers, William Gaillard, to justify Financial Fair Play. This letter is not an attack on the creators of the podcast. On the contrary, like I previously said, the podcast itself is very good. All of the other experts speak informatively about the regulations and I certainly learnt a lot from listening to it. It is just William Gaillard’s release of an abundance of patronising and contradictory hot air that I considered to be extremely offensive. He even took the time to explain to us common, unintelligent dim-wits the complicated business principle that, if a business generates more debt than it does revenue, it is not a good thing. Thanks a lot William! You truly are a spectacular educator.
He then says that, out of the kindness of his heart and everyone’s heart at UEFA, they have decided to help clubs become aware of this incredibly complicated issue (I’m not even exaggerating. Give it a listen!). Once again, thank you William! I’m sure the chairmen and boards of directors, each with decades of commercial experience, appreciate such insightful guidance. The interviewer, in a relaxed tone, picks up on the fact that he “sounds like he is speaking to primary school children”before William begins his barrage of, to put it politely, utter rubbish. And here is what he says:
“Many clubs have been used to rely on sugar daddies; people willing to spend their personal income in order to subsidise a football club… This generates transfer and wage expenditure inflation because some clubs have almost unlimited means… Other clubs trying to catch up and be competitive then have to do the same without a sugar daddy behind them.”William is stating that wealthy benefactors enable some clubs to be able to out-compete others in the transfer and wage market. As a consequence, clubs without the same resources can either accept their uncompetitive position or overspend. This isn’t fair or sustainable. And, guess what? William is absolutely right. How can it be fair? Of course it isn’t fair! Nobody can argue with that point!
But we, the general public, are not mugs. We know that Financial Fair Play does not eliminate this unfairness and you can hear that straight from the mouth of my good friend William. He says, “We wanted… to make clubs’ revenues match their expenditure.” And that is exactly what the Financial Fair Play Rules do. The consequence being that clubs with higher sources of revenue, Manchester United, Chelsea, Arsenal, Liverpool, Tottenham Hotspur and Manchester City, can spend more than the likes of Swansea, Norwich, Stoke, Everton etc thus consistently outcompeting them in the transfer and wage market.
But hold on a minute William! I thought that this leads to “transfer and wage inflation”? INFLATION!!!! AHHHH. It’s a scary word. A word which William and his friends correctly use to describe the effect of a financial imbalance which currently swarms the football industry. But William negates to explain that such an imbalance will be equally (if not more indefinitely!) present in a post-Financial Fair Play world.
Dear William and UEFA. We, run-of-the-mill football fans, can accept that you may implement a policy that we disagree with. We can accept that you might get things wrong and can even accept with great regret and pity that you may be inherently incompetent. But we will not accept deceitful nonsense.