FFP is a corrupt scheme that has killed competitive football. Here’s how it did it.

This week, UEFA announced that Manchester City are to be banned from the UEFA Champions League for two years, beginning in summer 2020.

The decision was taken after the club was found to have committed “serious breaches” of Uefa’s club licensing and Financial Fair Play regulations.

Across Europe, fans of rival clubs celebrated City’s demise, partly out of Schadenfreude and natural fan rivalry, but also, in some quarters, out of a genuine belief that the soul of the game had been saved.

I wish to argue, however, that, on the contrary, this was the day it was finally consigned to the pit.

Gallingly, for the existing management team at the club, the new ban relates to events that predate any of the current incumbents.

However, rules are rules, right? And Financial Fair Play, or FFP, exists to maintain that great modern cliché, a level playing field that ensures fair competition between competing teams.

Except that it does the exact opposite. The playing field has been sloping more and more steeply downhill ever since the (now disgraced and banned) architect of FFP, Michel Platini, introduced the scheme in 2011 then began a delicate little dance with the European Commission to try to convince them that his project wasn’t illegal under restraint of trade legislation.

It’s worth noting, in passing, that this is still a matter that has never been tested in the courts.

I have two basic objections to FFP. The first is with the logic of the concept in theory and the second relates to the double standards that have been used when applying it.

1. Flawed concept

Rich owners have always put money into their clubs. What has changed in the new century is the sheer scale of that investment, with billionaire owners of Premier League teams now two a penny.

As a result, after originally being intended to deal with the game’s dependence on debt, FFP changed quickly to be about restricting the amount of money that owners were allowed to put into their clubs.

Inevitably, however, without starting afresh with a genuinely level playing field, this ran the risk of creating a situation where the big teams got bigger and the small ones smaller. As David Conn observed in the Guardian as long ago as 2011, “Those who make the most income without owners’ help could become even more inevitable winners of the game’s prizes”

Conn also noted a second effect which would be that clubs “will seek to further increase their income, leading to yet more expensive ticket prices, as is happening in England, with rises announced at United, Arsenal and Liverpool.” This option, however, would be far harder to sell to fans of struggling teams.

In essence, the logic of FFP, imposed on an existing set of clubs that already ranged from ultra-rich to ultra-poor, would be to increase the polarisation between them.

All other things being equal, the rich would get richer and the poor would get poorer.

Perverse incentives

Even good legislation runs the risk of perverse incentives so FFP, being both novel and legally questionable, encouraged those likely to suffer from it, to bend the rules a little.

Once unfashionable clubs, now with fabulously wealthy owners, such as Leicester City and AFC Bournemouth, both tried this, with mixed success.

Although both have since been fined for breaking FFP rules – in Leicester’s case, as a steppingstone towards an unlikely Premier League trophy – only one of the two has since established themselves at the top table of English football. In so doing, Leicester seem to have somehow convinced the wider football public that their success was a proof of the romance of sport rather than of ‘financial doping’.

The problem of polarisation may sound academic but it’s fundamental to the implementation issues that I will explore below. UEFA’s various attempts to assess the “true value” of sponsorship deals, for instance, have been fraught with difficulty and carry a whiff of central planning apparatchiks trying to price things they don’t understand in the absence of market forces to guide them.

But, more importantly, the sponsorship question plays straight into the polarisation issue, via what economists call a network effect; because a shirt deal for Real Madrid or Manchester United, whose global fanbases are immense, is certain to be worth an awful lot more than an otherwise identical contract for far less popular clubs such as Leicester City or Bayer Leverkusen.

No wonder the big boys love FFP and bang on about the dangers of ‘financial doping’, especially when they find themselves beginning to fall behind in football’s never-ending race.

2. Implementation

If the only perverse outcome of an honestly implemented FFP scheme were to assure the giants of the game of their place in a de facto cartel, that would probably be vaguely tolerable.

But UEFA’s approach to the scheme’s implementation has been far from evenhanded and needs to be understood in the context of other changes it has made, in parallel, to support historically successful clubs.

A remarkable recent amendment to the organisation’s reward system, that has attracted surprisingly little comment in the media, was the announcement of new rules for UEFA payments that massively favour previous tournament winners.

As the Daily Mail explained in 2018, “Changes to UEFA’s coefficient, the ranking system for individual clubs, will take account of historic titles won, rather than simply results from the last five years.

And the new coefficient will be one of the strands used when it comes to sharing out the money…. Real Madrid, for example, champions a dozen times, will have a financial edge over Atletico Madrid, who have never won it, before a ball has been kicked in next season’s competition.

“If Real win next year’s final in Madrid, with all the new rules in place, they could bank an estimated £45million more than the £80m they earned for winning last year in Cardiff.”

Why should the fact that Real Madrid won the European Cup five times in the 1950s, when English clubs did not even participate, have anything at all to do with the rewards for success in the 2020s?

In what other sport do the winnings vary, depending on the name of the winner?

And how is any of this fair play? Indeed, how can it be seen as anything other than a blatant attempt to support the old guard at the expense of the new?

The same article also goes on to explain how the percentage of UEFA’s so-called “solidarity” payments to the hundreds of professional clubs not involved in European competitions “will be reduced in real terms” and that a further adjustment, to increase Champions League club payments at the expense of the teams in the Europa League, will further entrench the elite.

But even this is not the end of the story.

For, in a system as biased towards the cartel as this, we are not surprised to find instances of special exceptions being explicitly made for favoured (read, historic) clubs while no such generosity is extended to the nouveau riche.

Doing deals with UEFA

In July 2019, AC Milan, who had already been penalised twice for FFP transgressions, proposed and agreed a deal with UEFA whereby they would serve a one-year ban from the Europa League a season early – precisely so that they could continue to massively overspend, under their new Chinese owners, in a bid to qualify for the Champions League this season, thus improving their turnover and making the FFP sums add up.

It’s hard to imagine a more blatant example of collusion between a supposedly impartial administrator and a favoured, historic institution.

As the Sun newspaper observed at the time, “That means the former Arsenal CEO [Ivan Gazidis] can oversee a huge spending spree this summer as they gamble on securing a top four finish and Champions League qualification this season…. If they manage to do that, the club will be set for a huge cash windfall from the new Uefa “historical” rankings system.”

This was because AC Milan have famously won the European Cup no fewer than seven times.

Also in 2019, we witnessed a massive injection of cash into another famous old club, Juventus, again ignored by UEFA when it clearly merited an investigation, as a minimum, under FFP rules.

For no apparent commercial reason, club sponsor Jeep agreed to tear up its shirt sponsorship deal with the Italian giants, even though it still had two more years left to run; and instead signed a new contract that paid Juventus more than twice as much as previously.

Naturally, the fact that Jeep and Juventus have a common owner in the Agnelli family was wholly coincidental.

So what are we to conclude?

Football administrators have been shown, in recent years, to be only too human.

As well as high profile leaders, such as Sepp Blatter and Michel Platini, who have been publicly shamed and banned from the game, we have witnessed a litany of local nobodies around the world such as Mooketsi Kgotlele, Amos Adamu and Gordon Derrick being kicked out following corruption scandals.

FIFA and UEFA are organisations that today are characterised by fabulous wealth and endemic corruption, all developed on the back of someone else’s ability and effort.

Untalented, anonymous and fabulously wealthy, the game’s bureaucrats desperately need the teams and their superstars to keep doing what they have been doing so their gravy train can keep on puffing down the track.

And so we have the greatest scam of them all; clear alignment between the people assigned to run the game and those who have been most responsible for creating the aura around it.

Thus the scene is set for outright bias and the maintenance of a cartel that utterly undermines any remaining vestige of sporting integrity.

And thus the game died.

Nigel

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