There is an ominous tower looming on the horizon of Europe’s footballing future. There a whispers about its implications, but few are yet to fully comprehend the vastness of the impact it will have upon them. Among these pilgrims, trudging towards a structure that grows increasingly larger, are Manchester United owners the Glazer Family, Sheikh Mansour, Roman Abramovich and other Premier League club owners. As they move closer the wealthy executives spot Michel Platini at its summit, scrutinising a number of documents. The president of UEFA is comparing their finances with the rules of the UEFA Financial Fair Play (FFP) regulations and if their club is in the red, they will not be allowed to progress to European competition. Soon the full force of this will be felt across England and it could well change the landscape of the national game in coming years, as well as seeing a shift of power across the continent to Germany.
With the FFP rules continuing to clamp down on European clubs they will no longer be allowed to spend more than they receive in income. Therefore expenditure cannot exceed football-related earnings including TV rights, gate receipts, competition prize money and sponsorship. Currently, teams are allowed to register losses but the limits to these are being reduced with the aim of having every club break even. If any team fails to meet these standards, they could face expulsion from European competition as of the 2014-15 season.
These laws will stop owners from dragging the club out of trouble with their own personal wealth. Abramovich and the like will no longer be able to keep their clubs afloat out of their own pocket, an aspect of the game that Bayern Munich owner Uli Hoeness has been extremely critical about. He told The Mirror.
“The oil mafia takes money out of my pocket to invest it in footballers. For me this stinks to high heaven and I include Mr Abramovich in all this. If Bayern win it [the Champions League final], we will make around £20million. That is what the game is all about: sporting success based on sound economic sense. When the financial fair play rules come in it will be a golden era for Germany’s clubs.”
His claims are not unfounded. The Bundesliga already operates in an FFP environment, with the majority of clubs breaking even. With a large proportion of top-tier German sides also owned largely by the fans, it makes cash injections from wealthy owners almost impossible, reducing the risk of overspending. Large stadiums are regularly sold out, making it the league with the highest average attendance across the continent. FFP has by no means sacrificed the quality and competitiveness of the competition which recently overtook Italy in the UEFA coefficients rankings, earning it an extra qualifying spot in the continent’s premier club competition.
Indeed, the Bavarian club are an ideal example of a how to economically manage off the field. Their consistent growth in revenue has enabled the club to continue spending responsibly and continue to challenge for major honours. This Saturday will provide their second Champions League final in just three seasons.
Other German outfits such as Borussia Dortmund and Schalke 04 have seen their stature in the game improve in recent years. Domestic triumphs for BVB have raised revenues whilst the Gelsenkirchen club reached the semi-final stage of the previous Champions League. The proof is there to be seen that you can be self-sufficient and remain competitive. You do not need to spend big in order to win big.
England may have the most representatives of any nation in the 2012 Deloitte Football Money League top 20 (Arsenal, Chelsea, Manchester United, Manchester City, Tottenham Hotspur and Liverpool) but only the Gunners comply with FFP, though Tottenham could also be safe if they participate in next season Champions League. Failure to do so could mean the sale of key players such as Gareth Bale and Luka Modric in order to raise the revenue that is lost from no taking part in the tournament.
Of course, the only team that can deny them that now is Chelsea. Should the Blues win the showpiece finale this weekend, they will qualify for next season’s edition of the tournament. If they lose, decreased revenues the following season would push them further away from breaking even. Hence the recent interest in building a larger stadium on the current site of Battersea Power Station in order to drum up more income.
This weekend’s Champions League final could have huge implications on the credibility of FFP. Should Chelsea win, they will continue to be successful despite glaring losses, enabling them to stay afloat. On the other hand it could prove Platini’s point, that clubs that look after their finances will reap the rewards on the pitch. English clubs would then need to strive for the Bundesliga model as German clubs have shown you can be financially prudent and still achieve success. The Premier League giants, along with certain La Liga clubs and Serie A outfits, could struggle to remain competitive during the transition. With other teams across the continent scaling back their expenditure there is every chance that the Bundesliga could continue in the ascendancy and become Europe’s strongest league.
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