Two of Europe's wealthiest clubs must wait three
years to exploit the European governing body's new spending provisions
because of sanctions handed down last summer
After three years of self-enforced austerity, Uefa is amending
Financial Fair Play to try to make European football more attractive to
investors.Michel Platini insists it is not a ‘relaxation’ of the defining initiative of his presidency. “The new regulations are an expansion and a strengthening of Financial Fair Play,” he said in a statement this week. “The overall objectives of Financial Fair Play remain the same. We are just evolving from a period of austerity to one where we can offer more opportunities for sustainable growth and development.”
But it is certainly being perceived as a relaxation. For the first time, clubs who want to spend big can apply for ‘voluntary agreements’ that will allow them to lose more than FFP typically allows over a three-year monitoring period, provided they can make a convincing case that they will break even in the long-term.
“FFP allowed clubs to grow organically but now they can also grow inorganically,” Daniel Geey, sports lawyer with Field Fisher Waterhouse, told Goal. “Owners can invest potentially a large amount to grow in the short term - as long as they meet the qualifying criteria.”
For ambitious clubs below the elite, this change could not be more timely. From next season, the amount clubs are permitted to lose over a monitoring period is set to drop from £32 million to just over £21m, further squeezing the wiggle room for those who want to gatecrash the top tier of European football.
Yet for Manchester City and Paris Saint-Germain – two of the newest and wealthiest additions to that illustrious bracket – the FFP changes represent another kick in the teeth.
Clubs whose accounts have fallen foul of Uefa in the previous three years are barred from applying for voluntary agreements, meaning City and PSG, having been heavily fined and handed spending, squad and wage limits last summer, will have to wait until 2018 to exploit the new provision that would allow them to splash out beyond their means on bolstering their squads.
The insistence from City is that they are unconcerned. They recorded a loss of £23m in the year ending May 30, 2014 – a number that looks worryingly large until you subtract the £16m fine imposed by Uefa for breaching FFP in the first place and which does not count towards the club’s next assessment. There is a confidence around the Etihad Stadium that City’s financial results will comfortably avoid the wrath of European football’s governing body from now on, even as they embark on the daunting task of overhauling an ageing squad with some of the world’s most prized and valuable young talent.
Yet their exile from the voluntary agreement party will only increase the sense of persecution at City and PSG among a great many who feel FFP was primarily implemented to keep them in their place. Geey agrees that Uefa’s amendments deliberately target them, along with other clubs previously judged to have fallen short of the break-even target.
“The qualifying criteria are there to ensure that those who have entered into settlement agreements can't benefit from the voluntary arrangements,” he insists. “That seems very clear.
“Uefa's argument would be 'you should have complied in the first place'. At the same time, PSG and Manchester City can make strong arguments that they weren't in breach at the time [they were sanctioned], but decided for expediency reasons that they were going to settle rather than appeal to CAS [Court of Arbitration for Sport].
“Had they known this criteria would be on the table a year ago, entering into settlement is probably something they may have thought twice about.”
How popular the voluntary agreements will prove remains to be seen. They are not a license to launch a mammoth splurge on players in the manner that Roman Abramovich or Sheikh Mansour did on arrival at Chelsea and City; instead, clubs will have to apply around a year in advance and present to Uefa detailed plans and projections that show how short-term spending will help them achieve sustainable growth in the long-term.
The stated aim is to try to ensure clubs invest with one eye on the bigger picture while encouraging ambitious clubs to spend to try to challenge the established order. In doing so, Uefa hopes to shatter the accusation that FFP is anti-competitive and simply serves to lock in football’s traditional hierarchy.
On this front there is more than a PR battle to be won. A legal challenge mounted by football agent Daniel Striani, supporters of City and PSG and fronted by Jean-Louis Dupont, one of the lawyers who secured the landmark Bosman ruling 20 years ago, threatens to torpedo FFP on these very grounds.
A court in Brussels last week agreed with Striani and Dupont that Uefa have a case to answer over FFP and the lawyer is less than impressed with the latest amendments to the regulations he has been fighting since 2013.
“Uefa says that with these amendments, FFP is evolving from a ‘period of austerity to a sustainable growth period.’ In more direct terms, Uefa is simply moving from an entirely illegal rule to a rule that becomes a little bit less illegal,” he said in a statement on Tuesday. “Indeed, in competition law, any excessive restriction of the freedom of enterprise is by definition illegal.”
Dupont also believes the barring of City, PSG and others from immediately exploiting the voluntary agreements will only strengthen his case, which has been referred to the European Court of Justice.
“We are particularly puzzled about the fact that, according to Uefa, some clubs - those already sanctioned or under agreement procedure - will not immediately benefit from the adopted amendments,” he added. “At first sight, this is absolutely discriminatory.”
As yet there is no resolution to the legal battle in sight, meaning that for now at least, City, PSG and others have little choice but to take their medicine. The good news for football is that for the first time in the FFP era, Uefa is opening the door for clubs to speculate in order to accumulate. The bad news is it is keeping the wallets of some under lock and key.
