New rules announced by both UEFA and the Premier League are meant to curb football's financial excesses. but, as Mark Brophy points out, they might not have that much effect on the big clubs

UEFA’s impending Financial Fair Play regulations have met with seemingly universal approval. Starting in 2012, clubs who fail to comply with the rules laid down will be barred from European competition. Clubs spending more than the income they generate will fall foul of the rules, as will those which spend more than 70 per cent of turnover on wages, have unsustainable debt or fail to pay debts on time. At the same time Premier League rules limiting squad size to 25 with eight places reserved for homegrown players have come into effect for the new season, again to general acclaim.

UEFA’s impending Financial Fair Play regulations have met with seemingly universal approval. Starting in 2012, clubs who fail to comply with the rules laid down will be barred from European competition. Clubs spending more than the income they generate will fall foul of the rules, as will those which spend more than 70 per cent of turnover on wages, have unsustainable debt or fail to pay debts on time. At the same time Premier League rules limiting squad size to 25 with eight places reserved for homegrown players have come into effect for the new season, again to general acclaim.

The consensus seems to be that the financial rules will prevent rich benefactors giving clubs an unfair advantage through unearned spending. The gap between the richest clubs and everybody else will narrow, and the escalation in transfer fees and wages caused by spending of the kind Man City now exemplify will be prevented. Most pertinently, clubs will be saved from their own worst instincts – no one will spend themselves out of existence, as many Premier League clubs appear to have been trying to do recently. Michel Platini has stated: “Our intention is not to punish them but to protect them.”

Cynics might point to UEFA’s long established tendency to act in ways that safeguard the financial wellbeing of the richest clubs and entrench their positions of power, and wonder what else may be behind this. The formation of the Champions League and its later expansion wasn’t done to provide smaller clubs with more opportunity of playing in Europe’s most prestigious competition. No, a select band of already rich clubs were given a little more certainty of receiving the required level of income from European competition each season.

Similarly, the fact that the rules don’t kick in for two years means that the usual suspects have that time to spend as much as they can without it affecting the balance sheet in 2012. Their owners can convert club debts into equity then, and it miraculously disappears in the eyes of UEFA. Or they can service the debt and, as long as the interest payments are covered, they’ll be OK too.

From 2012 onwards no one else will ever be able to make those kind of spending decisions, but the top clubs will still have their expensively assembled squads. They’ll even be able to continue to sign top players, moving on squad members to balance the books. Those with the most expensive squads will be able to raise more money than others through such sales, enabling them to outbid the others for the best players. In contrast to the idea that the big clubs will find this restrictive, Roman Abramovich and the rest will be delighted. They will maintain their advantage without actually having to spend any money. Pre-2012 capital outlay will do the job for them. Just as with the Champions League, Europe’s elite clubs will gain financially while at the same time reinforcing their positions of power.

The squad rules are seen as a way of reining in the most powerful, preventing them from forming huge squads by buying up every decent player around. By extension it’s another way to remove inequality between rich and poor, and who could argue with that? However, though these rules may popularly be seen as one in the eye for the rich clubs, that’s not their purpose. They’re meant to give the English national team more of a chance of success, by forcing Premier League clubs to sign a certain ratio of English players and by aiding the development of young players through increasing their game-time at those clubs. But again, reality differs from the theory. Most of the clubs already have at least eight homegrown players over 21. Even Arsenal, the watchword for foreign domination, fill their homegrown slots. Unfortunately, it’s with Cesc Fàbregas, Nicklas Bendtner et al, so there’s not much help for the national team there. The strategy followed by most elite clubs of importing foreign talent at an ever younger age circumvents the need to comply with even the spirit of the regulations. Over time this effect will only become more pronounced as clubs’ academies fill with foreign talent who will qualify as homegrown by the time they reach the first team.

The combination of the two sets of regulations ensures one thing. Clubs will still attempt to secure the very best foreign talent, as they always have. They will merely have no choice but to get them when they are still at school instead of as established professionals. Panic buying to maintain position will become less and less feasible, and maintaining success will begin to depend on possessing the best foreign scouting networks. Sadly for the English, their national team is unlikely to improve by this method.

As we have seen this summer, Man City show no signs of curbing their spending yet, evidently not fearing being barred from competition by UEFA in two years’ time. They plainly aren’t worried by the prospect and must therefore reason that they will be able to meet the requirements of the financial rules. They expect a clean slate in 2012 and so, you have to imagine, does everyone else. When the rules kick in, they will undoubtedly have the intended and desirable effect, forcing clubs to be more prudent and protecting them from the terrifying game of one-upmanship they are currently playing. Until then, the spending will continue.

From WSC 283 September 2010

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