What makes financial fair play fair?

My understanding of the financial fair play rule from UEFA is that clubs can’t spend more money then they take in from ticket sales, sponsorships, media deals, etc. The goal being to prevent a super rich owner from coming in and dumping loads of money into a team to buy all the good players and keep everyone else from getting a chance at them.

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The idea behind financial fair play is, as you say, to prevent rich owners dumping in their money into a club, and “purchase” success. Examples of such being Chelsea, Man City and more recently PSG. One could count FC “Red Bull” Salzburg among those, even though that club have not been on the international arena as much as the previous ones.

Now there are two fundamental assumptions here:

  1. More money implies more success: This is actually not quite true, not all teams with rich owners get titles. More money usually means more/better players as the club would be able to attract players beyond their stature, given financial incentives. There are numerous examples of clubs giving astronomical salaries to attract players but fail to capitalise on their squad. AC Monaco is a good example. Similarly there are a series of russian clubs that have had their streak of foreign talent coming in for the $$$ but none of these clubs have made success on the international arena.

  2. Owners injecting money into clubs is the only way to “cheat” financially: This is also not quite true. There is a very thin line between what counts as injecting money, and getting a supreme sponsorship deal though business partners.

The idea behind financial fair play is to prevent teams from spending more money than they earn (via rich owners or otherwise) and have a sustainable future. In theory, bigger clubs get more money and indeed spend more money. However they still have to perform to get the big bucks.

If you exclude the absolute top teams (Man Utd, Real Madrid, Barcelona, FC Bayern etc) the majority of the money they get is through commercial products (i.e. merchandising). However for the overwhelming majority of the teams, the ratio between matchday sales, broadcasting and commercial income are more level, meaning that qualifying to continental cups and going further in these competitions bring in a significant amount of money. (Ref for this paragraph: Deloitte Money League report)

Now while a mid-table team, will not be able to compete with the big dogs in the course of a year or two, by doing better and better, they will increase their budget and possibility to attract players. In other words, success means first of all more money; by finishing the league in a good spot teams get more prize money, possibly get qualified for continental competitions (possibly raking in more $$$) AND who doesn’t want to buy the shirt of team that’s doing well?

Is it fair to compare Man Utd and Hull financially? No! One of them rake in £75M/year, while I doubt Hull come up to those figures even with all their income. Will/does the financial fair play make it fair? No, not really United still gets more money and buy more players than Hull. What the system is there however is to prevent teams like City, or PSG to buy their way to the top. Whether that will be effective or not is a whole different story however.

All in all, it’s a big mess with lots of politics and lawyers involved and very little sportsmanship. I recommend the wikipedia article on the subject for a thorough reading, I am sure there are details in there that I did not catch myself.

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