In 2003, Roman Abramovich became the owner of Chelsea
football club in a high-profile fashion and sparked off a series of foreign
investment into football. Since then, the connection between money and football
has never been weakened.
The heightening Eurozone crisis has already hit the football
business in Italy and Spain. The English Premier League, though, continues to
post record revenues with ever-growing popularity.
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However, the dream theatre has a corrupted backstage. Only 5
clubs have had a net profit in 2010-11, while Manchester City recorded the
biggest loss in football history – a whopping £197m. Arsene Wenger's and most
recently Sir Alex’s complaints about crazy transfer spending are not only out
of bitterness and jealousy. In fact, the Manchester duos, Chelsea, Liverpool,
joined by Paris St German lately, have been spending freely with the backup of
their wealthy owners.
Their survivals are in contrast to the grief in Portsmouth,
Glasgow and, a decade ago, in Leeds. Their gambles were only returned with
short-living fairy tales and finally miseries.
This is why Financial Fair Play was introduced last season, intending to put a halt to overspending and promote a sustainable business model in
football clubs. According to the regulations, clubs who wish to join European
competitions will only be allowed to make a loss of €45 million between 2011 and 2014, in which
UEFA can impose bans on European competitions from 2014 onwards if clubs fail
to comply. Annual losses for clubs are expected to decrease to 8.8 million by
2018.
The born of Financial Fair Play, as it is named, obviously
is driven heavily by financial factors, but the benefits will surely extend to
development of football, especially for the youths.
To start with, ‘football-related expenditure', as defined by
UEFA, does not include expenses on youth development. The pressure of balancing
the account should therefore not be exerted on youth facilities investment.
Secondly, it can inhibit the immature introduction of young prospects onto the bigger
stage of football. Andy Carroll is the perfect example. Surely possessed bags
of talents, he has yet to fully explore his potential but chose to leave Newcastle
after only an explosive half-season. The heavy price tag only mounted higher
expectation, thus bringing greater disappointment. Lastly, exerting control
over transfer fees and wages could avoid overcrowding star players in one
single team, enabling youngsters to penetrate info first team. Lukaku and Romeu
were two obvious victims last season at Stamford Bridge, they are good players,
but they were better bench-warmers.
There are always two sides of a coin. By relating transfer
spending with income, it could be even harder for mid-table teams to catch up
with the top with their limited potential in increasing revenues. Unable to
attract big names, their rebuild duration could be lengthy, as seen with Leeds.
Situation could be worsened when top teams expose the loopholes of the
regulations. Lucrative though questionable sponsorship deals have been used as
a mean to enhance incomes. Manchester United has entered NYSE to increase
earnings. In truth, it could be an opportunity as well as a risk to them. Some
underlying unfairness, for example the effect of different national tax rates
on player wages and the uneven share of TV sponsorship in La Liga, could also
ultimately undermine the creditability of Financial Fair Play.
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Obstacles are everywhere, but this is a policy that has to
be enforced. Investments have improved football, but they have also started to
overpower football. The rumours about the Qatar investors quitting Malaga
have already disjointed the team, which is just about to begin their bid to
become an international entity. The amount of debts incurred by the top-earning
clubs is also ridiculously worrying.
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