Football tackles its loss makers

Frank Dalleres
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Frank Dalleres looks at the landscape for this week’s City A.M. panel discussion

ON FRIDAY evening, after what has at times seemed an interminable wait, European football chiefs Uefa took a pin to Manchester City’s Premier League title celebrations and, in so doing, attempted to silence critics who have claimed that financial fair play (FFP) is little more than a vanity project.

For exceeding a stipulated limit of €45m in losses over the two-year period 2011-13, Abu Dhabi-owned City were issued with a raft of sanctions that included a wage bill freeze, restrictions on their playing squad for next season’s Champions League and a €60m fine. Having talked the talk, this was Uefa walking the walk.

The rulings, also issued to other teams including French champions Paris Saint-Germain, had been a long time in the making. Uefa president Michel Platini lit the touchpaper in 2009 when he announced the measures, arguing that the sport needed regulation to address a culture of loss-making.

Austerity was blowing through football at all levels. The Premier League and Football League, England’s top four divisions, followed suit with their own versions of FFP, with the similar stated aim of encouraging clubs to balance the books. Platini has not hidden from trumpeting FFP as a success, on the basis that aggregate losses across the continent have fallen, though the plan has been widely criticised.

Opponents argue that what began as an effort to improve the financial health of clubs has been hijacked by big teams and moulded into a means of preventing others from challenging their hegemony, for instance by injecting huge amounts of capital.

Others say the measures do not go far enough. Uefa initially indicated it would ban teams that offended, but that threat has not been exercised and a settlement process introduced to head off lengthy disputes. It remains to be seen whether the punishment meted out to City and PSG is a sufficient deterrent.

Andrew Jolly, a partner at Slaughter and May who has advised several top clubs and an expert panelist for Thursday’s event, says the settlement procedure is likely to be viewed with suspicion. “It has the benefit of speed, but the lack of transparency means that, whatever the outcome, without accompanying published and objective criteria and reasoning, the sanction is bound to be perceived by some as too light.”

Settlements mean that a summer of legal wrangling in the Court of Arbitration for Sport looks to have been avoided, unless rival clubs take up the option to challenge the decision to spare City and PSG bans.

Yet there is another row brewing. One of the lawyers behind the landmark Bosman ruling is spearheading a legal challenge to Uefa’s FFP, arguing that it contravenes European law. So while the wait for sanctions is finally over, the disputes may just be beginning.