UEFA’s Financial Fair Play Rule: A Step in the Right Direction?

Will new guidelines lead to economic stability or breed Europe wide corruption?

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As from 2012 all clubs competing in European competition will be required to meet with UEFA’s Financial Fair Play rules. The core principle of the new financial fair play concept is the “break-even” requirement, under which all clubs cannot repeatedly spend more than its income. The aim of this initiative is to promote greater financial responsibility among all European clubs.

But for clubs such as Chelsea who have just splashed out over £70m this transfer window and Man City, who’s most recent annual losses were £121.3m; this new legislation could be a cause of great concern.

Under the new Financial Fair Play rules clubs will be permitted up to £38.5m in losses in the first monitoring period of 2011-12 and 2012-13. However if clubs miss these targets they will escape sanctions as long as the losses are being reduced or if overspending was caused by transfer fees and wages before 2010.

However, Chelsea and Man City are confident that they will not be excluded from European competition in 2014-15, which will be the first season when disciplinary sanctions could be implemented.

These rules have been brought in to sort out the sorry state of footballs finances. UEFA said the aggregate loss of Europe’s top clubs was €578m. Some 65% of income was spent on average on salaries, and 47% of clubs reported losses.

The 80% of the total spending of £225m in the January transfer window in England was on only six players by 4 clubs. The Premier League spent more than the combined outlay in the top flights of Spain, Italy, Germany and France. However, without the deadline day activity the net spend in the Premier League would have been about £20m.

Financial fair play has the potential to be a good influence on football as a whole. The rules would encourage more investment in youth infrastructure and have a downward pressure on salaries and transfer fees.

Ultimately these new rules aim to safeguard the future prosperity and viability of European Club Football for years to come.

Do you think this rule is fair? What do you think about the running of our clubs? Voice your opinion here!

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