Are Clubs Sticking To The Financial Fair Play Rules

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Newcastle United have officially become the Premier League’s richest club after the completion of a takeover by Saudi Arabia’s Public Investment Fund. The Saudi led consortium ended previous owner Mike Ashley’s ownership of the club after 14 tumultuous years at the club.

Fans of The Tyneside based team were ecstatic upon hearing the news. Having spent most of Ashley’s reign campaigning against him for years of what they perceived as underachievement down to a lack of financial support from the businessman, they partied outside of St James’ Park when the takeover was made official. It seems that The Magpies have figuratively and literally hit the jackpot with their new owners. The new majority shareholders boast an estimated wealth of £320 billion, dwarfing the riches of the other owners in the league. This has fans salivating at the prospect of future business with superstars like Kylian Mbappe and Gareth Bale already rumoured to be on a list of transfer targets. However, fans of other clubs around the country have rebuked the acquisition, uneasy at the prospect of yet another Premier League club making a mockery of Financial Fair Play rules. So, what is FFP?

Put simply, FFP regulations were established to prevent clubs from spending more money than they earn. Whilst it prevents clubs from entering administration and possibly going out of business, it also goes some way in levelling the playing field in the transfer window regardless of how much money their owners have individually. This is because owners cannot simply throw money around and must instead work within the clubs finances instead of their own. However, history has shown that clubs will find various loopholes to flout said regulations.

Before Newcastle’s takeover, it was the riches of Manchester City that drew both envy and scepticism from fans. Owned by Sheikh Mansour, an Emirati politician, businessman and member of the Abu Dhabi royal family, they were able to splash the cash on a plethora of stars such as Sergio Aguero, Kevin De Bruyne and Raheem Sterling.

Whilst Mansour’s £3 billion wealth now pales in comparison to the Saudi PIF, it has been enough to win them the Premier League in five of the last 10 seasons. Man City are again the favourites to win the league in the 21/22 season, according to the latest 888Sport betting odds. With the success that has come with their business model however has also come allegations of financial doping. In 2020, UEFA banned the club from European competitions for two seasons for alleged breaches of the UEFA Financial Fair Play Regulations, though this was quickly overturned after they appealed to the Court of Arbitration for Sport. This was mainly down to the fact that some allegations were above the five-year limit for UEFA investigations, meaning the club were not and still have not been completely admonished.

Whilst the ongoing legal battle has remained very secretive, there are some things we do know for certain. As mentioned, City have never been fully exonerated. In fact the CAS believed them to be guilty enough to warrant a €30 million fine, although this was later reduced to 10 million. In their statement, CAS said that “MCFC has contravened Article 56 of the Club Licensing and Financial Fair Play Regulations”. We also know through leaked documents that the club are alleged to have misled UEFA over the financial source of some of their commercial deals, which were tracked back to their owners. There is a papertrail that goes some way to proving this. "We will have a shortfall of 9.9m pounds in order to comply with UEFA FFP this season," City's Chief Financial Officer Jorge Chumillas wrote in an internal email. "The deficit is due to Roberto Mancini’s termination. I think that the only solution left would be an additional amount of Abu Dhabi sponsorship revenues that covers this gap."

Whilst the legal battle is still ongoing, it is unfortunately unlikely that any real justice will be seen down to the aforementioned timeline of events. There is enough evidence to show that at the very least City purposely misled UEFA and enough to assume that they also created phoney commercial deals to cover their losses. City are not the only club to face allegations like these, though.

Chelsea Football Club were purchased by Russian billionaire Roman Abramovich in 2003 for £140 million. For a decade, Abramovich’s financial backing brought in the likes of Didier Drogba, Eden Hazard and Fernando Torres along with five premier league titles and two champions league trophies. Whilst they did face criticism for ‘buying the league’, they did so within the laws of the game or at least within the lack of laws in the game, as FFP regulations were not put in place until 2014. Since then, the club spent relatively more sensibly, but then received a transfer ban in 2019 after 150 rule breaches involving 69 academy players over several seasons. They then faced a fresh set of allegations in 2020, this time over potential breaches of FFP after spending over £220m in one transfer window. This was especially dubious as it was off the back of an unprecedented season in which clubs lost millions due to the COVID-19 pandemic.

However, Chelsea were able to escape scrutiny from UEFA down to the big money sale of Eden Hazard along with other players like David Luiz and also benefitted from a relaxing of the rules from UEFA. This itself was met with disapproval from fans who accused UEFA of protecting big clubs, something they would not afford to smaller teams.

The impact that City, Chelsea and now potentially Newcastle’s disregard of FFP has and will have on other clubs in the country is potentially devastating. Without strict rules, football is slowly becoming more and more of a numbers game in that trophies are metaphorically sold to the highest bidder. The gap created between those at the bottom of the table and those at the top is becoming further apart every year. The beauty of football once lied in its love affair with fairy tales. Forest winning back to back European titles, Wigan’s FA Cup win after relegation and Leicester’s unprecedented run to the premier league title. All seemed unattainable once upon a time, but the very nature of English football meant it was able to happen organically. Those moments will die along with the integrity of the game if things are allowed to carry on as they are.