The prize money for 23 European clubs participating in the 2012/2013 UEFA competitions has been withheld due to an investigation into their reported lack of co-operation with the new financial fair play requirements set in order by the UEFA Club Financial Control Body (CFCB).
The blinding issue is that none of the giant overspending clubs are on the list of 23. This directly follows up on some of the issues I raised in, Ronaldo’s ‘sadness’ exposes Real’s Price tag, but is it too high for his own good?.
As outlined in the Financial Fair Play section of UEFA.com, “The CFCB investigatory chamber has identified that important overdue payables towards other clubs, and/or towards employees or social/tax authorities existed in 23 cases.”
Part of this controlling body’s goal is to prevent a situation similar to what we saw with Rangers FC in Scotland, but the bigger issue, and what they’re really meant to control is clubs splashing out enormous amounts of money for transfers they can’t afford. This financial fair play act is designed to create a level playing field for all the lower clubs that have to compete in the Champions League against the likes of Real Madrid and Manchester United. So they say.
Three of the main objectives as directly stated by UEFA in the financial fair play act are:
– Decrease pressure on salaries and transfer fees and limit inflationary effect.
– Encourage clubs to compete with and/or within their revenues.
– Encourage long-term investments in the youth sector and infrastructure.
This is all great in theory, and as I’ve stated in previous posts, the transfer amounts for players has grown to a level that could surpass the ability of the market, but will these types of sanctions and outside involvement help? Or will it in effect strap clubs with restrictions actually making it more difficult for smaller clubs to compete?
It’s not the same as a salary cap situation, which as the name suggests caps the wages of all teams and arguably does more for the ability of smaller clubs/teams to compete. I’m not suggesting this is the answer, but something worth considering.
Instead though, to simplify the voluminous document, UEFA attempts to achieve the above objectives by merely requiring clubs to prove that they are spending within their means. Well, the “means” at Real Madrid are much different from that of the diminutive FC Rapid Bucureşti (ROU), one of the 23 clubs on the UEFA investigation list.
The positive aspect of this initiative is that it will force clubs to pay salaries owed and any outstanding transfer fees, which is something that undeniably needs to be done, especially after the situation at Malaga F.C. in Spain. According to Sky Sports, as of July the Andalucian club was in negotiations over 35-40% of unpaid players’ wages from the previous season. Since then the players have reportedly reached a settlement and payment plan.
These types of things are worth controlling, but a major role, at least as claimed by UEFA is to control transfer fees and player wages. However, it doesn’t seem to be policing the right clubs, at least not yet.
As much as I believe players are getting priced out of the market by their clubs I’m not sure that these types of bureaucratic regulations and restrictions will help. These smaller clubs are doing whatever they can to compete and if they take a risk that proves in the future to be a bad financial decision shouldn’t they suffer the same fate as Rangers? That seems a lesson that would resonate far louder in the world of football than any sanction. (For a great explanation of the Rangers situation check out this article on Bleacher Report.)
Or, should all clubs be protected in the name of equality?
The European Professional Football Leagues (EPFL) are also said to be involved and are planning to hold a financial meeting as reported by the ESPN Soccernet article, European leagues to hold financial summit.
The EPFL released this statement: “During the last couple of decades, professional football has grown exponentially in terms of global appeal, attractiveness and income, driven by the unconditional passion of millions of fans and the influx of money from TV broadcasters, sponsors and other investors.”
“Despite the income rising every year, expenses have also escalated, especially on players’ wages, transfers fees and payments to agents, leaving many clubs under considerable financial distress.”
The problem is this prize money is being held from the very clubs that need it most, while the larger Manchester City’s of the world are spending their Champions League prize money with reckless abandon.
A major motive of this financial fair play act is to protect the long-term viability of European clubs in a weakened economy, which makes sense, but they need to decide how best to do that and still maintain a free market.
It seems as if they are trying to tame and house train a wild ferocious beast, whose natural habitat is ever-changing and spreads the entire world, when the real choices are to either let it go extinct or figure out how to live with it, in its environment. But house training it? Well, not an option.