Has Financial Fair Play (FFP) finally found its teeth?

Posted in Dispute resolution, litigation and investigations Football Regulations

Co-authored by Andrew Reeves and Josh Kay

On March 22 2019, Birmingham City FC was docked nine points for breaching the English Football League’s (EFL) rules around profitability and sustainability. The sanction follows a raft of expensive signings coupled with the costly dismissals of managers Gianfranco Zola and Harry Redknapp.

Since 2016, the EFL regulations have prohibited losses in excess of £13m per year over a three year period but Birmingham City is the first club to have been punished by way of a points deduction since the introduction of the EFL FFP regulations. The independent disciplinary commission responsible for enforcement of FFP found Birmingham City to be in breach as a result of losses totaling £48.8m between 2015 and 2018.

Birmingham City has the opportunity to appeal but it is thought that the club will accept the sanction rather than risk their appeal failing, which would potentially mean that the club starts the 2019-2020 season on minus points.

An indication of things to come?

Allegations of FFP breaches are becoming increasingly common across European football. At a time when spending by football clubs is reaching record highs, FFP rules are now at the forefront of clubs’ thoughts. Aleksander Ceferin, the president of UEFA, the governing body of European football, recently stated that “thanks to financial fair play, European football is healthier than ever.” Ceferin pointed to the fact that European clubs made a combined profit of €600m in 2017, compared with the combined losses of €1.7bn reported in 2011. The world-record profit of £113m recently reported by Tottenham Hotspur in their financial results for 2017-2018 adds further weight to Ceferin’s argument.  

However, FFP has been plagued by accusations of ineffectiveness against Europe’s superpowers. Both Galatasary and AC Milan have successfully appealed FFP-related decisions in the last year.

Although the FFP regime has only been in effect for a relatively short period of time, Europe’s elite are showing an increasing willingness to challenge the rulings of football’s governing bodies. UEFA, the Premier League and the EFL appear to be set on promoting the importance of FFP but it is clear that clubs across Europe are intent on testing the resolve of football’s governing bodies when it comes to being tough on financial fair play.

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