What are the UEFA Financial Fair Play Proposals and what affect will they have on football clubs?

The Financing of Football Clubs in the FA Premier League

The way many of the football clubs are financed in the Football Association Premier League is currently a worrying aspect for the governing bodies in control of the sport of football. Following some high profile club takeovers in the last 7 years or so some of which have greatly increased the wealth of clubs some of which have plunged clubs into debt there is a statistic which has remained the same – these clubs are making huge losses every season.

Ability to spend big on players

For certain FA Premier League football clubs who have been taken over by an extremely wealthy businessman they have been able to spend as much money as they wish on players regardless of the financial loss that the club makes each and every season. Due to the vast sums of money owned by the owner of the club it is immaterial if he makes a loss as the main priority for them is to achieve success on the pitch.

Why is this a problem for the footballing world?

The huge amounts of loss being made by football clubs is a worrying issue for the footballing world due to the following reasons:

  • The financial instability of the clubs

  • The reduction of the level playing field

The financial instability of the clubs

If a club were to continue to keep making a loss each and every season then they would become an extremely unstable financial entity. If this were any other economic activity rather than sport the business simply would not be able to function. If for any reason anything was to happen to the owner or if he wished to sell the club it would be extremely difficult to sell due to the huge amounts of debt.

This huge financial outlay by certain football clubs without the requirement of balancing the books has led to many clubs suffering huge financial difficulties with some even going into administration.

The reduction of the level playing field

If certain clubs are able to spend vast sums of money without the requirement of balancing their books it is viewed by many as putting them at a competitive advantage to the smaller clubs without the same scale of investment who have to balance their books and who are only able to purchase players following the sale of other players.

The validity of the arguments

The reduction of the level playing field is a topic of hot debate in the football world as many feel that any rules to restrict spending in this manner would simply be prejudicing clubs who have huge investment simply because they have money.

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For more information on:

  • What are the UEFA Financial Fair Play Rules?
  • What is meant by clubs which are financially stable?
  • Does this apply to all football clubs?
  • When will this come into play?
  • How will this be monitored?
  • Will this have an effect on the money which the clubs can spend on training facilities and youth development?
  • Have these proposals been met with agreement?