Uefa’s plans to introduce Financial Fair Play faced up to new challenges last week. The first was the release of the financial results for Manchester City for the 2010-11 season, shocking many by achieving a loss of a whopping £195 million.
What was more remarkable was that their wage bill alone was £174m which exceeded their turnover by £21m!
There are many in the game who believe that the proposed deterrents will either fail to be enforced or will be insufficient to dissuade clubs with wealthy benefactors from spending freely irrespective of the potential fines.
The season in question is the first in a three-year spell during which the clubs’ balance sheets will be assessed and are technically permitted to make losses of no more than £39.5m.
With 63 professionals currently employed, City are highly unlikely to achieve this figure – although they will point to sizeable commercial deals to offset these losses. The injunction their lawyers may refer to is leniency for clubs making significant moves from heavy losses towards a more profitable position.
However, this comes with a risk.
If UEFA were to throw the book at them, the penalty most likely to cause City concern would be the threat of expulsion from European competition. However, many football pundits doubt the governing body’s willingness to go to this extreme. More lenient measures planned had been to impose transfer embargoes and fines. Others have been considered, although they appear to be fraught with legal obstacles.
Even the more punitive of these, the transfer embargos, has been withdrawn this week amid fears that they are unenforceable. Player registration is technically held by national associations, rather than the European governing body, meaning a loss of control. Furthermore, there are concerns that individual players could appeal against the embargo based on a restriction of trade.
UEFA is apparently intending to finalise its proposed penalties in January before being ratified in March.
