Thursday, 3 February 2011

Football's New Financial Regulations - Has UEFA cured the madness of the January transfer window?

It appears that a new era is dawning for European football, one in which clubs will seemingly no longer be able to operate in financially-unstable manners, and spend colossal sums of foreign money on players who, outside the madness of the January transfer window, would be valued sensibly and accordingly acquirable for reasonable outlay. UEFA, the often-maligned guardian of European competition, namely the Champions League and Europa League, announced earlier this week plans to enforce fresh ‘Licencing and Financial Fair Play Regulations’. Understandably, these announcements need some clarification, given the deliberate vagueness surrounding their title. Essentially free-spending Premier League clubs which have for too long belied financial scrupulousness will be nervously looking to the future after UEFA voted unanimously to adopt a ‘break even requirement’, to be introduced over a period of three financial years (2010/11-2012/13). This means that by the time of the 2013-2014 UEFA competition, clubs will be assessed according to whether or not, in essence, they have lived beyond their means or stuck to a prescribed budget. Yet does this key announcement for the future of the European game, described by UEFA President Michel Platini as an attempt to “put stability and economic common sense back into football”, sound the death knell for the sort of Premier League-led extravagance witnessed over the past few days?

This January transfer window, often a burden and a source of undue pleasure for managers and fans alike, sometimes within the space of 24 hours, has certainly lived up to expectations in terms of the outlay it has produced on footballing talent. Collectively, on just four players, Liverpool, Chelsea and Aston Villa have conspired to spend an astonishing £135 million. Naturally the individuals upon which this monstrous sum has been readily dished out, Luis Suarez, Darren Bent, Fernando Torres and Andy Carroll, have seen their abilities subject to significant price inflation, a naturally-occurring phenomenon during the transfer window, infamous for being a period in which clubs are willing to sacrifice natural fiscal activity for the sake of an assumed short-term advantage. Yet with UEFA’s announcement, has the fun gone out of the silly season which delights and infuriates supporters up and down the country annually? I would have to say it has; for Chelsea’s £50 million signing of Fernando Torres could easily become a phenomenon of the not-so-distant past, with clubs clamouring to reduce expenditure and operate at reasonable levels with at least a modicum of financial responsibility. Naturally for Arsenal the announcement will be of little concern, given that as pointed out by an esteemed journalist a couple of days ago, half of the Gunners’ starting eleven cost less than the silky Spaniard. Yet for clubs such as Manchester City, attempting to break into the top four seemingly by brute force of expenditure and a financial recklessness not witnessed in the Premier League since the early days of Roman Abramovich’s reign at Chelsea, UEFA may just have forced a rethink. Having said that, with a squad as large, young, talented and expensive as City’s already having been assembled, they probably needn’t spend again for another five or six years, not that this dose of common sense will fall on anything other than deaf ears.

When the paltry sum of £30 million was spent during the previous post-Christmas transfer window, analysts were clamouring to point out that the ‘age of austerity’ had finally hit football, up until that point the last bastion of financial insanity in a country and a continent tightening its belts and sheltering from the approaching storm. The claims that clubs such as Chelsea could possibly achieve a financially stable situation in which they would soon be in a position to ‘break even’ was spectacularly dashed just a few days ago, with the monied monoliths of West London announcing spectacular losses of £70 million up until June 2010. Journalists and spectators have also attempted to defy the odds and place Manchester City into this highly unrealistic category of Premier League clubs, claiming that the £200 million-plus shelled out by City’s extremely generous owners could be written off and turned into a profit over the next few years, providing for the existence of substantial Champions League revenue and the increased sponsorship that comes with this particular windfall. Yet despite the unrealistic sound of both Man City and Chelsea’s claims, each had better start trimming the fat and, no offence intended, ‘do a reverse Leeds’ if they wish to remain eligible to qualify for the lucrative fat-cat picnic that is the Champions League. Clubs which fail to adhere to UEFA’s new regulations will be banned from 2015, and whilst cutting back may seem a monumental task in itself, deprived of revenue from Europe’s premier club competition, clubs such as Chelsea, Manchester United and Manchester City would quickly find themselves almost inoperable. Surprisingly enough, it is only Arsenal and Tottenham Hotspur who would currently pass through UEFA’s stringent detectors unscathed; all other top five clubs, plus Liverpool, made substantial losses in the previous financial year, and the Merseysiders have done little to reverse this trend. Perhaps the aforementioned clubs are hoping for some change of heart from UEFA, and a relaxation of these deeply inhibitive regulations, but they are unlikely to get it from Michel Platini, whose negative feelings towards English football are well-documented in the domestic press, and for whom financial ‘common sense’, in his words, is a cornerstone of the new European order.

Furthermore it is also worth mentioning that not only the English clubs, so often maligned for their share of the ever-expanding Premier League financial pie, could fall foul of UEFA’s rulebook. Barcelona and Real Madrid, both of whom, particularly the latter, have spent astronomically in the past few years attempting to capture the coveted Champions League crown, are loss-making enterprises. Barcelona in particular announced staggering losses for the previous financial year, and Real’s extravagant and sometimes vulgar level of spending in the previous summer will surely not be a one-off should the requisite success not manifest itself at home and abroad. So it appears as though the tumultuous events of Transfer Deadline Day will soon be cast into the pages of history, to be replaced by an era in which clubs are forced either to recruit players who unlike Andy Carroll haven’t seen their fair market value grossly inflated, or simply work with the squads they currently have. In light of UEFA’s ‘parent-esque’ intervention into the January party, the insolent clubs such as Chelsea and Liverpool have had one last drink, desperate to spend the vast sums of money available to them through television revenues before a new age is ushered in. Only time will tell how this will impact upon European club competition in the long-term, but in the meanwhile it might be pertinent to expect a somewhat less dramatic deadline day, and the egregious spending on Carroll and Torres in England, as well as Kaka and Ronaldo in Spain, to become the hallmarks of a bygone age for Europe’s top clubs.

Photos courtesy of (in order): Zimbio, The Chelsea Blog, Football Pictures

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