Financial fair play bites in Europe
Published: 26.08.12 / Written by: David Gold
The idea that clubs will go on spending as though nothing had changed as a result of the financial fair play initiative has taken something of a blow this summer, outside of Paris that is.
Paris St Germain have continued to spend as though there are no restrictions, and as if money simply cannot stop flowing. And it can’t for them.
But there are clubs for whom the new UEFA rules have led to a change in philosophy and approach. Most striking is Malaga, the Spanish side who are, like PSG, owned by Qataris. Yet they have been forced to rethink their approach, citing financial fair play concerns. Santi Cazorla and Salomon Rondon have headed for the exit door and the team are for sale with their owners unwilling to continue funding them.
This may well be related to the fact that whilst they are in the Champions League for the first time this season, they will be unlikely to be allowed to participate in the competition unless they have a significant injection of funds from somewhere other than their owner’s pockets.
But Malaga are not the only side being affected. In England, Manchester City are having to bide their time in their attempts to sign a forward, with the priority to offload some of those already on the payroll due to the need to comply with the new rulings. UEFA’s new rules do appear to be having an impact in this area, noticeably affecting the purse strings at the Premier League’s richest team. City were the last Premier League side to actually sign a player this year. That they have been affected by financial fair play is clear, though it remains to be seen whether UEFA will turn a blind eye to them signing a deal with Etihad, a company owned by the Man City owner’s half brother.
Chelsea, unlike City, have spent heavily this summer, but they will be putting down player costs on a year by year amortisation basis. Or to put it another way the overall cost of a player is divided by the years on their contract, and that sum will go onto their accounts for each season. So while Chelsea may have spent big this year, expect them to spend less in the three or four years ahead as they face a huge battle to comply with financial fair play’s requirements.
The effect of the new rules has also been seen in Italy. There, AC Milan and Inter Milan are on a major restructuring as they seek to comply with the rules. Both sides have spent huge sums over the years to remain competitive but without a stadium they actually own themselves, unlike Juventus, they are having to downsize. Milan have for years been known for the number of older players they still have in their side, from Clarence Seedorf and Gennaro Gattuso to Alessandro Nesta. This summer they are all gone, as are their two best players, Zlatan Ibrahimovic and Thiago Silva, sold against their wishes to PSG to reduce some of the club’s debts. It is notable that Milan’s main three signings are Christian Zapata, Riccardo Montolivo and Bakaye Traore. Montolivo and Traore were free transfers, whilst Zapata joins on loan.
Inter are not far behind in the selling stakes, looking as they are to offload players like Giampaolo Pazzini, Maicon, Lucio and Julio Cesar. They have spent some significant money on Samir Handanovic, Rodrigo Palacio and Fredy Guarin, but it is clear that for them, too, meeting the new rules is a challenge.
All of which adds up to a shifting of the waves somewhat against big money spending that we have become used to. Is this the tipping point, where football in Europe suddenly becomes more frugal? That certainly remains to be seen, but the signs are that the UEFA rules are having an impact.