Financial Fair Play is now a part of football like never before, but is it going to level out the playing field?
The brains behind European football have set their fair play standard with the aims of stopping out-of-control spending, making clubs balance their books for sustained success and, one would hope, making it more possible for a smaller club to have some success.
I won't pretend to understand much of what the fair play rules and regulations state, but the most important factor is stopping teams from spending beyond their means. This could be buying players up with credit alone, it could be wealthy investors privately bankrolling clubs.
Whatever the situation is, clubs must now prove that the money going out isn't outrageously higher than the money coming in.
This aspect of the rule is a good thing. It will stop the plights that have happened over the years of teams like Leeds or Portsmouth, for whom spending and investing heavily for success became their downfall a few years later as the debts began to grow. It will stop things like Rangers all but disappearing from existence.
My worry, however, is that the gap that is already there between the top clubs and the rest of the league will actually grow even larger.
How come? I think that question was yelled from the back. Let me try to explain.
Clubs will have to prove that what comes in and what goes out tally to some degree. The outgoings they will have to disclose are not just player transfer fees. These outgoings will include transfer fees, as well as player salary, staff salary, advertising and marketing, ground upkeep, club supplies, bills, rents, etc, etc.
Imagine how many bills you receive at home and then think about how many more would come in to a corporation like that of a football team.
As for incoming money, what's going to be the main source of revenue to a club? Anyone? Yes, you in the back...sorry, that was the hat of one of the WAG's in session. The main source of revenue will be sponsorship money. Shirt sponsors, ground sponsors, advertising hoardings and the like.
Sure, other factors will be included in club income. Things like player sales (if any profit from the purchase is made), television broadcasting revenue and ticket sales will bring in money.
These things, however, are not guaranteed sources year in and year out. If you sell players to balance the books you risk fielding a weakened team. A weakened team risks losing more often and risks relegation. With relegation you lose a large amount of television revenue, and peripheral sponsors.
Also, a nice full stadium looks good on television, and is a motivator for players, but does it really bring in that much profit?
The more people in the stadium the more staff you need for the game. Increased security levels, more police officers reserved, catering and snack bar staff must be increased, ticket offices and club shops will require more staff. Cleanup after the game will be more difficult and costly.
Bums on seats motivate players, but cost a lot to the club.
So, back to sponsorship. For more sponsorship money you need to have success (recent or a rich history) and you need a market. Looking at England, there are two clubs that stand out for the history and that's Manchester United and Liverpool.
For those who aren't aware, Liverpool were the Manchester United of the era before Manchester United were Manchester United, got it? OK.
Both these clubs have huge global brands born out of their histories of success. The potential for large sponsorship deals for these clubs then is larger than many of their potential opponents.
Larger sponsors will mean more money, which will allow them to invest in better players. Better players will create more chance of continued success, thus keeping the brand high and sponsors coming in.
Now, sponsorship used to consist mainly of shirt sponsors and advertising hoardings. For many smaller clubs these will continue to be the main sources of sponsorship revenue. For larger teams, or brands, however the potential deals are almost endless.This article from uk.eurosport.yahoo.com shows a variety of manners in which sponsors will associate themselves with teams, highlighting 33 sponsors of Manchester United.
How many of Manchester United's competitors will be able to get companies to invest millions in the club to be listed as a responsible drinking partner?
This is the root of my worry about the fair play era. Teams with global brands like those noted above, along with teams who routinely compete in larger competitions in Europe (Champions League and Europa) like Manchester City, Arsenal, Chelsea and Tottenham, will all potentially have a huge advantage over the rest of the league in terms of earning potential from sponsors.
These teams all have extra exposure through television to new markets in which corporations could be interested in boosting their appeal. This would open to door to "Official Automotive Partners" and "Official Timekeeper" sponsorships that other teams would be laughed at for trying to establish.
Simply put, the teams outside of the elite five or six teams will all struggle to bring in enough revenue to fund transfers for the players they need to be competitive, while the upper echelons will all be raking in so much money hand over fist that they will still be able to buy, buy and buy some more.
The divide that stands right now in English football, and is mirrored somewhat throughout Europe, has the potential to grow even larger.Money will be plowed into those clubs who are currently achieving success. This money will allow them to further establish their dominance over those for whom deals are tougher to come by.
Attracting players will become a peripheral worry for the lower ranked clubs, who will instead have to be constantly seeking creative ways to attempt to market their brand to an ever-shrinking group of investors.
Fair play, therefore, risks making the playing field more unfair than ever.
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