With Real Madrid rumored to complete the signing of Gareth Bale from Tottenham for a record fee of £94 million ($144 million) by Metro's Jamie Sanderson, clubs are once again making a mockery of UEFA’s new Financial Fair Play rule.
The Financial Fair Play Rule outlines that a club cannot spend outside of their budgetary framework, which stretches across several seasons. Every team must provide UEFA with proof that outgoings do not outweigh their income. The rule’s overt purpose is to stop clubs with rich owners investing money into a club that cannot make enough money to balance the books, thus threatening the long term welfare and longevity of the club.
But with so many big clubs splashing the cash as frivolously as ever, the rule and the "level playing field" it is supposed to create are being massively undermined.
Infamous for their willingness to pull out the cheque book, Real Madrid are set to beat their own transfer record—of Cristiano Ronaldo for £80 million ($93.9 million) in 2009—as their lust for Gareth Bale’s signature reaches its climax. Bringing the much sought-after winger to the Bernabéu will cost the Galacticos a reported £93 million ($144 million) plus left-back Fábio Coentrão, according to Metro. This would add to their other summer signings of Asier Illarramendi and Spanish playmaker Isco, whose signatures cost a combined £55 million ($85 million).
It seems that the Financial Fair Play Rule has had no impact on the club's typically abrasive nature in the transfer market.
But Real Madrid aren’t the only ones happy to spend money of course, with Brazilian wonder-kid Neymar and Uruguayan Edison Cavani costing their clubs (Barcelona and PSG) $57 million and $60 million respectively, to name but two.
Elsewhere, and more intriguingly, French Ligue 1 side AS Monaco, who were plying their trade in the French second-tier last season, have been spending lavishly thanks to their new Russian billionaire owner, Dimtri Rybolovlev. Having already parted with nearly £150 million over the last 18 months, including the £50 million spent luring Radamel Falcao away from Atletico Madrid, the chances of them balancing the books is extremely unlikely. A convincing 4-1 defeat of 2011-12 League 1 winners Montpellier in their first home game of the season on the weekend showcased their squads brilliance.
What it did not show however, was a sustainable future.
The game—which was incredibly well-publicized around Monaco, including a plane that flew a banner with the match details emblazoned on it—could only muster a 15,000 strong crowd. Considering their attendances last season loomed around the 5,000 mark, this is a great improvement. However, their Stade Louis II home has a maximum attendance of a mere 18,480. Ticket sales alone will therefore provide little income, especially when considering the likes of Falcao’s €14 million a year wage bill. Their capacity does not generate much income at all when compared to the giants they are currently doing their best to out-spend in this current window.
While both Madrid’s and Monaco’s spending has been plentiful, Madrid do at least have a 85,000 capacity stadium and a worldwide fan base to fall back on. They are the highest grossing football club in the world, they are a business model whose success is then taken advantage of in the transfer market.
For Monaco, it is the other way around. They are spending to create success, praying that, by having names as big as Falcao’s on their roster, their popularity and therefore bank balance will rise and grow accordingly. It is, rather undoubtedly, a massive risk. Whether or not the plan will work, or whether they can actually provide an adequate business plan to the UEFA control panel, only time will tell. I, however, am not convinced.