Over the decades a number of professional football teams have been referred to as ‘the Bank of England club’, meaning they had masses of money to spend on transfers. This applied, for instance, to Sunderland in the 1950s.
But with the enormous rise in income from TV coverage, shirt sponsors, kit sales and season tickets, and the ownership of a number of clubs by wealthy individuals and multinational companies, it is recent years that have seen the rise of barely-credible transfer fees (£100m and more) and wages. The wealthier a club is, the more it can spend and, they hope, the more success and trophies they can achieve (or buy).
The football authorities, in both the UK and Europe, have felt obliged to regulate what happens, in order to prevent it just being a matter of the richest clubs winning more or less everything and a self-perpetuating elite emerging (money leads to success leads to money). Hence were developed the Financial Fair Play regulations (FFP), now in the Premier League termed Profitability and Sustainability Rules. A club can lose a maximum of £105m over a three-year period, and infringing this can lead to a points deduction, though special consideration was given to losses incurred during the Covid lockdown, and also investment in women’s football and community work. UEFA has a rather different system, whereby expenditure on transfer and wages cannot exceed 70 percent of revenue. This may be adopted in England, but not yet, and a different kind of spending cap has now been provisionally agreed by Premier League clubs.
Details aside, it is the less successful clubs that have suffered so far. Both Everton and Nottingham Forest, in the lower reaches of the Premier League, have had points deducted, though neither will be relegated as a result. Chelsea, on the other hand, have spent £1bn on transfers under their new owners (after Roman Abramovich was removed because of his Kremlin links). In the last financial year their losses would have been a cool £166m, but they avoided a penalty by selling two hotels for £76m to a firm owned by the same holding company.
As for the current top club, Manchester City, they have won the Premier League for the last four seasons, and in six of the last seven, plus other trophies too. But they have been handed no fewer than 115 charges for breaching FFP rules, going back to 2009. The case against them may not be heard until October and could even then take months to be resolved. In the meantime, City can carry on spending the money of their fabulously-wealthy owner, Sheikh Mansour of the UAE.
So the restrictions have not been all that effective, and as so often, capitalist concerns get round rules relating to taxes and profits by exploiting loopholes and playing (!) for time.
Paul Bennett
