Opinion Tevez

Published on November 29th, 2012

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The Financial “Fair Play” Regulations – How UEFA is Playing Leviathan

By Tor G. Jakobsen

Popular Social Science has recently published two stories on the sociological and psychological aspects of association football. This is the world’s most popular sport, and is subject to a new set of directives from its governing body. The UEFA Financial Fair Play regulations were agreed on in 2009. The essence of these rules was that a football club’s finances should be based on income rather than investments.

The arguments used to support these new regulations are, for example, to prevent bankruptcy, to keep football a sport rather than a wheel of fortune, and to give clubs incentives to produce their own talents.

The book Leviathan was written by Thomas Hobbes (1588-1679) in which he advocated rule by an absolute ruler (The Leviathan) who could dictate people and enforce his will as he pleased. Hobbes argued that one needed this absolute ruler to get rid of the state of nature, described as a “war of all against all”.

However, I disagree that the game of football could be described as finding itself in a “state of nature”.

There are major flaws with the new UEFA law. First, the law actually favors the rich well established clubs that participate in Champions League on a regular basis. For example, the four English clubs Chelsea, Arsenal, Manchester United, and Liverpool had achieved a seemingly unbreakable top-4 position in the Premier League. Year after year these teams were the only ones that could qualify for the Champions League, thus creating a gap between them and the rest of the heat.

This position was maintained by the continuous flow of money from television rights, merchandise, Champions League, and sponsors. The same was true for many other leagues as well. The only possible way for other teams to compete was to get investors.

Second, what about the rights of the foreign investors? Why is it right for people to invest money in arms production or polluting factories, but not to invest in sports? Why should football have special rights, and not other more important parts of society?

I, for one, find these new regulations irresponsible. Thanks to foreign investors it is once again exciting to watch the Premier League. Let us hope this does not change due to UEFA’s wish to play Leviathan.

Sincerely,
Tor Georg

 

 

*Cover photo by Duncan Hull

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3 Responses to The Financial “Fair Play” Regulations – How UEFA is Playing Leviathan

  1. Jo Jakobsen says:

    I agree with the author, although he should have added that he risks being accused of serious bias as it is well known that his own allegiance is to the very sky-blue team that in the last years have spent its investors’ money like there’s no tomorrow. But agree I do in any case; the hypocrisy (or is it sheer idiocy?) of UEFA is a fundamental trait of that organization. The thing is that the main effect of this rule is to institutionalize the inequalities of football – exactly the opposite of what is the claimed intention. A reasonably level playing field is what the game should aspire to have. In light of the perverse skewness of the distribution of TV rights (in particular those connected to the UEFA Champions League), as well as the more natural skewness related to stadium size, shirt sales etc., the most straightforward way of leveling the playing field is, of course, to get a sugar daddy on board. That’s why the (admittedly unsympathetic) sky-blue Manchester team suddenly competes for titles; that’s what brought Blackburn to the top a couple of decades ago; and that’s Malaga’s chance – its only chance – to break the egregiously boring Real Madrid-Barcelona duopoly in the Spanish Primera. There’s one point the author didn’t mention, though. What UEFA has effectively done here is to establish a (flawed) rule at the same time as having absolutely no plan of how to supervise and enforce it. This simply implies that the big guys (those with the built-up stack of TV money) will employ two dozen financial tricksters each, their job description being to make sure that incomes (e.g. from benevolent sponsors owned by the club’s own owners!) are bloated, and that the books never go into red no matter how many gazzilions are wasted on Gareth Barrys. If I know my UEFA right, however, the small clubs will be caught and hanged at the very hint of a tiny imbalance in the balance sheets.

  2. M. Clark says:

    Clubs like Man City and Chelsea are spoiling the Premier League through their ridiculous spending. I think most reasonable people would want clubs to work hard to develop high-quality players and sound management over time. The German Bundesliga has many good examples of this and even a relatively high-spending club like Bayern Munich has a significant degree of continuity in its squad. Compare Borussia Dortmund’s blossoming talent with the pigheaded decadence of Man City and ask yourself who you would like the rules of the game to favour.

    Even if there may be flaws with the current Fair Play regulations I appreciate any attempt that can bring some sanity back to the game and a ray of hope to people who refuse to be confined to the playground of corrupt Gulf monarchy sheiks.

  3. Stevo says:

    My interpretation of the rulings are that by 2014-2015, for inclusion into the UEFA Champions League, clubs must be able to show accounts with a minimum net loss.

    To set a scenario, Chelsea finish third, but do so after a strong finish thanks to £30m spent in January on exciting South American attacking talent. Their balance sheet is tipped over the threshold and their place is awarded to Everton, who finish fifth with a blend of bargains from the lower leagues, local academy graduates and shrewd if modest spending in the international market. Buying a place in the Champions League is discouraged and it’s honey pot is redistributed into cultures of coaching, development & community; football stops being a toy for the jetsey and goes back to being a proper sport.

    The ingenuity of this system is that the emphasis on finance doesn’t discriminate against clubs with the means to compete in the highest echelons of the transfer market: why shouldn’t the prize money from winning a domestic title give a club the funds to buy players who will improve the quality of football it plays out for the paying public?

    Perhaps the OP will soften his mood towards the forthcoming changes with the news that it should effectively legislate against the Glazer business model also (ie spend big on players – keep competing in biggest competitions – use TV money to service overdraft & interest payments accrued elsewhere) – it rains the same rain on Manchester and Salford :-)

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