By Tony Attwood
As we’ve mentioned on Untold before the issue has not been whether someone will take Uefa to a European court, but whether it would be a club claiming that Uefa has gone too far in laying down the code of practice, or another saying that Uefa has not gone far enough in dealing with an obvious transgressor.
Now we know, and the answer is “neither”. The first case of a legal challenge in the European courts over FFP comes from a players’ agent who will argue that FFP unfairly restricts the amount of money his man can earn.
Daniel Striani is registered in Belgium as an agent and he has lodged a formal complaint with the European commission against FFP rules.
The lawyer who has taken on the case is Jean Louis-Dupont, who has form in this area, because it was he, in 1995, who challenged football’s contracts on behalf of … Jean-Marc Bosman. The result was that all players now have a freedom to move at the end of their contracts.
Dupont argues not so much that the rules themselves are against EU laws and European Commission ruling, but rather that the implementation of the rules will inevitably have a range of outcomes which will be anti-competitive, primarily because investment which is there and available for clubs won’t be put into the club, because the clubs’ losses are limited by FFP.
That is obviously the big one, but the other points argued are important too. The second argument in the case is the suggestion that smaller clubs will have less chance of breaking into the stranglehold on success that the bigger clubs have. Thus the leagues will be less competitive.
The argument is that Manchester City have broken into the top layer of English clubs, as did Chelsea before it, and as PSG have done in France, with Monaco coming up behind. But from now on the already wealthy clubs will continue to dominate.
This argument is powerful but there are counter-views that can be expressed. Liverpool’s fall from grace, for example, shows that top teams can fail to gather the right type of investment and so fall from a superior position, leaving a place vacant at the top table which others such as Tottenham will quickly scramble towards.
The third argument looks to be open to debate as it suggests that FFP will reduce players’ wages and the inevitable rise of transfer fees and thus is “anti-competitive”, and therefore a breach of European law.
Here the argument is particularly interesting in that it is said that FFP will lead to a “reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club”, and will therefore deflate salaries.
But at this point the argument begins to look rather sticky because FFP only applies to those clubs that accept the offer of a place in the Champions League or Europa League. There is nothing in the regulations to stop clubs building up their team, and then building up the income of their club with a larger stadium, higher prices and more sponsorship money, and in the meanwhile not accepting a Champions League spot for the first couple of seasons. It should not take more than a year or two to do this, as long as there is no FFP in the individual leagues.
Of course Manchester C and Chelsea have not acted in this way, because there was no need for them to speed up the process, but they could have changed tactics had FFP been in place.
Dupont’s argument is that FFP stops the free movement of capital, of workers and of services, the last being a reference to the agents. He also argues that Uefa could instead run a system in which money from the rich clubs is “taxed” and then shared out with the smaller clubs – presumably by a tax on expenditure rather than a tax on profit. Thus for every player who is transferred there would be a tax, the money from which would be shared out.
A £30 million transfer might result in £5 million of that money going to smaller clubs in the league of the country in which the player played before the transfer – or even the country where he first started playing.
The arguments look clever, but the European Commission has already given encouragement to FFP, although the EC is not allowed to break its own rules. But this is not the first time the EC has been so accused. Back in September 2009 the EC was accused of helping to fund the Irish referendum on the Lisbon Treaty – although no case was brought against the EC.
Uefa’s response is that the new FFP rules are supported by Europe’s clubs and players’ unions, and the EC itself. Since it has been long established that sports activities are different from other everyday activities, not least because whereas you or I could start up work tomorrow as a plumber and compete with all other plumbing firms, we could not form a club and enter it into the Premier League. It is the nature of sport that means that different rules apply to sport.
Uefa’s response statement says, “The rules encourage clubs to ‘live within their own means,’ which is a sound economic principle aiming to guarantee the long term sustainability and viability of European football. Uefa believes that financial fair play is fully in line with EU law and is confident that the European commission will reject this complaint.”
The Bosman case of freedom of movement at the end of a contract was won because it did not affect any aspect of the actual organisation of football with entry into leagues being restricted on artificial bases. This challenge to FFP looks to be on less sound ground because its arguments are of a different type.
But with football, as with European law, one never quite knows.
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- Royal Arsenal: from the Common to the Manor. Coming next.