18 November 2018

Is FFP legal or could it be challenged in the European courts?

By Tony Attwood

Many objections have been raised, mostly but not exclusively by supporters of Manchester City, to our coverage of Financial Fair Play, which has been our main topic of conversation during this period without any men’s football (although it has been wonderful to see how great the women’s team has become – boosted undoubtedly by our exclusive interview with the manager). (OK maybe not, but it was a bit of a coup for Andrew)

Some of the objections have really caused a lot of laughter – particularly that ones that said we, as Arsenal fans should not be commenting on this given that our club bribed its way into the League. Always a good idea to contemplate to whom one is writing, since we are the people who have written the definitive detailed history of the event. Anyway there is an index to the relevant articles with relevant data from the time.

But I’m left with one other topic that needs looking at a little further. Is FFP legal?

The fact that it has lasted for nearly seven years suggests yes, it is, and indeed we have looked at this before, but here’s a quick summary. And in this thanks to Asser International Sports Law who have a massively detailed review in multiple parts of the subject which gave me a chance to check some of our facts along the way.

It is certainly true that FFP has been challenged in various EU courts, as we have covered in many previous articles. The main protagonist is Mr Striani, a football agent who has argued that FFP breaks European competition law and restricts various fundamental freedoms guaranteed in the EU.

The Belgian court case is perhaps the most famous, and in this the court referred the case to the Court of Justice of the European Union. The court rejected the application by Mr Striani as “manifestly inadmissible.” Mr Striani then made a complaint to the EU Ombudsman against the Vice President of the European Commission because the VP was assoicated with Athletic Bilbao. The Ombudsman threw out the complaint.

Galatasaray on the other hand appealed to the CAS, arguing FFP was illegal and so sanctions against them were illegal. The CAS found that to prove their case Galatasaray needed to show that FFP was having an anti-competitive effect or was an abuse of a dominant position, and they did not manage to do. So court cases yes – but victories against it, no.

Over the years FFP has changed a little and now include “Settlement Agreements” which is of course what Manchester City were involved in – they offered to settle their case in a particular way and Uefa accepted their offer.

Also by 2015 Uefa had introduced Voluntary Settlement Agreements, which allow clubs to move towards a break even requirement. But to do this clubs have to submit a long term business plan based on reasonable conservative assumptions.

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This allows new owners of clubs to run up debts providing they can show they are moving to break even over an agreed period of time although in contrast to that there is a statement that says FFP is ntended to “decrease pressure on salaries and transfer fees and limit inflationary effect”. This is the bit that some of us are worried about. Is Man City’s break even going to come by including the continuing input from without at the current level we are seeing? It appears so.

Certainly FFP incorporates various exemptions – amounts of money that can be spent without being in the FFP consideration. These have always included stadium and youth development, and now include also the development of women’s football.

Meanwhile back in the men’s game, people came back to FFP after a period of quiet, when Neymar went to PSG for €222m transfer. You might recall that PSG used some interesting tactics involving Neymar becoming a world ambassador for Qatar, and thus paying off his own release clause money but the regulations, as many have pointed out do contain Article 72.1 which outlaws activities the aim of which is to get round the regulations.

However Uefa changed when its president became head of Fifa and in came Aleksander Čeferin, a man from a very different background from Infantino, and who was elected on a ticket of reducing the gap between the ultra rich and the rest.

There have been many more complaints since the first, to the CAS, and these have failed each time to dent FFP. But what was never considered was the notion that Uefa could accept a settlement based on sponsorship which appeared to be at rates that far exceeded the commercial norm.

But to return to our main theme, in terms of legality – FFP has been repeatedly challenged, and has come through. However what Uefa does about it now, in the light of the revelations that have come out in recent days is another matter. Čeferin is not Infantino and his brief has never been to support the wealthy. We shall see.

That more or less brings us up to date. And now, for anyone interested in whether Arsenal bribed their way into the league as some correspondents have said, no one has ever previously alleged this. However it has been alleged that Arsenal’s election to the first division in 1919 upon its expansion by two clubs after the first world war, was fixed.

So for the first time ever, we went through all the evidence from the era, and such evidence as has emerged since. Here are the articles to “The 1919 affair.” All these articles come from the series “Henry Norris at the Arsenal.”

The preliminaries

The voting and the comments before and after the election

Is FFP legal or could it be challenged in the European courts?

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