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.

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



18 Replies to “Is FFP legal or could it be challenged in the European courts?”

  1. Why are you boring southern turds so bothered about City and FFP? You definitely should be removed to the Championship and EARN you promotion and maybe stop boring everyone to death with your constant whining.

  2. Of course the European Court would rule FFP illegal. It could clearly be shown to result in a restraint of trade and free movement, and even more fundementally, restricts someone from spending their own money in a way that they wish to.

  3. I don’t know about the Galatasaray case, but Striani was given short shrift because he was deemed to be outside football as an agent. Basically he was told to sod off because it had nothing to do with him. He wasn’t allowed a court case. It seems strange to me that a club cannot prove FFP is an affront to competition when it keeps the rich and privileged on their thrones and takes all hope from the poor clubs. FFP has been tampered with by the old G14 cartel in order to keep them at the top table. Protectionism is anti competition, surely? These same clubs forced the Champions League format on UEFA by threatening a breakaway league. Seedings and taking historical results into account close the shop further. My team are Man City but if they break away to this rumoured superleague, I will be going watching Bolton Wanderers instead.

  4. Hey Jack, not sure if you pay attention to other media outlets that mention city and ffp. what is your stance on that?

  5. FFP has never been properly tested in the courts. Not by a long shot. Those involved within European football have been waiting with bated breath for either City or PSG to be pushed too far by UEFA. If and when they are, they will be able to afford the biggest legal guns. And FFP will, I suspect, quickly be shown up for the anti-competitive rule that it is. UEFA knows it very well – which is why they capitulated so quickly when City threatened legal action.

    And, once again, I’d be grateful if you could explain and justify your continued advocacy for FFP in its current form. You’ve yet to do so, IMO. Certainly not satisfactorily, if at all. There can be little question that FFP has been hijacked by the greedy, cosy cartel of G14 clubs to protect and consolidate their hegemony.

  6. OT: How poor/xenophobic is England?

    England is wanting to Brexit. I think it will kill the UK. You may become as poor as Canada in football as a result.

    CONCACAF also has a Nations League.

    USVirgin Islands 0 – 8 Canada _ _ 204,901 _ _4.58 Billion _37.067,011 1847 Billion
    Canada 5 – 0 Dominica _ _ _ _ _37.067,011 1847 Billion _ _ _ _ 73,543 _ _0.69 Billion
    St.Kitts&Nevis 0 – 1 Canada _ _ _ _54.821 _ _1.46 Billion _37.067,011 1847 Billion

    For each game, I am suffixing the population and GDP. Of the three games (which see us into the final 6?), today’s game against St Kitts (we have almost 100 times the population, and more than 1000 times the GDP, and we get the 0-1 win.

    The only Canadian national football team worth watching, is the women. The men are f***ing hopeless.

    This is far worse than losing to Iceland.

  7. Jim B I don’t have an advocacy of FFP in its current form. My articles this week have been about what the laws are, where they come from, what happens when organisations claim the rules are unreasonable and challenge them, and how Manchester City are reported in the hacked emails to have got their spending OK’s by Uefa. Really sorry I didn’t make that clear.

  8. I wonder if you are actually looking at the Court cases the wrong way round.

    Now, I’ve been in Sales for 26 years now and this idea of market dominance is an interesting one. I have been selling two very well know brands into the NHS for a very long time, one has a very high market share, the other a relatively low one. Under UK and EU competition law, how we market in terms of price, claims and promotions is very different between the two products as we are seen to be dominant in one market but not in the other.

    Now, you quote, “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” … surely smaller teams could go to CAS and suggest that by not implementing FFP and doing these break even deals, the richer clubs are abusing their dominance and ensuring that dominance by that abuse. I suspect that is an argument that would at least be considered and if you break competition law the possible sanctions are draconian !!! Forget the usual financial wrist slaps that the football authorities administer, these guys can take percentages of the global income and I believe I’m right in saying they are able to go for the controlling organisation/owner, not just (in this case), the football club.

    Just wonder if anyone is brave enough to do it … or in reality they are all just hoping to hook a passing Arab Nation and it’s bank accounts …

  9. Football rules have already been challenged in a court of Law by Alan Sugar when he was supremo at Spurs.

    He won hands down as it was a restriction of trade and Spurs were quoted on the stock market at the time affecting share price.

    Rules made by members of a select club are not law. Anything that restricts a clubs financial position would be ruled out by any court as a restriction of trade.

    Football is a business off the field and a sport on it.
    Rules of the game are the result of common agreement between members and have never been challenged in a court of law but a wrongful sending off that affects a clubs position financially could be challenged in Law but no one wants to be the first to do that as victory would render the FA and its rules superfluous.

  10. Blue to bits: quite true. But the FFP rules were created by Uefa, and all the various court challenges (I counted 10 when putting the article together) have failed. No saying the 11th would not succeed, but each time it gets easier for Uefa since they turn up in court and cite the 10 previous cases, and the courts then look to see if there is anything new this time. I’m not an expert of course but it is getting hard to think of a new argument against FFP which could win in court, given the previous rulings.

  11. And I say again. you can’t use your market dominant position to commercially kill off opponents … that would not be classed as a restraint of trade … I’m sure the lawyers will be wining and dining off this for many years to come !!!

  12. ‘Football is a business off the field and a sport on it.’

    Football has lost its soul to the business & lost its sport to a select group of corrupt thinking officials. The sport no longer reflects the Laws but instead reflects the wealth of those that use position to overwhelm the honesty of sport (at least that’s my opinion of what has happened to English football).

    The skill and fitness of players has enhanced aspects of the game while ‘professional fouls’ and ‘prima donnas’ have destroyed the enjoyment that honest competition gives.

    When every aspect of the game is made transparent & support can be better informed, the game will begin its journey back to sport.

  13. ALAN MEADOWS “and even more fundementally, restricts someone from spending their own money in a way that they wish to.”

    That is genuinely one of the most stupid arguments I’ve ever heard in my entire life (and, no, that’s not even hyperbole). Human trafficking laws also stop me from spending my money on a sex slave; am I not well within my rights to spend my money however I want?!

  14. @Tony, I smell something fishy. If UEFA have been so successful defending ffp in court, how come they’ve given in to threats by man city to take them to court, and cut compromising de deals? It’s obvious you go for a deal that weak when you know your position is fragile. I fear your argument is far from the reality

  15. Uefa didn’t really do much defending of the deals – if you real the legal texts you will find that throughout the judges threw out the cases before they got to full hearings because they were manifestly not valid.
    In the Man city case, it looks like two men at the very top of the Uefa gave in the Man City. that can’t be proven of course, it is merely what it looks like from the leaked documents. The question then is why. Certainly not on legal advice as there doesn’t seem to have been any.

Leave a Reply

Your email address will not be published. Required fields are marked *