Financial Fair Play And Its Consequences: A look at City & Chelsea

Financial Fair Play And Its Consequences: A look at City & Chelsea

Manchester City are due to be levied with a £50 million fine and a play registration limit in next year’s Champions League for their breach of Financial Fair Play rules. The fine can be paid over three years, so will not be a problem for a financial powerhouse such as City. The restriction of their Champions League squad is the sanction that is most likely to cause them some difficulty. Although City will no doubt appeal the sanctions, if they are upheld it will show the rest of Europe the seriousness of FFP.

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Man City and Paris Saint-Germain are the two teams most likely to be in the most hot water with UEFA due to their high transfer fees and massive wages. In recent years these two clubs have made the most of having owners with billions of funds to spend. UEFA has been keen to stop these clubs from making huge losses every season at the expense of success. The regulations are also supposed to level the playing field. Many believed that expulsion from European competition would be the punishment, but that has not turned out to be the case.

City and PSG, whilst aware of the possible punishments, did not believe that they would be enforceable by UEFA as their disregard for the rules have shown. City’s players are rumoured to have the highest wage bill in sport, with their players earning an average weekly wage of £103,653. Added to this wage bill was the £102 million that City spent on the summer on recruitment, which was supplemented by receiving only £10 million from player’s departures. That leaves a difference of around £93 million in City’s spending and their income on transfers alone. Combined with their mammoth wage bill, it was almost inevitable that they would break UEFA’s FFP rules.

Whilst City have apparently fallen foul to UEFA’s punishment, former big spenders Chelsea have escaped by not moving players on in order to balance the books. The Blues have spent even more than City during the two transfer windows this season. In both windows combined they have spent £112 million on the likes of Andre Schurrle, Nemanja Matic and Willian. At the same time in contrast to City, they have recouped around £67 million in transfer fees selling the likes of Juan Mata and Kevin De Bruyne.

In recent seasons Chelsea have invested in a wealth of young talented players from around Europe. They understand that the majority of these players will not make the Chelsea first team squad, however the Blues have begun loaning these players around Europe in order to increase their value. On their returns to Stamford Bridge Chelsea, the Blues are then able to sell these players on for a much higher fee than they purchased them for. This business model is one that we could see Chelsea and other teams around Europe use more in the future.

What is clear from this rumoured UEFA ruling is that City will be negatively affected in the Champions League and domestically. If they’re only able to register 21 players and eight of these players must still be home-grown, they may have to look closer to home for their future transfer targets. Manuel Pellegrini will also have the dilemma of having to drop at least four foreign players from his squad for European fixtures, weakening the pool of players that he is able to call on. This will mean that City will have to include more home-grown players in their European squads which will be good for the player’s development. At the same time, City will be affected on the field as they will not be able to use their full quota of top international players in the Champions League.

Whilst it is almost certain City will appeal, the ruling will definitely make them take financial fair play more seriously. Whether this means that they adopt a policy like Chelsea of buying, loaning and then selling on players remains to be seen. It is clear that City will have to reduce their spending and that will we not see the sort of recruitment that we have seen from them in the past. With player’s wages likely to only rise in the future, City would put themselves in more danger by spending big on more superstars. It Is due to be a very interesting few years in football after today’s revelation as Financial fair play has shown that is not to be taken lightly.