The ambiguity of Fair Play

BY STEVEN BELL

The release of the Deloitte Football Money League 2014 allowed individuals to pollute the World Wide Web with “Manchester United slip out of top three” headlines. But if you look at this in the way it should be looked at, it raises a number of questions more than anything else.

Yes, Manchester United’s slip was news, especially since it’s the first time they had been ousted from the top 3, but there are no worries about them making that place back next year. This is a statistic which should have been glossed over, really.

It’s the commercial revenue figures that particularly jump out from the report. In particular, Paris Saint-Germain’s.

PSG recorded an 81 per cent increase in revenue for the 2012-2013 period, and this was primarily gained as a result of their €254.7m yield on commercial revenue. To put that into perspective, it’s the largest ever commercial revenue by a football club, with Bayern Munich recording €237.1m in the same period.

Evidently, PSG have had success both on and off the field since the arrival of Qatar Sport Investment. Ligue 1 success, Champions League qualifications and big name signings like Zlatan Ibrahimovic, Edinson Cavani amongst many others. With this, the inevitable commercial revenue increase comes; the natural surge in shirt sales, TV cash and partnerships in general. But there is a very specific sponsorship deal that seems to test UEFA’s Financial Fair Play (FFP) rules.

A 4 year deal struck with Qatar Tourist Authority, paid back to 2012, will see incremental rises of up to €200m per annum thrust toward the French club. All this with no shirt sponsor, stadium naming rights or any of the usual privileges a sponsor stresses. Cash injections like this can offset any spending with relative ease, including any French tax increases as it is the business (club) who takes the brunt of that. Despite this, it seems to be an “artificial” way of doing so, and moreover, a potential breach of FFP.

FFP is fairly long winded. UEFA’s team of 15 accountants has been tasked with ensuring football spending is on a more level playing field and clubs are not over spending. That’s an easy way to explain it, but there is mention in the extensive rules of “Related Party Transactions”, and “Fair Value”. Ultimately, UEFA are able to investigate deals they believe have been concluded solely to pass their FFP regulations with club owner’s interest in the participating company. It reads;

“An arrangement or a transaction is deemed to be ‘not transacted on an arm’s length basis’ if it has been entered into on terms more favourable to either party to the arrangement than would have been obtained if there had been no related party relationship.”

If UEFA deem this to have breached their rules, then sanctions will certainly be called for. As will action against a similar case with Manchester City’s Etihad Stadium deal, which has also been criticised. If they judge these deals to be perfectly above board, it creates a sense of ambiguity going forward. It will certainly call into question UEFA’s FFP policy as a whole.

On release of the results, Austin Houlihan of Deloitte Sports Business Group said:
“We expect to see PSG become a mainstay in the top five [in the Money League] in years to come, backed by their ambitious Qatari owners and strong commercial support.”

Only time will tell.

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