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Why Financial Fair Play Does Not Help the Premier League

20/03/2014 17:23 GMT | Updated 20/05/2014 10:59 BST

Today, the Premier League's financial might is clear for all to see and one just has to take a look at Wayne Rooney's £300,000 per week contract or Chelsea's mammoth £50million transfer fee for Fernando Torres to see this. That being said, there is a huge disparity in the financial power of Premier League sides. Despite the fact that all Premier League clubs have a significant income compared to their lower league counterparts, those at the top can buy players and take financial risks that other clubs in the lower echelons of the Premier League cannot not dream of and it is extremely unfair.

Although this is particularly prevalent in the Premier League, it is not a problem unique to England and there are obvious examples to be seen throughout world football. In order to remedy the ever-growing problem of clubs spending billions and incurring huge losses in the process, UEFA introduced a set of 'Financial Fair Play' (FFP) rules by which clubs must break even over a period or they will be punished with sanctions. In theory, it is a very good idea as clubs are now not able to spend in the ridiculous manner of early-days oligarchical Manchester City or Chelsea, which is fairer on smaller clubs without said financial might. Or is it? When examined in finer detail, FFP might actually do the Premier League more harm than good.

As already mentioned, the rules mean that clubs cannot spend more than they earn. What this means in practice, however, is simply that the already rich will stay very rich and the already poor will stay in the same financial mire. Clubs such as Manchester United turn over significantly more money than the likes of Norwich City and under the new rules will have the right to spend more. The same would have been the case for Manchester City and Chelsea had the rules been introduced a few years ago - their turnover at the time was not particularly impressive and as such they would not have been able to lavish the millions that they did on new players, staff and facilities. The huge losses incurred by both Manchester City and Chelsea can be somewhat justified by the fact that both are now top Premier League clubs and have a worldwide audience. Had FFP been introduced a few years earlier, neither would have been able to incur the huge losses needed to get them to the more stable position that they are in presently.

To explain this in more depth, a club's turnover is based on factors such as gate receipts, sponsorships, prize money, TV revenue, transfer profits and many more. A club that has a higher income based on these factors is therefore allowed to spend more under the FFP rules and the result of this will be an almost unbreakable status quo. Clubs that currently play in the Champions League will continue to receive the vast riches gained from playing in Europe's premier competition, while those below them can only spend what they earn from playing in the Premier League. As a result, those at the top can continue to spend more and more and pull away even further from those trailing behind. To make matters worse, as leading clubs continue to rake in the extra revenue, they also gain more exposure and therefore yet more cash. To cap it all off, clubs with very rich owners such as (of course) Chelsea and Manchester City, often receive 'gifts' from owners and extremely large sponsorship deals from the same source which all helps to balance the books. If equality is one of FFP's ultimate goals, then it is some way off the mark of actually enacting it.

Therein lies the problem. A side who have almost sorted themselves out financially after years of significant loss have had a much quicker route to the top than a club which is currently aspiring to such a position. The only way now for a smaller side to reach the upper echelons of the game is via a very slow and torturous route, one that still does not guarantee success. To build even a moderately successful side on a shoestring budget is hard enough, but to do it whilst the top clubs with endless resources poach your players is nigh-on impossible. In essence, under FFP, you either have it or you don't and this will be the unfortunate case for the foreseeable future.

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