How Financial Fair Play went from City’s worst enemy to become the club’s best friend

For years, Manchester City was at least to some degree restricted by UEFA and the FA’s Financial Fair Play (FFP) regulations. Last season, Manchester City faced spending restrictions, squad size restrictions and the club had to pay a fine for violating Financial Fair Play, although it was a comparatively lighter sentence compared to what some other clubs received for violating FFP regulations. For years, it was perceived that Financial Fair Play was a major roadblock on Manchester City’s path towards success, but that is no longer true. Starting from this season, it seems like the tables have turned, and Financial Fair Play is firmly on Manchester City’s side.

Financial Fair Play is probably one of the most misunderstood rules in sports. Due to its name, many fans perceive that FFP is designed to promote competitive balance, similar to say, the NFL salary cap. Despite the “fair play” in the name, it was NEVER intended to promote competitive balance. At its core, FFP is a set of regulations designed to minimize financial misconduct and overspending. Its goal is to prevent clubs like Portsmouth and Rangers from overspending themselves into financial insolvency. Competitive balance was never a goal for FFP. In fact, FFP does the opposite of competitive balance, it helps those at the top, while keeping the rest down.

In order to prevent football clubs from going bankrupt, Financial Fair Play sets a limit on the amount of losses that a club is allowed to take. So clubs in theory cannot pull a Portsmouth and overspend their way into oblivion. This also effectively kills outside investment by rich owners, making it so that there simply cannot be a next Manchester City or PSG. Wealthy owners literally cannot invest in their clubs to bring them to a higher level.

So yes, to put it bluntly, Financial Fair Play is blatantly anticompetitive. The legality of these regulations aren’t really established, there hasn’t been a sustained legal challenge to the regulations yet. It’s not hard to see that one of the biggest effects of FFP is that effectively the “ladder” has been drawn up. In this modern era, where inequality in football is huge and only getting bigger, FFP is killing the only sliver of hope that smaller clubs have to challenge the status quo.

Let’s take a look at the numbers. In the 2013-2014 season. In the Premier League, Manchester United was number 1 in revenue, with £433 million. Cardiff City was last, with only £83 million. In fact, if we graph the revenue numbers, we can easily see a massive disparity between the top, and well, the rest. There is a massive drop off between Manchester United, whose name has been used to endorse everything from shoes to noodles, and whose famous red shirt is probably one of the most popular pieces of sports merchandise, probably second only to the legendary New York Yankees hat. Manchester City, Chelsea, and Arsenal are second, third, and fourth respectively. They are all above the 300 million line, and their revenue numbers are somewhat within approximately a £50 million gap. This season, both Manchester City and Chelsea should have pulled closer to Manchester United with their partnerships and sponsorships, but we won’t know anything until the next fiscal year.

After the top 4, lies Liverpool. Liverpool is a very interesting club financially speaking. Historically very successful, they have missed out of the Champions League for a few season. Combined with their middling performances in the league, Liverpool is far from matching the top four financially. £75 million below Liverpool lies Tottenham, another middling club with potential to challenge for champions league spot, but unlike Liverpool, their fan base is not nearly as big.

After Tottenham, we have well, the rest of the league. The gap between 7th place Newcastle and last place Cardiff is less than £50 million. Of course, under that we have another massive gap between Premier League and the Championship.

Before Financial Fair Play, revenue matters for most clubs, but there were clubs bankrolled by wealthy owners, making the revenue table quite irrelevant. Manchester City was a middling club before wealthy owners started investing heavily, and they were able to become the juggernaut they are today.

The difference between an ownership group willing to consistently spend (Manchester City, PSG), and those who aren’t willing to step up the investment (2013-2014 Liverpool), or cannot keep up the investment (Blackburn) is massive. It’s not impossible for a club to outperform their financial ability for a short team, like Liverpool’s 2013-2014, or Blackburn’s title win. But the big difference lies in the ability to stay good. Revenue increases usually lag behind performance increases for a few years, but player’s statures and wage demands increase pretty much instantly. With Liverpool’s unexpected title challenge, a much wealthier club came in and immediately swooped away their best player, same thing with the one time Tottenham finished 4th, Bale quickly left to go to Madrid.

In the post Financial Fair Play world, it doesn’t matter if a club’s owners have billions they are willing to spend, everything is tied to your revenue. The gap between the top clubs and the rest of the league have just become too big. For years, Manchester City and PSG with hampered by Financial Fair play, but those two are probably the last two clubs to climb to the top of the hierarchy due to outside investment.

Before Man City’s ascent to the top, the Premier league was dominated by the “big 4”, Man United, Chelsea, Arsenal, and Liverpool. City’s massive investment allowed them to knock Liverpool out of the top four, but without financial fair play, this scenario could very well happen again. Who knows, maybe some wealthy man purchases a mid-table club like say, Stoke, invests a few hundred million, and Stoke might just knock Man City out of the top, just like Man City did with Liverpool. But now, with FFP, you are not allowed to run a loss, so that scenario is impossible! At most a middling club like Tottenham or Stoke might get lucky and crack the top four, but their revenue will not increase that fast, and a season later they’ll be back mid table after their best player goes to Barcelona or Madrid for triple his previous wages.

Financial Fair Play has effectively “Pulled up the ladder” that City used to climb to the top. But now Manchester City is at the top, with massive revenue, the system suddenly shifts into City’s favor. The whole FFP system works to keep small clubs down by eliminating their best chance of ever making it to the too, Cementing the position of wealthy clubs like Manchester City at the top.