The truth behind football’s much-maligned Financial Fair Play rules in the Man City case

After the shock, the waves. Usually, by the third day of every new episode of the eight-year Manchester City saga, debates about the story devolve into debates about the rules alleged to have been broken. That they’re “unfair”; that they seek to stop those challenging the “establishment”; that they were created by a “cartel”.

Such views – currently being argued – have also long been shaped by spin, increasingly fired by complex new ownerships seeking to show “ambition”.

Consequently, a lot of myths have been propagated about the rules – originally called Financial Fair Play (FFP) – that are almost exclusively viewed through the prism of the top end: who wins.

Such myths make it all the more important to remember the reality, and how the rules were actually borne out of a turn-of-the-millennium world that offers a lot of warning for right now. Unrestricted owner spending put immense stress on the football system, with clubs going to the brink and everyday people not getting paid.

There was real-world effect way beyond the trophies.

In the years immediately following the 1996 Bosman ruling, more responsible figures in Uefa were hugely concerned about this. Uncontrolled spending in an open market created an arms race that was bringing more clubs to the brink of destruction. Salaries were ominously high proportions of revenues. Multiple clubs across Europe didn’t pay transfer instalments or even players on time, in what was described as “a wild west”.

Tackling this was actually the genesis of the “Fair Play” in the name.

Uefa’s response was initially to try and introduce a hard salary cap in 1999 but this was against European labour law. The body’s technocratic Nordic leadership similarly realised the need to create a legal framework first, so set about accumulating information that became club licensing rules. These are essentially all the criteria you need to fulfil to play in Europe, which conditioned the prudent running of clubs.

It was while all of this was happening that Leeds United began to go into financial free fall from the exact kind of overspending they were trying to stop, emphasising the need for change. Simultaneously, Roman Abramovich’s 2003 Chelsea takeover put a completely new stress on the system. Even Ferran Soriano, City’s current chief executive, described this as a “gigantic disruption” that caused “crazy inflation spread throughout the entire circuit”. The drag from the top ensured wages rose right down the pyramid.

Other clubs didn’t just have to pay more to buy players. They crucially had to pay much more to keep them.

Those involved in crafting FFP were conscious of stories from leagues like Ireland and Czech Republic, let alone England’s lower divisions, where players couldn’t afford Christmas presents as they hadn’t been paid. This is why it’s about so much more than whether clubs actually fail, particularly in an industry awash with so much money. As one official says, “those stories have stuck with me”.

Some form of cost control was essential, especially if you believe in the pyramid. And this was all before the further turbo inflation from state-linked wealth.

The inherent competitiveness of sport ensured this was always going to be a problem, since everyone just wants to try and win.

There was an inherent inconsistency, though. German clubs would complain to Uefa that they faced much stricter regulation than counterparts in England or Spain.

They found a sympathetic ear in Michel Platini, who became Uefa president in 2007. The former French playmaker had long been conscious of how his country had the strictest regulation of all in the Direction Nationale du Controle de Gestion [DNCG].

A will to recreate this at Europe-wide level was merged with the salary cap project, to eventually become FFP – an indirect salary cap. Such a move towards regulatory prudence also ensured it made sense to link expenditure to income, especially when football was generating so much money. Platini also got crucial endorsement from European Union Competition Commissioner Joaquin Almunia. He was a fan of Athletic Bilbao, a model of self-sustenance.

And, once FFP was eventually implemented by Uefa, it made obvious sense for the Premier League to follow. The clubs would be competing in the same competitions, after all. The Premier League even made their regulations that bit more permissive, in terms of owner investment allowed, so as to ensure Uefa prize money wouldn’t lock specific clubs in or out.

All of which raises an obvious counter-point, now also argued a lot. As was repeatedly pointed out to prominent Uefa staff – often in strident terms – all of this had the inherent risk of perpetually preserving the status quo; of keeping the clubs with the biggest revenues at the top.

That argument is correct but misplaced. It isn’t a criticism of the rules, which are essentially just a necessary cost-control mechanism. It is really a criticism of the economic system, and where the money goes.

The game generates more than enough money itself, after all. It doesn’t actually need more owner investment, especially at Premier League or Champions League level.

Where the big clubs really deserve pushback in this regard is in ensuring that virtually every other decision in football for 40 years has meant they get more money, from broadcasting rights to Champions League prize money. That was the true “establishment” stuff.

Really, FFP regulations should have been complemented by much better redistribution from the very start. It was absurd this was never addressed; especially since English football had been a model for so much of its history until the 1990s.

There is even a mirror to all of this now in how the Premier League’s new Squad Cost Ratio rules were not complemented by the crucial anchoring mechanism, so the wealthiest club could only spend a set multiplier of that of the weakest.

Attempting to solve this – and ensuring a much greater distribution of talent – would also be to the benefit of the wider game, rather than just those few individual clubs with wealthy owners.

If anyone was devising a sport from scratch, absolutely no one would think it was a good idea to outsource competitiveness to oligarchs, sovereign wealth funds or private equity groups; that you need to win the owner lottery to win at all.

In other words, the shortcut.

It’s also why it’s helpful to imagine the alternative solution. What would the game look like if it didn’t have anything resembling these regulations, or they were greatly loosened? You’d see less competition, not more, since it would be even more beholden to the wealthiest. Everyone else would go bust trying to keep up.

In other words, like pre-2006, but with much higher inflation and much more risk.

Although this was not the original intention of the rules, it does make obvious sense to try and regulate the kind of resources that football would not possibly be able to cope with. How could anyone compete with state money otherwise?

A crucial point is also from a tranche of clubs that are often overlooked in such discussions. They are those that seek to organically grow, like the Brightons, the Bilbaos, even the Tottenham Hotspurs.

Spurs may have been one of the “big six” often derided in these discussions, but they only forced their way into that after steady macro management over years.

They also offer something of a coda. That diligent work could well have seen Spurs defy the odds to maybe even win a title, except they were denied by cheating. In 2016-17, it was down to Chelsea, who have since been punished. Over many other seasons covered by the City investigation, then, Spurs were just squeezed out of the top four. How different their recent past and future might have looked had they been regular Champions League qualifiers.

It is all worth a different perspective on the rules.