Although they are not fully introduced until next season, Uefa’s Financial Fair Play rules have already changed the financial outlook for Premier League clubs. They are no longer taking their situation for granted and are instead trying to securing their long term future at the top of the English game.
Alarmed with the massive amounts of debt carried by Europe’s leading clubs, and the fact that only 20% of them turn a profit, Uefa President, Michel Platini has introduced the FFP rules to encourage a more sustainable business model. The rules, designed to ensure clubs live within their means over a rolling three-year period, prohibit clubs sustaining losses of more than £40 million during this period.
Football has become more of a business than ever before and as a result the recession and economic downturn are really starting to have an affect with most clubs experiencing a decline in revenue with ticket and merchandise sales falling. The consequence is that these clubs are looking at new ways to keep their costs down while still maximising their revenues.
While millions more was spent during this year’s summer transfer window than in the last, it still feels like the wind is changing in Premier League with a widespread policy of buying now as an investment for the future.
This can been seen with the fact that more money was spent on English players that ever before and a higher percentage of transfer fees went to clubs based in England with an increasingly trend to buy young English players. Manchester United’s Phil Jones, Arsenal’s Alex Oxlade-Chamberlain and Sunderland’s Connor Wickham were just some of the young English talent purchased in the summer by top clubs in the country. As they fit into the new home grown rule and also have a higher resale value in the future, these signings make perfect sense. I think we have now seen the end of big wages and relatively high fees for footballers in their late 20s and early 30s especially at the top clubs in Premier League, minus the odd exception.
Despite the £485 million lavished by Premier League clubs during this summer’s transfer window, there was still an increased financial restraint on managers with numerous clubs attempting to reduce their wage bill by clearing out surplus players on loans and free transfers in an attempt to cut their overinflated squads. Loans moves like Adebayor’s and Benayoun’s were rarely seen previously and are yet another example of club directors trying to balance the books.
Not only are clubs cutting down their wage bills but they are also signing players on reduced contracts. Mikel Arteta took a pay cut when agreeing his ‘dream move’ to Arsenal but in return he got stability with a long term contract and this sort of deal is the future of the Premier League. No longer can clubs pay ridiculous wages to average players and instead a balancing act must take place which will help stabilise the game.
Cost cutting measures have already been introduced in the Premier League and the FA are now looking at ways to bring in appropriate cost cutting measures which will introduce more prudence into the division. UEFA’s rules have changed the business of football in the Premier League and we can expect a different landscape, where clubs only spend when they earn, to emerge in the next few years.
Let me know you what think below and follow me on twitter @aidanmccartney for more thoughts about the beautiful game.
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