Football-wise, 2014 will not only be remembered for the World Cup in Brazil. This year will also determine the credibility of UEFA’s highly controversial Financial Fair Play (FFP) Regulations. The FFP debate will soon be reaching a climax, since up to 76 European football clubs are facing sanctions by the UEFA Club Financial Control Body (CFCB). This large number of clubs includes two heavyweights: Manchester City and Paris Saint-Germain. On paper they face a potential disqualification from one or more editions of the UEFA Champions League. This would most certainly jeopardize the great ambition their billionaires-owners have for them and would vindicate FFP as a powerful mechanism capable of reigning in even the world’s richest football clubs. Whether this will indeed occur shall remain uncertain until the beginning of May, when UEFA is expected to announce the details of the (potential) disciplinary sanctions. However, in order to grasp the likely consequences of a sanction we offer you the definitive short introduction to FFP.

It is in the view of curtailing the, sometimes dramatic, losses made by an increasing number of football clubs, that UEFA’s Executive Committee decided to introduce the FFP Regulations in May 2010. The stated aims of FFP, stipulated in Article 2 of the Regulation include, inter alia, improving the economic and financial capability of the clubs; increasing their transparency and credibility; introducing more discipline and rationality in club football finances; encouraging clubs to operate on the basis of their own revenues; and protecting the long-term viability and sustainability of European club football. On UEFA’s own website a further aim was mentioned, namely to decrease pressure on salaries and transfer fees.

To achieve these aims, UEFA has introduced the break-even requirement[1]. By this requirement, clubs must demonstrate that their revenue exceeds or equals expenditure. The club’s spending on transfers and employee benefits (including wages) will be counted as expenditure, whereas income from gate receipts, TV revenue, advertising, merchandising, sales of players, and prize money is regarded as revenue. Any money spent on infrastructure, training facilities or youth development will not be included in the assessment.

In accordance with article 68 of FFP Regulations and article 3 of the Procedural rules governing the UEFA Club Financial Control Body, the CFCB is competent to inter alia determine whether clubs fulfil the break-even requirement and impose disciplinary measures in the event of non-fulfilment of the requirement. A first assessment is undertaken by the investigatory chamber, which leads the monitoring process, the investigation proceedings, and collects evidence. At the end of the investigation, the CFCB chief investigator, Jean-Luc Dehaene, after having consulted with the other members of the investigatory chamber, may decide to: (a) Dismiss the case; (b) Conclude, with the consent of the club in question, a settlement agreement; (c) Apply, with the consent of the club in question, a disciplinary measure limited to a warning, a reprimand or a fine up to a maximum amount of EUR 100,000; or (d) Refer the case to the adjudicatory chamber.[2] It should be noted that this is the phase the 76 clubs find themselves in right now.

Should the investigatory chamber decide to refer the case to the adjudicatory chamber, then the adjudicatory chamber can decide to: (a) Dismiss the case; (b) Accept or reject the club’s admission to the UEFA club competition in question; (c) Impose disciplinary measures; or (d) Uphold, reject, or modify a decision of the CFCB chief investigator[3]. A final decision by the adjudicatory chamber will be made before the end of the current season at the latest.

Concerning more specifically the disciplinary measures, Article 29 of the Procedural rules provides a long list of potential measures including fines, deduction of points, withdrawal of a title or award and disqualification from competitions in progress and/or exclusion from future competitions. Undoubtedly, for teams like Manchester City and Paris Saint-Germain whose greatest ambition is to be successful in Europe’s most prestigious tournaments, a disqualification from European competitions would be the most severe disciplinary sanction possible.

Furthermore, the Procedural rules governing the UEFA Club Financial Control Body give the sanctioned party the possibility to appeal against the decision. The appeal should be launched in accordance with article 34 of the Procedural rules, which states that final decisions of the CFCB may only be appealed before the Court of Arbitration for Sport (CAS) in accordance with the relevant provisions of the UEFA Statutes.

Whether the CAS will have to pronounce itself on a specific case regarding FFP in the upcoming months will largely depend on the scope of the decisions adopted by the investigatory chamber later this week and then by the adjudicatory chamber in the upcoming month. The effectiveness, credibility and, more broadly, the future of the FFP Regulations are at stake. This is either the beginning of the end for FFP or the end of the beginning. 

A story to be continued…

[1] UEFA Club Licensing and Financial Fair Play Regulations. Edition 2012, Articles 58-63

[2] UEFA Procedural rules governing the UEFA Club Financial Control Body. Edition 2014, Articles 12-14

[3] Ibid, Article 27

Editor's note:

Dr Borja García joined the School of Sport, Health and Exercise Sciences at Loughbourough University in January 2009 as a Lecturer in Sport Management and Policy. He holds a PhD in Politics, International Relations and European Studies from Loughborough University (United Kingdom), where he completed his thesis titled ‘The European Union and the Governance of Football: A game of levels and agendas’.

In this leafy and relatively mild autumn, we are celebrating two important anniversaries. Recently, we just passed ‘Back to the Future day’, marking the arrival of Marty McFly to 2015. In a few weeks, we will be commemorating the 20th anniversary of the Bosman ruling. Difficult to decide which one of the two is more important. As we move well into the 21st century’s second decade, these two dates should mark a moment to consider innovation. They are perhaps occasions to take stock and reflect how much sport has evolved to reach this new future… or not.

When Marty McFly ‘landed’ on October 21st 2015, at 4.29 PM, he found a whole new world. Flying skateboards, holograms, massive jumbo screens… There was not much reference to sport governance in Back to the Future, although in the vein of the rest of the film, one would anticipate a modern, innovative and decidedly better sporting world. However, if Marty McFly, coming from the 1980s or 1990s, had arrived into the real October 21^st 2015 and looked at the present state of sport governance, he may have thought his De Lorean was not working properly! Twenty years on from Bosman, and more than a decade since major scandals that were supposed to change the landscape of sport (so we were told back then), a familiar feeling of déjà-vu emerges when reading the sport news nowadays.

The late 1980s and 1990s were characterised by legal insecurity, scandals and transformation in the governance of sport. There were legal challenges to the legitimacy of governing bodies. Bosman was just one of them, but on the back of the ruling the European Commission was inundated with questions related to the application of EU law to the rules of sport governing bodies. Those were also days of major public opinion upheaval against the institutionalised doping or the mismanagement of the IOC.

Fast forward to 2015 and we find ourselves in a very similar situation! After a period of relative calm, legal challenges from stakeholders against rules and regulations of governing bodies have flourished everywhere. Dutch skaters against ISU, Mr. Striani against UEFA, FIFPro against the international transfer system, the Spanish and Portuguese leagues against FIFA... just to name a few. Moreover, it seems as if doping and corruption never left us. It was cycling back then, and Russian athletics now. It was the Olympics and Salt Lake City in the 1990s, football, Russia and Qatar now. It seems not much progress has been achieved in 20 years.

Why is that? One of the reasons is that, despite some changes and mild modernisation, the governance structures are still very similar. No flying skateboards around FIFA or the IOC, I am afraid. Sport continues to be regulated by international federations trying to keep their place at the top of a pyramid that, however, is no longer there because it has given place to a much more complex network. The transformation from vertical governance to horizontal structures, that caused many problems in the public sector as described by Rod Rhodes[1] (among others), has not been correctly addressed in sport.

As Jack Anderson has correctly pointed out, perhaps one of the problems is that the current political governance structures of sport are not fit for purpose. They lack real separation of powers. For example, when the Spanish athlete (now a senator!) Marta Domínguez is allegedly accused of doping due to irregularities in her blood passport, WADA sends the dossier to the Spanish Athletics Federation, in which Domínguez was a vice-president for a few years, serving under the current president (who has been in charge since 1989, so probably Marty McFly knows him well!). Can the disciplinary committees of such a body be really independent and be expected to pass a clear and decisive judgment? Of course, they cannot and have not done so!

But the questions are perhaps more systemic. Are international sport federations really fit for the purpose of modern sport? The new reality of sport is one where the commercial dimension is increasingly divorcing from the coveted grassroots or sport-for-all Holy Grail. ISFs, and most public sport policies, are still attempting to house these two different realities under one common roof. Questions need to be asked as to whether this confusion des genres is even possible. There was a time in which the European Commission suggested that international federations had to separate their regulatory and commercial roles. But not much has been done in that respect since the Formula 1 case. Perhaps it should be accepted that elite and professional sport needs a new approach. If ISFs are serious, they need to start putting in place much more modern management and governance structures. Executive committees need to stop being ‘representative’ of the stakeholders, turning to be ‘skills based’. They need, of course, to be much more age, race and gender diverse. Independent directors need to be fully incorporated to councils, boards and federations’ EXCOs. Standing committees need to be more independent and need to have targets… This is nothing new, but it reads as a revolution in the world of international sport.

Given the governance failures of sport, it is often questioned whether public authorities could/should/ought to regulate or bring sport to account. Here, it seems fair to say that following the political ‘backlash’ of Bosman, aptly articulated by some sport bodies, politicians have erred on the cautious side. The idea that the EU “was trying to kill club football in Europe”, as put forward by Lennart Johanson on 16 December 1995 was powerful enough to discourage the EU, and other public authorities for that matter, to regulate sport. The reality is that, to date, perhaps the EU is the only public body that has managed to bring to account international sport, even in a limited fashion, as I have argued in a recent article[2]. The mainstreaming of the autonomy and specificity of sport into EU policies, however, has deterred EU institutions from pursuing a much more proactive approach in the control and regulation of sport.

After Bosman, there was a period in which both sport and EU law found each other. There were negotiations and some changes in both sides. There were even positive noises coming from different social dialogue committees. The calm, however, has been broken abruptly. And we have woken up back to the future, as if 1995 had never passed. ASSER’s very own Antoine Duval, and some authors such as Arnout Geeraert have recently argued that the EU should be much stronger in its application of EU law to sport. The problem is: can they really do it? In an increasingly Eurosceptic environment amongst the peoples of Europe, can the EU really risk trying to have a go at sport? It can be argued, that sport as an area of ‘soft politics’ and popular culture may give the EU some of its lost legitimacy back. But I am not so sure. In a recent survey, part of the FREE Project, we asked Europeans in nine countries whether they trusted the EU (amongst other bodies) to regulate the governance of football. The answer was clear: No, they do not. Of the nine different organisations offered in the survey, the EU was the third least trusted body, only above the media and national governments. In the survey, only 40% of the Europeans in the nine countries polled trusted the EU in this respect. This goes down to 21% when the survey is restricted to core football fans, not the general public. In other words, Europeans do not trust the EU, nor national governments to improve the governance of football. So, if the EU tries to have a stronger position in the application of European law and policies to sport, it may well backfire.

Normally, I have refrained from such a normative approach to governance. As a political scientist, I prefer to analyse what actors do, rather than to tell them, what to do. However, it is clear to me that what they have done so far is not working. Twenty years on from Bosman, and a visit of Marty McFly after, the ‘future’ of international sport governance looks conspicuously similar to the past. And it is not good. We need a solution that brings us to the future, to a real future where the past is finally put to rest.

[1] Rhodes, RAW. (1997) Understanding governance: policy networks, governance, reflexivity and accountability, Maidenhead: Open University Press.

[2] Meier, HE and García, B. (2015) ‘Protecting private transnational authority against public intervention: The power of FIFA over national governments’. Public Administration, Early view, September 2015, doi: 10.1111/padm.12208.