Great insights into football finance

By Anton Colella

27 May 2014

Anton Colella says the ICAS paper on European football finance rules provides useful insights.

Our recently published paper on UEFA's Financial Fair Play rules (FFP) for football clubs is an excellent piece of work.

The study was undertaken by leading sports finance academic and CA Stephen Morrow, for the Research Committee of ICAS.

It highlights the challenges European football's governing body faces in forcing clubs playing in Europe to live within their means. And the report provides insight into the issues clubs face in balancing the books.

The paper makes a series of recommendations to help improve the UEFA regulations and financial reporting by football clubs in general.

We've seen how tough the consequences can be for clubs who breach the break-even measures imposed by UEFA, with Manchester City and Paris St Germain facing multi-million pound fines and squad caps for forthcoming competition.

Eyewatering stuff for the clubs and fans, and Stephen highlights the irony of imposing financial penalties on clubs for breaching rules designed to ensure that they break-even.

While his interviews with club finance directors, auditors and representatives of the governing bodies and leagues did find support for the overall aims of FFP, Stephen says the rules must take into account the nature of football and be relevant.

Football is unique. Yes, it is a business, but football clubs are also social institutions and standard financial accounting may not always be a good fit, especially when communicating a club's performance to fans. The ICAS study also notes the importance of cash in football finances and suggests that this is something taken into account by UEFA.

Central to this paper is the need to ensure that the FFP rules, laudable as they may be, are aligned to the financial viability of football clubs. Therein lies the challenge.

This paper is a worthy contribution to that debate.

Topics

  • Research

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