Financial Fair Play 'It's Rude'
Football finance expert Rob Wilson explains in an interview why the recent revelations about Manchester City and Paris Saint-Germain are problematic -- and why a Super League seems more and more likely.
DER SPIEGEL: What is the main issue that UEFA looks at when assessing if the clubs are compliant with Financial Fair Play (FFP)?
Wilson: After their new owners took over, clubs like PSG and ManCity recorded an increase in sponsorship and commercial income that was coming from Qatar and Abu Dhabi, respectively. The question is if those sponsors can be considered related parties of those particular clubs: Would they have sponsored them if they weren't controlled by the club owners?
DER SPIEGEL: If that answer is no, why is it problematic?
Wilson: If a related party pays inflated sponsorship sums, the suspicion is that it's in fact just expenditures from the owner, routed through those companies and then recorded as income. And the FFP rules are supposed to prevent club owners from injecting too much personal wealth. Clubs should only spend what they can earn to help ensure financial sustainability.
DER SPIEGEL: In 2014, UEFA considered sponsors of ManCity and PSG as related parties and their contracts to be massively overvalued. We can prove that Gianni Infantino, who was UEFA's Secretary General back then, helped the clubs to avoid harsh sanctions and reach a settlement agreement.
Wilson: If that's the case then, that's problematic. You would expect that in these kind of cases the major sporting bodies value the endurance of a regulatory process.
DER SPIEGEL: Why would UEFA settle at all with clubs that are so blatantly breaching the rules?
Wilson: UEFA need to maintain their brand. They want to sell Champions League TV rights all over the world. Of course, if you want FFP to have teeth, you have to sanction the clubs that breach those rules more severely. In my view, if clubs are found to be in breach of FFP then they should have been excluded from the competition.
DER SPIEGEL: What UEFA didn't know at that point was the extent of ManCity's breach. We revealed that sponsorship contracts were not honest: Etihad for example was supposed to pay ManCity 67.5 Million pounds each year, but in our documents, it says that the airline in reality only paid 8 Million and the rest was provided by alternative sources, likely club owner Sheikh Mansour.
Wilson: That could mean they're just running money from the ownership into the club through those companies. From an accounting standpoint, that's a misrepresentation of revenue, expenditure and profits and loss calculation. That would be against the generally accepted accounting principles, which suggest that accounts are true and accurate. Misrepresentation of accounting data is quite a serious matter, it can be sanctioned in court and lead to fines. Depending on where the business is registered, the tax authorities will be very interested to look at exactly what was going on.
DER SPIEGEL: I almost don't dare to ask if you think UEFA will sanction ManCity for that.
Wilson: Well, my view is that they should, if they're found to be breaching regulations and they're not being transparent with their accounting information. I know that UEFA has come to certain settlements with the clubs before. But maybe they finally want to make an example of some of these the clubs that are riding roughshod over Financial Fair Play.
DER SPIEGEL: Our revelations show that whenever ManCity need, they can restructure a sponsorship contract with a company connected to the club owner and spontaneously get more money. That's just not how a normal sponsorship works.
Wilson: It's rude. Professional team sport is built on a principle of fairness. The rules of the game are set, everybody will play by these rules. Offside is offside, a penalty should be a penalty. If this is the case, they're distorting the rules of the game. They're making the goal smaller for somebody else to score, so to speak, while making the goal on their attacking end very big. That, for me, goes against the philosophy of competition, which should be an honest and fair fight. The best team must ultimately win, not the team with the best lawyers or accountants. Maybe that's a utopian idea. But that's how I look at it.
DER SPIEGEL: We journalists are quite idealistic about that sort of thing, too.
Wilson: Right, and I don't think we should apologize for that. I am a football fan and I want to go watch a team compete. I want there to be uncertainty of outcome. That's what I'm interested in as a fan. Of course, I want to see my team win, but I want to see a fair contest. What some of these European super teams are doing is stacking the decks in their favor and making it very difficult competing against them.
Uncovering the Dirty Deals Behind the Beautiful Game
Guardian Faber Publishing; 320 pages; 14,99 Euro
DER SPIEGEL: Are you shocked about that?
Wilson: I'm surprised of the lengths they are alleged to have gone through. I'm not surprised if they've done it. It shows a lack of respect for competition. That's the thing that shocks me the most in this: This kind of win-at-all-cost-mentality is slightly outdated, if I'm entirely honest. Of course, if you're a fan of these 'super team' clubs, I'm sure it's great to see that they're winning and that they're getting superstar players.
DER SPIEGEL: What's the consequence for European football?
Wilson: Clubs like PSG and ManCity have essentially bought years of history in terms of what history generates in financial return. Manchester United for example has turned into a super club over the turn of maybe 50 years, which allows them to command top numbers for their shirt sponsorships. What PSG and ManCity have allegedly done is to scale their sponsorships way beyond what they ought to be. The gap between the rich clubs and the normal clubs will further increase.
DER SPIEGEL: Why is that?
Wilson: If you are one of the richest clubs in the world, you're able to qualify for the latter stages of the Champions League, which in turn will give you additional TV revenue and prize money -- which therefore enhances your chances to reach the Champions League again the next year. It's becoming increasingly difficult for other clubs to break into the monopoly that the others have.
DER SPIEGEL: And that means that national leagues will become more boring.
Wilson: Yes, at league level we're seeing much more imbalance and single-team dominance. In France it's always Paris, in Germany it's always Bayern Munich, in Italy it's Juventus. The next logical step, I would imagine, would be to reopen the discussion about a European Super League.