La Liga will have 5 teams participating in the Champions League next season thanks to Sevilla’s success in the Europa League. Premier League clubs, though, continue to, publicly at least, shun their involvement in Europe’s second major club competition. Managers at clubs, as big as Spurs and Liverpool, constantly bemoan their potential participation on Thursday nights. As a result, by this time next year, Serie A could, potentially, regain its 4th Champions League spot, at the expense of the PL, largely due to poor performances by the latter’s clubs in the Europa League. This is facilitated by England losing its highest co-efficient points (2010/11) from the calculation period next season. The question is why is there such a disdain by PL clubs in taking the competition seriously?
Spurs, Liverpool, and Everton are sides who have experienced Champions League action due to their league position on an inconsistent basis over the past decade. The gap between the “Big Four”, which includes Chelsea, Manchester City, Arsenal, Manchester United and other clubs is arguably greater than ever (with the caveat of Manchester United’s out of character last couple of seasons). Three spots are probably etched in stone whilst a 4th CL may be open to a challenge, at some point during the season, before the CL regular pulls away. It is a vicious cycle as the financial benefits gained from the CL allow the respective sides to build and develop a playing squad that is able to “compete” on two fronts – without necessarily challenging for a trophy on either. Clubs who miss regular participation in Europe’s elite competition arguably do not have the squad depth to similarly compete in a balanced way.
Considering that the league is a 38-game slug-fest, it’s difficult to understand why some clubs prefer to prioritize the league route (not even a title challenge) to the CL over a Europa League one especially with the knowledge that victory there would guarantee a CL spot. Winning the Europa League would include a, approximately, 17-match journey for PL clubs, less than half the games of the league season. In reality, a side could gain the CL spot by winning as little as 6 or 7 matches during the campaign. Surely by mid-February, the start of the knock-out rounds, clubs would be in a good position to strategize the rest of their season’s assault rationally. History suggests that they are far likelier to reap the rewards by prioritizing winning the Europa League over a futile 4th spot race, unless they are already comfortably ahead in that race. In the age of projections and statistic models, it would not take much for clubs to have a clear indication of where they should put their focus on and it’s hard to conclude that it would be pointing towards the league.
Instead, PL clubs such as Spurs, this season, find their seasons fizzling out towards the end of March when it’s clear that the CL assault through the league is over, following their exit from the Europa League, had they been in it in the first place. For others, such as Everton, their assault is usually over far earlier in the season.
Next season, Liverpool and West Ham should be joining Spurs and possibly Southampton in the Europa League. For at least 2 if not 3 of those sides the mathematical likelihood of finishing 4th is slim to none. It would be good to hear a more re-conciliatory approach by their managers when it comes to targeting the Europa League. There is no logical reason for there not to be one as long as they have secured their club’s position in the league, away from relegation. There is no reason why these clubs cannot target a more realistic Europa League-placing through the league whilst challenging for a CL spot through the European competition itself. If they don’t, sooner than later, there is a real risk that the PL will surrender the coveted fourth position to Serie A, as quickly as in 12 months time.
The UEFA Champions League remains club football’s most sought after trophy for a multitude of reasons. Due to its ever growing status in the post-Bosman world of football, not least of which is due to the financial prizes on offer, simply qualifying for the competition is considered more important than winning a domestic cup or even the Europa League. Just ask Arsene Wenger. The Arsenal manager has gone on record to state “I say that because if you want to attract the best players, they don’t ask if you won the League Cup, they ask if you play in the Champions League.” Wenger is not in the minority with that viewpoint. Teams like Liverpool and Atletico Madrid face uphill struggles to retain stalwarts such as Luis Suarez and Falcao if they are not able to offer them Champions League football imminently. But what is the role of the Europa League in providing a balance to the dilemma? It is after all UEFA’s “second” big competition.
Gone are the days of the prestige of playing in and winning the UEFA Cup and Cup Winner’s Cup. Big teams such as Barcelona, Juventus, Arsenal, Paris Saint-Germain, Chelsea and Lazio were among the winners of those competitions during their final years before a re-structuring was undertaken by Europe’s governing body. In fact, UEFA has played a central role in the demise of Europe’s second competition through neglecting it whilst the Champion’s League’s grew larger and more influential in world football. Their high-profile public re-branding of the Europa League in 2009 has done little to change the perception or reality of the situation. At the time, UEFA President Michel Platini stated “I am convinced the new format will give the UEFA Europa League a successful new impetus…these changes will improve this historic competition, which is very important for UEFA and for European football as it gives more fans, players and clubs the thrill of European club football”
Firstly, the fact that less and less “champions” take part in the Champions League has simply depleted the prestige of the Europa League. It has been firmly given a second-tier look and feel, and that sense has never been reversed by the entry of the third-placed group stage “lucky losers” from the Champions League at the latter stages of the Europa League because those sides only see the tournament as a distraction to their quest of winning the league title or qualifying for next season’s Champions League through their domestic league. Secondly, UEFA provided the nail in the tournament’s coffin by confirming its position as a second-tier competition through the meager prize money on offer. For instance, winning a group stage match nets a team €140,000 in the Europa League whilst €800,000 in the Champions League. For a team in the Europa League to get that sort of prize money they would need to qualify for the semi-finals of the tournament. On the flip-side, a team that qualifies for the semi-finals of the Champions League gains €4,200,000. The winners of the Champions League and Europa League attain €9 million and €3 million respectively as further bonuses. In short, if a team wins every watch on its way to winning the tournaments, starting from the group stages, they would gain €31.5 million and €6.44 million respectively in the Champions League and Europa League. This is even before the huge impact of television money is taken into account as that further widens the financial gulf between the two competitions.
Nevertheless, UEFA still encourages managers to talk up the Europa League. In October 2012, it was reported that a sheet was distributed to managers of sides in the tournament. The sheet, headlined “Discover the Drama”, included terms such as “prestigious” and “rich in heritage” and highlighted that the dramatic nature of the matches should be talked up during press conferences and interviews. It is a bit hypocritical, not to mention naive, to expect supporters, teams, players, sponsors, and the media to buy into a manufactured and commercial measure. Instead of tackling the issue at hand, UEFA has taken a fruitless approach that has further brought it ridicule as well as further undermined the value of the Europa League. Simply put, it is all talk and little substance. This brings us to the ultimate question. What can UEFA do to salvage the reputation and importance of the competition?
On one hand, increasing the financial winnings that are to be gained by clubs could prove to have a positive impact. If, as expected, “big” clubs, from the big leagues then begin taking the competition a little more seriously, then supporters would do so, as a consequence, especially in terms of TV audiences, and sponsors would begin to pool more money towards the tournament. However, this could prove financially costly for UEFA and it would take a considerable increase in prize money, possibly doubling it at the very least, to have an impact. However, the prize money would still fall quite short of what is on offer in the Champions League. At the same time, it does not fix one of the biggest weaknesses of the competition in that almost all the big clubs are already present in the Champions League. Unlike the past when winning the domestic cup was seen as far more prestigious due to the passage towards the Cup Winner’s Cup, today, it has also taken a back-seat to the domestic league’s passage towards the Champions League. In many cases, the winner of the domestic cup would already be present in the Champions League so the runners-up or next best-placed domestic league position not in European competition qualifies to the Europa League. All lit roads lead to the Champions League, whilst a dead end leads one towards the Europa League. It has firmly become the “black sheep” of European football.
On the other hand, if one takes a closer look at Arsene Wenger’s comments, then a viable solution could be found in raising the profile of the Europa League. It is clear that everyone wants to participate in the Champions League, and the Europa League is little consolation to clubs that miss out on that privilege. But what if the relationship between the two competitions was further intertwined? We already have clubs who drop down from the Champions League to the Europa League mid-competition, so why can’t the reverse journey be possible? The proposal is not as radical as it sounds.
If UEFA begins offering the winner of the Europa League a spot in the following season’s Champions League it would almost certainly solve the problem permanently. It would offer clubs the chance to qualify for the Champions League following what could be as little as a 15-match campaign, less than half the matches it would take through most domestic leagues in Europe. In fact, in a knock-out competition most clubs would have more of a chance for success than a dragged-out 38 match league campaign. English teams like Everton, Liverpool and Spurs would find it more “attractive” competing with some of the sides present in the Europa League than their counterparts such as Manchester United, Manchester City, Arsenal and Chelsea for a spot through the league. Teams that get knocked out of the Champions League at the group stage may be suffering in terms of their domestic league as a consequence of their squad being stretched, as Spurs found out a couple of years ago, but re-entry into the Europa League would offer then a few matches to redeem themselves and give themselves a second shot at the Champions League the following season. In fact, one can argue that the winner of the Europa League has more of a claim to taking part in the Champions League than a 4th place side of a domestic league.
Having expanded the Champions League in recent seasons, it is unlikely that UEFA would have practical problems in offering a spot in the Champions League to the winners of its second-tier competition. In fact, to go further in gaining national association support for the idea, the Europa League winner’s “spot” could have special dispensation which does not endanger the final domestic league qualifier to the Champions League due to the fact that the Europa League winner finished outside those spots. So, in theory, England could have 5 spots one season or Italy could regain a 4th spot quicker than they would have expected. The proposal is certainly something that UEFA could look into if it has serious intentions in regaining the lost prestige of the Europa League. Whether it does so or not is a whole different debate. But there are no excuses left for UEFA and the clock is ticking for the Europa League.
In 2009, UEFA with the strong personal campaigning of Michel Platini, agreed to get the ball rolling on Financial Fair Play (FFP), thus meaning that from this season onwards, it is effectively in motion. At its core, FFP establishes a set of parameters/criteria in monitoring European clubs in order to prevent them from “over-spending” and, as a consequence, threatening their own long-term survival. Reports had suggested that hundreds of European clubs were running in debts with a percentage in serious financial peril. Most recently, the perilous state of Glasgow Rangers has come to light. A large proportion of European club debts is attributed to clubs within England, Italy and Spain. It must be noted that French and German leagues have been running regulations similar to FFP for years and, hence, their clubs are in better financial shape than their counterparts in the other countries mentioned.
After numerous delays in implementing FFP, the current season is the beginning of the monitoring period from within which clubs will not be allowed to lose more than a certain amount per three-year period. With that said, it is still unclear to many as to what constitutes FFP, what is allowed under it, what is not, and what happens if clubs do not adhere to it. What we will try to do is to simplify everything through a question and answer analysis in order to dissect FFP to its basic core.
Question marks, such as those raised by Arsene Wenger, lay over how far UEFA would go in potentially punishing violators. Already and very significantly, Manchester City have signaled their acceptance that they may not be able to fulfill all regulations and pass the FFP’s first monitoring period review. The question remains over how UEFA deals with clubs such as Manchester City, and possibly Chelsea, who in all likelihood, may fail to fulfill UEFA’s criteria in gaining a license for European competition the first time around. Only time will tell.
What will UEFA Financial Fair Play do?
a) Monitor club finances ensuring that clubs do not lose more than a specific amount annually
b) Implement periods of monitoring (three years) to avoid single-season “one-off” events from distorting financial prospects
c) “Punish” violators of FFP
What must clubs do?
They need to ensure that they don’t make losses of more than €45m per three year period except for the first monitoring period which is over two seasons (2011/12 and 2012/13) and would impact over participation in 2014/15 European competitions. The “allowed” loss drops to €30m over three years from the 2015/16 season onwards (3rd season of FFP application).
However, clubs are only allowed to record this level of loss if owners are willing to “subsidize” losses above €5m by injecting equity, otherwise the maximum permitted loss is €5m for the first review period of 2011/12 and 2012/13. So in reality the level of losses “allowed” by UEFA is much lower than what is being widely reported. Although equity injection helps owners such as those at Chelsea and Manchester City to have a better chance of compliance with FFP. Complicated much?
Will all “expenses” under expenditure be monitored?
In a word, no. Any expenditure accumulated under developing or building new stadiums will not be recorded under FFP monitoring. Furthermore, any expenses made towards youth development and infrastructure or anything to do with the youth team will not contribute towards expenditure either
So what exactly is considered in terms of “expenditure”?
Only football-related expenses from transfer fees and salaries. Transfer fees would be “amortized” or divided evenly over the term of a player’s contract
What about in terms of income?
Almost everything will be part of the assessment of income. That means ticket sales, TV money, sponsorships, merchandising, player sales and prize money from competitions.
What are critics saying about FFP?
a) They are questioning whether smaller clubs will be able to compete with bigger clubs if clubs can only “spend what they make”
b) Wages for players contracts signed before June 2010 will not go across calculations for the 2011/12 break-even analysis. A one-season waiver has been given by UEFA for the first monitoring period and again this goes a long way to help clubs such as Chelsea who signed deals with Drogba, Terry, Cech, Cole, Lampard, Essien and Kalou, among others, before that deadline
c) Potential for bigger clubs to create “artificial” income from sponsorships/stadium rights from companies with vested interests from their owners. Manchester City’s stadium naming rights with Etihad Airways has recently come under the microscope. UEFA have yet to rule on its validity although they have stated “if we see clubs looking for loopholes, we will act”. UEFA have said they will ensure “Fair Value” is given to such deals
d) Effect of different tax rates across countries mean some clubs will be paying more/less gross than the net figure accounted for
e) Third-party ownership is “allowed” by FFP but the English Premier League out-laws it, thus disadvantaging English sides
f) Solidarity or “parachute” payments to lower league clubs are only made by the Premier League and Ligue 1. These payments will be accounted for in FFP as the Premier League continues to lobby UEFA to discount them
g) UEFA states that if there is a loss recorded in a review period but there is a “positive trend” and losses recorded for 2011/12 can be attributed partly to deals undertaken before June 2010, then the club may not be sanctioned
Has FFP effected club behavior already?
a) Italian clubs have, for the first time, negotiated a collective TV rights deal which gives bigger clubs a smaller share of the cake in the spirit of creating a more level playing field in Italian football. Spain’s La Liga remains the only major league which still negotiates individual TV rights and, as a consequence, creates a huge gulf between income raised by Barcelona and Real Madrid compared to other teams
b) Clubs can no longer afford to lose major players on Bosman free transfers, as signaled by Arsenal’s sale of Samir Nasri and Gael Clichy to Manchester City in the summer of 2011. Manchester United manager Sir Alex Ferguson admitted in March 2012 that even though they will let Dimitar Berbatov leave in the upcoming summer transfer window they will “sign a new contract” with him first in order to get a fee for him and not lose him on a Bosman transfer
c) Traditionally heavy spenders like Inter Milan and to an extent Chelsea have begun curbing their spending
How will UEFA punish violators of FFP?
a) Give them a warning
b) Fine the club. Although this may seem like a chicken/egg conundrum when one thinks of it
c) Deduct points. This is likely to occur in the group stages of the Champions League and Europa League. Importantly, this measure was a new punishment proposed and ratified immediately at Nyon in an Executive Committee Meeting in January 2012
d) Disqualify the team from UEFA competition. Although this is a major step, it is difficult to see if UEFA will take this stance
e) Exclude the team from future UEFA competitions. Again, similar to above, it is difficult to see if UEFA will adhere to such a measure
f) UEFA will discuss three other potential punishments for violators at the Istanbul UEFA EXCO on March 20-21. They include the withholding of UEFA prize money for taking part in the Champions League and Europa League, preventing clubs from registering “new players” for UEFA competitions, as well as restricting the total number of players that clubs may register for UEFA competitions. UEFA have shelved the proposal to implement transfer bans on clubs after receiving legal advice suggesting that it would contravene the European Community’s Restraint of Trade regulations
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