The Rules of the Game - Financial Fair Play in Football

Football fans have launched litigation against the European Football governing body UEFA alleging that its “financial fair play” rules are anticompetitive because they prevent challengers from competing effectively with the more established clubs. 

The case has been brought by supporters of Paris Saint-Germain (PSG) who argue that the UEFA “break even” rule, which is designed to make firms financially sustainable, actually prevents the smaller club from buying in the talent that they need to compete with the major teams.  The rule was introduced in 2010 and prevents clubs from spending more money than they earn.  This means that they can’t use shareholder money to invest in new players.  The case takes place against a background where PSG cannot spend more than 60 million euros to buy the players it claims it needs to challenge teams like Manchester United, Real Madrid, Barcelona and other familiar names.

Football aficionados will also be aware that Barcelona apparently paid 94 million euros to buy Luis Suarez; a sum which would not be within the reach of PSG according to the financial fair play rules.  The competition issue is whether such regulations create a barrier to entry and expansion by protecting the position of the wealthiest clubs.  A further legacy effect is that many of the more established clubs built up their positions by spending amounts which would now fall foul of the financial fair play rule. 

The PSG fans claim 80,000 euros compensation for the club’s lack lustre performance and for the losses that they have incurred due to the club having to increase prices for tickets and merchandise to kick-start revenues.

If the Paris court rules in favour of PSG and other claimants who have brought similar challenges it will be interesting to see whether claimants in other countries, including the UK will bring similar actions.  UEFA remains in discussions with the European Commission over the initiative. Up to now the Commission has not raised concerns over the compatibility of financial fair play with the state aid rules, although it has not addressed head-on the application of Article 101 TFEU.