Financial Fair Play (FFP) was introduced to make football fairer. The arbitrary points deductions we’ve seen this season go against that. If FFP is ever going to live up to its lofty goals, reform is essential. And it must come soon…
FFP was established in the Premier League back in 2013, aiming to encourage the financial sustainability and responsibility of its clubs. Ever since its introduction, the punishments for clubs that broke the rules have not been clear. Until this season, no Premier League club had been docked points because of FFP. The saga began with Everton’s ten-point deduction in November 2023, relating to financial losses. It was later reduced to six points, before they were docked an additional two points in April 2024. In March 2024, Nottingham Forest were deducted four points, dropping them into the relegation zone. The Premier League deemed these breaches “significant” enough to justify the sanctions, but they have caused outrage among football fans. And rightly so.
It is entirely unclear as to how FFP breaches translate into a number of points that can be deducted. This undefined framework means that the Premier League is inventing deductions as they go along, with huge implications on the league table. Points deductions primarily punish the players and fans, rather than the club executives who control the finances that cause the penalties. The integrity of the league is called into question when points deductions, based on off-field issues, influence the outcomes of a season.
To make matters worse, points deductions risk creating perverse incentives to change clubs’ behaviour. For instance, clubs may break FFP rules by overspending on a star striker, who may earn them 20 points over a season, but incur a points deduction (likely to be less than 20 points), resulting in a net benefit.
Other footballing bodies, including FIFA and UEFA have used alternative forms of rule enforcement in the past, including fines and transfer bans. Relatively small fines placed on clubs with billionaire owners are unlikely to change their spending behaviours. Meanwhile, transfer bans can simply lead to splurging on players before the ban comes into effect, as Barcelona did in 2014. The Premier League has set a precedent through points deductions, but points deductions are inconsistent and unfair. In truth, there is no perfect way to punish clubs that break the rules.
Instead, the Premier League should think about how they can negate the need to punish clubs. This could be achieved through a new system, based on increased transparency and monitoring. The current system requires clubs to submit accounts annually, but a reformed system would require more regular, quarterly financial audits of clubs. These records would be scrutinised by data analysts to identify breaches and forecast financial risks. Eventually, much of the regulatory process could become automated, reducing the cost of human monitoring, the margin for human error and the time taken for account reviews.
This would allow the Premier League to detect potential breaches and loopholes much quicker, and stop breaches before they develop into major problems. For example, Chelsea’s strategy of paying for transfers over 6-8 year amortisations to comply with FFP laws would have been tackled much faster.
Any new system requires some kind of punishment regime, but the Premier League should use more supportive action to reduce repeated offences. This could involve mandatory financial training for club executives or offering advisory services to help clubs develop sustainable financial strategies. In the most severe cases, the Premier League could sanction owners and club executives with fines and withdrawal of ‘Fit and Proper Person’ status to save clubs from rogue management.
Indeed, a new ‘Independent Football Regulator’ (IFR), separate to both Government and the football authorities, has only recently been shelved due to the General Election but may come back up under a Labour government. The proposal aims to improve financial sustainability of clubs, ensure financial resilience across the leagues, and safeguard the heritage of English football.
However, there is no such body in any other major European country, and the Premier League’s Chief Executive, Richard Masters, has expressed his concerns over its potential impact on competitiveness. The bill states that decisions on owners “must also have regard to the foreign and trade policy objectives of His Majesty’s Government in the United Kingdom”, raising big concerns about the regulator’s powers. Importantly, details on punishment mechanisms are absent from the bill.
It remains pivotal, therefore, that the Premier League reform their own system before next season to minimise the need for points deductions and the risk of chaos. If they fail, we will be closer than ever to a scenario in which relegation is decided in a courtroom.
