Keeping an Eye on the Books

September 1, 2013 at 2:32 pm Leave a comment

The court of arbitration in Europe has publicly stated this week that it is bracing itself for a flurry of cases related to UEFA rules that aim to curb debt in Europe’s football leagues. Matthieu Reeb the secretary general of the Court of Arbitration explained that expert arbitrators would have their work cut out handling what have the potential to be highly complex disputes over club finances.

“These cases are more economic than legal, and we need certain experts from the financial world, the economic world. Its a new challenge for us. We can expect trucks full of folders and paper,” Reeb is quoted as saying.

Financial Fair Play was introduced by UEFA in agreement with the clubs themselves and after extensive consultation lasting over a year. It is designed to rein in excessive spending on players and reduce massive debt currently held by many clubs as they strive to compete at the highest level. Failure to comply could result in a series of sanctions, including at worst expulsion from European competition.

Malaga are the first club to suffer such sanctions. They were banned from entering the European Champions League or Europa Cup for one season from this year due to outstanding debts. They appealed the decision to the Court of Arbitration for sport in June, and lost.

UEFA have stated that the new rules have already driven down clubs payment areas by 40 per cent between 2011 and 2012.

No doubt the FFA and their state bodies are watching this with great interest and looking to adopt a similar approach to all of the clubs participating in the NPL. The threat however is expulsion from the NPL, rather than the FFA cup; if and when it really does begin. We have had two false starts already with this competition, and will also have to wait and see if the draw for this much heralded competition will be geographically based just as the NPL’s inaugural finals series was this year.

One key question that arises is does the games governing body actually have the manpower to police these financial requirements? How many state league clubs this season actually had Football West’s CEO Peter Hugg or Keith Wood the General Manager Competitions & Operations come out and check that they were adhering to the imposed salary cap? These were the two men given the responsibility by the board to police this. (Please comment and let us know)

The trouble facing the policing of the salary cap and other financial issues is that like UEFA, the FFA and state bodies will face having to defend their punishments should they issue them, and this is something they cannot afford to do. Earlier this season Football West understandably lost an appeal where a fine they imposed on Bayswater City and Perth SC for an alleged altercation between players from each club away from the game and in a public place, was overturned. Their defence of their punishment on this occasion alone saw them as an organisation shell out in the region of $6000 on legal fees. Money the game can ill afford to squander on legal advice.

If UEFA and the Court of Arbitration in Sport are facing massive challenges then those looking to impose a ‘big brother’ approach in the NPL will also face an uphill battle. They will also have to be careful how hard they push as the clubs, as they may turn around and question the payments due to them for player development and transfers that are held up by the FFA itself.

In a smaller market such as Australia a big stick approach is doomed to fail and inflict a great deal of pain on the game. A more co-operative approach is likely to reap more beneficial outcomes for all concerned; but that would result in conceding some ground by the powers that be, and it is unclear at this point in time if they are prepared to do that.

 

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