How will UEFA's new transfer rulings affect Arsenal?

How will UEFA's new transfer rulings affect Arsenal?

By Tom Masters
Next week, UEFA are set to change their rulings on Financial Fair Play, a financial regulation used by European football's governing body to ensure clubs don't overspend.
It is set to change the landscape of club spending, so we had a look below how it would impact Arsenal going forward.

FFP – what is it?

UEFA first introduced Financial Fair Play (FFP) in 2011 in order to prevent clubs from overspending in what is often referred to as the “break-even requirement”.
They had seen what was going to happen and wanted to act swiftly to prevent financial disaster amongst European clubs.
In 2009, when UEFA first started implementing FFP, European net losses were at an all-time high of £1.3 billion – it was time to act.
FFP means that any club participating in UEFA competitions must therefore ensure that they keep their losses down to no more than €5m over three years.
Essentially FFP was brought in to prevent clubs getting into ‘unsustainable’ debt, such as Leeds in 2002, who were facing debts of over £70m.
But in reality, the main purpose of UEFA’s financial system was to provide a level playing field by encouraging (enforcing) clubs to spending within their means.
And while FFP has essentially prevented the tide of debts, clubs are now in a far healthier position than they were a decade ago, with several clubs even making a profit, FFP has continued to receive waves of criticism.

What is wrong with FFP and what are the proposed changes? 

One of the main reasons for this is that it seems to favour big clubs that already have financial power, “spending within your means” means very little to the likes of PSG and Manchester City, preventing smaller clubs from attempting to make a leap of faith to try and keep up with Europe’s elite. 
Another area with FFP that has failed to have the desired effect is limiting the surely unsustainable rise in transfer fees – a hyperinflation if you like. 
In 1975, Napoli purchased Giuseppe Savoldi from Bologna for £1.2m in the first transfer fee of over £1m.
Diego Maradona was twice the subject of a record transfer fee in 1982 and 1984, when Barcelona bought him from Boca Juniors for £3m and then Napoli again broke the record fee with a £5m purchase of the great Argentine. 
Fast forward to 2017, and PSG spent an eye watering £198m on Neymar from Barcelona, an increase of 6,500% in 35 years. 
UEFA’s new plan is a ceiling of a 70% salary cap which will limit teams from spending more than 70% of their income on player salaries, with the proposals also containing a ‘luxury tax’, which would mean any money spent over the cap would lead to a fine with the proposal being that the fines could go to the other clubs in that same UEFA competition. 
That new ruling, which is due to be passed by UEFA’s executive board on April 7, would still mean the bigger clubs will have more money to spend due to their higher revenue, but it would instil a degree of a level playing field as clubs who break it would be directly punished and other clubs who have been affected will also receive extra money at the expense of their rivals. 
It is set to come into play from 2023, with teams initially allowed to spend 90% that year, before dropping down to 80% the following year, with the target being that in 2025, all clubs will meet the 70% target. 

How does this affect Arsenal?

What UEFA’s new policy is set to do is prevent teams from taking a complete disregard for financial regulations, as unlike under FFP there will be clear and strict sanctions for doing so.
Aside from the potentially heavy financial sanctions, UEFA will have the right to impose points deductions and also demotion from their main competition.
This has been the subject of debate before, when Manchester City were under scrutiny and threatened with expulsion from the Champions League.
Spanish clubs Atletico Madrid, Barcelona and Real Madrid have all been punished at various times and Chelsea were handed a transfer ban, but under new rulings it would give UEFA more power to punish those sides not willing to comply.
For Arsenal, this would ultimately mean they would be on a more level playing field with financially better off teams, as there is a ceiling for all teams.
It will also limit the rise of growing powers, mainly Newcastle United, as although they have serious wealth, they would only be able to spend 70% of their income on wages.
Arsenal are one of the World’s biggest football clubs, and in 2020/21 despite a significant lack of ticket sales due to the Covid-19 pandemic, their overall revenue was £487m, which by the new UEFA regulations at least, would allow them to spend £340m on wages.
In summary, the new UEFA regulations will benefit the most financially powerful clubs in Europe, but with stricter sanctions in place, it seems likely to be a good thing for everyone, including Arsenal. Photo Credit: Getty Images

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