How Financial Fair Play Was Justified

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How financial fair play was justified.

In 1971, Peter Sloane published an article titled The Economics of Professional Football: The Football Club As A Utility Maximiser. It laid bare the ideological differences between the North American and European sporting cultures. In the United States, there had always been an assumption that sports teams should be ‘profit-maximisers’, and therefore be organised as ‘closed’ leagues to protect the sports clubs against the economic penalty of relegation. Conversely, in Europe, where leagues were ‘open’ and had promotion and relegation, ‘utility maximisation’ - the desire to prioritise sporting success - was the true objective. Profit, or underwriting losses, was only important insofar as it was necessary for a club’s long-term stability and survival. This economic concept is the bedrock behind the implementation of Financial Fair Play.

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#ffp #manchestercity #uefa
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“All animals are equal but some animals are more equal than others.”

marinusdijkhuizen
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5:20 This Quote could easily describe the relationship between American banks and their Government; "...Where an entire [Finance Sector] operates on the verge of insolvency, chronically expending more than its earnings but being systematically rescued by external money injections..." Very interesting.

n__rtu
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Only Tifo could have taught us this without complicating a single thing.

How these videos are still free is beyond me. Great content once again.

robertwynn
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Financial Fair Play is a excuse to keep the top clubs on top, keeping the smaller one on the bottom.

MrScarduelli
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I love how guys manage to explain tricky concepts with great graphics and soothing narration. Keep up the good work, Cheers!!

romilpatel
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UEFA: we’ll call it Financial fair play.
Man City & PSG: 😂😂🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣

hanhly
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As the video stated, it's important to note that keeping the big clubs happy was also an important part of FFPs creation. FFP would be just as effective if it regulated debt instead of net spending. But by regulating net spending you make it harder for new PSGs, Man Citys, Leipzigs, and Hoffenheims to gain seats at the table. From the big clubs point of view, it's about protecting their own hegemony.

coltoncunningham
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The only purpose of FFP is to keep the big clubs always successful and challenging for honours while holding back smaller clubs who dare not invest or show any kind of ambition or risk the wrath of a points deduction. Think of the scene in the Matrix where Neo discovers that the machines are using humans as batteries to generate power. Bigger clubs swoop in for young talent and of course best players, who must be sold to balance the books to keep the so called football authorities happy. Never again will England see a Jack Walker. A rich fan who bought the small club he supported and took took them to pinnacle of the English game, the big clubs and authorities never want to be challenged like that again. These big clubs, In their own minds, the spoils of war ( money and trophies) is theirs by divine right and FFP keeps them at the top from now until the rules are changed. Football has become very corrupt.

markbryce
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Since 2000, 12 different teams have won the NFL Superbowl and 9 in the NBA. Same time frame and the numbers are 5 in the Premier League, 5 in La Liga, 4 in BundesLiga and 5 in Serie A.
FFP is a poor attempt at cost control. Till you have a hard limit on wages and transfer window budget, FFP simply will not work because money can be "earned" in many ways.

American sports leagues like NFL and NBA have hard salary caps to make sure middle of the road teams actually have a shot at being competitive unlike soccer leagues in Europe. Without a hard cap, Everton and West Ham are forever mid table teams.

JW-bewf
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Anyone coming back after the super league announcement?

mauricioruiz
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Can you also explain how financial fair play works?

syleshdevarajan
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I agree that regulations need to be in place, and not just in football. It's unfair how the taxpayer is the last in the queue to get paid, and it makes no sense how the banks, after gambling with money irresponsibly, got bailed out. In such a case, legislation should be in place not only to prevent organisations from acting irresponsibly, but also to make sure they can't get away with it.


However, there is also a hidden agenda in the fair play rules, and that is one to preserve the dominance of the currently established powers. If, let's say, a billionaire comes and actually wants to spend loads of money on the club, even if he doesn't generate profit from it. Give the warranties are given that he can pay whatever is needed if they decide to pull out, why is that a problem? Why are Manchester City punished?


Yes, they say it's to protect "competition" in football, but that is nonsense. If anything, such laws discourage billionaires from taking on mediocre clubs and turning them into rising powers.


Just for the record, I'm not arguing with the fact the the money invested both in Manchester City or Leicester is "dodgy money" and controversy surrounds those involved, but that's a different story.


The fact is, while pretending to promote financial stability, the fair play rules serve a hidden agenda of preserving the dominance of the currently established powers.

MaximIl
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Hi Tifo, I have a question
If financial fair play was introduced to stop clubs from going bankrupt because of over-leveraging and spending the money. Why isn’t an owner of the club allowed to spend his own money to the club as he/she is not taking any debt from anyone.
For example, why can’t elon musk with his net worth 200billion buy a football club worth 5-10billions and spend his own money 5-10billions in it’s development and renovation? You can’t tell him not to spend his own earned money to his own club if he wants to. Isn’t that like saying Tesla company can’t buy and invest in new technology with Elons money because other car company like toyota, honda, bmw car company doesn’t have similar level of rich owner and can’t compete with Tesla technology? Since, football has already become a business in last 30-40years.

bibeksinghrokka
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Not even a Leeds fan, but Peter Ridsdale should be imprisoned. I spent 2 mins looking at his Wiki page to check if he was ever tried, and instead found a tale about a conman going from one team to another, leaving ruined football clubs and businesses in his wake. It baffles me how he is allowed to be a part of society.


And HMRC should get the rest of our £7million off Leicester.

theskankingpigeon
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Funny to hear the mention of a Super League in 2008, just for it to almost become real in the pandemic. I guess it's a theme we will continue to see, as global economic crises arrive, the threat of a Super League will return.

tja_tv
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Do a video on how QPR got away with breaking them rules

alexandertyson
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Should let the fans pick up the bill if a club goes into administration. Any other business that mismanages funds or fails to get with the times goes into administration gets liquidated never to be seen again. It's not fair on the tax payer.

drewberry
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FFP came about because all of the traditional big clubs of Europe got worried when teams like Chelsea, Man City, PSG, started getting bought out by billionaires who could inject a ton of cash into the club and buy the big trophies, increasing the competition at the top table, the big clubs with the big histories like liverpool, man utd, barca, real, juve, milan, bayern, all got worried about losing their status and fan base, so they threatened to break away and form their own league, which prompted UEFA to do something about it, that's why FFP was introduced, it's all about keeping the big dogs big and the small dogs small, the result of FFP is that if you want to invest in a football club then you better invest in a club that is already huge, or you will never win anything, any team that gets close to breaking into that elite bracket these days just gets torn to pieces in the transfer market, and there's nothing they can do about it, as per Monaco, Ajax, Leicester

chrisb
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Good video tifo, you explain everything.
Video Idea:How do leagues earn money(in depth)

guardiansbob
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Awesome vid, always been impressed with the tenth and diversity of content on this channel.

silverstonegardening