FFP – three small letters that have a huge bearing on world football, and as a consequence, Newcastle United. Of course, FFP stands for Financial Fair Play, UEFA’s, and the Premier League’s rules on spending by their clubs.
FFP was brought into existence by UEFA in 2009 to combat overspending by clubs, thereby reducing the risk of clubs coming into trouble due to financial mistakes. It is also a method of attempting to keep football on a level playing field by reducing the amount that big teams can spend on upgrading their squad.
There are set percentages that clubs can spend on transfers and wages in a revenue year, with 90% being allowed next year before it drops to 80% in 2024 and 70% for the 2025/26 season.
Clubs can also face punishment if their total loss over three seasons exceeds £105 million. It is the club’s owners who will be liable to pay the deficit if the loss falls between £15 million and £105 million. Punishments usually come in the form of fines but can also lead to point deductions or transfer embargoes. Breaking UEFA’s stricter rules can lead to clubs being barred from European competition.
There are some ways for clubs to have so-called ‘add-backs’ to their profit or loss. With women’s football on the rise, the Premier League now rewards clubs for investing in their respective women’s team setup, as well as providing incentives for the development of the academy and youth football.
This has been something that Newcastle have been trying to do since the takeover by Saudi Arabia’s PIF. The women’s team has been given a huge boost since the takeover and the appointment of Dan Ashworth has coincided with an influx of talented young players coming through the doors of the youth setup.
For years the FFP has been a help to Newcastle, but it is just our luck that when we finally have money to spend, the rules say we can’t!
Thankfully, we had some wriggle room within FFP rules to make the necessary signings to survive last season, and also to further invest over the summer to launch our surprise assault on the top four. There is just one downside to this, and that is the man we have to thank for it – Mike Ashley!
The only thing we thought we had to be thankful for with Ashley, was that he left the club. But, after years of non-investment and stringent budgets, he actually left the club in good condition financially, allowing the new owners to invest money into the club from the get-go.
So there you go, the dreaded FFP we are so sick of hearing about. I’m sure there are some finance experts out there who can find a loophole to get around the tight budgeting. I suppose we could just ask Man City, PSG, Barcelona, Chelsea, Real Madrid………