This will be short and sweet.
Any reader of this site will know that I tend to spend A LOT of time ranting and raving about Financial Fair Play. I don’t think it’s a panacea for the financial problems in European football, and I’m not even particularly interested in whether it will stop owners from running their clubs into the ground (grassroots advocacy for club ownership via Supporters Trusts to me is the best way to go: donate to SD here).
What I do believe is that FFP could go a long way to halting transfer fee inflation. While there is a good argument that Wesley Sneijder’s career could be on the verge of an exciting new chapter at Galatasaray for example, the fact he was not the subject of a buffoonish transfer fee bidding war is in itself a testament to the new conservative world order. This summer will truly tell the tale of course, but I suspect FFP is already working to calm wildly outlandish transfer fee valuations.
That said, I have been annoyed of late that some are attempting to use their data on the correlation between transfer fees, wages and table position to make an argument about Financial Fair Play. The most high profile example comes from Thomas Peeters & Stefan Szymanksi, who wrote a paper titled “Vertical restraints in soccer: Financial Fair Play and the English Premier League.” The paper posts the results of a table simulation with Premier League FFP restraints added.
I’m not an academic, a statistician, or an economist, but there are still some assertions that don’t read square to me. For one, their model assumes a static competitive universe in which the only means for teams to overcome clubs that enjoy higher revenues is transfer spending and wages. For one, forced profitability could give teams an opportunity to reinvest in their stadium to increase gate receipts, or allow them to reinvest in better scouting, or player development. While FFP would almost certainly lower payrolls across the board (as Peeters and Szymanksi acknowledge), it would contain higher payrolls at the top end as well, which would at least allow clubs to compete on a slightly more level playing field than a league in which clubs will pay whatever they want.
Part of the problem to me is in determining table position as primarily function of wage efficiency or transfer spending, as if the latter two were integral to football qua field sport competed in 38 league matches. Szymanksi has modeled the close relationship between wages and table position before and determined it correlates close to 90%. But within this time period, there was little regulation, revenue sharing, or artificial spending restraints for English football to contend with since the maximum wage cap was done away with in 1961.
In other words, it’s a fairly static model.
Within that model, table position is a function of spending, no ifs ands or buts. But across all possible worlds? Including a world fundamentally altered by a stringent break-even provision? Perhaps, but I have yet to see a cogent argument that would dismiss the idea of an underdog challenging the established order by other means…