European Commission calls for reduction in football transfer fees

Labour Party

The measures agreed voluntarily by the Premier League last week will dramatically reduce transfer spending  by England’s top football clubs.  The last decade has seen some truly astronomical amounts of money going on transfers. I can only assume that the Premier League took pre-emptive action in the face of massive pressure, from both UEFA and the EU, to curb expenditure.

The European Commission has welcomed the reforms with Androulla Vassiliou, the European Commissioner responsible for sport, stating:

“The Premier League’s decision to introduce new financial regulations in order to improve the financial sustainability of its clubs is definitely a move in the right direction. It follows the same principle as UEFA’s Financial Fair Play initiative and will secure long-term viability that can only benefit the league, the clubs, the fans and the game,”

The new rules, agreed in principle by the 20 clubs in the Premier League, mean that from next season Premier League clubs will not be allowed to make a total loss of more than £105 million over the next three seasons. Teams that break the rules could face a deduction in points.

The decision by the Premier League clubs was announced on the same day as the European Commission published a study calling for changes to international rules on transfer fees.

Football, clubs spend around €3 billion a year on player transfers, but very little of this money trickles down to smaller clubs or the amateur game, according to a European Commission study published today. The number of transfers in European football more than tripled in the period 1995-2011, while the amounts spent by clubs on transfer fees increased seven-fold. But most of the big spending is concentrated on a small number of clubs which have the largest revenues or are backed by very wealthy investors. The situation is only increasing the imbalances that exist between the haves and have-nots, as less than 2% of transfer fees filter down to smaller clubs and amateur sport which are essential for developing new talent. The level of redistribution of money in the game, which should compensate for the costs of training and educating young players, is insufficient to allow smaller clubs to develop and to break the strangle-hold that the biggest clubs continue to have on the sport’s competitions.

Transfer rules are set by the sport governing bodies – for example, FIFA for football and FIBA for basketball. FIFA’s online Transfer Matching System (TMS), which is used by 4 600 clubs worldwide, has increased transparency in international transfer operations but more needs to be done at national level. The report finds that the current system continues to mostly benefit the wealthiest clubs, superstar players and their agents.

It recommends that FIFA and national football associations’ rules should ensure stronger controls over financial transactions and for the introduction of a ‘fair-play levy’ on transfer fees, beyond an amount to be agreed by the sport’s governing bodies and clubs, to encourage a better redistribution of funds from rich to less wealthy clubs.

The report also calls for full implementation of UEFA’s Financial Fair Play rule and stronger ‘solidarity mechanisms’ to enhance youth development and the protection of minors.

England is the best country to host the World Cup

Labour Party


I have been following with interest the recent Panorama investigation in to leading figures within FIFA and the allegations of bribery.  It seems uncertain now whether or not this story will impact our bid for the 2018 World Cup, I hope it doesn’t and Michel Platini doesn’t think it will, but we have to maintain the BBC’s right to journalistic independence and if the allegations are true then they should certainly be exposed.  I think it would be wonderful for England to host the World Cup, just as it is such a boon for London to host the 2012 Olympics, but we can’t suppress the reporting of corruption just for the sake of this opportunity.

FIFA is obviously a very powerful, supranational organisation that maintains a massive amount of independence from governments around the world.  This is probably for the best, but looking at this situation made me think of the work that bodies such as the EU can do in terms making sport fairer and more accountable.  Within the next month or two the commission will be releasing a communication on sport that will put forward a number of proposals that will hopefully go some way to dealing with some of the major issues facing sport in Europe.  The first of these is player’s agents, which is something that has marred the reputation of some sports (I’m thinking of football in particular here) in recent years.  Due to the many levels of authority that exist in the sport world at the local, national and international level, you can see why there is so much confusion in the regulations surrounding the representation of athletes.  I think what we have to bear in mind is that people usually enter sport at a very young age and they need to be protected.  Hopefully their families can offer them support, but sometimes this is not enough.  Agents must be held to account and I think they should be required to pass exams and gain licences, which could be revoked for misconduct.  I wouldn’t mind seeing a licensing system run by FIFA or UEFA, or other relevant sporting bodies, but for it to be effective it would have to be mandatory.

I hope that we can introduce some legislation that will properly protect professional athletes across Europe.  Sport is such an important part of all our lives, whether we are professional athletes, amateur enthusiasts or just keen observers, so I think we should be making sure that the sports men and women who we look up to and inspire us are properly protected and represented.  I am very much looking forward to the Commission communication on this and hope to work closely with them to see that we achieve the best result possible.

The Beautiful Game

Labour Party

Although I’m by no means football crazy, many of my colleagues on the Culture and Education Committee are.  Football is, in fact, one of the areas where our generally collegial bonhomie can become rather strained.  Since sport has officially become part of the remit of the Culture and Education committee since the ratification of the Lisbon Treaty we will probably have to spend a lot more time discussing football over the next few years, though it might be worth pointing out to some of my colleagues that there are in fact other sports equally deserving of our attention. 

Given all of this, it wasn’t that surprising that one of the most adversarial discussions so far this year was the result of a presentation given by representatives from UEFA (Union of European Football Associations).

UEFA is increasingly concerned about the level of debt some of Europe’s biggest football clubs are finding themselves in, so are introducing new regulations in order to curtail some of the worst excesses.  They provided our committee with some pretty incredible statistics; for instance the aggregate loss across Europe’s top clubs last year was 578 million Euros, with debt reaching 5.5 billion Euros.  Despite this clubs still spend on average 65% of all money they receive on salaries.  This is obviously unsustainable and we have already seen a number of clubs in the UK going in to administration. 

UEFA are introducing rules that will stop clubs being able spend more than they receive year after year and hold them to their financial commitments, to creditors, players and social/tax  authorities.  This all seems sensible enough, but they seemed to have devised rules which disproportionately affect English clubs.  These regulations would label Manchester United, Manchester City, Liverpool, and Tottenham Hotspur as financially unviable. 

I have never really been a follower of football, but even to me it seems absurd that clubs as big and as successful as these would be penalised and even excluded from European competitions.  I asked what exactly these clubs were expected to do about the situation, but did not get much of a response from the UEFA representatives.  Perhaps they are not particularly concerned about knocking the Premier League down a peg or two, and some of my fellow committee members seemed positively happy at the thought.  I think UEFA are right to be concerned with the level of debt in football.  At a time of global financial instability it seems gratuitous that football clubs should be being so profligate.  But it is a bit hard to swallow when they introduce such unforgiving rules that will affect English clubs more so than any others.  

Perhaps the CULT committee’s time would have been better spent focussing on what were only minor features of the discussion; UEFA’s desire to encourage youth development and investment in social and community projects.  Football, whether you love it or hate it, is a massive industry that reaches a lot of people and therefore could be a real force for good.  I found it very encouraging that Europe’s governing body has recognised this and is actively seeking to encourage clubs to develop home grown talent and reach out to the broader community.  These are the sort of areas that I feel the CULT committee can play a more positive role, and where we can reach the consensus that I find so refreshing.