Is Financial Fair Play Officially Dead With AC Milan Ruling?
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The 2018-19 AC Milan Europa League campaign is back in business thanks to a ruling Friday from the Court of Arbitration for Sport. But now it has us wondering if this spells the end of Financial Fair Play in Europe.
AC Milan qualified for the Europa League based on its sixth-place finish in Serie A. However, due to Financial Fair Play improprieties, the club was banned from European competition. But now it appears FFP is meaningless in the wake of the CAS ruling.
Milan’s money woes stem mostly from the takeover by Chinese businessman Li Yonghong in 2016. After spending exorbitant fees to sign new players, he sought a loan in excess of $350 million. The Rossoneri finished last season with a spending deficit of $117 million, three times more than the $35 million annual limit under UEFA’s Financial Fair Play rules.
Because Milan could not reach the FFP break-even requirements by June 19, the club was barred from European competition for the next two seasons in which it qualified.
Milan appealed the decision, pointing to its new owner — Elliott Management, which gave the loan to Li — and improved finances. The CAS partially upheld the appeal, annulling the two-year European ban and referring the case back to UEFA to issue a “new proportionate disciplinary measure on the basis of the current financial situation of the club.”
The problem is, this ruling basically renders Financial Fair Play powerless.
The CAS was lenient and allowed for AC Milan Europa League qualification because it showed improvement. In theory, any club could come in and claim new ownership has improved the financial situation and thus should not be punished.
This ruling effectively takes all the teeth out of the FFP requirements. Who will be scared of a European ban when the CAS has made a precedent of leniency? The CAS has essentially called European bans disproportionate.
Financial Fair Play was put in place to prevent teams from spending over their means and racking up debts, or to prevent wealthy owners from taking away the competitive balance with their massive pocketbooks. AC Milan essentially tried to do both, spending beyond its means with a wealthy benefactor, who then defaulted on his loans.
So now Milan will be back in the Europa League in 2018-19, where it reached the Round of 16 last season before falling to Arsenal.
The biggest victim of this ruling in its immediacy is Fiorentina, which would have taken Milan’s place in the Europa League. But there will be further-reaching effects across the continent. Why would PSG care to balance its budget when it watched AC Milan get away with ignoring FFP regulations? Why would Manchester City sell anyone ever if it knows it can just appeal to the CAS and find leniency?
After the CAS’s AC Milan Europa League ruling, Financial Fair Play might just be dead.