Fenerbahçe - Trabzonspor financial fair play case
UEFA's Financial Fair-Play (FFP) rules have been argued over since 2010 when it was first approved by European football's governing body. Since then, clubs that have qualified for UEFA competitions have to prove they do not have overdue payables toward other clubs, their players and social/tax authorities throughout the season. The first appraisements were activated in 2011 and many football clubs around Europe were affected by these financial principles, especially Turkish clubs. Since 2013, clubs have also been evaluated on break-even requirements that require clubs to balance their spending with their revenues and limit clubs from accumulating debt. The break-even rule basically contains the last three consecutive seasons for clubs that have qualified for UEFA competitions; implemented by the Club Financial Control Body of UEFA (CFCB). If clubs are not in line with FFP, it is CFCB that decides on measures and sanctions.
Last week, Fenerbahçe and Trabzonspor, two of Turkey's biggest clubs, announced that their income from UEFA competitions had been frozen while investigations are underway over break-even requirements. When both of the clubs made announcements to the stock market public disclosure platform, the bad news rapidly spread to their millions of fans and caused confusion. These two clubs spent millions of euros, more than their traditional rivals Beşiktaş and Galatasaray, to buy a couple of players during the last two seasons, even though they didn't turnover enough money to cover it. Fenerbahçe Chairman Aziz Yıldırım said in an interview that they spent around 50 million euros to buy stars like Luis Nani and Robin Van Persie last summer. Trabzonspor also spent around 30 million euros at the beginning of the 2014-15 season. What's interesting is that this was not the first time a Turkish club has had its prize money withheld, and not even the first time for Fenerbahçe and Trabzonspor, granted previous implementations were not because of this type of break-even requirements. For example; in September 2012, Fenerbahçe and Eskişehirspor had their prize money temporarily withheld along with 21 other European clubs from different countries because of the status of overdue payables as of the end of June 2012. After the required payments were made, the CFCB unfroze their prize money. In September 2013, Trabzonspor had the same precaution because of overdue payables towards other clubs and towards employees or tax authorities. In September 2014, Beşiktaş and Bursaspor also had some precautions because of their overdue payables towards employees and their absent financial measuring documents. All these examples show that the financial control body opened many different types of investigations because of overdue payables or missing information but the lack of break-even requirements is a first for Turkish clubs.
The next step in these investigations is negotiations between the CFCB and the clubs. The UEFA investigation body will recommend several measures to the clubs and clubs' prize money will be unfrozen. UEFA's spotlight will track the club's finances for the next two years, all of their turnover and expenditure, the club's biggest expense items like taxes, transfer fees and wages will be measured and after that time, the parties will negotiate again. If they don't pay the required compensation, the CFCB has the right to apply sanctions like points deductions, withholding revenues from UEFA competition, prohibiting the registering of new players in several competitions and disqualification from competitions in progress and/or exclusion from future competitions. Another important Turkish team, Galatasaray, is now in that period of tracking.
Many European teams, particularly Turkish teams, had the opportunity to spend more than their earnings to make their fans happy before the Financial Fair Play era. The biggest Turkish football clubs' accumulated total debts are still pushing nearly $300 million on average. With these investigations, they have to learn to manage their finances better. If not; hard times are not too far for those distinguished clubs.
Last week, Fenerbahçe and Trabzonspor, two of Turkey's biggest clubs, announced that their income from UEFA competitions had been frozen while investigations are underway over break-even requirements. When both of the clubs made announcements to the stock market public disclosure platform, the bad news rapidly spread to their millions of fans and caused confusion. These two clubs spent millions of euros, more than their traditional rivals Beşiktaş and Galatasaray, to buy a couple of players during the last two seasons, even though they didn't turnover enough money to cover it. Fenerbahçe Chairman Aziz Yıldırım said in an interview that they spent around 50 million euros to buy stars like Luis Nani and Robin Van Persie last summer. Trabzonspor also spent around 30 million euros at the beginning of the 2014-15 season. What's interesting is that this was not the first time a Turkish club has had its prize money withheld, and not even the first time for Fenerbahçe and Trabzonspor, granted previous implementations were not because of this type of break-even requirements. For example; in September 2012, Fenerbahçe and Eskişehirspor had their prize money temporarily withheld along with 21 other European clubs from different countries because of the status of overdue payables as of the end of June 2012. After the required payments were made, the CFCB unfroze their prize money. In September 2013, Trabzonspor had the same precaution because of overdue payables towards other clubs and towards employees or tax authorities. In September 2014, Beşiktaş and Bursaspor also had some precautions because of their overdue payables towards employees and their absent financial measuring documents. All these examples show that the financial control body opened many different types of investigations because of overdue payables or missing information but the lack of break-even requirements is a first for Turkish clubs.
The next step in these investigations is negotiations between the CFCB and the clubs. The UEFA investigation body will recommend several measures to the clubs and clubs' prize money will be unfrozen. UEFA's spotlight will track the club's finances for the next two years, all of their turnover and expenditure, the club's biggest expense items like taxes, transfer fees and wages will be measured and after that time, the parties will negotiate again. If they don't pay the required compensation, the CFCB has the right to apply sanctions like points deductions, withholding revenues from UEFA competition, prohibiting the registering of new players in several competitions and disqualification from competitions in progress and/or exclusion from future competitions. Another important Turkish team, Galatasaray, is now in that period of tracking.
Many European teams, particularly Turkish teams, had the opportunity to spend more than their earnings to make their fans happy before the Financial Fair Play era. The biggest Turkish football clubs' accumulated total debts are still pushing nearly $300 million on average. With these investigations, they have to learn to manage their finances better. If not; hard times are not too far for those distinguished clubs.