Simon Boyes, Senior Lecturer, NLS https://www.ntu.ac.uk/staff-profiles/law/simon-boyes
The news that Saudi Arabia is likely to be selected as the host country for the men’s football World Cup in 2034 further augments a growing sense that the country is rising as a superpower within the sport. It sits alongside the meteoric rise of the Saudi Pro League as a destination for many high-profile professional footballers, funded by significant investment from PIF, the Saudi sovereign wealth fund.
The vast sums of money expended in transfer fees and wages, aimed at establishing the Saudi Pro League as a competitor to the major European leagues, give rise to potentially thorny issues for football regulators like the FA (Football Association), UEFA (the Union of European Football Associations), and FIFA (International Federation of Association Football).
Leading European football leagues and, more notably, football’s European regulator – UEFA – have sought to curb excessive spending on transfer fees and player wages through the introduction of regulatory measures which limit clubs’ expenditure on those costs, this constrains unsustainable borrowing and the ‘bankrolling’ of clubs by wealthy owners. The roll out and application of these ‘financial fair play’ rules is in response to major European clubs being acquired by wealthy private owners, as well as sovereign wealth funds, including PIF which partly owns Newcastle United.
Even taking account of these restrictions, the big European clubs and leagues are comfortably the highest spenders when it comes to investment in players; English Premier League clubs spent a record £2.36 billion on transfer fees alone during the summer transfer window of 2023.
There is, however, likely to be growing pressure on UEFA and domestic regulators to dilute their ‘financial fair play’ regulations. The wealthiest European clubs are likely to argue that competition for players from the Saudi Pro League, which is not subject to similar fiscal constraints, necessitates a liberalisation of the rules, to enable them to continue to acquire and retain the world’s most high-profile and talented players.
Such arguments are likely to be made not because European and Saudi clubs are in competition on the field, but because the Saudi Pro League is seeking to rival major European leagues and UEFA’s cup competitions for a chunk of the lucrative global television and media market for club football.
UEFA is thought to have secured a global rights deal for its club competitions for the three
years to 2027 of around €15 billion. The English Premier League’s overseas television deal is worth in the region of £5 billion over three years. It is these revenue streams which the Saudi Pro League is looking to access, and which European leagues and clubs will be looking to defend.
Of particular concern to UEFA will be the ongoing threat to its monopoly of European club competitions posed by the European Super League. Though the project foundered [GS1] soon after its launch in the face of fierce opposition by fans, governments, and other stakeholders, it may well be reinvigorated if the challenge to important revenue streams is threatened by the emergence of a high-quality alternative in the Saudi Pro League.
There may, too, be pressure on football’s global regulator, FIFA, to step in to limit effectively unconstrained spending by Saudi clubs. Hitherto, FIFA has not regulated for financial fair play between club sides; preferring to leave that type of oversight to domestic and regional associations. The historic concentration of economic power within European football, but regulated by UEFA, has been sufficient to ensure at least some sort of constraint. The emergence of the Saudi Pro League in this regard – falling outside of UEFA’s jurisdiction – has shifted the balance.
Should it decide to act, FIFA may find it more difficult to implement a financial fair play scheme than its European counterpart. UEFA effectively ties its regulations to entry to its continental club tournaments and, as such, clubs are incentivised to comply. FIFA has no such incentive to offer, its Club World Cup (notably hosted in Saudi Arabia in 2023) includes only a small number of clubs and is not sufficiently lucrative to induce compliance with financial fair play regulations as a condition of participation.
Whether FIFA seeks to impose such regulations directly, or seeks to mandate national associations to do so, there would be an accompanying risk that leagues, or groups of clubs, might seek to break away from its regulatory strictures entirely in order to avail themselves unconstrained access to lucrative revenue streams.
The probability is that the circumstances will remain far less clear cut. At least in the short term, the result of these tensions is likely to be an uncomfortable compromise between the desire of the regulators to maintain financial stability controls and the push from the largest clubs to spend more freely in an effort to maintain their share of revenues.
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