Financial Fair Play: The Complete Picture.

UEFA supremo Michel Platini's plan to implement the Financial Fair Play has been approved by majority of the UEFA and FIFA body members. In layman's language, Financial Fair Play is a plan to make "rich" clubs live within their means and not to spend more than they actually generate in an accounting year. This plan does not stop clubs from spending huge amounts of money in the transfer market but rather limits them to spending that sort of money which the club has generated in revenue. FFP was born out of Michel Platini's desire to curb the spending of many clubs and also to provide a fair financial platform for the 660 clubs playing in 53 divisions of Europe.

Key Points of FFP:
* Three years to ‘break even’
* Clubs will be able to record maximum losses of £39.5m before 2014.
* From 2014 to 2017, the overall permitted loss will fall to £26.3m.
* Owners cannot bail clubs out of debt with personal wealth.
* Clubs could face exclusion from Uefa competitions in 2014-15.
* Newly-created Club Financial Control Panel to ensure rules are abided by.


Clubs likely to be affected (Key Reason):

1. Chelsea Football Club (Spending Habits).
2. Manchester United (High Debts).
3. Manchester City (Spending Habits).
4. Barcelona (Spending Habits and Low Sponsor Income).

Real Madrid are not likely to be affected as they have the highest revenue and spend only a fraction of that amount to buy new players and pay player salaries.

The organization that will head and implement this plan is called the Club Financial Control Panel. This panel consists of 8 members and is headed by former Belgium Prime Minister Jean-Luc Dehaene.

Clauses:
1. The transfer fee will not be included as a lump sum, and will be distributed over the years of the contract that the player has signed.
2. The Fair Play comes into action in the 2013-14 season as of now, therefore giving all clubs ample time to rectify their account books.
3. Clubs do not need to spend till a certain limit. All they need to do is match their balance sheets at the end of the season.
4. Many clubs have signed "big" sponsorship deals which give them a big revenue which can be used to buy players. Clubs can sign "deals" with their parent companies or companies with which their owners have good connections. For example, Manchester City signed a multi-million pound deal with Etihad, whose owners are relatives of the owners of Manchester City.