Will FFP Punish Clubs' Creative Ambition?

It's all very well for PSG and Manchester City to have sweetheart promotional deals but Turkish club Trabzonspor might come a cropper by using their imagination...

Last Updated: 17/01/13 at 15:38 Post Comment

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While many applaud the general aims of UEFA's Financial Fair Play regime to limit the excesses of the unfeasibly rich owners of Chelsea, Manchester City and PSG that subvert the game, there is a danger that UEFA's plans may also derail the creative plans of smaller clubs designed to boost their revenues and increase their competitiveness.

Back in September I wrote about the innovative approach of Turkish club Trabzonspor to making provision for its own long-term revenue streams through the construction of a $50million 28 megawatt hydro-electric power plant. With no oil or gas reserves to speak of and a huge and growing demand for energy in the country, Trabzonspor - with its board dominated by the Sener family, whose riches come from the large infrastructural construction business - intend to capitalise.

Club chairman Sadri Sener believes that the plant will contribute up to $10million a year to the club's revenues, a figure that is significantly higher than the Black Sea coast club could ever expect to earn from the sales of replica shirts, scarves and mugs. So confident is he of the plant's success that a second smaller power station is already in the pipeline.

So not only will the club benefit in a financially sustainable fashion, but the plants will also offer a serious social and economic good in terms of employment (in construction and eventual plant operation) for the Anatolian region where the club is based and feed in a source of clean, renewable, domestic energy to the power-hungry Turkish electricity grid.

But before other clubs round Europe dash out and start buying up likely mountainous real estate, there is the concern that the revenues from the power stations will not be classed as football-related income for FFP revenue purposes and hence would have to be excluded from Trabzon's FFP license application.

UEFA's rules allow for profits from non-football operations to be included in the FFP licensing calculations 'so long as the operations are: (a) based at, or in close proximity to, a club's stadium and training facilities, such as a hotel, restaurant, conference centre, business premises (for rental), health-centre, other sports teams; and (b) clearly using the name/brand of a club as part of their operations'.

OK, taking part (b) first, Trabzon should be on solid enough ground - provided that it can prove that the power plants are financed by the club and not its owners. This would appear to be the case given that the club had the foresight to establish its own energy subsidiary - Bordo Mavi Enerji Elektrik Uretim - in 2007, naming the new company after the team's blue and purple colours.

So, if UEFA are satisfied with the source of the funding, then the club should be able to sell Trabzon-branded units of electricity to fans, via the country's grid - although just how comfortable fans of Galatasaray and Fenerbache etc. might be about that might is another matter entirely.

However, part (a) of the regulation quoted above, relating to proximity to the club, may pose a problem. Coastal, downtown Trabzon, where the club's stadium is located, is not an ideal location for a hydro-electric power station, which as a rule tend to require elevation, damns and plenty of water. Here, it is to be hoped, UEFA will show a measure of common sense. After all, if Roman Abramovich can count on the room tariffs for his Chelsea Village Hotels and cafes for Chelsea's FFP license application, it would seem unfair to deny Trabzonspor doing likewise with projects of greater social and economic importance. Moreover, disqualification of the HEP revenues would certainly reinforce the view held by some that FFP will only serve to maintain the status quo, holding back ambitious smaller clubs.

As it happens, we won't know UEFA's decision on the matter until the 2013-14 season when clubs have to submit their accounts for FFP compliance for the first time. Hopefully, the Turkish club's innovative revenue plans get the governing body's blessing, inspiring other clubs to consider creative funding from outside of their traditional merchandising and sponsorship strategies and giving hope to those who, unlike PSG, are unable to secure a sweetheart promotional deal worth €800million from the tourist board of an oil-rich emirate.

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