Football as a Business: How Financial Fair Play Shapes Modern Club Ownership and Commercial Deals

The implementation of Financial Fair Play (FFP) regulations by UEFA in the early 2010s marked a paradigm shift in European football's economic governance. Beyond promoting simple fiscal prudence, the legislation's most profound and often-litigated effect has been the restructuring of commercial transactions to ensure regulatory compliance. This article systematically investigates the influence of FFP and parallel domestic rules, such as the Premier League's Profitability and Sustainability Rules (PSR), on the configuration of club ownership models and the long-term strategic direction of investor capital. The discussion is framed within the intersection of sports law and financial regulation, critically assessing the incentives and constraints on commercial activity.

The beginning

T​​o frame this analysis, we first briefly review the impetus and core tenets of the Financial Sustainability Rules (FSR). Introduced by UEFA in 2022 (built on the financial fair play rules introduced by UEFA in 2011), FFP now FSR was a direct response to a decade of escalating club insolvencies and unsustainable debt across Europe (Conn, 2019).[1] While its comprehensive structure involves multiple regulations, our focus will be narrowed to the two pillars most relevant to investment strategies and commercial valuation of FSR:

Stability: The Football Earnings Rule (FER) - this is a slight development on the old break-even requirement: Clubs must ensure their football earnings (relevant income minus relevant expenses) balance out over a three-year monitoring period. The acceptable deviation (maximum allowed loss over three years) has been increased from €30 million under FFP to €60million under FSR (UEFA, 2023). [2]

Squad Cost Control rules: A club's expenditure on the first-team squad must not exceed a certain percentage of its annual relevant revenue. This is calculated as the Squad Cost Ratio. The limit will be 70% of revenue in the 2025/26 season and thereafter (UEFA, 2023).[3]

These regulations establish strict compliance constraints and mandate severe sanctions for breaches, fundamentally shaping the economic environment. The transition from lax oversight to these rigorous Financial Sustainability Regulations (FSR) has directly dictated the necessary investment models and facilitated the proliferation of specific ownership structures now growing in the sport.

Shift in M&A Strategy and Multi-Club Ownership (“MCO”) 

Crucially, the introduction of FSR has had a profound impact on the calculus of club acquisitions, altering both the M&A valuation models and the required investment strategies. The sport has moved from an era dominated by owners motivated by patronage and personal prestige (the "trophy asset" model) to one where new ownership, particularly Private Equity (PE) and Sovereign Wealth Funds (SWFs), explicitly seek to maximize financial returns and shareholder value through operational efficiency and commercial growth (Fulbright, 2022) [4]. Financial Fair Play in culmination with the Premier League’s Profit and Sustainability rules have not only changed the way clubs spend, but also how investors have structured their deals. The emphasis on sustainable revenue streams and capped losses means investors now seek clubs with strong commercial potential rather than simply deep pockets for player spending. 

As Norton Rose Fulbright notes, FSR has become a key factor in shaping ownership strategy, prompting investors to prioritise “long-term revenue growth, infrastructure investment and financial compliance” over immediate on-field success (Fulbright, 2022).[5] Clubs with robust fan bases, scalable digital engagement, and modern facilities are seen as lower-risk assets capable of meeting regulatory tests. This has driven a surge in strategic investment models — such as private equity consortiums, multi-club ownership groups, and minority stake purchases — all designed to diversify risk and achieve efficiencies across portfolios. In essence, FFP has transformed club takeovers into sophisticated corporate ventures, where due diligence, regulatory compliance, and financial sustainability are as crucial as sporting ambition (Loosemore, 2025).[6]  FSR does not specifically legislate as to who can and cannot be an owner of a football club, FSR has the effect of influencing what kind of people would be interested in owning a football club. The slow translation from single investor owned football clubs to private equity firms can be stated to be slightly influenced by FSR. We can see this in the fact that MCO’s have increased from 40 pre 2012 to now over 300 football clubs are in the MCO structure (Osborne, 2025).[7] In effect, football ownership has evolved from a vanity pursuit into a corporate exercise in compliance, governance, and strategic brand management — a shift that has opened the door for investors who treat clubs as long-term business assets rather than short-term trophies.

So, what is so appealing about MCO’s? 

The appeal of MCO’s for investors in football is rooted in applying a structured, business-centric, private equity (PE) model—often referred to as a "buy-and-build" strategy—to an otherwise volatile and emotionally driven industry (Insights, 2023). [8] By owning a portfolio of clubs, investors can unlock financial and sporting benefits that are unavailable to single-club owners, ultimately aiming for asset appreciation and a higher group valuation.  At its core, buy-and-build is a scaling play: PE firms acquire a well-positioned platform company and strategically bolt on smaller related firms over time to accelerate growth, enter new markets or consolidate fragmented sectors (Ee, 2025).[9]

The primary value creation is through the creation of synergies - by centralising operations such as scouting and data analytics, companies can benefit from the sharing of information and economies of scale. This can reduce costs on overhead and allow for an improved alignment in goals between the clubs. As we will go onto to note later, the commercial bargaining chip with reference to sponsorship deals and media partners allows the group stronger negotiating power (Insights, 2023).[10]

A crucial strategic mechanism for navigating the FSR framework is the utilization of inter-club transfers within a Multi-Club Ownership (MCO) structure. Under these arrangements, transactions between affiliated clubs are subject to the Associated Party Transaction (APT) rules, which mandate that the transfer of any player, asset, or service must be executed at Fair Market Value (FMV). These MCO transactions must be submitted to UEFA's regulatory department for review and confirmation of fair valuation. By correctly booking a profitable player sale to an affiliated club at FMV, the selling club can strategically ease its FSR compliance burden (specifically the Football Earnings Rule), while the buying club benefits from developing talent not immediately required by the parent organisation. The transactions between Chelsea and its sister club, RC Strasbourg Alsace, exemplify this increasingly common practice.

In summation, the strategic use of Multi-Club Ownership (MCO) provides owners and investors with a multifaceted tool for both FSR compliance (by generating strategic football earnings) and talent management (through a structured development pathway). This duality demonstrates MCO's central role as a crucial component of modern, financially sustainable football investment strategy.

Creative ways of commercialisation 

As part of the strategy shift, clubs are further looking for ways to generate revenue to be legally compliant with FSR. For many of the top clubs, commercial revenue, mainly via image rights, sponsorship and merchandising have become the biggest revenue streams. Commercial revenue was the largest revenue source for the second consecutive year, accounting for 44% ($4.9 billion) of the total aggregate revenue.[11] This dominance highlights a strategic shift where clubs can no longer rely solely on exponential growth from broadcast deals and must create commercially focused business models, often by turning their stadiums into multi-purpose assets and diversifying revenue streams.

Football clubs are continuously evolving their strategic partnerships to maximise their revenue streams. The old school static sponsorships on the football shirts are no longer enough, now brands are looking to entrap fans and create fan and community engagement. New advanced sponsorships are being introduced to a level they have never been seen before with data playing a more significant role in this process. Some examples would include the stadium and training ground naming rights - most recently seen with Arsenal renaming their training ground to Sobha Realty Training centre in a deal which sees them earn between £10,000,000 and £15,000,000 per year. This alongside Barcelona’s innovate partnership with Spotify which features €460 million (Carp, 2025) [12] for both the training and men’s kits, including personalised jerseys involving global musicians. The emphasis on new innovative ways to generate revenue and ease FSR compliance cannot go unnoticed. 

Stadium developments 

The modern business model for elite football clubs is evolving, with a sharp focus on transforming stadiums from simple sporting venues into year-round, multi-purpose entertainment hubs to generate revenue beyond matchdays. This strategic shift is primarily driven by the need for commercial growth and the financial constraints imposed by regulations like Financial Fair Play (FFP).

Tottenham Hotspur Football Club serves as the prime exemplar of this paradigm shift. Following the move to their new stadium, the club's commercial revenue has experienced substantial growth, reportedly seeing a 79% rise compared to the last full season at their previous ground. The venue's design, which accommodates a diverse range of events—including high-profile concerts, NFL games, and major boxing events—has been the central catalyst for an average annual commercial growth rate of 20% since the stadium’s opening in April 2019 (Finance, 2025). [13]

Many clubs are now actively pursuing similar strategies to replicate this financial success. Everton FC, currently developing their new dockside stadium (Bramley-Moore Dock), aim to bolster their revenue streams as they navigate the financial challenges posed by FFP penalties. Similarly, Arsenal FC is reportedly considering a project to increase the capacity of the Emirates Stadium and introduce modern enhancements, reflecting a broader intent across the industry.

Ultimately, these significant stadium developments represent a sophisticated new commercial strategy by major football clubs, designed not only to maximise traditional matchday income but also to unlock lucrative, diversified revenue streams from global entertainment properties.

Conclusion 

In conclusion, while Financial Sustainability Regulations (FSR) successfully improved clubs' financial health, their primary legacy is the unintended consequence of cementing the elite's advantage. This has triggered a shift in ownership from high-spending benefactors to sophisticated, multi-club ownership (MCO) groups focused on compliant financial engineering. Future adoption of the Squad Cost Ratio will accelerate this trend, demanding greater corporate professionalism and global commercial dominance to sustain on-pitch ambition.

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