UEFA & Football League Financial Fair Play Regulations
Objectives of the Regulations
to improve the economic and financial capability of the clubs;
to place the necessary importance on the protection of creditors;
to introduce more discipline and rationality in club football finances;
to encourage clubs to operate on the basis of their own revenues;
to encourage responsible spending for the long-term benefit of football; and
to protect the long-term viability and sustainability of European club football.
UEFA Club Licensing System v Football League Compliance
European Cup Competition (License application) v Domestic League Dynamic (accounts application)
From 2013/14 season UEFA monitoring requirements will include Financial Fair Play adherence
From 2012/13 season FL will ensure Financial Fair Play adherence
Aiming for a Deflationary Effect
Clubs to spend no more than they earn (with exceptions)
Infrastructure investment permitted
The Debt v Loss Debate
UEFA Break Even (ish)
Acceptable Deviation Levels
Monitoring Period
Number of Years
Years Included in the Calculation Acceptable Deviation (€m)
T-2 T-1 T Equity investment
Non-equity investment
2013-142014-152015-162016-172017-182018-19
233333
N/A2011-122012-132013-142014-152015-16
2011-122012-132013-142014-152015-162016-17
2012-132013-142014-152015-162016-172017-18
4545303030> 30
555555
Football League Break Even (ish)
Reporting Period Reporting Period Equity Contributions
Reporting Period Acceptable Deviation
Total Acceptable Deviation
2011/12 £8m £4m £12m
2012/13 £6m £4m £10m
2013/14 £5m £3m £8m
2014/15 £3m £3m £6m
2015/16 £3m £2m £5m
2016/17 onwards £3m or lower onwards £2m or lower >£5m
Record-breaking 10 year, £400m shirt stadium and Etihad campus deal
Manchester City and Etihad: Case Study
Definition of Related Party Transaction
– a club will fail the "related party" test if money comes in from a "close member" of the club owner's family who "has significant influence over the [club]".– City are confident that they can demonstrate that Etihad's chairman, Sheikh Hamed bin Zayed al-Nahyan, and vice-chairman Sheikh Kaled, both half-brothers, do not exert any influence over City.
Players under contract before 1 June 2010
“If a licensee reports an aggregate break-even deficit that exceeds the acceptable deviation and it fulfils both conditions described below then this would be taken into account in a favourable way.
i) It reports a positive trend in the annual break-even results (proving it has implemented a concrete strategy for future compliance); and
ii) It proves that the aggregate break-even deficit is only due to the annual break-even deficit of the reporting period ending in 2012 which in turn is due to contracts with players undertaken prior to 1 June 2010 (for the avoidance of doubt, all renegotiations on contracts undertaken after such date would not be taken into account).
This means that a licensee that reports an aggregate break-even deficit that exceeds the acceptable
deviation but that satisfies both conditions described under i) and ii) above should in principle not be
sanctioned.”
An Early Loophole- Annex XI Definition
An Early Loophole- Annex XI Definition
Player Date SignedLength of Contract (in years)
Expiry of Contract
Eligible for Annex XI Qualification?
A June 2009 5 June 2014 Yes
B June 2009 4 June 2013 Yes
C June 2009 3 June 2012 Yes
D May 2010 5 May 2015 Yes
E July 2010 5 July 2015No, as the contract was signed after the 1 June 2010 deadline
Financial Fair Play Rules Timeline
Clubs can take advantage of Annex XI(2) wage exemption
Acceptable deviation = €22.5m per season
When applying for a UEFA license, clubs will have to adhere to the FFPRs too
Clubs to supply 2 years worth of accounts
FFPR in force(first monitoring period)
2013-14
(Second monitoring period) 2014-15
Clubs to supply at least 2 years worth of
accounts
Acceptable deviation = €15m per season
Acceptable deviation = €10m per season
(Third monitoring period) 2015-16
2018-19
The earliest possible date clubs may be
required to breakeven
(One year to go)2012-13 season
Accounts from this season will be used for the license application
(Two years to go)2011-12 season
Accounts from this season will be used for the license application
27 May 2010
FFPRs approved and published by
UEFA
• UEFA: Club Financial Control Body
• Football League: Financial Fair Play Panel
• UEFA's general secretary, Gianni Infantino, has recently stated “There may be intermediate measures. We would have to ask why, maybe there would be a warning, but we would bar clubs in breach of the rules from playing in the Champions League or the Europa League. Otherwise, we lose all credibility.”
• UEFA sanctions: expulsion, docking points, fines, refusal of application PLUS withholding prize money or limiting the number of players registered for European competition
• FL sanctions: transfer embargo or fine
UEFA and Football League Sanctions
Football League Fine Calculation Illustration
Percentage of the Excess Excess Calculation (rounded up)
1% of the Excess between £1 and £100,000; £1,000
20% of the Excess between £100,001 and £500,000; A maximum of £80,000
40% of the Excess between £500,001 and £1,000,000; A maximum of £200,000
60% of the Excess between £1,000,001 and £5,000,000; A maximum of £2.4m
80% of the Excess between £5,000,001 and £10,000,000 A maximum of £4m
100% of the Excess over £10,000,000. No Maximum
Rules/sanctions in force by 2013-14 (UEFA) and 2012-13 (FL) season
Leeway for a transitional period
A phased approach obviously beneficial for clubs
Pure break-even not required for some time in both sets of rules
Talk Takeaways