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UEFA & Football League Financial Fair Play Regulations

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;

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UEFA & Football League Financial Fair Play Regulations

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  1. UEFA & Football League Financial Fair Play Regulations

  2. 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.

  3. 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

  4. Aiming for a Deflationary Effect • Clubs to spend no more than they earn (with exceptions) • Infrastructure investment permitted • The Debt v Loss Debate

  5. UEFA Break Even (ish)

  6. Football League Break Even (ish)

  7. Manchester City and Etihad: Case Study • Record-breaking 10 year, £400m shirt stadium and Etihad campus deal • 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.

  8. An Early Loophole- Annex XI Definition • 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.”

  9. An Early Loophole- Annex XI Definition

  10. Clubs can take advantage of Annex XI(2) wage exemption Financial Fair Play Rules Timeline FFPR in force (first monitoring period) 2013-14 (One year to go) 2012-13 season (Second monitoring period) 2014-15 (Two years to go) 2011-12 season (Third monitoring period) 2015-16 27 May 2010 2018-19 Clubs to supply at least 2 years worth of accounts Accounts from this season will be used for the license application The earliest possible date clubs may be required to breakeven FFPRs approved and published by UEFA Acceptable deviation = €15m per season When applying for a UEFA license, clubs will have to adhere to the FFPRs too Accounts from this season will be used for the license application Acceptable deviation = €10m per season Clubs to supply 2 years worth of accounts Acceptable deviation = €22.5m per season

  11. UEFA and Football League Sanctions • 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

  12. Football League Fine Calculation Illustration

  13. Talk Takeaways • 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

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