Termed Financial Sustainability Regulations, it replaces the FFP, which was set into motion in 2010 and had its limitation in dealing with state-held clubs like Manchester City and PSG.
File photo of UEFA Champions League trophy. AP
The apex European football body, UEFA, has made some landmark changes in the recent past and has continued with the norm this past week with the federation deciding to replace its contentious Financial Fair Play (FFP) rules with new regulations.
Termed financial sustainability regulations, it replaces the FFP, which was set into motion in 2010 and had its limitation in dealing with state-held clubs like Manchester City and PSG. The new set of rules, slated to come into effect from June 2022, were brought forward after UEFA admitted that new regulations were needed with clubs suffering unprecedented losses due to COVID-19 pandemic.
What are the new rules?
As the name suggests, the key objective of the new regulation is to help clubs be financially sustainable. In order to achieve that UEFA has cited three pillars in solvency, stability, and cost control.
In line with the three regulations, UEFA executive committee has pushed for three major rules in No Overdue Payment Rule, Football Earnings Rule, and Squad Cost Rule.
The No Overdue Payment Rule will ensure that all clubs adhere to the timely payment of their bills and UEFA will do a quarterly check of clubs’ accounts to regulate solvency.
The Football Earnings Rule will allow clubs to incur losses up to EUR60m over three years while financially strong clubs — as per UEFA’s guidelines — would be allowed to lose an extra EUR10m a year. Earlier clubs were only allowed losses up to EUR30m over three years under FFP rules.
Finally, the Squad Cost rule will cap the spending on wages of players and head coaches (including transfers and agent fees) at 70 percent of club revenues. In order to ensure that both the summer and winter transfer windows fall under the purview, the assessment will be done by UEFA over a calendar year.
What are the punishments for non-compliance?
UEFA has agreed on pre-decided financial and sporting punishments if clubs fail to adhere to the rules. In case of violation of the squad cost rule, clubs could be forced to play with a smaller squad and prohibited from using specific players signed during the assessment year. UEFA has also added the right to deduct points if clubs fail to follow rules. UEFA also wishes to relegate teams from UEFA Champions League to the UEFA Europa League in cases of non-compliance but the rule is yet to get an approval.
How this affects the financially-secure clubs of Europe?
One may argue that clubs can get away with paying fines in cases of financial punishment. However, the sanctions are progressive and will result in severe actions if repeated.
When and how do the rules come into effect?
The new rules will come into effect from June 2022 but in the case of squad cap, UEFA has agreed on a phased introduction over the next three years. In 2023-24 the cap will be 90 per cent, in 2024-25 it will be 80 per cent and from 2025-26 onwards it will be 70 per cent.
Are the new rules facing opposition?
No club has opposed the new rules publicly.
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