Aleksander Ceferin, president of UEFA. /
Paradigm shift
The clubs will only be able to allocate 70% of what they enter to salaries, although the implementation will be progressive and that cap will not come into force for two campaigns
The UEFA Executive Committee has approved this Thursday the new economic control mechanism by which European football must be governed from June this year and which replaces the current financial ‘fair play’ system. An ambitious reform that Aleksander Ceferin had been cooking for a long time and among whose main innovations stands out the point that establishes that the clubs will not be able to allocate more than 70% of what they earn to salaries, although the implementation of that cap will be progressive, in a that in the next campaign the ratio will be set at 90%, lowering to 80% in the next and being established at the final figure from the 2024-2025 academic year.
“UEFA’s first financial regulation, introduced in 2010, fulfilled its main objective. He helped bring European football finances back from the abyss and revolutionized the way European football clubs are run. However, the evolution of the football industry, together with the inevitable financial effects of the pandemic, has shown the need for a total reform and a new regulation of financial sustainability, “said the UEFA president, who has defended that the new regulations “will help protect football and prepare it for any potential future shocks, while encouraging sound investment and building a more sustainable future for the game.”
The objective is to achieve financial sustainability through three fundamental pillars: solvency, stability and cost control. To achieve this, the new regulation limits spending on salaries, transfers and agent fees to 70% of the clubs’ income. But, so that the entities can adapt, a gradual implementation is set with limits of 90% in the next season and 80% in the following. The evaluations will be carried out punctually and the infractions will give rise to predefined economic sanctions and sports measures.
Regarding solvency, the new rule of not having overdue debts (with football clubs, employees, social/tax authorities and UEFA) will guarantee better protection from creditors. The controls will be carried out every quarter and there will be less tolerance with those who are late in their payments.
The new football profit requirements are an evolution of the current break-even requirements, and will bring greater capacity to clubs’ finances. To facilitate application to clubs, calculating football profits is similar to calculating the break-even point. Although the acceptable variance has increased from €30m over three years to €60m over three years, the requirements to ensure the fair value of transactions, improve club balance sheets and reduce debt have been tightened considerably.
