The Union of European Football Associations (UEFA) on Thursday approved new licensing rules to replace the existing Financial Fair-Play (FFP) rules.
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The rules will allow teams to suffer greater financial losses than before, but by limiting payroll and transfer spending. As expected, UEFA decided to replace the FFP rules introduced in 2010 to reduce the continent’s large debts.
FFP restrictions were violated with the appearance of clubs owned by state-owned companies, such as the City of Manchester and Saint-Germain in Paris.
UEFA will now allow clubs to make a loss of € 60 million over three years, instead of the € 30 million it used to have, and will even allow a loss of € 90 million for clubs in “good financial standing”.
However, the relaxation of this rule is combined with the introduction of a salary cap. There was no way to introduce the salary ceiling used in North American sport, as UEFA has 55 Member States with more than 1000 clubs, and European Union and national and tournament laws must be taken into account.
Under the new UEFA rules, clubs will be allowed to spend 70% of their total income on player and staff salaries, transfers and agent fees until the 2025/2026 season.
The cost ceiling will fall at the end of the current contracts – 90% of revenue in 2023/2024. season, followed by 80% next season and 70% thereafter.
“Violations will result in both financial and sporting penalties,” said UEFA President Alexander Cheferin.
Clubs that break the rules will be subject to transfer bans as well as player rental restrictions.
