President Aleksander Ceferin stated on Thursday that the UEFA executive committee had accepted new ‘sustainability regulations’ to replace the existing Financial Fair Play (FFP) system.
About the New Sustainability Regulations
The new ‘Financial Sustainability and Club Licensing Regulations (FSCLR)’ will cap expenditure on wages, transfers, and agent fees to 70% of a club’s revenue following a three-year transition period.
The former FFP laws were drafted in 2010 by UEFA’s Financial Control Panel, directed by Michel Platini and Gianni Infantino, and were initially challenged by the European Club Association.
It was created to prevent European clubs from overspending and to eliminate financial doping from the game. Currently, clubs can spend up to €5 million (£4 million) more than they make in three years.
However, if the excess was covered in full by the club’s owner or a related party, they were allowed to go over that sum – up to a limit of €30 million (£25 million). The new rules are intended to promote a competitive balance and improved sustainability for clubs, but they still give the richest clubs a built-in advantage rather than closing the gap.
Salary caps were investigated by UEFA, but their validity under European law was questioned. Teams that spend too much money in UEFA competitions, from the Champions League to the Europa League and the third-tier Europa Conference League, may now be relegated.
History of UEFA Financial Regulations
In an Executive Committee meeting at Nyon, Ceferin said: “UEFA’s first financial regulations, introduced in 2010, served its primary purpose. They helped pull European football finances back from the brink and revolutionized how European football clubs are run.”
“However, the evolution of the football industry, alongside the inevitable financial effects of the pandemic, has shown the need for wholesale reform and new financial sustainability regulations.”
Acceptable losses will increase from €30 million (£25 million) to €60 million (£50 million) during the next three years, according to UEFA. If a club is in good financial shape, an additional €9 million (£7.5 million) in expenditure beyond the cap could be allowed as a “sustainability bonus.”
The new regulations will take effect in June 2022, with a three-year transition period to allow teams to adjust.