The new economic control ends with the club-state

UEFAin the absence of a last fringe, has almost approved the new Economic Control. The ECA (European clubs) and the leagues have given their approval to Ceferín’s new Financial Fair Plan, which is close to one of the demands made of it: toughen the regulations so as not to give an advantage to the state clubs. They describe it as a hard blow for these teams, since waste is curbed.

During the last decade, several of the big clubs and big leagues have criticized UEFA for allowing teams like PSG and Manchester City to spend without caring about the economic losses. They were considered financially “doped” teams and therefore there was a disadvantage and imbalance with the rest of the clubs. However, UEFA intends to put an end to this situation and will limit both losses and capital contributions. This is a very similar rule to the one currently in force in Spain, which is considered one of the toughest for clubs to be solvent. According to sources consulted by this newspaper, it is a very good economic control and that it is a blow to the club-states.

UEFA reform aims at financial sustainability and responsibility in European football through solvency, stability and cost control requirements. In addition, this reform responds to one of the main criticisms of the Super League, which criticized UEFA for the permissiveness of its regulations towards club-states. In this sense, the regulatory reform is much more solid and strict towards these clubs, as well as towards all European clubs.

One of the new rules will be in obtaining the UEFA License. The net worth of the clubs will be looked at, which must be positive as of December 31 of the season prior to the one for which the UEFA License is requested., or have improved by 10% compared to December 31 of the previous year. Regarding overdue debts with employee clubs and public administrations, there are also novelties: the reference date is postponed to February 28, thus allowing the control of January and February debts once the winter market is over. Clubs must be up to date with all amounts before March 31. The concept of employees is expanded, including all professional players and staff (either labor or commercial relationship) administrative, technical, medical and security mandatory according to UEFA License. The obligation to be up to date with the payment with the Licensor and UEFA is added.

Regarding the norm that governs the sustainability of the clubs (former Fair Play), the Football Earnings Rule. This norm is calculated as Relevant Income minus Relevant Expenses, and must be positive (or within an acceptable deviation of €5M) for the three-season monitoring period. It is also allowed to cover the deficit (in addition to €5M) with €60M in this period of three seasons (currently up to €30M is allowed). It must be covered with capital contributions or with Equity. In addition, these €60M over 3 seasons can be increased by an additional €10M per season.

How is the salary limit calculated?

It is calculated as the sum of personnel expenses, amortization, impairment and intermediation expenses. It must be less than 70% of income (operating income + result from transfers and assignments). The concept of operating income includes box office and subscriptions, sponsorships and advertising, broadcasting, marketing, charity and UEFA market pool, and other operating income; while the expenses and income are calculated with the amounts of the 12 months prior to December 31 of the season in which the club participates in the corresponding UEFA competition. As soon as the result from transfers is calculated as a net book profit or loss. The result of other operations includes income and expenses from the transfer of players. The average of the last three years up to December 31 of the season prior to the club’s participation in the corresponding UEFA competition is calculated. Includes all male professional players registered with the club or loaned to another club and the head coach. The cost of personnel is calculated gross, including the entire tax and Social Security cost.

But this new regulation, despite having the approval of the ECA, its president Nasser Al Khelaifi has not liked, since it affects PSG. The Parisians had been one of the beneficiaries of the much more lax Economic Control still in force and that did not control losses as much. Although a priori it was speculated that in this revision of the rule it would be relaxed even more as a wink from Ceferín to Al Khelaifi for having rejected the Super League. But According to what they point out to AS, it is quite the opposite: one of the complaints of the Superliga clubs is met, which was to tighten the Financial Fair Play and it ends with the club-states by limiting losses and capital contributions. There is a greater demand in the fulfillment of overdue debts, it is obligatory to value all operations at market value. With the Football Earnings Rule, the balance in the results is measured, complemented by capital contributions in a limited and reasonable way. Control of the cost of the sports squad the cost of the squad is limited to 70% of income.