MADRID, 7 Apr. (SportsFinding) –
The UEFA Executive Committee approved this Thursday its new financial regulations, the Club Licensing and Financial Sustainability Regulation, which comes to modify the old ‘fair-play’ and whose main novelty is that it will limit the wage bill to 70 percent of the income of the teams, although it will give a margin of three years to be able to adapt.
The continental body gave birth to what “is the first major reform” of its financial regulations, introduced for the first time in 2010 and whose “key objective” is that the clubs have “financial sustainability” through “the solvency, stability and cost control”.
This new regulation will begin to work from June this year, but UEFA warned that its application “will be gradual over three years to give the clubs the necessary time to adapt”, especially in the face of the main one that is that they will be limited on how much they can spend to train their templates.
The governing body of European football has introduced a rule on squad costs “to better control expenses in relation to player salaries and transfer costs.” “The regulation limits spending on salaries, transfers and agent fees to 70 percent of the club’s income,” UEFA said.
However, according to various information, this limit will be 90 percent in the 2023-2024 campaign, 80 percent in 2024-205 and finally the aforementioned 70 percent from 2025-2026. To control it, UEFA will carry out “timely” evaluations and stressed that it has “predefined economic sanctions and sports measures” in case there are infractions.
In addition, to increase stability, this new regulation establishes the ‘Football Earnings Rule’, which measures the balance in results, supplemented by capital contributions in a limited and reasonable manner, and which must be positive.
On the other hand, in terms of 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 for those who are late in their payments,” he stressed.
The body indicated that “the new requirements on the benefits of football are an evolution of the current requirements of the break-even point and will provide greater capacity to the finances of the clubs.”
“To facilitate application to clubs, the calculation of football profits is similar to that of the break-even point. Although the acceptable deviation has increased from €30m over three years to €60m over three years, the requirements to guarantee the fair value of the transactions, improve the balance of the clubs and reduce debts,” he added.
CEFERIN: “IT WILL HELP US PROTECT FOOTBALL”
Aleksander Ceferin, president of UEFA, recalled that the first financial regulation of 2010 “achieved its main objective” and “helped to bring European football finances out of the abyss and revolutionized the way European football clubs are managed.”
“However, the evolution of the football industry, together with the inevitable financial effects of the pandemic, have shown the need for a total reform and new financial sustainability regulation,” he said.
The Slovenian leader pointed out that they have worked “together with the different stakeholders from all over European football” for these new measures aimed at helping clubs “to face these new challenges”. “This regulation will help us protect football and prepare it for any potential future shocks, while encouraging sound investment and building a more sustainable future for the game,” he added.