What Are UEFA Financial Fair Play Regulations?
Association football, soccer or, simply, football is the most popular sport in the world and by far the most profitable. Many countries have their own leagues, some of which have championships with teams outside of it. International competitions bring national teams from all over the world to compete for glory. Individual players have some of the highest profiles and financial portfolios of any athlete. Despite such global competition, many fans look to the UEFA European leagues as the gold standard. Although often the most profitable, many UEFA teams have seen financial problems decimate their reputation and even their fanbase.
At oneHOWTO, we look at what measures are being enforces to prevent such financial disasters by asking what are UEFA Financial Fair Play regulations? We explain the parameters of FFP, to which teams it applies and what are the repercussions of not following FFP regulations.
What is Financial Fair Play in football?
Financial Fair Play in football refers to a se of regulations which are design to prevent teams from entering serious financial difficulties. To do so, they specify that the difference between a team's transfer expenses and the income it receives cannot exceed 100 million euros. This figure was previously set at 30 million euros, but with the update of this control system in 2022, this amount has been modified.
The regulations were created by the Union of European Football Associations (UEFA) in 2011 to ensure the stability of the various clubs. It was established to prevent them from spending money on signings that would jeopardize their future. The regulations also aim to prevent the competition's entities with the greatest economic potential from become excessively dominant over other teams with more modest incomes.
Among other changes, Financial Fair Play will be controlled by season, a condition that has already been implemented in LaLiga. According to FFP, clubs will be able to allocate up to 90% of their income to pay the salaries of their players during 2023, 80% in 2024 and 70% in 2025. In addition, teams will not be able to have tax debts, either with individual players or with other teams.
The club's net worth must be positive as of the 31st December of the previous season or improve by 10% compared to the end of the year. This percentage is analyzed using the football profit rule.
Expenses related to improvements in facilities and equipment are not included in Financial Fair Play. Nor are those initiatives whose ultimate goal is to promote grassroots football, youth teams or women's football.
How Financial Fair Play works in football
Having clarified what Financial Fair Play is, it is important to know how it works in order to fully understand it. The UEFA Club Financial Control Committee is the team responsible for analyzing whether the different clubs comply with the regulations which have been established.
This is an entity that studies the financial situation of each club using the last three years as a reference. After carrying out this analysis, an offending club is sanctioned if any of the stipulated measures are breached. This sanction will be applied the following year.
Who does UEFA Financial Fair Play in football apply to?
These regulations apply to clubs participating in UEFA competitions. These include the Conference League, Europa League and the Champions League. In addition, there are specific regulations for each of the professional leagues in the different European countries. In each case, they have their own characteristics depending on their guidelines and regulations.
What is the penalty for breaking the Financial Fair Play regulations?
Now we know the basic regulations of UEFA Financial Fair Play, there wouldn't be much incentive without repercussions. If a team does not comply with FFP, there are sanctions which will be placed on them. While FFP is relatively new, there are teams which have already been punished with disciplinary measures, including Galatasaray, Manchester City, AC Milan and PSG. UEFA's disciplinary measures include sanctions such as the following:
- Penalty notice
- Retention of profits obtained by the club in UEFA competitions
- A financial penalty
- Unable to make new signings
- Impose restrictions on the registration of footballers in various UEFA competitions, as well as on the spending incurred on their salaries
- The possibility of reducing points for the offending club in any of the competitions (may affect the club's classification in said competition)
- Disqualification of the team from any of the competitions in which it is participating, as well as from future ones
- Withdrawal of prizes won or titles from any UEFA competition
As you can see, the measures applied have different levels. How UEFA proceeds will depend on the severity of the case. For example, Galatasaray was banned from playing in European competition for one season (2016-2017) for not complying with the Financial Fair Play regulations. AC Milan was excluded from participating in UEFA competitions in the 2019-2020 season for failing to comply with its Financial Fair Play obligations between 2015 and 2018.
Now that you know what UEFA Financial Fair Play is in football, you may be interested in these articles on what is the international standard football field size and which football managers have won the most trophies in history?
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