Financial Fair Play rules: Explained

The significance of capital in the modern game can’t be overstated. Never before has capitalist gluttony threatened to compromise the humble foundations of football as it has done in recent years.

Whether it be the European Super League proposal or the ludicrous free-spending of Europe’s elite (primarily in the Premier League), the signs are bleak in regard to the sustainability and competitiveness of the game adored worldwide.

In a bid to combat and somewhat control the financial might of the world’s richest clubs, Financial Fair Play (FFP) laws have been introduced by UEFA in the past decade. Such rules have been laid out to facilitate sustainability and prevent financial doping.

But what exactly are these rules, and how are they violated by Europe’s biggest clubs?

When was FFP introduced?

The concept of FFP was established by UEFA in 2009 and implemented at the start of the 2011/12 season.

The basic premise of FFP was to ensure that clubs were not spending more than they earned and, in doing so, prevent them from falling into financial trouble which could threaten their existence.

In 2009, UEFA discovered that more than half of 665 European clubs suffered financial losses over the course of the previous year, and at least 20% of the clubs analysed were believed to be in financial danger. This sparked the governing body into action.

The regulations also attempt to stop clubs from over-spending across several seasons within a set budgetary framework.

UEFA’s FFP regulations

UEFA’s FFP rules have altered over the years, with the latest adjustment arriving last summer in the wake of the Covid pandemic.

UEFA’s new rules allow clubs to incur losses of €60m over three years, compared to the previous allowance of €30m. A spending cap on wages, transfers and agents’ fees to 70% of a club’s total revenue by 2025/2026 has also been introduced. Clubs are also required to settle overdue payables in specified timeframes.

There are also new sanctions in place should clubs fail to adhere to any of UEFA’s regulations.

Premier League’s FFP regulations

This is where the crux of Europe’s major spending has taken place as of late. The Premier League has developed into a cash haven, and Todd Boehly has seemingly made a mockery of FFP since he became Chelsea owner in 2022.

Nevertheless, the Premier League has its own laws regarding club finances, accounting and good governance. These regulations are available to view in the Premier League Handbook.

The league has several financial rules in place, including requirements for clubs to pay transfer fees, salaries and tax bills on time. They must also submit accounts annually, and disclose payments made to agents.

Which clubs have broken FFP rules since they were created?

Manchester City are the latest club to allegedly break FFP laws. The Citizens are said to have made over 100 breaches of the Premier League’s rules following a four-year investigation conducted by the governing body.

It’s not the first time City have behaved erroneously either. In 2014, the Manchester club and Paris Saint-Germain were charged with breaking UEFA’s FFP rules. These two clubs were among several to breach UEFA’s ‘break-even’ rule (essentially outspending their income) and were subsequently handed €60m fines (€40m suspended).

PSG had their UEFA squad reduced to 21 players, were handed transfer spending restrictions as well as two-year squad salary restrictions. City, meanwhile, also had their squad size reduced and suffered similar transfer limitations.

In 2022, eight clubs, including PSG, Inter, AC Milan, Juventus, and Roma, were fined for failing to comply with UEFA’s ‘break-even’ requirement.

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