More flexible, but more targeted: UEFA reformed financial fair play on Thursday. This prohibits European clubs from burning all their income in wages and transfer fees while ensuring their growing deficits.
Not surprisingly, the body’s executive committee changed the budget rules introduced in 2010 to clean up a lucrative European football, but this often put sports passions before financial rigors.
“The main innovation will be the introduction of control of team-related costs,” which was implemented gradually and aimed at limiting the flight of salaries, the head of the body, Aleksander Ceferin, told the media.
UEFA is moving away from the strict accounting logic of the first era of financial fair play, by doubling the allowable deficit in three years for each club (to 60m euros) or even to 90m euros for a club in the same period. “good financial health”.
But at the same time, the organization introduced a very weakened form of “salary cap”, an invaluable rule for North American sports franchises, but impossible to transfer in the same way as 55 federations with separate legislation.
Concretely, clubs will have to limit the salaries, transfer fees and manager commissions of their players and coaches to 70% of their revenues from the 2025/2026 season.
Sports fines and sanctions
If the deadline is far, it’s because the average maturity of ongoing contracts is about three years and requires gradual implementation: 90% of revenues in 2023/2024, then 80% of revenues for the 2024/2025 season. “Before the pandemic, the average rate was below 70%”, said Andrea Traverso, UEFA’s director of financial sustainability, so the majority of clubs managed to stay on the nail.
He added that the health crisis has cut nearly 7 billion euros from European football revenue in two seasons without adjusting salary costs, bringing that percentage closer to 90%, even if it has to drop mechanically with the return of packed stadiums.
Defective clubs will have to pay penalties previously determined by the degree of excess, which will then be distributed among the virtuous clubs.
In addition, and for serious or repeated infractions, UEFA provides sports sanctions: “ban on use of a certain player acquired from the market, limit the number of players or take back points” during “mini-champions”. Group stages of the 2024 European Cups, detailed Andrea Traverso.
Is the reduction from one competition to another, such as the Champions League to the Europa League, “still under discussion”, he continued.
“New construction site”: sports balance
While a handful of clubs currently monopolize the biggest trophies, Andrea Traverso said that improving the competitive balance “wouldn’t come from financial measures alone”.
The new rules will surely play into the battle between historic clubs and new giants with unlimited resources, especially as the gradual lowering of the salary cap would allow the latter to burn for two more seasons.
Even with the 70% rule applied, previous disagreements with PSG and Manchester City demonstrated the ability of these clubs to inflate their revenues through sponsorship by companies close to the States holding them, and easily circumvented any control. .
On the other hand, legendary clubs that were in the red financially like FC Barcelona or Juventus Turin could see their ambitions curtailed by the need to gradually reduce their debt.
But now that UEFA has spawned new budget rules after months of consultation, Andrea Traverso has announced a “very, very complex” project, promising “we will turn a new page and move on to other measures”.