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UEFA & Football League Financial Fair Play Regulations.

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Presentation on theme: "UEFA & Football League Financial Fair Play Regulations."— Presentation transcript:

1 UEFA & Football League Financial Fair Play Regulations

2 Objectives of the Regulations to improve the economic and financial capability of the clubs; to place the necessary importance on the protection of creditors; to introduce more discipline and rationality in club football finances; to encourage clubs to operate on the basis of their own revenues; to encourage responsible spending for the long-term benefit of football; and to protect the long-term viability and sustainability of European club football.

3 UEFA Club Licensing System v Football League Compliance European Cup Competition (License application) v Domestic League Dynamic (accounts application) From 2013/14 season UEFA monitoring requirements will include Financial Fair Play adherence From 2012/13 season FL will ensure Financial Fair Play adherence

4 Aiming for a Deflationary Effect Clubs to spend no more than they earn (with exceptions) Infrastructure investment permitted The Debt v Loss Debate

5 UEFA Break Even (ish) Acceptable Deviation Levels Monitoring Period Number of Years Years Included in the CalculationAcceptable Deviation (m) T-2T-1TEquity investment Non-equity investment N/A >

6 Football League Break Even (ish) Reporting PeriodReporting Period Equity Contributions Reporting Period Acceptable Deviation Total Acceptable Deviation 2011/12£8m£4m£12m 2012/13£6m£4m£10m 2013/14£5m£3m£8m 2014/15£3m £6m 2015/16£3m£2m£5m 2016/17onwards £3m or loweronwards £2m or lower>£5m

7 Record-breaking 10 year, £400m shirt stadium and Etihad campus deal Manchester City and Etihad: Case Study Definition of Related Party Transaction –a club will fail the "related party" test if money comes in from a "close member" of the club owner's family who "has significant influence over the [club]". –City are confident that they can demonstrate that Etihad's chairman, Sheikh Hamed bin Zayed al-Nahyan, and vice-chairman Sheikh Kaled, both half-brothers, do not exert any influence over City.

8 Players under contract before 1 June 2010 If a licensee reports an aggregate break-even deficit that exceeds the acceptable deviation and it fulfils both conditions described below then this would be taken into account in a favourable way. i) It reports a positive trend in the annual break-even results (proving it has implemented a concrete strategy for future compliance); and ii) It proves that the aggregate break-even deficit is only due to the annual break-even deficit of the reporting period ending in 2012 which in turn is due to contracts with players undertaken prior to 1 June 2010 (for the avoidance of doubt, all renegotiations on contracts undertaken after such date would not be taken into account). This means that a licensee that reports an aggregate break-even deficit that exceeds the acceptable deviation but that satisfies both conditions described under i) and ii) above should in principle not be sanctioned. An Early Loophole- Annex XI Definition

9 PlayerDate Signed Length of Contract (in years) Expiry of Contract Eligible for Annex XI Qualification? AJune 20095June 2014Yes BJune 20094June 2013Yes CJune 20093June 2012Yes DMay 20105May 2015Yes EJuly 20105July 2015 No, as the contract was signed after the 1 June 2010 deadline

10 Financial Fair Play Rules Timeline Clubs can take advantage of Annex XI(2) wage exemption Acceptable deviation = 22.5m per season When applying for a UEFA license, clubs will have to adhere to the FFPRs too Clubs to supply 2 years worth of accounts FFPR in force (first monitoring period) (Second monitoring period) Clubs to supply at least 2 years worth of accounts Acceptable deviation = 15m per season Acceptable deviation = 10m per season (Third monitoring period) The earliest possible date clubs may be required to breakeven (One year to go) season Accounts from this season will be used for the license application (Two years to go) season Accounts from this season will be used for the license application 27 May 2010 FFPRs approved and published by UEFA

11 UEFA: Club Financial Control Body Football League: Financial Fair Play Panel UEFA's general secretary, Gianni Infantino, has recently stated There may be intermediate measures. We would have to ask why, maybe there would be a warning, but we would bar clubs in breach of the rules from playing in the Champions League or the Europa League. Otherwise, we lose all credibility. UEFA sanctions: expulsion, docking points, fines, refusal of application PLUS withholding prize money or limiting the number of players registered for European competition FL sanctions: transfer embargo or fine UEFA and Football League Sanctions

12 Football League Fine Calculation Illustration Percentage of the ExcessExcessCalculation (rounded up) 1% of the Excess between£1 and £100,000;£1,000 20% of the Excess between£100,001 and £500,000;A maximum of £80,000 40% of the Excess between£500,001 and £1,000,000;A maximum of £200,000 60% of the Excess between£1,000,001 and £5,000,000;A maximum of £2.4m 80% of the Excess between£5,000,001 and £10,000,000A maximum of £4m 100% of the Excess over£10,000,000.No Maximum

13 Rules/sanctions in force by (UEFA) and (FL) season Leeway for a transitional period A phased approach obviously beneficial for clubs Pure break-even not required for some time in both sets of rules Talk Takeaways

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