Presentation on theme: "UEFA & Football League Financial Fair Play Regulations"— Presentation transcript:
1UEFA & Football League Financial Fair Play Regulations
2Objectives 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; andto protect the long-term viability and sustainability of European club football.
3UEFA 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 adherenceFrom 2012/13 season FL will ensure Financial Fair Play adherence
4Aiming for a Deflationary Effect Clubs to spend no more than they earn (with exceptions)Infrastructure investment permittedThe Debt v Loss Debate
5UEFA Break Even (ish) Acceptable Deviation Levels Monitoring Period Number of YearsYears Included in the CalculationAcceptable Deviation (€m)T-2T-1TEquity investmentNon-equity investment23N/A4530> 305
6Football League Break Even (ish) Reporting PeriodReporting Period Equity ContributionsReporting Period Acceptable DeviationTotal Acceptable Deviation2011/12£8m£4m£12m2012/13£6m£10m2013/14£5m£3m2014/152015/16£2m2016/17onwards £3m or loweronwards £2m or lower>£5m
7Manchester City and Etihad: Case Study Record-breaking 10 year, £400m shirt stadium and Etihad campus dealDefinition of Related Party Transactiona 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.
8An Early Loophole- Annex XI Definition 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); andii) 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 acceptabledeviation but that satisfies both conditions described under i) and ii) above should in principle not besanctioned.”
9An Early Loophole- Annex XI Definition PlayerDate SignedLength of Contract (in years)Expiry of ContractEligible for Annex XI Qualification?AJune 20095June 2014YesB4June 2013C3June 2012DMay 2010May 2015EJuly 2010July 2015No, as the contract was signed after the 1 June 2010 deadline
10Financial Fair Play Rules Timeline FFPR in force(first monitoring period)(One year to go)season(Second monitoring period)(Two years to go)season(Third monitoring period)27 May 2010Clubs to supply at least 2 years worth of accountsAccounts from this season will be used for the license applicationThe earliest possible date clubs may be required to breakevenFFPRs approved and published by UEFAAcceptable deviation = €15m per seasonAccounts from this season will be used for the license applicationWhen applying for a UEFA license, clubs will have to adhere to the FFPRs tooAcceptable deviation = €10m per seasonClubs to supply 2 years worth of accountsAcceptable deviation = €22.5m per seasonClubs can take advantage of Annex XI(2) wage exemption
11UEFA and Football League Sanctions UEFA: Club Financial Control BodyFootball League: Financial Fair Play PanelUEFA'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 competitionFL sanctions: transfer embargo or fine
12Football League Fine Calculation Illustration Percentage of the ExcessExcessCalculation (rounded up)1% of the Excess between£1 and £100,000;£1,00020% of the Excess between£100,001 and £500,000;A maximum of £80,00040% of the Excess between£500,001 and £1,000,000;A maximum of £200,00060% of the Excess between£1,000,001 and £5,000,000;A maximum of £2.4m80% of the Excess between£5,000,001 and £10,000,000A maximum of £4m100% of the Excess over£10,000,000.No Maximum
13Talk TakeawaysRules/sanctions in force by (UEFA) and (FL) seasonLeeway for a transitional periodA phased approach obviously beneficial for clubsPure break-even not required for some time in both sets of rules