Aug 7, Chelsea is the bookies' favorites to win the English Premier League, In , UEFA introduced financial fair play (FFP) rules which limit the. Jan 21, UEFA plot 'Financial Fair Play ' with Manchester City, Chelsea and PSG targeted Another new rule under consideration, one that Manchester United This project will be voted on on May 24 at a meeting of the UEFA. Dec 13, It is worthy to note however that this figure represents Chelsea's net more than their generated revenues, and clubs will be obliged to meet all their Are there loopholes in the Financial Fair play Rules that European clubs.
Either way it will be possible for a club applying for a UEFA license in the first and second monitoring periods to fall significantly outside of the standard deviation provisions but still obtain a UEFA license.
UEFA Financial Fair Play Regulations - Wikipedia
A number of people have asked whether the FFPRs could be challenged as illegal under a number of avenues; one being competition law. As a competition lawyer, it seemed appropriate to briefly outline some of the risks and justifications from a competition law perspective. Set out below is an outline analysis of whether the FFPRs could be challenged on competition law grounds, by whom and whether UEFA could provide enough resolute justifications.
A challenge to the rules would be likely to occur in the form of a complaint to the European Commission, a national competition authority or a civil action in the domestic courts. Presumably, an aggrieved club could make complainant representations to the European Commission or national competition regulator once the UEFA appeals procedures had been exhausted; the European Commission could then initiate an investigation.
Note that Article 66 of the Disciplinary Regulations states that any appeal is final, which would suggest that no other civil court proceedings could be commenced.
Ian Ayre, the Liverpool Managing Director, commented recently that: These rules should be rules and should be hard and fast. What will kill the initiative, or certainly stifle it, is people easing themselves into it rather than the rules applying and everyone operating within them. The rules should be clearly defined, you cannot have a half-rule process. Suffice to say that if a club still decides, after incurring the wrath of UEFA, to use competition law to challenge the FFPRs it is worthwhile to note that Article 1 outlaws: All agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market and specifically b limit or control production, markets, technical development, or investment.
In other words, the autonomy of what a club owner can do is restricted. The club challenging the rules would have to argue that Article 1 or its domestic equivalent is engaged. The provisions of paragraph 1 may, however, be declared inapplicable [if the restriction] i contributes to improving the production or distribution of goods or to promoting technical or economic progress, while ii allowing consumers a fair share of the resulting benefit, and which does not, iii impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; or iv afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
A club could perhaps decide to seek declaratory relief in court proceedings as the basis for re-instatement into the UEFA competition. This author is yet to hear of any club claiming that the FFPRs are illegal.
On the contrary they incentivise investment in long-term projects like youth development or stadium construction over shorter term investment on transfer fees and wages. They are thus indirectly constrained by their own cost base. To counter this, UEFA would use such arguments that a benefactor could buy a club and invest heavily on infrastructure, youth development and other FFPRs exempt costs.
Chelsea confident of meeting Uefa fair play rules despite £70.9m losses
Whilst this does restrict the autonomy of what an owner can do, UEFA would point to the restrictions having the pro-competitive benefits of: In a previous article, in relation to third party player ownership, I stated that in relation to multiple club ownership: This was because, among other reasons, it still allowed an entity to purchase more than one European club.
The prohibition was that two commonly owned clubs could not compete in the same competition. It just meant both could not play in the same European competition. Indeed, any club that qualifies can chose whether it wants to apply for a license for participation in European competitions. Needless to say, the challenging club would argue that if you want to be a top club, Champions League revenue is vital and therefore re-occurring qualification into the Champions League is imperative to maintain revenues and compete at the top of the national league.
UEFA would however have to set out appropriate reasons for why the regulations would pass the other three tests that make up Article 3 gateway. In reality many of the arguments may overlap.
Higher-risk clubs that fail certain indicators will also be required to provide budgets detailing their strategic plans. In other words, they have to prove they have paid their bills5. Sinceclubs have also been assessed against break-even requirements, which require clubs to balance their spending with their revenues and restricts clubs from accumulating debt.
In assessing this, the independent Club Financial Control Body CFCB analyses each season three years' worth of club financial figures, for all clubs in UEFA competitions, The first sanctions and conditions for clubs not fulfilling the break-even requirement were set following this first assessment in May From JuneUEFA updated its regulations as it does from time to time for all regulations to address some specific circumstances with the aim to encourage more sustainable investment while maintaining control on overspending.
Situations addressed include clubs requiring business restructuring, clubs facing sudden economic shocks and clubs operating with severe market structural deficiencies in their operating region. For the first time the work of the CFCB is potentially expanded to include clubs not yet qualified for UEFA competitions but who anticipate and want to participate at some stage in the future7.
A record-breaking transfer window was delivered in the summer. The humongous amount of money spent by these clubs has raised eyebrows regarding the effectiveness of these Rules.
UEFA Financial Fair Play Regulations
Has UEFA been consistent in the application of its sanctions on clubs who flout the regulations? To what extent have clubs been deterred by the regulations? The sheer ease with which PSG was able to pull off the Neymar transfer and structure Kylian Mbappe's deal as a loan deal with the option of completing a permanent transfer next season has led many to question the potency of the FFP in keeping big-spending football clubs on a leash.
Are there loopholes in the Financial Fair play Rules that European clubs can take advantage of to circumvent same?
Chelsea confident of meeting Uefa fair play rules despite £m losses | Football | The Guardian
The Neymar and Mbappe deals seem to suggest so. Indeed, the in-built mechanisms in the Rules heighten the complexity of the enforcement procedures in the Rules. The system of punishment for clubs is this: A A warning B A second warning C A fine D A deduction of points E Withholding of funds generated by European competitions F Ban on new players playing in European competitions G A restriction on the number of players that clubs can register to participate in UEFA competitions, including a restriction on the number of registered players, H Disqualification or future disqualification I Withdrawal of titles or prizes.
It is submitted that the system of punishment appears to over-indulge the footballing elite who may be inclined to flout the Rules on the basis that it would be able to balance its books before any concrete sanctions are handed down by the football governing body. The writer knows of no instance where the football governing body has de-registered clubs from competitions or disqualified them from participating for breaching the Rules nor has any of the defaulting teams been ducked points or stripped of honours.
The sanctions cascade ensures that even the perennial defaulters never receive serious punishment for breaching the Rules. Many have therefore seen the punishments as a slap on the wrist for defaulters. While it makes sense to issue the first and second warnings to a defaulting club before a fine is imposed on the club and ultimately impose a ban or player registration cap, one would have expected that the Rules would be more direct regarding the applicability of certain punishments to infractions of the Rules.
One readily available instance where UEFA equivocated on the application of the penalty for breach of the Rules is in the case of FC Barcelona who were slammed with a 14 month transfer ban by UEFA for breaching the FFP following their unsuccessful appeal to the Court of Arbitration for sports in Barcelona curiously signed Luis Suarez during the pendency of the ban even though he was not registered and eligible to play till the end of the ban.
A transfer ban should be exactly what it purports to be, a ban; no more, no less. Equivocating on whether a transfer ban should be interpreted as an embargo on registration of players is not good for the sport. Negotiations with Treasury It has been stated that UEFA does not want clubs to view the Rules as a punishment, but rather as an element that helps clubs in distress or in need of economic rehabilitation.
UEFA, just as the tax agencies do in each country, will look to negotiate with clubs as part of 'stabilisation agreements'. These are based around both time and economic targets that need to be met, although UEFA prefers rehabilitation in short periods Negotiating with the defaulting party certainly strips the Rules of the much needed "bite" required to compel compliance. Indeed, what are Rules without definitive sanctions that forbid disobedience to them?