UEFA approved new licenses and “sustainability” regulations to replace existing Financial Fair Play (FFP) rules on Thursday, with greater losses than before while European clubs limit salary and transfer spending Made it possible to wear.
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As expected, European football governing bodies have decided to overhaul the FFP rules introduced in 2010 to reduce the debt of clubs that are skyrocketing across the continent.
The limits of FFP were revealed by the emergence of state-owned superpowers such as Manchester City and Paris Saint-Germain, but the coronavirus pandemic caused great losses, leaving poor clubs with little room for mobility. ..
“The biggest innovation is the introduction of squad cost rules to better manage the costs associated with player salaries and transfer costs,” UEFA President Alexander Cheferin followed at a meeting of the authorities’ executive committee. Said.
The UEFA has allowed clubs to declare a loss of € 60 million ($ 65.5 million) from the previous € 30 million in three years, allowing the amount to be € 90 million for “good financial” clubs. It can even reach.
However, the relaxation of this rule is combined with a new cap on salary spending.
With 55 member states in the UEFA and the need to deal with the European Union and domestic labor and competition laws, it was not possible to introduce a specific salary cap like in North American sports.
However, under the new UEFA rules, clubs will be forced to limit player and staff salary, transfer, and agency fees to 70% of total revenue by 2025/26.
When the current contract expires, the limit will drop, followed by 90% of club revenue on 2023/24, 80% and 70% of the next season.
“Before the pandemic, the average ratio was below 70%,” said Andrea Traverso, Director of Financial Sustainability at the UEFA.
The health crisis then pushed up this ratio, with losses of around € 7 billion in two seasons.
– Financial and sports penalties –
Violations of the new rules “will result in pre-defined fines and sporting measures,” Cefellin said.
The amount of the fine depends on how much the club has exceeded the threshold, and the money will be redistributed among the wise men in line with the idea of a “luxury tax” that Ceferin has advocated in the past.
Serious or repetitive violations result in sports penalties. Traverso says it could range from banning the use of certain players and limiting team size to points deductions for the league’s new group stage champions, which will be introduced in 2024.
He added that there is ongoing debate about the possibility that the team will be demoted from one European tournament to another, such as the Champions League to the Europa League.
The fate of FFP in its current form was sealed when Manchester City appealed to the Court of Arbitration for Sport (CAS) in 2020 to overturn the two-year ban from competition in Europe.
The city owned by Abu Dhabi has been accused of deliberately inflating the value of revenue from Etihad Airways and Etihad Airways, which are sponsors of Etihad Airways, in order to comply with FFP regulations.
State clubs such as Citi and Qatar-backed PSG could spend far more than their rivals, despite the new 70% rule.
Meanwhile, traditional giants like Barcelona and Juventus, two of the main backers of the failed European Super League project, can see their ambitions further limited by the need to reduce debt. I did.
The new regulations come into force when elite-level football is dominated by a group of clubs that are smaller and more restricted than ever, but Traverso is more than just a financial measure to improve its competitive balance. He said he needed something.
Now that the UEFA has announced new budget rules after months of talks, he said the organization “opens a new chapter and moves on to other steps.”
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