UEFA changing angle of attack with revised fair play rules
NYSE - LSE
UEFA changing angle of attack with revised fair play rules
With many clubs reeling from the financial fallout of the pandemic and competitive inequality growing despite existing fair play rules, UEFA will on Thursday unveil changes in its tactics for levelling European football's economic playing field.
After months of discussions, UEFA is expected to adopt an overhaul of the Financial Fair Play (FFP) system introduced in 2010 to stop clubs piling up debts in their pursuit of trophies.
The focus will change from requiring clubs to balance their books to curbing spending on salaries, transfer fees and agent commissions.
The change of approach could make clubs more attractive to potential investors by putting a fixed limit on costs, Raffaele Poli, head of the CIES soccer observatory in Neuchatel, told AFP.
"You can inject new money, but you mustn't burn it all in recruitment and salaries," he said.
"Even the big clubs are victims of this salary inflation, while feeding it."
In 12 years, FFP has persuaded many clubs to clean up their accounts, but its limitations have become clear.
Super-rich owners who are not interested in profits, led by state-held Manchester City and Paris Saint-Germain, have found ways to inflate the income of their clubs.
On the other hand, as the Covid pandemic cost European football about seven billion euros over two seasons, FFP left poorer clubs with little room to manoeuvre.
To avoid a wave of bankruptcies, UEFA relaxed its deficit rules in 2020, and then announced an overhaul of FFP.
The plan combines strategies used by North American sports.
The biggest of those, the National Football League, has only 32 clubs, all in the United States, and negotiates with a single player union.
UEFA, on the other hand, has 55 member countries with well over 1,000 clubs and must contend with EU and national labour and competition laws.
That makes the "hard" salary cap used by most North American leagues impractical.
- 'Luxury tax' -
Even so, while UEFA plans to double the permitted deficit over three years (to 60 million euros), it will oblige clubs to limit wage bills. The ceiling will drop as current contracts expire: 90 percent of club income in 2023-2024, dropping to 70 percent from 2025-2026.
UEFA also plans to borrow from the "luxury tax" used by Major League Baseball.
Clubs who overspend will be fined a percentage of the overrun. The money will be redistributed among the more virtuous clubs.
Since the wealthiest clubs may not be deterred by financial penalties, UEFA's plan includes signing bans, loan restrictions, demotions from one European competition to another and penalty points in the "mini-league" competitions that will replace the group stages in European competitions from 2024.
Poli says the plan gives even the rich clubs clarity.
"Investors gain predictability: they can put a figure on their budget if they choose to spend beyond the salary cap," he said, adding that they will be able to brandish the new rules "in the face of the excessive demands" of players and agents.
Yet the new rules will not stop clubs with unlimited backing if they wish to continue to flex their financial muscle.
The debt ceiling means members of the old elite, such as Barcelona and Juventus, who have overspent trying to keep up and who showed their desperation by their support of the Super League plan, could continue to struggle to compete.
A.C.Netterville--NG
