How The New Financial Fair Play Affects YOUR Club! | Explained

on the 7th of april 2022 european

football's governing body uefa approved

a new set of regulations to replace

financial fair play as of june this year

ffp will be no more with the new rules

entitled financial sustainability and

club licensing regulations or fsr for

short coming into action it marks the

biggest change in the way uefa attempts

to combat excessive spending by club

owners since ffp's introduction in 2010.

the announcement came at uefa's recent

executive committee meeting in

switzerland drafted in cooperation with

the european club association uefa's

president alexander sefrin proudly

announced that the updated measures

would help european football address the

new challenges of today allow for

rational spending and build towards a

more sustainable future so why is uefa

decided to act now what was wrong with

ffp and most importantly what will the

new regulations mean for your club let's

find out in our latest euro football

daily explained financial fair play was

considered a long overdue measure

towards bringing clubs and their

spending back under control in 2002

leeds united were forced into a far sale

after running up debts of 78 million

pounds the same year fiorentina were

nearly disbanded with equally crippling

losses palm and napoli and torino were

sent tumbling down the football pyramid

due to financial issues while in spain

heavy losses saw deportivo la caruna go

from la liga champions to the second

division in just over a decade at the

other end of the spectrum football

ushered in a new era of super rich

owners with bottomless pits of cash by

2004 it was revealed chelsea had accrued

debts of 295 million pounds under the

russian oligarch roman abramovich up 67

on the previous year one man city went

from a profit of 17 million pounds in

2006 to a loss of 190 million in five

years thanks to the heavy spending of

sheikh mansour state-owned clubs had

entered the game all determined to

shatter the status quo of europe's elite

at any cost by 2009 net losses across

europe hit 1.6 billion euros and 78

clubs were recorded as spending more

than 100 of their income on player wages

uefa had been paying close attention

conducting a survey that revealed at

least 20 percent of the 655 professional

clubs on the continent face financial

peril ffp they declared would help

improve the overall financial health of

european football its principal mandate

was the break-even requirement this

permitted teams competing in uefa

competition to spend no more than 5

million euros over what they earned

across a three-year period although they

could exceed this limit by up to 30

million euros if it was entirely covered

by a contribution from the club's owners

to stop wealthy individuals from pumping

their own money into player purchases

budgets only took into account relevant

expenses and income from normal football

business activities spending on youth

development and infrastructure was

exempt from scrutiny however sponsorship

agreements would be analyzed by uefa

carrying out a fair market assessment on

any prospective deal failure to adhere

to the rules came with nine specific

punishments ranging from fines to

transfer caps and expulsion from uefa

competitions so was ffp a success the

statistics would suggest yes in 2019 the

net loss from uefa club stood at 125

million euros a 92 decrease on 2009

levels and for the first time ever 2017

and 2018 delivered two consecutive years

of overall profitability alexander

severan has labelled ffp a brilliant

success to help pull european football

back from the brink and revolutionized

how european football clubs are run

chelsea held up as an example of a club

who adapted to its requirements they

moved away from abramovich's millions

and transitioned towards a model of

bringing young players to be developed

and sold for a profit this approach

proved so lucrative that between 2011

and 2020 the blues earned 623 million

pounds in player sales it is generally

appreciated that thanks to ffp new money

clubs like newcastle united can no

longer spend recklessly from the start

of new ownership however ffp would

encounter many critics rather than

encourage competitiveness it has been

accused of maintaining a hegemony of the

rich and stifling the ambitions of any

side looking to make inroads towards

silverware they have also found it

exceedingly difficult to police while

teams like milan malaga and trabzon

spore have all been handed european

bands for breaching the guidelines the

same rules have not been applied to the

big players on the continent back in

2013 uefa warned man city and psg that

they would be unable to cheat ffp yet

both have been accused of flagrant

violations of the regulations over the

years which have escaped major

punishment for example take psg's

arrangement with the qatari tourism

authority signed in 2012 to the tune of

200 million euros per year in 2017 uefa

commissioned an independent

investigation to the fairness of the

agreement which valued the deal at just

5 million euros a season however psg

commissioned their own report with a

separate company that sided with their

interpretation of the deal uefa backed

down and two years later the french

outfit had signed clean and bapped in

neymar for a combined 350 million euros

even when man city were hit with a

two-year ban from the champions league

in 2020 uefa's verdict was overturned in

the court of arbitration for sports such

high-profile defeats and issues left ffp

as a tainted force however the global

pandemic really finished it off after

years of careful planning kovid

shattered the accounts of clubs across

the continent with top estimates

predicting 7 billion pounds of revenue

was lost to europe's top flight clubs

alexander sefrin admitted the ffp was no

longer viable stating the covert

pandemic and the evolution of the

football industry have shown the need

for wholesale reform and so the

financial sustainability regulations or

fsr were born so how are they different

to before while uefa has claimed the new

rules centered around three pillars of

cost control stability and solvency will

be much easier to follow cost control

states a club's total expenditure on

transfers wages and agents fees cannot

exceed 70 percent of its revenue the

plan will be phased starting at 90 in

2023 and progressing to 70 by 2025 to

give sides an opportunity to adapt the

stability rule or football earnings rule

provides one of the biggest changes

under the new system acceptable losses

will double from 30 million euros across

the three-year period to 60 million

euros with an additional 10 million

euros allowed for those who can show

their own good financial health

according to ua for they have also

significantly strengthened the

requirements to reduce debt and improve

balance sheets and finally solvency

concerns transfer payments like money

owed to employees or tax authorities

like before clubs cannot have overdue

debts however uefa is bulking up its

response to any rule breaks

strengthening its quarterly checks and

automatic penalties punishments for

breaching of the rules will now have

predefined financial penalties and

sporting measures so to avoid the

ambiguity of before reaction to the new

regulations has been mixed they've been

praised for giving clubs a greater

freedom over their spending power ac

milan ceo ethan gazidis described them

as a significant evolution of ffp adding

they would keep european football on

course towards the critically important

objective of sustainability however

there is doubt that they will really

help level the playing field of european

competition zefran had been pushing for

a salary cap to hinder the wild spending

of the continent's elite however the

complexities of european employment law

plus the negative reception from certain

members of the eca saw uefa settle on

the 70 spending limit for clubs with

high revenue streams this will be easier

to get around take the premier league

which in 2021 generated 5.7 billion

euros in revenue almost double that of

the bundesliga and 2.6 billion more than

la liga their sides benefit from some of

the most lucrative football earnings

available from broadcasting rights to

sponsorship deals man united's website

lists 23 separate partnerships ranging

from an official tar partner to a

blockchain these are revenue drivers

most smaller clubs don't attract while

there are no guarantees that uefa's

tightened fair value assessments will do

anything to prevent the inflated

sponsorship deals of the past all eyes

will be on how much newcastle's kit

deals will be worth in the future the

rest of europe's major divisions may

struggle to keep pace with the premier

league especially those who have a

history of overspending to remain

competitive matteo morani a popular

italian journalist for tuto sport

highlighted how the fsr would put clubs

in syria at the edge of their historical

and sustainable limits our clubs are

held back twice he detailed in his

weekly blog on the one hand we have

revenues equal to 15 or 20 years ago on

the other hand we have two high costs

for the personnel and agents where we

proportionately beat any country the gap

the uefa wants to tighten in italy today

presents two ends that are really too

far apart three years he argues is not

enough time for clubs to adapt to a 70

spending cap remain competitive and

avoid harsh punishment it also remains

to be seen how the league will react to

the regulations a spanish top tier

currently has its own rules which

dictate the spending power of each

laliga club per season with the rules

famously forcing lionel messi to leave

barcelona la liga's president javier

tebas has been a vocal critic of the

impact of state-owned clubs on the game

labeling psg and man city as enemies in

the past so he may not view the new

regulations as doing enough to tackle

their presence after all they were

drafted with the eca whose president is

none other than psg's ceo nasral khalifi

in short only time will tell how

successful the financial sustainability

regulations will be its critics think

they have pandered to the needs of

europe's elite what its advocates say it

has given clubs back more control uefa

only just about survived the attempted

mutiny of the super league serve the

financial sustainability regulations

prove more harm than good it may

struggle to bounce back once more so

guys that was our efd explained on how

uefa is changing financial fair play

written by henry hill and voiced by

myself doogie critchley and edited by

george wright so give them some love in

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