New UEFA financial fair play regulations
A few months ago, UEFA approved a new system for financial sustainability and club licensing regulations, based on solvency, stability and cost control. In this way, it limits spending on salaries and transfers.
This new regulation comes into force on June 1, and its implementation will be progressive over the years to facilitate its adaptation. Aleksander Ceferin, UEFA President, explained that «I am very pleased with the support of all parties, the leagues, the clubs and the members of the Executive Committee, which is a good sign. These regulations will help us to protect the game and prepare it for any possible future impacts while encouraging rational investment and building a more sustainable future for the game».
Mbappe and the new financial fair play
All this new regulation is called into question with the recently announced renewal of Kylian Mbappe, as the Parisian team has made losses of more than €200 million. The new regulation that has come into force presents a great novelty to manage the costs of the squad, limiting it to 70% of the club’s revenue, and skipping the regulation can lead to financial and sporting sanctions.
Manchester City and PSG surprise year after year, with signings or renewals exceeding the previous season’s figures. These clubs have unlimited capacity to be able to take on signings with stratospheric figures. Several years ago, Manchester City was sanctioned by UEFA and banned from competing in Europe for two long years, as they failed to comply with the regulations, and in turn were investigated by the English league. However, they did not serve the sanction period, as the Court of Arbitration for Sport considerably reduced the sanction.
The Spanish and European regulations aim to protect players and clubs from falling into debt and ending up in insolvency proceedings. In Spain the financial ‘Fair Play’ that is carried out is different from the French one. In our country there is a general regulation that dictates which is the limit that cannot exceed the debt of a club to its profits and losses. In France, the body in charge of financial compliance is the Direction Nationale de Contrôle de Gestion.
The main objective of this body is for French clubs to demonstrate solvency and liquidity by keeping their accounts in line. In this way, a club like PSG, which may have losses of 800 million euros, but at the same time demonstrates that it will have profits of 2 billion euros, is not in breach of the regulations, as it guarantees its solvency.
Tebas' denunciation of PSG
Javier Tebas, president of LaLiga, stated «it is impossible for PSG to comply with the current financial fair play and more so with what the renewal of Mbappé will entail». The indignation of the president of LaLiga has been to which he has declared that in the coming weeks he will file a complaint to initiate legal action in France and in the European Union. «We have been fighting against clubs State for years. We already denounced Manchester City and Paris Saint-Germain 3-4 seasons ago and they were sanctioned by UEFA, but the sanction was lifted due to strange CAS decisions. I hope that this time the CAS, I am very critical of them, will not have to rule,» said Tebas.
The new regulations allow a club to spend up to 90% of its income, so they could face without any trouble the mega operation of Mbappe considering that the Parisian club’s earnings in the previous season were 550 million euros.
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