UEFA relax Financial Fair Play rules in bid to attract new investors

Sport360 staff 17:09 30/06/2015
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  • PSG have previously been sanctioned for FFP breaches.

    UEFA has eased financial fair play rules on clubs in a bid to tempt investors after a tough three-year campaign to cut sky-high debt in the European game.

    With Gulf state-owned Manchester City and Paris Saint Germain still feeling the pain of sanctions ordered last year, UEFA’s executive committee eased the rules at a meeting in Prague on Monday.

    They will force clubs to give extra information on ownership, but will also start new voluntary financial revival plans to allow clubs to avoid sanctions and to spend on players if they have a “plausible and conservative” business plan.

    The new UEFA rules are clearly intended to attract investors and Europe’s top clubs welcomed the move.

    “The financial fair play rules are a very important tool for clubs to control their economic situation,” said European Clubs Association president Karl-Heinz Rummenigge of Bayern Munich. “Therefore, ECA calls on clubs to keep on supporting the financial fair play system and to work within the framework of the new financial fair play rules.”

    Since the introduction of Financial Fair Play in 2011 clubs have basically been ordered to live within their means. UEFA says that European clubs’ overall debt has been cut from 1.7 billion euros ($1.89 billion) in 2011 to 487 million euros in 2014.

    UEFA president Michel Platini insisted that the new fair play is “an expansion and a strengthening” of the rules.

    “The overall objectives of financial fair play remain the same. We are just evolving from a period of austerity to one where we can offer more opportunities for sustainable growth and development,” he said.

    But UEFA general secretary Gianni Infantino acknowledged legal challenges made against the rules and doubts raised by some clubs about the restrictions.

    “This is what we were hearing: ‘Why should we invest if it’s forbidden. If I invest I am in breach (of fair play and) there are consequences,'” Infantino said after the executive committee approved the new rules.

    “We are sure that these new rules will encourage investors to invest in European football because European football is the best product in the world when it comes to club football.”

    Manchester City, owned by an Abu Dhabi state entity, and Paris St Germain, controlled by a Qatar government entity, both recorded losses of more than 100 million euros ($110 million) in some seasons, leading to questions about how debts are covered.

    UEFA in particular said that a backdated 200 million euro sponsorship deal with the Qatar Tourism Office was not market value and a secret subsidy.

    In future, any sponsor that gives more than 30 percent of a club’s revenue’s will be considered a “related party” to the club.

    In the past two years, UEFA has had fair play plans with 23 clubs including City, Paris St Germain, Inter Milan, AS Roma and Sporting Lisbon.

    Dynamo Moscow have been banned from European competition next year while others have faced huge fines. Four clubs have already left their fair play plans though and UEFA said it did not anticipate any new major cases.

    The fair play rules have faced a legal challenge from Manchester City and Paris fans who got a Brussels court to block the implementation of a new phase of the existing rules.

    UEFA’s legal counsel Alasdair Bell said however the governing body was confident the ruling would be overturned. The fans and a players’ agent want to stop UEFA reducing the permitted deficit from 45 million euros to 30 million euros.

    Infantino insisted that fair play has been a success and “is really in the head of everyone: of every club manager, every coach, the players, the agents, everyone.”

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