Financial Fair Play System

[ARodgers]

Factbox on the financial fair play system approved by UEFA's Executive Committee on Thursday.

BACKGROUND
* The financial fair play (FFP) plan is designed to stop reckless spending by clubs and to stop rich benefactors from injecting large amounts of cash, a practice which distorts the transfer market and pushes players' wages to astronomical levels and has a knock-on effect as other clubs try to keep up.
* Clubs will instead have to live within their means by ensuring that their expenditure is not more than the revenue they generate through their activities.
* A UEFA report said this year that around 50 percent of top European clubs were losing money and 20 percent were producing serious deficits.
* Inspired by UEFA president Michel Platini, the plan has been two years in the making.

THE NEW RULES
*When the new rules are fully enforced, clubs will only be allowed to enter European competition if their generated revenues -- money from sources such as television rights, gate receipts, competition prize money and sponsorship -- is equal to or greater than their expenditure
* Clubs are also barred from owing money to other clubs, players, tax authorities and social service departments.

PRACTICALITIES
* UEFA has set up a Club Financial Control Panel, headed by former Belgium Prime Minister Jean-Luc Dehaene, which is responsible for scrutinising clubs' accounts and enforcing the club licensing system.
* The FFP takes will be phased in but will officially be introduced on June 1 when UEFA beefs up its current licensing criteria for admission to European competition.
* On June 1, 2011, the rule which bans clubs from owing money to other clubs, players, tax and social security departments will come into force.
* The break-even requirement, banning clubs from spending more than their generated revenues, will take effect for the financial statements of the reporting period ending 2012.
* The first season where a club could be barred from European competition will be 2014-15.

EXCEPTIONS
*Clubs will be assessed over three seasons. They are allowed a 5 million euro leeway over for the aggregate period.
* Money invested in stadiums and youth development does not count in the expenditure for FFP purposes. The main targets are high wages and high transfer fees.
* Benefactors are allowed to contribute up to a maximum of 45 million euros for the 2013-14 and 2014-15 seasons together. This will be reduced to 30 million euros for the period covering 2015-16, 2016-17 and 2017-18.


About time!!!

[ozzie owl]

Good news stop sugar daddy clubs.

[Napoli]

so clubs like Man City and Chelsea look to be in trouble?

[Stitch This]

so clubs like Man City and Chelsea look to be in trouble?

One would guess that it is not retrospective and that it will have more holes than an EEC compliant Swiss cheese for clubs to wriggle through.

[Litmanen]

so clubs like Man City and Chelsea look to be in trouble?

This is why Abramovich has been cutting costs, the hope is that Chelsea are viable within two years i believe ( that's how it's been planned anyway).

All this means is that they'll be buying more until the rules come into play.

Good to see it doesn't interfere with youth development so young players can still be poached for a few mill, and then trained with all the extra money they didn't spend on buying a 30 year old!

watch everyone start signing young guns.

[berbatov]

this won't work at all - it'll only make the big clubs bigger.

i can see what they're trying to do but the only thing it'll stop is more man city/chelsea style take overs (aka real life football manager)

All this means is that they'll be buying more until the rules come into play.

Good to see it doesn't interfere with youth development so young players can still be poached for a few mill, and then trained with all the extra money they didn't spend on buying a 30 year old!

watch everyone start signing young guns.

exactly right

[Hawkesy]

what a load of fucking bullshit, uefa/fifa should stick to their corrupt ways and feeding from their own trough. What other business would stop people investing their money in a way that they see fit. If someone is rich, they should be able to waste their money in any way they see fit.

[Loppermann]

so clubs like Man City and Chelsea look to be in trouble?

One would guess that it is not retrospective and that it will have more holes than an EEC compliant Swiss cheese for clubs to wriggle through.

City to build a new stadium... it's name is Sergio Aguero?

[budmustang]

Benefactors are allowed to contribute up to a maximum of 45 million euros for the 2013-14 and 2014-15 seasons together. This will be reduced to 30 million euros for the period covering 2015-16, 2016-17 and 2017-18.

That's still a lot of money. Won't stop lower league clubs living off benefactors. Plus, isn't there a loophole in that benefactors can sponsor the club and give generously through that channel?

Don't get me wrong though... these rulings are overdue for the long term health of the sport. I just wonder how effective they'll be. And that's before we start talking about underhand payments and corruption.