27 February 2023
Here’s everything you need to know about UEFA’s new financial sustainability rules, including their objectives, key pillars, and implementation timeline. The regulations represent a major reform of UEFA’s finance regulations since they were first introduced in 2010, previously knowns as UEFA’s Financial Fair Play (FFP).
As the name suggests, the key objective of the new regulations is to achieve financial sustainability, through three key pillars:
- Solvency
- Stability; and
- Cost control.
The new rules include the following:
- No overdue payment rule; and
- Football earnings rule; and
- Squad cost rule.
The regulations came into force in June 2022, with gradual implementation over three years to allow clubs time to adapt.
UEFA’s club licensing and financial regulations project, which has been ongoing since 2010, has successfully improved the financial stability of European clubs at all levels. However, the COVID-19 pandemic has negatively impacted club finances, necessitating new regulations to promote financial sustainability in the evolving global football industry.
The new regulations aim to ensure that clubs maintain stability and solvency with a focus on strengthening balance sheets and promoting better cost control. The regulations were developed through consultation with various stakeholders, including national associations, the European Club Association, FIFPro, supporters, the European Commission, the European Parliament, and the Council of Europe.
The no overdue payables rule
The no overdue payables rule promotes solvency and protects the integrity of competitions by requiring clubs to settle payables to football clubs, employees, social/tax authorities, and UEFA by specific deadlines. Clubs with overdue payments may face sanctions.
The football earnings rule
The football earnings rule encourages clubs to build equity and invest in infrastructure and youth development by requiring them to cover the costs of relevant investments with existing equity or contributions. The acceptable deviation has been increased from €30 million (under the, now, old FFP) to €60 million over three years, with the potential for further increases for financially healthy clubs.
The squad cost rule
The squad cost rule restricts spending on player and coach wages, transfers, and agent fees to 70% of club revenues, with gradual implementation of up to 90% in 2023/2024, 80% in 2024/2025, and 70% in 2025/2026. Breaches to the regulations may result in sanctions, with strengthened overdue payable sanctions and progressive squad cost rule sanctions based on severity and the number of breaches.