Will UEFA bare its teeth over Financial Fair Play?

Mon 17th Oct 2011 | UEFA

Football Clubs hoping to compete in lucrative European competition should expect to navigate a labyrinth of caveats and exceptions to the governing body’s Financial Fair Play Regulations, an expert will explain today.

The rules, which come into force from 2013 have been designed to ensure clubs do not spend more than they earn, with the prospect of fines or the withdrawal of licences for those who fail to comply.

However, Dr Nicholas Braslavsky QC, barrister and head of Kings Chambers, will tell members at a meeting of the Kings Sport Network in Manchester today that a lack of clarity from UEFA on how strictly these sanctions will be imposed means clubs should peruse the rules carefully. 

“For the first time UEFA has tried to grasp the nettle where it believes expenditure is running massively out of control. The extent to which it will achieve that remains to be seen,” he said.

Since 2005 clubs have required a licence granted by UEFA to compete in the Europa and Champions Leagues. In 2009 UEFA ratified an additional component to the system which means that clubs will have to comply with a series of Financial Fair Play Regulations, designed to produce a more level playing field. The ultimate aim being to ensure that the very largest clubs which are able to draw on significant private equity investment are brought within the regulations and can no longer spend more than they earn.

By 2018, the FFP Regulations state that all clubs should break even. They will be monitored by the UEFA Club Financial Control Panel.

“The question everyone would like to know the answer to is whether UEFA would be prepared to withdraw the licence of a large club for failure to meet these guidelines,” asked Dr Braslavsky. “At present, UEFA is talking about financial penalties or transfer fee adjustments and seems to be avoiding talking about exclusion or withdrawal. Perhaps this is because UEFA might risk a club seeking redress against it on the grounds of a restraint of trade.”

A number of exceptions have been written into the FFP Regulations which could also provide clubs with breathing space, including an acceptable deviation from the breakeven point. “This is a buffer zone, set at €45m from 2013-14 reducing to €30m in the lead up to 2018 and then after that point the UEFA Executive Committee can fix another acceptable deviation,” explained Dr Braslavksy. 

“Is UEFA really likely to flex its muscles in terms of license revocation or refusal, bearing in mind that the minimum value of a Champions League Group Placement is €30m for a club or are these regulations designed to achieve a less draconian encouragement towards an even playing field? Though financial penalties are not to be scoffed at as a sanction, they fall well short of the drama and significance of licence refusal.”

In the latest issue of fcbusiness, it was found that UEFA’s Financial Control Panel have no direct investigatory power to beyond questioning the documentation they receive from the clubs themselves.

A spokeswoman for UEFA told fcbusiness, “The Financial Control Panel can request additional information from clubs, but UEFA has not set up a specialist financial investigation team.”

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