Soccer’s richest club Seedstep UEFA pay cap to control new costs

The biggest financial control reforms in European football in a generation will stop creating US-style pay caps to control team spending and will instead enact rules that will not prevent the richest clubs on the continent from buying and winning the best talent. The most tempting trophy.

UEFA, the governing body of European football, has spent more than a year discussing with a delegation of elite clubs a new model for replacing the rules of its so-called financial fair play, a spending-control system that has sought to limit for a decade. Team expenses as part of competition promotion efforts.

UEFA has finally unveiled a replacement. The teams’ football-related spending, according to those briefed on the rules, will not be able to exceed 70 per cent of their income, a rule that seems to be watered down by the harsh pay cap that has long been championed by UEFA President Alexander Seferin.

Ceferin discussed the imposition of a salary cap for at least five years as a way to bridge the gap in European football’s growing wealth. But in the face of the complexities and deep-pocketed opposition to European employment law, UEFA has abandoned the idea of ​​a hard-cap and, according to three people familiar with the proposals, has agreed to a proposal – after a three-year implementation period. Teams need to keep their spending in a strict proportion.

The rules will be added to the UEFA rules book after the April 7 vote of its executive board. Their names will also be changed, UEFA will seek to withdraw from the FFP, or Financial Fair Play, a term coined under Ceferin’s predecessor, and will instead adopt a more straightforward title: the Financial Stability Regulation.

With more than a decade of use, the current financial fair play system has proven to be more adept at creating critics than fair ones. Smaller parties complained that they were punished for violating the rules while larger, richer parties were often able to avoid the most severe punishment. The largest and richest clubs, meanwhile, have objected to financial control as an unfair barrier to their ambitions.

There has been talk of changing the rules during the coronavirus epidemic, when closed stadiums and television broadcasters’ exemptions caused financial inconvenience for large and small teams. UEFA reported in February that an estimated 7 billion euros (approximately $ 7.7 billion) had been collected from clubs’ balance sheets during the epidemic.

Despite their high commitment to sustainability, the rule changes could actually cover the growing dominance of wealthy English teams, who not only benefit from the highest domestic television revenue in world football but also gain access to the wealth of some wealthy owners in sports. In last season’s Champions League, the two English teams met in the final for the second time in three years.

The move to bring football-related costs, such as wages and transfer fees, into a tight ratio will be a challenge for many big teams outside England, many of whom have struggled to maintain financial discipline as they try to keep up with rivals in the game. Premier League.

In Italy, for example, the cost of wages alone often exceeds the ratio recommended by UEFA. In Spain, where there are some strict financial rules in football, the powerhouse team Barcelona could not retain star player Lionel Messi last year because doing so would have violated a cap imposed on the team by the league.

Negotiations over the ratio were complicated by conflicting interests that should be imposed on the UEFA club. Some parties, especially those used by wealthy owners to pump up their own cash to buy success for their team, wanted the limit to be as high as 85 percent. Others, including several German clubs whose balance sheets are usually controlled by a system where members maintain a majority stake in ownership, argued for even lower limits.

To allow teams to adapt to the new rules, new rules will be imposed over time: clubs will be able to spend up to 90 percent of their revenue before the number is permanently reduced to 70 percent within three seasons. Under the proposed rules, parties may be allowed the flexibility to spend up to about $ 10 million on the ratio in certain circumstances, if they have a healthy balance sheet and have not previously violated the rules.

Critics of UEFA have long complained that despite having cost-control rules, they often fail to punish the biggest teams. In recent years, Manchester City and Paris Saint-Germain – teams bankrolled by the rich Gulf states – have been able to avoid harsh penalties for technical reasons.

There is also little clarity around the current penal system and concerns about UEFA’s appetite for taking on the toughest cases. Several long-term members of the Financial Rules Oversight Panel have been replaced or resigned in recent years. Former US soccer president Sunil Gulati was named chairman of UEFA’s reformed financial control panel last year.

Under the new arrangement, UEFA violators will have the right to impose both sporting and financial penalties, including fines, threats of expulsion, and, for the first time, an option to degrade the team in one of the three competitions currently held. For example, a team in the Champions League could enter the second tier Europa League for violating financial rules.

Another measure could include cutting points under the revised format of the Champions League and Europa League: starting 2024, all participants in the first round of the competition will be placed on a single league table. And while some parties claim to have benefited from inflated contracts with companies affiliated with their ownership group, the regulations would require further scrutiny of sponsorship agreements.

UEFA is in talks with several clubs already on the performance plan due to their poor financial record. These teams, like the 40, have entered into so-called settlement agreements with the governing body to continue their participation in the tournament.

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