The new financial fair play rules will be adopted by UEFA’s executive committee on Thursday. They will impose a new framework for the participation of salaries in the budget, while doubling the authorized deficit.
Financial Fair Play (FPF) receives an update from UEFA this Thursday. The European confederation will adopt a new system after two dark years (2020, 2021) due to the Covid-19 crisis. The new budget rules were also designed in the midst of the crisis to contain the increase in salary costs, twelve years after the system was launched. Limiting the deficit of the clubs has helped clean up the accounts, but it has also revealed its limits: its rigor worsens the luck of weakened teams, while the pandemic has cost European football some seven billion euros in two seasons, being easily disrupted by state-owned clubs with almost unlimited funds, Manchester City and PSG in the lead.
In order not to precipitate a wave of bankruptcies, UEFA relaxed the assessment of deficits from the spring of 2020 and then announced a major review of the financial rules imposed on clubs. The main change is philosophical: it is no longer a matter of demanding the balance of the books but of limiting spending on salaries, transfers and agent commissions, which have long been identified as football’s main economic problem.
An advantage for PSG in Mbappé’s file
Specifically, UEFA will double the authorized deficit in three years (up to 60 million euros) but will force clubs to limit their wage bill to 90% of their income in 2023-2024, then to 80% and finally to 70% beginning in the 2025-2026 season, until current contracts expire. According to L’Equipe, this gradual decline could serve PSG, especially in their desire to extend Kylian Mbappé for two more seasons. The French star’s possible new salary could be more easily factored into the percentage of earnings in 2023-24.
This mechanism is a watered-down form of “salary cap” that is very difficult for UEFA to import: the 55 associations it oversees obey various social and accounting rules, and there is no centralized bargaining. If they do not do so, offenders will suffer pre-established fines according to the magnitude of the cost overrun.
Two more years of “llama”
This “luxury tax”, promoted last year by UEFA president Aleksander Ceferin, will be redistributed among the most virtuous clubs, even if the expected boost seems modest for each of these beneficiaries. In addition, the UEFA project provides for hiring bans, loan limitations, relegation from one European competition to another and penalty points during the “mini-championships” that will replace the group stage from 2024.
However, the articulation of these measures with financial sanctions remains to be clarified, a key issue since sporting sanctions continue to be the main threat to the new rich in European football. UEFA and the ECA have also insisted: financial fair play should hardly influence the concentration of trophies.
However, the new rules could weigh on the battle between the historical leaders and the ogres with unlimited resources, especially as the gradual lowering of the salary cap will allow the latter, including PSG, to burn for another two seasons. On the contrary, mythical but financially red clubs, such as FC Barcelona or Juventus Turin, could see their ambition curbed by the obligation to progressively reduce their debt.