The richest football clubs are bypassing UEFA’s salary cap in new cost controls

The biggest financial control reforms in European football in one generation will be stopped without creating American-style wage limits to limit team spending, and will instead enact rules that are unlikely to stop the continent’s richest clubs from buying the best talent and winning the most coveted trophies.

UEFA, the governing body of European football, has spent more than a year in talks with a representative group of elite clubs on a new model to replace its so-called financial fair play rules, a cost control mechanism that has been trying to limit team spending for decades. competition.

UEFA has finally decided on a replacement. According to people familiar with the regulations, the spending of football-related teams will not be able to exceed 70 percent of their income, which is a regulation that seems to be diluted by the strict salary limit advocated by UEFA President Alexander Ceferin.

For at least five years, Ceferin has been discussing the imposition of salary restrictions as a way to address the growing wealth gap in European football. But faced with the complexity of European employment law and opposition to deep pockets, UEFA has abandoned the concept of hard borders and, according to three people familiar with the proposals, has opted for a proposal that will require teams to keep spending after a three-year implementation period. in strict proportion.

The rules will be added to UEFA’s rules after a vote by its executive board on April 7. It will also be renamed, and UEFA wants to move away from FFP or financial fair play, a term coined under Ceferin’s predecessor, and adopt a more prosaic title instead: regulations on financial sustainability.

In more than a decade of use, the current financial fair play system has proven to be more adept at creating criticism than honesty. Smaller teams complained that they were punished for breaking the rules, while larger, richer teams could often avoid the harshest penalties. The biggest and richest clubs, meanwhile, have opposed financial control as unjustly limiting their ambitions.

Talks about changing the regulations intensified during the corona virus pandemic, when closed stadiums and discounts on television broadcasters caused financial discomfort for large and small teams. UEFA reported in February that about 7 billion euros (about 7.7 billion dollars) were collectively erased from the balance of clubs during the pandemic.

Despite their lofty approval of sustainability, changes to the rules can actually strengthen the growing hegemony of wealthy English teams, who benefit not only from the highest domestic television revenues in world football, but also from access to the wealth of some of the richest sporting owners. In last season’s Champions League, the two English teams met in the final for the second time in three years.

The movement to bring football-related costs such as salaries and transfers to a solid balance will be a challenge for many big teams outside England, the vast majority struggling to maintain fiscal discipline as they try to keep up with rivals playing in the Premier League.

In Italy, for example, wage costs themselves often exceed the ratios proposed by UEFA. In Spain, which has some of the strictest financial rules in football, the powerful Barcelona team failed to keep star Lionel Messi last year because that would violate the limit imposed on the team by the league.

Discussions about the ratio that UEFA should impose on clubs have been complicated by conflicts of interest. Some teams, especially those backed by wealthy owners who used their money to buy success for their teams, wanted the limit to be as high as 85 percent. Others, including several German clubs, whose balance sheets are usually kept under control by a system in which members retain a majority stake, have advocated an even lower limit.

To allow teams to adapt to the new regulations, new rules will be imposed over time: clubs will be able to spend up to 90 percent of their revenue before that figure is brought to a steady level of 70 percent within three seasons. Under the proposed rules, teams may, under certain circumstances, be allowed the flexibility to spend up to about $ 10 million above the ratio, provided they have a healthy balance sheet and have not violated regulations before.

UEFA critics have long complained that, although they had rules on cost control, they often failed to penalize the biggest teams. In recent years, Manchester City and Paris St.-Germain – teams that fund rich Gulf states – have managed to avoid severe penalties for technical reasons.

There was also little clarity about the current penalty mechanism and concerns about UEFA’s desire to take over the most difficult cases. Several longtime panel members overseeing financial rules have either been fired or left in recent years. Sunil Gulati, the former president of American football, was appointed president of UEFA’s renovated financial control panel last year.

Under the new system, UEFA will have the right to impose both sports and financial penalties for violators of the rules, including fines, the threat of exclusion and, for the first time, the option to degrade teams between the three competitions in which it currently operates. A team in the Champions League, for example, could be relegated to the second division of the Europa League for violating financial rules.

The second measure may include deducting points according to the revised format of the Champions League and Europa League: from 2024, all participants will be placed on one league table during the first phase of the competition. And regulations will also require greater scrutiny of sponsorship deals amid claims that some teams have benefited from inflated contracts with companies affiliated with their ownership groups.

UEFA is discussing proposals with several clubs that are already planning to play due to poor financial situation. These teams, as many as 40 of them, have concluded so-called settlement agreements with the governing body in order to continue participating in their tournaments.

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