European football’s governing body UEFA has revealed that 76 clubs in European club competitions this season are being investigated for possible breaches of its Financial Fair Play (FFP) rules. This represents roughly a third of the 237 eligible clubs involved.
The 76 clubs have all supposedly failed UEFA’s break-even calculations for 2012 and have been asked to provide financial information for 2013, with the likes of Manchester City and Paris Saint-Germain are believed to be among those involved.
The clubs will all now have their finances assessed by the Club Financial Control Body to see if the breaches have continued and whether sanctions should apply. UEFA general secretary Gianni Infantino said:
“This figure of 76 clubs is a high figure but it has to be looked at in the perspective of what the end figure will be.”
According to the FFP regulations, which were introduced to encourage European clubs to be more financially responsible, clubs in European competition are required to limit their financial losses to €45m in total over 2011-12 and 2012-13 and this limit will be enforced for the first time before the beginning of next season.
Clubs in breach of the rules face sanctions ranging from a warning or a fine up to being forced to play in Europe with a salary cap on the squad, or even being barred from competing and having trophies stripped.
In compliance with the break-even rule, after the first monitoring period of Financial Fair Play. pic.twitter.com/e2pHCXlWat
— Daniel Lissoni (@Daniel741L) March 1, 2014
The sanctions will apply from the start of next season but in April UEFA will name the clubs that are facing possible action. Some clubs will be offered settlements if they agree to certain conditions, but clubs who have been found to have severely breached the conditions will be referred to the adjudicatory arm of the financial control body which will announce sanctions in the middle of June.
The only appeals will be straight to the Court of Arbitration for Sport and UEFA expects final decisions will be made before the Champions League and Europa League group draws in August.
UEFA has pledged to defend the legal challenges it expects some major football clubs to make if sanctions are imposed on them for breaches of the financial fair play rules. UEFA’s legal affairs director Alasdair Bell, anticipating a number of legal challenges, said:
“This will be no surprise to us. We are not afraid of them being contested. We fully anticipate there will be challenges – it would be strange if there weren’t. July and August could be a busy time.”
Among English clubs, Manchester City would have the most to fear having returned losses of £97.9million in 2012 and £51.6million last year. Chelsea made a £49.4million loss last year but actually made a £1.4million profit in 2012 so may escape any action.
Chelsea tell us they are not one of 76 clubs under investigation for possible breaches of UEFA Financial Fair Play rules. #cfc
— Bryan Swanson (@skysports_bryan) February 28, 2014
A club’s annual figures do not directly reflect UEFA’s break-even calculations but are an indication of those that are at risk – for example spending on facilities, youth development and contracts signed before 2010 are not included.
UEFA’s rules state clubs can be up to 45million euros (£37million) in the red over 2012 and 2013 so long as the owners put in equity to cover the losses. If clubs are over the 45million euro-mark over the two years then they will face sanctions.
Infantino said the rules were necessary to “protect European football from greed, reckless spending and financial insanity”.
Bayern Munich chairman Karl-Heinz Rummenigge recently voiced his concerns with PSG’s spending and called on UEFA president Michel Platini to punish the Ligue 1 champions if they indeed fail to comply with the regulations. Rummenigge said at the SpoBiS convention:
“It’s hard to imagine that Paris Saint-Germain are complying with Financial Fair Play. We all know about the money stream coming in from Qatar, allegedly about €200 million per season.
“I hope that Michel Platini will take this matter seriously. Clubs that breach the FFP rules will have to pay the price. It’s an important moment for UEFA. Clubs have had three years’ time to meet the FFP criteria and UEFA should not accept any breaches of the rules.
“People might disagree with Platini and I, but it should not be possible that some rich guy from Saudi Arabia or Russia can decide the Champions League. Platini shares my opinion on this.
“Bundesliga clubs comply with FFP, but this is not the case in all of Europe. UEFA should enforce the rules. The big German clubs will struggle to keep their teams together if other clubs don’t comply with FFP.”
Qatari-owned PSG has announced a huge, back-dated sponsorship deal with the Qatar Tourist Authority. However, UEFA refused to discuss individual clubs, but said all sponsorship deals with related parties to club owners would be assessed to ensure they are of fair value.
The manner in which UEFA handles clubs in violation of these rules will set a major precedent moving forward. If UEFA lets them skate by with little more than a slap on the wrist in response, then it is unlikely clubs will take the fair play rules seriously moving forward. However, should UEFA truly crack down, clubs will be far more mindful of the rules in the future.
Considering the potential loopholes that such situations always seem to have, clubs such as Manchester City and PSG are likely to be ready to combat the allegations, and we might end up seeing some firework off the pitch in the summer.