UEFA Financial Fair Play Regulations

The UEFA Financial Fair Play Regulations (FFP) were agreed to in principle in September 2009 by the Financial Control Panel of football’s governing body in Europe (Union of European Football Associations – UEFA). They were established to prevent professional football clubs spending more than they earn in the pursuit of success and in doing so getting into financial problems which might threaten their long-term survival.

The regulations provide for sanctions to be taken against clubs who exceed spending, over several seasons, within a set budgetary framework. The 2011–12 football season is set for implementation of the regulations. The severest penalty is disqualification from the European competitions. Other penalties included fines, the withholding of prize money, and player transfer bans.

On announcing the new legislation, UEFA President Michel Platini said,

Fifty per cent of clubs are losing money and this is an increasing trend. We needed to stop this downward spiral. They have spent more than they have earned in the past and haven't paid their debts. We don't want to kill or hurt the clubs; on the contrary, we want to help them in the market. The teams who play in our tournaments have unanimously agreed to our principles…living within your means is the basis of accounting but it hasn't been the basis of football for years now. The owners are asking for rules because they can't implement them themselves - many of them have had it with shovelling money into clubs and the more money you put into clubs, the harder it is to sell at a profit.

Platini went on to say that the measures were supported by the majority of football club owners, and that an independent panel would be set up to judge whether clubs had broken the rules. Although the intentions of encouraging greater financial caution in football have been well-received, FFP has been criticised as illegal by limiting the internal market, failing to reduce football club debt and protecting the status quo. In 2015, UEFA announced FFP would be "eased" in response to a number of lawsuits which are currently ongoing in courts.

A 2009 UEFA review showed that more than half of 655 European clubs incurred a loss over the previous year, and although a small proportion were able to sustain heavy losses year-on-year as a result of the wealth of their owners, at least 20% of clubs surveyed were believed to be in actual financial peril. The reasons for this are well summarised in the 2010–12 House of Commons report on Football Governance:

Club owners are generally over optimistic about their management abilities and vision for a club. With ample academic evidence that there is a clear correlation between squad wages and points won - something which is obvious to owners - there is a natural tendency to borrow in the pursuit of success, although not all teams can be successful. There are many examples of clubs where the directors (true fans) have "chased the dream" - gambling short-term investment (or borrowing) in the hope of long-term success. The pressure on the directors of a club to invest, to sign a star player…is often immense from ordinary supporters.

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