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What is Financial Fair Play?

The financial fair play took place back in 2010 as UEFA wanted to have financial parity between the clubs. The FFP rules ensure club owners cannot spend more than the income the clubs generate.

A number of clubs with the likes of FC Barcelona, Manchester City and Paris Saint Germain have been under scrutiny for alleged breach of financial fair play regulations. The main aim of this FFP is to maintain the financial health of the European clubs so that every big and small club could sustain itself in this inflated market.

European club football is pretty lucrative when it comes to television rights and other money and clubs involved in European competition often tend to spend more money than their capability. FFP rules can stop them from doing that.

UEFA’s strict FFP rules have been tough to comply with and in 2014 the European club’s governing body found that a number of clubs breached FFP regulations which also including the likes of Manchester City and Paris Saint Germain.

UEFA managed to broker a settlement with a few clubs while City and PSG were dealt with severe fines and punishments. The two rich clubs were fined 60m each and also saw their European squad reduced and transfer and wage restrictions.

Financial Fair Play: What are the FFP rules

A three year assessment period was set and clubs will be monitored and judged on a regular basis. Clubs are allowed to spend a maximum of 5 million Euros more than their income and a total of 45 million Euros of losses could be permitted as long as the club owners are ready to cough up the losses.

Also, clubs are entitled to meet all their transfer commitment and wage payments at the right time. The FFP regulations came in effect from the 2011-12 season and until this season they had been in place as the club finances are subject to fall under heavy punishments if they do not adhere to the rules and regulations.

There should be a uniform balance between the club’s expenditure, which includes the wages and transfer related finances, and income with the likes of match day revenue and commercial revenue.

Clubs owned by wealthy owners can survive through their money but small football clubs do struggle to compete with the wealthiest ones. With the rising transfer fees and increasing wages, it has even become difficult for the richest clubs to run smoothly.

for an instance, FC Barcelona were forced to lose their prized asset Lionel Messi to Paris Saint Germain due to La Liga’s stringent financial fair play rules. La Liga has a special salary cap in place for the clubs and the Spanish giants have over 1.5 billion in debt.

Financial Fair Play: Introduction of the financial sustainability regulations

In a major new reform, UEFA announced to replace the existing FFP regulations with the new financial sustainability regulations. Club now can show losses in the tune of 60 million Euros, double from the previous allocation, in each assessment period. They will also be given room for 10 million more if their financial state is good.

UEFA will be checking the financial book of the clubs every quarter and they are permitted to spend up to 70 per cent of their revenue on wages. UEFA can take a number of steps if these conditions are not met.

A club can be warned if they are found to breach the FFP rules. Their transfer activities could be barred and there could even be points deductions. UEFA could restrict their total squad registration number and they also can face prohibition from registering players.

Money spent on the renovation of the club’s infrastructure and training facilities will not be counted in the FFP regulations. Clubs regularly competing in the UEFA competitions such as Champions League and Europa League will be feeling the heat from this summer as the new regulations have already been in place from this June.

European football has always been entertaining and engaging and UEFA is trying to protect the rights of every club. Domestic leagues have also their own FFP regulations as the likes of the Premier League and La Liga also pull their strings whenever needed.

Premier League does have a more relaxed rule in place while La Liga’s stringent system has taken a toll on several big clubs very recently.

FAQs

When was Financial Fair Play introduced?

Financial Fair Play was introduced in 2011-12 season

Is Financial Fair Play suspended?

Financial Fair Play has been replaced by financial sustainability regulations

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