The governing body of European football is proposing four major changes to Financial Fair Play (FFP) rules, it has been reported.
Reports in Italy suggest that UEFA are to implement four key changes to the FFP rules that were introduced a decade ago in order to try and make football operate in a more sensible and sustainable way.
Liverpool owners Fenway Sports Group have long sought some kind of reform for both the Premier League and Champions League and will be watching developments keenly to see if the changes that are being proposed do indeed get the green light.
The proposed new system will allow clubs to have more control over their finances and in particular in the transfer market according to the Italian newspaper Gazzetta dello Sport.
Further information regarding the rules that will replace the ten-year-old FFP system will be discussed on Friday 25 March in a video conference between UEFA and the European Parliament.
Clubs to be consulted before implementation
The move away from the Michel Platini and Gianni Infantino FFP rules will only come into place with the agreement of clubs, with UEFA said to be “unlikely to want to impose itself on clubs without dialogue.”
The current FFP regulations were designed by UEFA’s Financial Control Panel with the European Club Association at first appealing the introduction of FFP and successfully delaying its introduction. The new rules will see the clubs consulted before they are implemented.
Spending what is necessary
Once a set system has been designed and accepted by all parties, including compiling with EU law a gradual adaptation period is expected to begin in 2022. With full implementation of the rules to come at a later date.
The redesigned system is to be a “transition from the idea of ‘spending as much as you collect’ to ‘spending what is necessary without waste,’” according to Italian journalist Fabio Licari in Gazzetta dello Sport.
The new regulations could also see an “introduction of a salary cap, to be disguised as a luxury tax to ensure compliance with European regulations.”
This would mean there would be a total limit that clubs could spend on wages throughout the playing squad, how the budget for each club is figured out has yet to be announced.
Introduction of economic sanctions
Currently, clubs that fall foul of FFP can, in theory, be expelled from competing in European competitions, a sanction that was handed down to Manchester City until they successfully appealed the ruling at the Court of Arbitration for Sport.
This punishment would no longer be so prevalent under the proposed regulations with sporting sanctions expected to be reduced in favour of greater economic sanctions for the clubs which break the parameters.
UEFA have already begun designing the new regulations and once they have discussed them with the EU Parliament they will take them to the clubs for consideration before a final decision on the implementation schedule is taken.
The rules around FFP were agreed back in 2009 as UEFA sought ways to try and address the financial issues that were becoming increasingly prevalent across the continent.
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FFP’s aim was to try and ensure that clubs could not simply spend their way to success with no restrictions placed upon them and to prevent clubs from falling into financial peril and aiming to try and preserve the essence of competition in domestic and European competition.
In recent seasons both Paris Saint-Germain and Manchester City were investigated by UEFA for alleged breaches of FFP rules through third party sponsorship. PSG were cleared while City were hit with a two-year ban from European competition that was overturned by the Court of Arbitration for Sport.
Speaking to the ECHO, Dr Dan Plumley, a football finance expert and senior lecturer at Sheffield Hallam University, said: “We have kind of come full circle with FFP and if you look at PSG and Manchester City, UEFA kind of lost a bit of face on that Manchester City verdict.
“There has been a lot of talk in the industry that they aren’t fit for purpose anymore in their current format, hence this idea that is being presented.
“UEFA have been aware of the problems for a while but it is a case of what comes next. Do you introduce new cost controls? Do you set spending against things like internal budgets? Do you have to submit a budget proposal to UEFA? The other is to put in hard caps across the board or just let it be and create an open season in European football.”