FACTBOX-UEFA's Financial Fair Play rules explained

Reuters

Fri, 28 Jan 14:00:00 2011

Factbox on UEFA's Financial Fair Play rules:

BACKGROUND

The Financial Fair Play (FFP) plan is designed to stop reckless spending by clubs and rich benefactors from injecting large amounts of cash, a practice which distorts the transfer market, pushes players' wages to astronomical levels and has a knock-on effect as other clubs try to keep up.

* Clubs will instead have to live within their means by ensuring that their expenditure is not more than the revenue they generate through their activities -- the "break-even rule".

* A UEFA report last year said that around 50 percent of top European clubs were losing money and 20 percent were producing serious deficits.

* Inspired by UEFA President Michel Platini, the plan took two years to formulate. Stricter licensing rules came in last June, while the enhanced rules come into force on June 1 this year.

THE NEW RULES

* When the new rules are fully enforced, clubs will only be allowed to enter European competition if their generated revenues -- money from sources such as television rights, gate receipts, competition prize money and sponsorship -- is equal to or greater than their expenditure

* Clubs are also barred from owing money to other clubs, players, tax authorities and social service departments.

PRACTICALITIES

* UEFA has set up a Club Financial Control Panel, headed by former Belgium Prime Minister Jean-Luc Dehaene, which is responsible for scrutinising clubs' accounts and enforcing the club licensing system.

* The next key step comes on June 1 this year when the rule which bans clubs from owing money to other clubs, players, tax and social security departments will come into force.

* The break-even requirement, banning clubs from spending more than their generated revenues, will take effect for the financial statements of the reporting period ending 2012.

* The first season where a club could be barred from European competition will be 2013-14.

EXCEPTIONS

* Money invested in stadiums and youth development does not count in the expenditure for FFP purposes. The main targets are high wages and high transfer fees.

* Benefactors are allowed to contribute up to a maximum of 45 million euros for the 2013-14 and 2014-15 seasons together.

* This will be reduced to 30 million euros for the period covering 2015-16, 2016-17 and 2017-18.

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