The teams will be limited to allocating 70% of their revenue to salaries, albeit the implementation will be gradual and the cap will not take effect for two seasons.The UEFA Executive Committee adopted the new economic control mechanism, which will rule European football from June this year and will replace the present financial 'fair play' system, on Thursday. An ambitious reform that Aleksander Ceferin has been working on for a long time, with one of the most notable innovations being the point that establishes that clubs will not be able to allocate more than 70% of their earnings to salaries, though the implementation of that cap will be progressive, with the ratio set at 90% in the next campaign, lowering to 80% in the next, and finally being set at the final figure from the 2024-2025 academic year.
"The primary goal of UEFA's first financial rule, which was implemented in 2010, was achieved. He transformed the way European football clubs are run and helped bring European football finances out of the abyss. "However, the evolution of the football industry, combined with the inevitable financial effects of the pandemic, has demonstrated the need for a total reform and a new financial sustainability regulation," said the UEFA president, who defended the new regulations, claiming that they "will help protect football and prepare it for any potential future shocks, while encouraging sound investment and building a more sustainable future for the game."The goal is to create financial sustainability by focusing on three key pillars: solvency, stability, and cost management. To do this, the new rule limits expenditure on salaries, transfers, and agent fees to 70% of a club's total revenue. However, in order for the entities to adjust, a phased adoption is planned, with 90 percent in the next season and 80 percent the next. The evaluations will be completed on time, and transgressions will result in predetermined financial penalties and sporting measures.
In terms of solvency, the new regulation of not having late obligations (with football clubs, employees, social/tax authorities, and UEFA) would provide stronger creditor protection. Controls will be carried out every quarter, and those who are late will be penalized more severely.The new football profit standards are an evolution of the present break-even requirements, and they will provide teams more financial flexibility.
Calculating football earnings is comparable to calculating the break-even threshold, which makes it easier to apply to clubs. Despite the fact that the allowable variation has increased from €30 million to €60 million over three years, the standards to assure fair value in transactions, enhance club financial sheets, and reduce debt have been significantly strengthened.
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