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UEFA’s requirement for football clubs to balance their books. The rules also specify that clubs keep up-to-date with their taxes, their transfer fees and pay player wages on time.
Amortisation sounds like and is deadly dull accountants speak, but smart clubs can and do use it to their advantage. Basically it means spreading a transfer fee over the lifetime of a contract. That allows for creative accounting opportunities to comply with financial fair play (FFP) regulations.
Sports lawyer Daniel Geey takes the example of the David Luiz transfer to explain how it makes it easier for both Paris Saint-Germain and Chelsea to comply with FFP.
The European Commission has given Uefa’s financial fair play (FFP) rules a clean bill of health, stating that they are compatible with EU competition law. This might seem to be a surprising decision, given that many sports lawyers have argued that the rules are in conflict with competition law. However, the Commission was extensively consulted about the rules.
Manchester City are odds on favourites to take the Barclays Premier League title today. However, on Monday Uefa may spoil their parade by announcing the sanctions to be imposed on them for breaching financial fair play regulations.
Manchester City are to be found guilty under financial fair play rules this week and face either a heavy fine or a transfer embargo. Much depends on how sponsorship of the club by Etihad is treated and whether it is regarded as a related party transaction.
All reports relating to financial fair play and annual results need to come with a health warning as it is more likely that a legal challenge will be launched to the Football League’s plans if they crack down hard on leading clubs.
Nottingham Forest have reported losses of £17m for the 2012/13 season compared with £12.2m for the previous season. Forest have made nine permanent signings since these accounts, in addition to four loan deals. With the associated transfer fees and wages involved, the losses over the current season are likely to have significantly increased
UEFA is investigating 76 unidentified Champions League and Europa League clubs for potentially breaking the Financial Fair Play rules designed to curb excessive spending. Chelsea are thought not to be under investigation, but Manchester City are.
The first sanctions against clubs will be announced in April, UEFA announced today. Clubs involved in more serious cases will also be identified then, with UEFA setting a June deadline to publish verdicts ahead of the qualifying round draws for next season’s competitions.
We have argued for some time that the financial fair play schemes at both Uefa and domestic competition levels are based on shaky legal foundations and were open to challenge in the courts. Sports lawyers like Daniel Geey have drawn attention to how complex the rules are and open to different interpretations which of themselves give grounds for a challenge.
It is well established that Uefa’s financial fair play (FFP) rules are both very complex and open to the interpretation that the football governing body wants to put on them. Hence, there is plenty of scope for any punished club to challenge them in court, particularly if the punishment was as onerous as exclusion from the Champions League.