What will change the new financial fair play adopted this Thursday

The new financial fair play rules will be adopted on Thursday at a meeting of the UEFA executive committee. They will introduce new frameworks on the share of wages in the budget, while doubling the allowed deficit.

The Financial Fair Play (FPF) will receive an update from UEFA on Thursday. The European confederation will adopt the new system after two dark years (2020, 2021) due to the Covid-19 crisis. New fiscal rules were also drafted in the midst of the crisis to contain the rise in wage costs, twelve years after the system was introduced. Limiting club deficits has helped clean up the bills but has also revealed its limits: its austerity exacerbates the fate of weakened teams, and the pandemic has cost European football an estimated €7 billion over two seasons and is easily thwarted by state-owned clubs with almost unlimited funds.” Manchester City” and “PSG” in the lead.

Therefore, in order not to provoke a wave of bankruptcies, UEFA softened the deficit estimate from the spring of 2020, and then announced a major revision of the financial rules imposed on clubs. The main change is philosophical: it is no longer about book balance requirements, but about limiting spending allocated to wages, transfer fees and agent commissions, which have long been considered the main economic problem in football.

PSG advantage on file

Specifically, UEFA will double the allowed deficit within three years (to €60m), but will force clubs to cap their payroll to 90% of their income in 2023-24, then 80% and finally 70% in 2025-26. season until the current contracts expire. According to L’Equipe, this gradual decline could benefit PSG, especially in their bid to renew Kylian Mbappe for another two seasons. The French star’s potential new salary could be more easily factored into a percentage of earnings in 2023-24.

The mechanism is a loosened form of a “salary cap” that is very difficult for UEFA to import: the 55 federations it oversees comply with various social and accounting rules, and there is no central negotiation. If they fail to do so, the perpetrators will incur predetermined penalties depending on the extent to which the limit is exceeded.

Two more years of “flame”

This “luxury tax”, touted last year by UEFA president Aleksander Čeferin, will then be redistributed to the more virtuous clubs, even if the expected increase looks modest to each of those beneficiaries. In addition, the UEFA project provides for recruitment bans, loan restrictions, demotions from one European competition to another and penalty points during “mini-championships”, which will replace the group stages from 2024.

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However, the link between these measures and financial sanctions remains to be clarified, which is a key issue as sports sanctions remain a major threat to the new rich in European football. UEFA and ECA have also been successful: financial fair play is unlikely to affect the concentration of trophies.

However, the new rules could make the battle between historical leaders and ogres with unlimited resources more difficult, especially as a gradual lowering of the salary cap would allow the latter, PSG included, to burn out for another two seasons. Conversely, legendary but financially unprofitable clubs such as Barcelona or Juventus Turin may find their ambition limited by a commitment to phase out their debt.