After a four-year investigation into Manchester City’s numerous violations of Premier League financial regulations, the much-maligned Financial Fair Play (FFP) has once again found itself in the spotlight. The Premier League claims that throughout the 2009–10 and 2017–18 seasons, Man City disregarded the rules.
“In accordance with Premier League Rule W.82.1, the Premier League confirms that it has today referred a number of alleged breaches of the Premier League Rules by Manchester City Football Club (Club) to a Commission under Premier League Rule W.3.4.,” according to a release from the Premier League.
In response to the announcement, the club expressed surprise at the reported violations. The six-time winners acknowledged that they are eager to resolve the issue.
When UEFA initially accused Manchester City of violating FFP regulations in March 2019, the Premier League began looking into the matter on its own. However, the Court of Arbitration for Sport (CAS) reversed the Citizens’ two-year ban from UEFA club competitions in July 2020.
Financial Fair Play: What Is It?
UEFA implemented the Financial Fair Play (FFP) in 2009 with the goal of “improving the overall financial health of European club football.”
The primary goal of FFP is to keep teams from spending more than they bring in. Additionally, it seeks to keep teams out of financial difficulties that would jeopardize their long-term viability.
FFP is essentially a regulatory instrument designed to keep teams from going over their allocated budget, which may unintentionally put them in debt.
What is the process for Financial Fair Play?
Football teams are allowed by UEFA to spend no more than €5 million (£3.9 million) over their earnings during each three-year evaluation period. However, if the club’s owners or a connected party can afford these losses, there is a new cap of 30 million euros (formerly 45 million euros).
According to the Financial Fair Play rules, what counts?
The Club Financial Control Body (CFCB) declared that only a club’s outgoings in the areas of transfers, employee benefits (including salary), amortisation of transfers, financial charges, and dividends shall be included in order to adhere to the Financial Fair Play criteria.
Gate receipts, television revenue, advertising, merchandise, and expenditures on infrastructure, training facilities, and youth development will not be included.
What penalties exist for violating the Financial Fair Play guidelines?
Eight different sanctions will be imposed on the football teams who were deemed to have violated UEFA’s Financial Fair Play rules. Based on the type of infraction, they are ordered as follows.
Warning/Reprimand
Deduction of fine points
Revenue withheld from a UEFA competition
Registration of new players for UEFA tournaments is prohibited.
Limitations on how many players a team may sign up for UEFA tournaments
Disqualification from an ongoing competition and exclusion from subsequent ones
Which aspects of the Financial Fair Play rules are being criticized?
The first and most obvious disadvantage of the Financial Fair Play rules is that they favor the wealthiest clubs over those vying for European football spots.
The FFP cannot simply interfere in the sponsorship process. After a club’s sponsorship agreements have been thoroughly examined and found to be in good standing, any money they receive will be excluded from Financial Fair Play.
Aleksander Ceferin, the president of UEFA, stated earlier this year that measures are underway to replace the Financial Fair Play rules with a luxury tax and wage limit.
According to sources, teams participating in European competition would be permitted to pay wages with 70% of their earnings. ‘The equivalent or more’ of any overspend will go into a pot to be divided among other teams, and any team that violates the new regulations would be required to pay a luxury tax.
