UEFA Approves New Club Licensing & Financial Sustainability Regulations

UEFA’s Executive Committee has today approved the new UEFA Club Licensing and Financial Sustainability Regulations at its meeting in Nyon.

The new regulations are the first major reform of UEFA’s finance regulations since they were first introduced in 2010.

Speaking of the changes, UEFA President Aleksander Čeferin, said: “UEFA’s first financial regulations, introduced in 2010, served its primary purpose. They helped pull European football finances back from the brink and revolutionised how European football clubs are run.

“However, the evolution of the football industry, alongside the inevitable financial effects of the pandemic, has shown the need for wholesale reform and new financial sustainability regulations.

“UEFA has worked together with its stakeholders across European football to develop these new measures to help the clubs to address these new challenges. These regulations will help us protect the game and prepare it for any potential future shock while encouraging rational investments and building a more sustainable future for the game.”

The new regulations will help European clubs achieve greater financial sustainability through three key pillars: solvency, stability, and cost control.

For solvency, the new no overdue payables (towards football clubs, employees, social/tax authorities, and UEFA) rule will ensure better protection of creditors. Controls will be performed every quarter and there will be less tolerance towards late payers.

The new football earnings requirements are an evolution of the existing break-even requirements and will bring greater ability to club finances.

To ease the implementation for clubs, the calculation of football earnings is similar to the calculation of the break-even result. While the acceptable deviation has increased from €30m over three years to €60m over three years, requirements to ensure the fair value of transactions, to improve the clubs’ balance sheet, and to reduce debts have been significantly strengthened.

The biggest innovation in the new regulations will be the introduction of a squad cost rule to bring better cost control in relation to player wages and transfer costs. The regulation limits spending on wages, transfers, and agent fees to 70% of club revenue. Assessments will be performed on a timely basis and breaches will result in pre-defined financial penalties and sporting measures.

The new regulations will come into force in June 2022 but there will be gradual implementation over three years to allow clubs the necessary time to adapt.

In response, the European Leagues welcomed the approval and introduction of the new regulations releasing a statement reading: 

“During the past two years the European Leagues has debated intensively both with its Member Leagues as well as with UEFA regarding this set of new financial regulations for international club competitions which is targeting to improve the long-term financial sustainability of clubs across Europe.

Although our member leagues had various opinions on some elements of the new regulations, a large majority of European Leagues’ members agreed on important matters such as strengthened overdue payable rules, the football earnings rule, squad cost and strengthened sanction mechanisms which were well reflected in the new UEFA Financial Sustainability Regulations.

The implementation of the new regulation now remains decisive. We thank UEFA for the good consultation process.”