No football fan had a doubt about it: PSG and Manchester City are the “scamps” of European football. The two clubs, respectively owned by Qataris and Emiratis, have been punished according to UEFA's Financial Fair Play regulations.

Are these penalties severe or not? We leave you to judge for yourselves: the winners of the French Ligue 1 and the English Premier League have agreed to pay a 60 million euro fine (of these sixty, forty will be withheld from the revenues they will earn from participating in UEFA competitions).

Furthermore they will not increase the total roster salaries for the next two seasons (2015 and 2016) and for the duration of the settlement they will be subject to a limitation on the number of players on which they can dispose during continental competitions (21 players instead of the usual 25). A less clear bullet-point of the settlement affirms “PSG and Manchester City agree to significantly limit spending in the transfer market for seasons 2014/2015 and 2015/2016”…So, hypothetically, signing Messi is still ok.

But what's UEFA Financial Fair Play? Imagine you were a winner, rich, attractive and you won the lottery every year. Well, that must have been how big clubs felt like when their owners used to poor money in the coffers. Before Michel Platini sat on UEFA’s throne and Alberto Traverso (head of Club Licensing and Financial Fair Play) and his équipe drafted the first European financial regulations in the world of football.

As you may or may not know, the FFP is aimed at benefiting the long-term financial health of European football, and therefore the principal requirement made to clubs is to prove that the company has a solid business continuity: going concern, and we are pleased to say that currently no Italian club is failing that duty. Since UEFA’s FFP start back in 2011, one first-rate club (Malaga FC) and numerous minor clubs have been denied the participation to European cups as they failed to meet the first required financial licencing criteria introduced at the time: no overdue payables.

Clubs who have qualified to European competitions need to provide documentation attesting they do not have overdue payables towards other clubs, their players and social/tax authorities. This first financial condition proved its effectiveness in the last seasons as aggregate unpaid sums have significantly diminished:

The Club Financial Control Body (CFCB) has therefore the duty to analyse all clubs participating in Champions and Europa League during the season, so that would be Juventus, Milan, Napoli, Fiorentina, Udinese and Lazio considering the Italians for this year and. None of these resulted in having unpaid wages, transfers or taxes. But this season FFP really got into full swing, as clubs now will also be assessed under the break-even rule. Essentially, clubs will no longer be allowed to spend more than they earn.

I intentionally used the future tense since UEFA rightly opted for a smooth and gradual application of the regulation and now allows clubs to spend up to €5 million more than they earn per assessment period (that would be three years). However it can exceed this level to a certain limit, if it is entirely covered by a direct contribution/payment from the club owner or a related party. The current limits are:

• • €45m for seasons 2013/14 and 2014/15

• • €30m for seasons 2015/16, 2016/17 and 2017/18

In the following years the limit will be lower, with the exact amount still to be decided. As I initially stated, the long-term health of football is what these laws are about, so in order to promote investment in stadiums, training facilities and youth development, all such costs are excluded from the break-even calculation. Once again FFP proved its success since through the break-even rule, for the first time in recent history, revenue growth outpaces wage growth.

And combined losses have an unequivocal trend since 2010.

 

*figures in millions of €.

Italian clubs are safe, for now... Still no problem here for Napoli (positive balance for the last seven years straight), Fiorentina and Milan (thanks to the big cut in salaries and the transfers of Ibrahimovic and Thiago Silva to PSG). Roma are safe if their loss before tax isn’t bigger than 20 million at the end of this season. If not, they’ll enter UEFA’s black list and be under the CFCB’s surveillance.

Juventus should share Roma’s faith, with approximately the same limits. At the bottom of a theoretical FFP chart of Serie A clubs we would surely find Inter. The Milanese club managed to pass unharmed this first round of sanctions (probably by providing evidence of going concern), but only a miracle will save Thohir’s club from the next year’s round. The club presents a loss of nearly 100 million considering the last two seasons, and as previously mentioned, the limit for the triennium 2011/2014 is of 45 million, meaning the Nerazzurri should produce a profit of 55 million this year. Impossible.

Relatively hard to forecast how our clubs will therefore move on this summer’s transfer market. We know Antonio Conte is persistently asking for Top Players who will take the club to a next level and seriously challenge the European queens but he won’t be easily satisfied. Here’s why:

Uefa’s FFP also includes some minor directions which aren’t too significant at the moment for clubs who are not under observation, but will probably gain weight in the relative future. One of these is the salary-revenue ratio: the CFCB believes that clubs will face difficult times if more than 70% of their revenues are spent on salaries. Juventus, like Roma and Fiorentina are borderline, if not beyond limit.

Roma shouldn’t have any problems in the next years as revenues are projected to rise considerably and the going concern in assured with the new stadium project. The Viola has no other apparent problem in their financial statements but will have to keep an eye on this ratio if they don’t want to risk in the next years. Juventus, on the other hand, have great ambitions and must reduce their roster of 33 players if they want to buy.


Vucinic, Quagliarella and Isla all have a significant salary and haven’t played much, and therefore seem quite certain to leave Torino this summer. A more delicate approach must be used with Giovinco or Marchisio, as they were raised in the club’s youth sector and consequently might be useful for the Champions League roster regulations, even though this could be easily sidestepped if Agnelli’s club decided to call the young Domenico Berardi back home. Regarding the Milanese clubs: Milan at first and Inter this season have applied severe cuts in order to decrease their wage expense but might suffer the loss of revenue deriving from the Champions League exclusion.

Nine more careless clubs around Europe were (like expected) found guilty of non-compliance with FFP regulations and sanctioned by the CFCB to different extents. Here the official Uefa documents regarding the settlements. 

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