End of UEFA Financial Fair Play: UEFA set to ‘replace’ Financial Fair Play rules as salary cap looms for European clubs
Reports allege UEFA are set to replace the current Financial Fair Play (FFP) regulations by the end of the year with a salary cap and luxury tax.
The new proposals will be discussed by UEFA, clubs and leagues in Nyon next month at a conference on the future of European football.
The Telegraph are now alleging the proposed regulations would have the power to make Champions League clubs change their squads immediately as they’re set to work in ‘real time’.
News emerged last week that the governing body deem the current FFP rules ‘no longer fit for purpose’ and are set to replace them with rules that mean clubs in European competition would be limited to spending a fixed percentage of their revenue, in the region of 70 per cent, on salaries.
Any club in violation of those rules will have to pay a luxury tax where ‘the equivalent or more’ of any overspend would go into a pot to be shared among other clubs.
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UEFA assumes no system can ‘realistically’ close the gap between the richer and poorer clubs, but holds the redistribution of the so-called luxury tax would follow a ‘principle of fairness’.
The Telegraph say the luxury tax would take into consideration ‘squad costs’, not just transfer fees and player salaries, but also agents’ fees, when determining whether limits have been breached.
It states that clubs would need to present to the governing body each player’s squad costs to be assessed and any breaches could see players dropped from squads for UEFA competitions.
The proposals have been compared to the system used in the United States in Major League Baseball and the National Basketball Association
Major League Baseball’s ‘competitive balance tax’ was first executed in 1997 and allows teams to go over the set spending thresholds, but at a premium – the premium being having to pay a percentage of any overspend as punishment.
Those percentages vary and can rise depending on how many times the outset has been broken by a specific club over consecutive previous years.
UEFA are set to lay out the finer details of their plans over the next few months, following the convention in Switzerland next month.
The aim is to see financial stability across the leagues following the disturbance caused by the global pandemic.
The report goes on to say that the Premier League and Football League will be represented at the convention in Nyon and they too are demanded to change their FFP laws in order to ‘harmonise’ with UEFA.
Current rules state that Premier League clubs are permitted to lose £105 million over three years.
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End of UEFA Financial Fair Play: UEFA set to ‘replace’ Financial Fair Play rules as salary cap looms for European clubs
