UEFA’s new Financial Sustainability regulations explained

UEFA, the governing body of European football, has recently introduced new financial sustainability regulations for its member clubs. These regulations aim to promote financial stability and integrity in European football by controlling clubs' expenses and strengthening their balance sheets.

One of the most significant changes in the new regulations is the enhanced disclosure requirements for clubs' legal and ownership structures. This will provide greater transparency and help protect the integrity of competitions by ensuring that clubs are being operated and financed in a fair and transparent manner. This is especially important in light of recent financial scandals involving clubs and their owners.

Another important aspect of the regulations is the strengthened requirements for clubs to pay their debts on time. Starting from the 2022/23 season, clubs will be subject to quarterly checks to ensure that they have no overdue payables. This will help to prevent clubs from getting into financial difficulties due to unpaid bills and debts.

Perhaps the most impactful change in the new regulations is the requirement for clubs to report positive or improved net equity ahead of each season to obtain a licence to enter UEFA competitions. This will ensure that clubs are financially stable and able to meet their obligations to players, staff, and other creditors. This will also help to prevent clubs from overspending in an effort to achieve short-term success at the expense of long-term financial stability.

In addition to these changes, UEFA also introduced new football earnings requirements for clubs starting from the 2023/24 season. Under these requirements, clubs' aggregate football earnings over three years must be positive or within an acceptable deviation of up to €60m if covered by contributions. This will help to ensure that clubs are generating enough revenue to cover their expenses and are not relying on external funding to sustain their operations.

Lastly, the new regulations will also include a squad cost rule starting from the 2023/24 season. This rule will limit the wages, transfer costs and agent fees of a club's players and first team coach in each calendar year to 70% of the club's revenue. This will help to ensure that clubs are spending within their means and not overburdening themselves with excessive player salaries and transfer fees.