UEFA to introduce new spending limits for European football clubs

A complete overhaul of the fiscal restriction in European football clubs with limits on spending rather than salary caps is being discussed by the executive body of UEFA.

UEFA’s Financial Fair Play rules are set to be replaced after more than a decade. After the new regulations, teams in the competitions, including the Champions League will only be able to spend 70% of their income on football-related activities. The proposals will be assessed by the European club association before final rules are concluded at an executive committee meeting in April.

There are still issues about differences in domestic tax regimes and social contributions across Europe that can give unfair advantages to certain clubs over their rivals. Some clubs have been pushing for permission to spend up to 85% of their profits. The spending limit can likely be 90% in the beginning before it is brought down to 70%.

Penalty for breaking rules 

Clubs that overspend will be expatriated within UEFA’s tournaments, ranging from Champions League to Europa League and the third-tier Europa Conference League.

An extra USD10 million in spending might be allowed in what is being called a sustainability bonus if the clubs are in good fiscal health.

The measures are aimed towards achieving a form of competitive equilibrium with greater sustainability for the clubs. Despite the motive, the news rules will still give a in built-in advantage to richer clubs rather than narrowing the gap. Even though UEFA has been exploring payment caps, the legitimacy of such a move in European law is unclear.

Qatar funded Paris Saint-Germain FC and Abu Dhabi possessed Manchester City are yet to win the Champions League despite more than a decade of enormous investment in players. It is still in doubt whether UEFA will assess the real value of potentially inflated sponsorships associated with state-backed ownership of teams like both Manchester City and Paris Saint-Germain. Both teams have been benefiting from deals connected to their Gulf Ownership.

Naseer Al-Khelaifi, the president of Paris Saint-Germain FC, is also the chairman of the influential European Club organization. The organization is working on the new fiscal regulations along with the Union of European Football Associations. He is also a member of the administrative committee at UEFA.

The number of teams in the Champions League will increase from 32 to 36 in 2024. UEFA is yet to finalize the plans for entry into the tournament. Two spots are planned to be reserved based on past performances for teams that fail to qualify through their domestic leagues based on their past performances in Europe.