UEFA passes new financial regulation plan to replace FFP
Over the last couple of months UEFA has been releasing the details of their new Financial Stability and Club Licensing Regulations (FSCLR) to replace the Financial Fair Play rules that were killed by the pandemic. To understand just what UEFA is trying to do with the FSCLR we need to understand what they were trying to do with FFP, and what worked or did not work under that scheme. It’s important to remember just what FFP was designed to do. However, FFP has had an impact on competitiveness, probably as an unintended consequence of its structure. At a recent meeting in Vienna UEFA explained that the program that three key pillars; solvency, stability and cost control.
The stability portion seems to relate to new balance sheet and debt reduction rules. The complete set of enforcement rules has not been passed yet. Now this gets a bit wonky, but bear with us it is important. Under FFP only related party transactions were scrutinized to see if they were fair market value (FMV). The first was teams booking players in swaps at lower than FMV to cook the books.
The new scheme will come into force on June 30th of this year, but it is coming into play in stages over a three year period to allow clubs to adjust their business practices into compliance. It is hard to predict how these rules will make an impact in such early days. While many pundits remain on the fence on FSCLR’s potential, at least one, Dr. All football observers will be paying close attention to see if he is right.
Read full article at Bavarian Football Works