Man City and PSG found to have breached FFP rules

UEFA have made their first FFP-sized bite into financial irresponsibility in European football. Following years of sugar daddy investments and gargantuan losses among the elite (and less elite) clubs in Europe, UEFA is finally executing its first punishments relating to its Financial Fair Play rules, designed to combat against financial irresponsibility.

Under 20 clubs are understood to have breached FFP rules, including Champions League clubs Manchester City and Paris St-Germain. It has been thought that repeated breaching of these rules could lead to exclusion from European competition football, though it appears that this is a punishment that is not to be enacted immediately. For this year’s first offences, Uefa has offered settlements to all clubs who have breached the rules. These settlements remain unknown, but the clubs paying these settlements provides the first test for genuine authenticity of these laws. Any unsettled cases will go to an adjudicatory panel.

Clubs are limited to losses of £37m over the previous two years under FFP. FFP only applies to clubs who have been playing in European competition this season; clubs that haven’t played European competition this season will have to pass the rules from next autumn. Michel Platini, the Uefa president, said that clubs who would have breached rules this season would be unlikely to be liable to a ban from the Champions League or Europa League this coming season.

Man City, who have become a major force in the Premier League since investment from the Sheikh Mansour family, and are likely to win the English title this year, have posted combined losses of almost $150m over the last two seasons (£97m in 2012 and £51.6m in 2013). Qatar-owned PSG have also reported significant losses following spending sprees that have seen them sign high-profile players including Zlatan Ibrahimovic, Edison Cavani and more recently Yohan Cabaye from Newcastle United. PSG were under particular scrutiny having erased their losses with a huge and back-dated sponsorship deal with the Qatar Tourist Authority. Man City have also enacted apparently lucrative ‘self-sponsorship’ deals, with their stadium sponsored by Sheikh Mansour-owned Etihad. Platini has said that he was unsure how “innovative” sponsorship deals will be dealt with by the FFP rules.

In the future, if these rules are repeatedly breached, exclusion from European competition is seen as a drastic option and Uefa is apparently more likely to punish clubs through squad penalties, salary caps, limiting numbers of eligible players, or even transfer bans. However, Uefa is also keen to ensure that FFP rules are respected and adhered to, in order to ensure a more level financial playing field in the game.

About William Barns-Graham

William is the content manager and head of communications at GC Research Club. He is a professional journalist, researcher and strategist. He has worked at GC Research Club since February 2013 and has rapidly become a distinguished voice in the in-house legal blogging community, writing on Lexis Nexis and interviewing leading legal thinkers and writers, in house lawyers and CEOs within the legal tech world. He has also coordinated the GCRC Sports Panel series.
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