Published Fri, May 28 10 01:27 AM
Factbox on the financial fair play system approved by UEFA's Executive Committee on Thursday.
BACKGROUND
* The financial fair play (FFP) plan is designed to stop reckless spending by clubs and to stop rich benefactors from injecting large amounts of cash, a practice which distorts the transfer market and pushes players' wages to astronomical levels and has a knock-on effect as other clubs try to keep up.
* Clubs will instead have to live within their means by ensuring that their expenditure is not more than the revenue they generate through their activities.
* A UEFA report said this year that around 50 percent of top European clubs were losing money and 20 percent were producing serious deficits.
* Inspired by UEFA president Michel Platini, the plan has been two years in the making.
THE NEW RULES
*When the new rules are fully enforced, clubs will only be allowed to enter European competition if their generated revenues -- money from sources such as television rights, gate receipts, competition prize money and sponsorship -- is equal to or greater than their expenditure
* Clubs are also barred from owing money to other clubs, players, tax authorities and social service departments.
PRACTICALITIES
* UEFA has set up a Club Financial Control Panel, headed by former Belgium Prime Minister Jean-Luc Dehaene, which is responsible for scrutinising clubs' accounts and enforcing the club licensing system.
* The FFP takes will be phased in but will officially be introduced on June 1 when UEFA beefs up its current licensing criteria for admission to European competition.
* On June 1, 2011, the rule which bans clubs from owing money to other clubs, players, tax and social security departments will come into force.
* The break-even requirement, banning clubs from spending more than their generated revenues, will take effect for the financial statements of the reporting period ending 2012.
* The first season where a club could be barred from European competition will be 2014-15.
EXCEPTIONS
*Clubs will be assessed over three seasons. They are allowed a 5 million euro leeway over for the aggregate period.
* Money invested in stadiums and youth development does not count in the expenditure for FFP purposes. The main targets are high wages and high transfer fees.
* Benefactors are allowed to contribute up to a maximum of 45 million euros for the 2013-14 and 2014-15 seasons together. This will be reduced to 30 million euros for the period covering 2015-16, 2016-17 and 2017-18.
Source: Web Search
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