Uefa has implemented new financial laws that limit teams’ wage, transfer, and agent fees to 70% of their total earnings.
Over a three-year period, allowed losses increased from 30 million euros (£24.98 million) to 60 million euros (£49.96 million).
Clubs will have three years to adopt the new rules after they take effect in June.
“Breach will result in pre-defined financial penalties and sporting sanctions,” according to Uefa.
New enhanced penalties, including as point deductions, relegation to lower-level competitions, and potential removal from European football entirely, are expected to be implemented as part of the new regulations.
Clubs will be able to spend 90 percent of their revenue in 2023-24, then 80 percent in 2024-25, and 70 percent the following year.
Uefa and the influential European Clubs Association (ECA) collaborated on the new “financial sustainability regulations,” which “are the first major change” of the 2010 financial fair play (FFP) rules.
“The first financial regulations implemented by European football’s regulatory body in 2010 served their basic aim,” stated Aleksander Ceferin, head of the governing body.
“They revolutionized how European football clubs are run and helped pull European football finances back from the brink.”
“However, the growth of the football industry, combined with the unavoidable financial consequences of the epidemic, has demonstrated the necessity for comprehensive reform and new financial sustainability regulations.”
“These [new] laws will assist us in protecting the game and preparing it for any potential future shocks, as well as encouraging prudent investments and ensuring the game’s long-term viability.”
“While the allowable deviation has increased from 30 million euros to 60 million euros over three years, obligations to assure the fair value of transactions, enhance the clubs’ balance sheet, and decrease debts have been significantly strengthened,” Uefa said in a statement.
“The inclusion of a squad cost rule to bring better cost control in regard to player salary and transfer expenses will be the most significant innovation in the new regulations.”
“The rule prohibits clubs from spending more than 70% of their revenue on wages, transfers, and agent fees.”
