financial regulation

9 November 2021 - 4:36 PM

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Alamy

UEFA’s new financial controls may create a host of new problems – and the lawyers are going to be busy

  • UEFA are rumoured to be close to presenting their new financial regulations which will involve a salary cap to replace FFP. Based on what we know so far, we remain skeptical about these proposals.
  • A salary cap and so-called luxury tax is unlikely to solve the problem of club wage spend, especially at the biggest clubs. 
  • Salary caps are inherently linked with the US "closed" model of professional team sports rather than the European model which remains more “open”, and any changes are also likely to impact competitive balance in the structure, which is already in decline.
  • Any salary cap may also be challenged under EU law, given that such rules may potentially create an anti-competitive environment.

Recently, it was reported exclusively by The Times that UEFA are proposing to replace their Financial Fair Play Regulations with a salary cap and luxury tax, commencing as early as next year.

Under the system, clubs that compete in European competition would be limited to spending a fixed percentage of their revenue (rumoured to be 70 per cent) on player

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