No more bankrolling by sugar daddies

The UEFA Club Licensing and Financial Fair Play Regulations were unanimously approved by UEFA’s Executive Committee today.

UEFA-registered football clubs will be required to show a clean bill of financial health by the end of their 2012 fiscal year. After a phased implementation over three years – 2010, 2011 and 2012 – club owners will only be permitted to cover a small, predetermined financial loss, predicted to be in the region of  £10-30 million.

This means that billionaire owners like Chelsea’s Roman Abramovich and Manchester City’s Sheikh Mansour will not be allowed to “cover up the cracks” in their ships hull. Football clubs will be forced to be profitable or at least operate at only a small loss.

However, no restrictions will be placed on investments on youth developments and infrastructure. Closer to home, the new regulations do not cover how much debt a club is able to incur, meaning  that as long as the Glazers can service the interest on their debts and show an operating profit, the club will not be penalized.

The full UEFA Club Licensing and Financial Fair Play Regulations, edition 2010, will be published in June and will be available on UEFA.com. Clubs will be assessed on a risk basis, taking into account debts and salary levels, as well as the following main pillars:

• Break-even requirement – clubs must not spend more than they generate over a period of time
• No overdues payable during the season – towards other clubs, employees and/or social/tax authorities
• Provision of future financial information – to ensure clubs can meet their future obligations

The independent Club Financial Control Panel, chaired by Jean-Luc Dehaene, will be responsible for the monitoring process in terms of assessing the documentation submitted by the licensor and, if necessary, requesting additional information.