UEFA introduced the Financial Fair Play system in 2010 to reduce club debt. Twelve years later, it can be seen that the accounts of clubs were cleared, but several limitations also came to light. The rigor of the system especially took a toll on already weakened teams. Teams of lenders with an almost unlimited scope, such as PSG or Manchester City, regularly circumvented the system.
In 2020, the corona pandemic came on top of that. That cost European football about seven billion euros in two seasons. In order not to cause a wave of bankruptcies, UEFA temporarily relaxed the rules since March 2020. Now there is a reform.
The main change is of a philosophical nature. UEFA no longer wants a balance in the accounts of clubs, but it wants to cut spending on salaries, transfer fees and brokerage commissions. They have long been regarded as the clubs’ main financial problem.
UEFA wants to send a signal to investors. New money may be injected into clubs, but not to pay wages and transfer fees. The goal is to hit the big clubs with this. They fuel wage inflation the most.
In concrete terms, UEFA will double the permitted deficit to sixty million euros over three years. On the other hand, the wage burden must fall slowly. In the 2023-2024 season, 90 percent of the income may still be spent on the payroll, in the 2024-2025 season that will be 80 percent and 70 percent in the 2025-2026 season. The current contracts should be finished by that season. UEFA is thus introducing a watered-down form of a salary cap, an important rule in several American sports competitions. In Europe, a strict ‘salary cap’ is difficult to implement because of the different legislation in different countries.