UEFA Settlement Sanctions: a summary

By Daniel Geey published on 22 May 2014

UEFA announced on Friday evening that it had come to settlement agreements with nine clubs that had breached the Financial Fair Play (FFP) break-even regulations. To understand the detail of the UEFA settlement procedure click here.

The remainder of this blog sets out a high level description of the Manchester City sanctions with some initial comments on the Manchester City settlement and a summary of the other eight club sanctions.

The nine clubs that have settled with UEFA are Bursaspor, Rubin, PSG, Galatasary, Manchester City, Anzhi, Zenit, Sofia & Trabzonspor. The various in-depth UEFA settlement sanction descriptions are set out here.

The below points are the most salient points from the Manchester City settlement decision. City published their own statement shortly after the UEFA press releases which can be accessed here.

1. City and the other eight clubs have settled with UEFA’s Club Financial Control Body (CFCB). No appeal to the CFCB adjudicatory chamber is permitted as a result of the settlement agreement which in turn means that no Court of Arbitration for Sport (CAS) appeal by the club can occur. The positive benefit to UEFA is that all clubs in breach have settled and there will be unlikely to be direct disputes over the summer months (bar affected parties challenging the settlement agreement).

2. City have agreed to the following: a. a maximum loss of €20m for 13-14 season & a €10m loss for 14-15 season. City explained in their statement that they have stipulated losses they must adhere to, which will be different to the normal break-even €45m loss that other clubs must comply with.

3. The club’s employee benefit expenses cannot increase for at least the next accounting period. According to City, this includes playing and non-playing staff but excludes performance related bonuses.

4. City are limited to registering 21 players for their 14/15 Champions League season squad. If they comply with the other above/below conditions, they will be able to field their full 25 man squad for 15-16 Champions League season. City explained that they only registered 23 players for the 13-14 Champions League season and only used 21. Nonetheless, it is assumed that 8 from their 21 man list will be required to be home-grown based on UEFA’s competition restrictions. This means that if City potentially sell Sinclair, Lescott, Richards, Rodwell, Boyata and Wright, they will need to buy a number of home-grown players to adequately supplement their 21 man squad. Without the necessary home-grown players, the club would only be allowed to register 13 non-home-grown players plus presumably Hart, Clichy and Milner.

5. City explained in their statement that UEFA have stipulated that they will not be able to spend more than €60m on transfers in the summer transfer window.

6. City have been given a €10m fine based on 13-14 Champions League prize monies and an additional €10m fine based on their upcoming 14-15 Champions League prize monies. If they do not comply with the above conditions, an extra €40m fine will be imposed. It is still unclear whether the fine money will be allocated to other clubs from the Premier League who have qualified for next season’s competition or into a wider fine allocation pool.

7. By settling, City can play in the Champions League next season, though affected parties now have 10 days to appeal the settlement agreement. For an understanding of the affected parties appeal process, click here.

 

Summary Table

Below is a sanction summary table of the other eight affected clubs.

 

Club Fine Squad Reductions Other
Anzhi €2m 21 1 year squad salary restrictions
Bursaspor €200,000 - 1 year squad salary restrictions
Galatasaray €200,000 - 1 year squad salary restrictions
Levski Sofia €200,000 - 1 year squad salary restrictions
PSG €20m with €40m suspended 21 Transfer spending restrictions and 2 year squad salary restrictions
Rubin Kazan €6m 21 Transfer spending restrictions and 2 year squad salary restrictions
Trabzonspor €200,000 - 1 year squad salary restrictions
Zenit St Petersburg €12m 22 Transfer spending restrictions and 2 year squad salary restrictions

 

Conclusion

Strong sporting and financial sanction have been imposed by UEFA on a number of leading European clubs. There are plenty of reasons to suggest that UEFA has hit clubs hard with budget and squad size constraints. It appears a raft of sanctions will have adequate deterrent effect for clubs in future years yet expulsion for break-even breaches is yet to be imposed by UEFA.

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About the Author

Daniel Geey

Daniel Geey

Daniel advises clients in the football industry. Such guidance has included advice on the Fit and Proper Person Test, parachute payments and the football creditors rule, disclosure obligations under the relevant football authority's rules, conflicts of interest and third party player ownership contracts. 

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