May 2 – UEFA have taken a step further in their proposed rethink of their financial sustainability rules with the creation of a Working Group that will look at ‘squad cost control’ (essentially the issue of wage caps) as well as how transfer fees are accounted for by clubs.
The working group will not be hanging around. UEFA said that a set of proposals “will be presented for further discussion and consideration at the next UEFA Executive Committee meeting to be held on 28 June 2023.”
The decision to create the working group was taken by the UEFA Club Licensing Committee, chaired by UEFA Vice-President Gabriele Gravina.
It immediately had the public support of Germany’s DFL who welcomed “further strengthening of UEFA’s financial regulations”.
“Today’s resolutions address recent developments in European football with respect to increasing squad costs, unsustainable financial levels and changing club ownership structures. The DFL will be represented in the expert group and continue its efforts to strengthen financial regulations, their strict implementation and sanctioning,” said the DFL in a statement.
In particular the working group will address the amortisation period over which the transfer fee can be spread.
Chelsea in particular exploited a loophole in financial fair play rules that saw more than £500 million spent on new players since the takeover by Todd Boehly and Clearlake Capital, including a record-breaking outlay in the summer and, in January, a staggering £88.5 million on Mykhailo Mudryk from Shakhtar Donetsk.
Mudryk has signed an unprecedented eight-and-a-half-year deal – the longest in Premier League history – allowing Chelsea to amortise the fee over the length of his contract. Fellow January arrivals Benoit Badiashile and David Datro Fofana both signed six-and-a-half-year deals and Noni Madueke joined on a seven-and-a-half-year contract. Last summer, Wesley Fofana signed a seven-year deal and Marc Cucurella joined on a six-year contract.
UEFA want to close that loophole to set a five-year maximum for the amortisation of the player’s transfer fee.
UEFA is also keen to bring in more robust rules to deal with swaps of players that are made to artificially inflate transfer profits.
At its meeting, UEFA said the Club Licensing Committee “proposed amendments to the regulations regarding the accounting of transfer operations to prevent abusive practices and ensure equal treatment.”
While the implementation of those new accounting rules are imminent, especially with the summer transfer window approaching, UEFA also indicated that the working group would take a deeper dive into the issue of squad salary caps.
The Working Group will “analyse the impact of national taxes and social charges in various jurisdictions to develop effective and equitable cost control mechanisms. It will also examine the feasibility of specific measures that would supplement the existing squad cost rule, with the aim to enhance cost control, promote the development of youth players and foster a better redistribution of resources.”
The Working Group is comprised of 11 representatives from National Associations, the European Club Association, European Leagues, FIFPRO Europe and Football Supporters Europe.
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