How the new UEFA Financial Fair Play affects Valencia CF

UEFA has designed the Financial Fair Play and Valencia CF is attentive to find out how it can affect it and, in the best cases, benefit it. It will come into force from next season after being approved by the Executive Board last Thursday, April 7. The constant controversies in which European football has been involved in recent years has meant the need to renew the current model. Therefore, according to New York TimesUEFA has created the economic control law that will end the battle between the state clubs and the rest of Europe.

Until now, Financial Fair Play had only been concerned with maintaining the balance between income and expenses over a period of three years. This economic model arrived in 2010 and has left numerous controversies that shook the transfer markets: excessive sanctions and forgiven punishments that have altered competitiveness in Europe. Therefore, UEFA has wanted to put an end to all this and seek a more equitable alternative. According to the American media, The new model is summed up in that the total expenditure of a club may not exceed 70% of the annual income.

Neverthelessits application is not immediate. European clubs would gradually adapt: the first year UEFA would allow 90% of income to be spent on staff costs and, after three seasons, it would be reduced to 70%.

Anil and Bordalás, at Valencia CF training on Wednesday, March 23 (Photo: Valencia CF).

This model is a headache for many clubs. Currently there are already 40 clubs that could not comply with the new regulations and they are in negotiations with UEFA to find a solution to a situation that they did not expect. In this way, they would avoid increasing the gap between the so-called state clubs and the most humble teams.

What sanction would they receive if they fail to comply with the new model?

Europe has seen the privilege some clubs have had in not receiving the same severity of sanctions as smaller teams. In addition to the well-known economic fine and the threats of not playing European competitions, UEFA has decided to add two new penalties.

On the one hand, the possibility of a demotion. If a team of champions breaches the new Financial Fair Play, would be sanctioned with going down to the Europa League. In the case of playing in the second highest European competition, the team would go down to the Conference League. Despite not yet being official information, there will still be the possibility of expelling any club from European competitions. In any case, the new sanction would apply to those who fail to comply with the rules with less economic margin.

The first day of Peter Lim in Mestalla.
The first day of Peter Lim in Mestalla.

Besides, UEFA will use the economic model to sanction those entities that do not respect the financial rules. Despite the fact that currently this type of penalty would mean elimination from the competition due to the few points to which they aspire (18), the fact of creating a league with more points at stake would be a sanction that the clubs could take into account.

Ceferin reformulates his previous UEFA model

The president of the UEFA has abandoned the main idea it had of imposing a system similar to the one that exists in the NBA. According to the information he had The times last summer, UEFA intended to severely punish clubs that failed to comply with economic regulations with luxury rates. The first idea was to distribute the money collected by UEFA among the rest of the clubs to make the new Champions League format more competitive.

Nevertheless, Ceferin has run into several impediments that have forced him to back down. First, the refusal of European labor law to impose wage limitssomething that the leader wanted to impose. And the most important, the refusal of all clubs, especially the most powerful.

Does it benefit Valencia CF?

After analyzing what are the main changes in European competitions, it could be said that English clubs are the most benefited from the new economic model. The reason for this conclusion is the great economic muscle they possess due to the millionaire income they receive for television rights. Especially tycoons like the owner of the manchester city: more income, more spending allowed and, therefore, better equipment.

Anil Murthy (Photo: Valencia CF).
Anil Murthy (Photo: Valencia CF).

Ceferin’s sensations

“I am very happy for the support from all parties, the leagues, the clubs and the members of the Executive Committee, which is a good sign. These regulations will help us protect the game and prepare it for any possible future impact while promoting rational investments. It builds a more sustainable future for the game”, affirmed the president of the organization, Aleksander Ceferin.

At the end of the Executive Committee meeting, Ceferin pointed out that although the first financial regulations introduced in 2010 fulfilled their first purpose, “the evolution of the football industry and the financial effects of the pandemic have highlighted the need for a reform and new standards of financial sustainability”. He added that “the key objective of the new regulations is to achieve financial sustainability. This will be achieved through three key pillars: solvency, stability and cost control.”