Volume: 12 Issue: 5
UEFA’s Club Financial Control Body (CFCB) Investigatory Chamber agreed individual settlement agreements with the nine clubs it was investigating for breaches of its Financial Fair Play Regulations (FFPR) on 16 May. Article 14(1)(b) and 15 of UEFA’s Procedural Rules governing the CFCB allows UEFA to conduct settlement agreements with defendant clubs.
Bursaspor agreed to become break-even compliant for the 2014/15 monitoring period, which means that its aggregate break-even result for 2012, 2013 and 2014 and must not exceed a €45 million (if covered by a benefactor) deficit. The Turkish club has also agreed to a pay freeze and a €200,000 fine. Turkey’s Trabzonspor and Bulgaria’s Levski Sofia agreed similar terms.
Russian club Rubin agreed to report a maximum deficit of €30 million for the 2015 financial year and no deficit for 2016. It has also agreed to a pay freeze, to limit the number of players registered on the ‘A’-list for UEFA competitions and a €6 million fine. Russian clubs Anij and Zenit St. Petersburg agreed the same terms, but with a €2 million and €12 million fine respectively.
Galatasaray agreed to become break-even compliant for the 2015/16 monitoring period, which means that its aggregate break-even result for 2013, 2014 and 2015 and must not exceed a €30 million (if covered by a benefactor) deficit. The Turkish club has also agreed to a pay freeze and a €200,000 fine.
Paris Saint-Germain (PSG) agreed to report a maximum deficit of €30 million for 2015 and no deficit for 2016. It agreed to a pay freeze and to limit the number of players registered on the ‘A’-list for UEFA competitions, to limit transfer spending during the 2014/15 and 2015/16 seasons and to pay UEFA a €60 million bond, which will be withheld from revenue it earns in UEFA competitions from 2013/14 onwards. Of this, €40 million will be returnable provided the club achieves the settlement terms agreed with UEFA. Manchester City agreed the same terms, only it agreed to a maximum break-even deficit of €20 million for the 2014 financial year and €10 million for 2015.
UEFA said that PSG’s contract with Qatar Tourism Authority ‘has been carefully considered and a fair value, significantly below that submitted by the club, has been assigned.’ The French club has been owned by the Qatar Investment Authority since 2012.
Annex V1(E)(1) of UEFA’s CLFFPR require clubs to provide ‘Confirmation that related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.’ Annex X(A)(2)(j) allows UEFA to decrease a club’s ‘relevant income’ calculation if it deems that ‘income transaction(s) with related party(ies) [were] above fair value.’
Manchester City faced a similar examination. ‘In this context certain commercial partnerships were subject to examination,’ reads the agreement with City. ‘In order to avoid dispute and for the avoidance of doubt, Manchester City has agreed that for the period of the settlement it will not seek to improve the financial terms of two second tier commercial partnerships.’
Manchester City is owned by Sheikh Mansour Bin Zayed Al Nahyan of the United Arab Emirates Royal family and Abu Dhabi United Group, and it is understood that UEFA is referring to two of the following sponsors: Visit Abu Dhabi, Etisalat and Aabar Investments PJS. UEFA approved the club’s headline sponsorship deal with Emirates under its rules on related party transactions.
Manchester City also agreed that ‘revenues from the sale of assets within their group structure will not be included in future break-even calculations.’ It is not known whether this refers to the sale of City Football Marketing Limited and City Football Group Limited referred to in the club’s 2012/13 accounts. The accounts also refer to funding received on behalf of Brookshaw Developments Limited, a company also owned by Abu Dhabi United Group.
There were indications that PSG and City were not happy with UEFA’s judgement regarding their compliance. In a 16 May statement, Manchester City said there remains a ‘fundamental disagreement between the club’s and UEFA’s respective interpretations of the FFP regulations on players purchased before 2010. The club believes that it has complied with the FFP regulations on this and all other matters. In normal circumstances, the club would wish to pursue its case and present its position through every avenue of recourse. However, our decision not to do so must be balanced against the practical realities for our fans, for our partners and in the interests of the commercial operations of the club.’
Paris Saint-Germain said that it ‘deplores the fact that although the partnership agreement with the QTA [Qatar Tourism Authority] has been recognised, the full value of said agreement has not been taken into account.’ In its 16 May statement, it said it had ‘taken the decision to accept the measures imposed on it in spite of the tremendous handicap they represent in terms of the club’s ability to compete on an equal footing against Europe’s biggest teams.’
“Until a precedent is set by way of a challenge/appeal to the adjudicatory panel, we really don’t have a full and proper interpretation of the parameters of FFP,” said Jack Anderson, Professor of Law at Queen’s University Belfast. “If we take it that FFP is about living within your ‘means’ so as to ensure prudent economic management etc., all that we can garner thus far from the sanctions imposed on Man City and PSG is that in its initial guise, FFP must be seen primarily as an anti-subsidy policy.”
Each club will continue to be monitored, and if they do not comply with the terms of their individual agreements with UEFA, they will be automatically referred to the CFCB Adjudicatory Chamber, as stipulated by Article 15(4) of the Procedural Rules governing the CFCB, which will decide on any further disciplinary measures.