Countering COVID-19: An overview of the amendments to UEFA’s Financial Fair Play Rules

The pandemic has resulted in severe economic consequences for all stakeholders in the football world. The suspension of domestic football leagues led to substantial loss of revenue from ticket sales, sponsorship and broadcasting rights. Ambiguity concerning the resumption and format of current and future seasons meant that even the value of financial projections was limited.

As players and matches remained sidelined, players’ wages, in particular became unbearable for some clubs. Despite successful outcomes in most negotiations between clubs and players for a temporary salary reduction, the former were still facing financial distress and possibly even the impending breach of UEFA Club Licensing and Financial Fair Play Regulations (FFP Regulations).

In order to prove financial stability, football clubs affiliated to UEFA are required to report information on their financial position for the set monitoring period. The sustainability of clubs’ financial performance and their due discharge of monetary obligations are the linchpins of the licensing process. Consequently, a number of clubs across Europe were facing the very real prospect of losing their licence.

UEFA’s response

In April, we considered the possibilities with respect to UEFA's attempts to ease the financial and regulatory burden on football clubs. It since established an ad hoc body – the UEFA Emergency Working Group on Legal, Regulatory and Financial matters (UEFA Emergency Working Group) – to tackle the economic impact of COVID-19 on football clubs. This led to an addendum to the FFP Regulations (Addendum), adopted by the UEFA Executive Committee in June 2020 to come into force immediately and to be applied temporarily.

From the text of the Addendum three main objectives can be deduced:

  • to provide clubs with flexibility in relation to the timely satisfaction of their transfer and salary obligations;
  • to permit clubs to adjust the break-even calculations to account for COVID-19 related loss of revenue (relevant for reporting in 2020 and 2021); and
  • to postpone for one season the assessment of the financial year ending in 2020 in order to facilitate compliance of the clubs with the FFP Regulations.
The amendments

These objectives are set out in the amendments of two sections of the FFP Regulations, namely (a) the overdue payables for the 2020/21 licence; and (b) the break-even rule for the 2020/21 and 2021/22 monitoring periods.

(a) No overdue payables – Enhanced

The “No overdue payables – Enhanced” rules regarding payables towards other football clubs, employees and social/tax authorities have been amended exclusively for the assessment during the 2020/21 licence season.

  • The Addendum amends Articles 65, 66 and 66bis with respect to the date on which clubs have to prove that they have no overdue payables (31 July instead of 30 June).
  • The amendments thereby provide the clubs with an additional month to settle their monetary obligations towards the aforementioned counterparties and prove to the licensor that they have a clean sheet.
  • The other amendments in this section are related to the reporting of accounts receivable information. In order to enable cross-matching of reporting data, clubs should disclose (i) all transfers for which an amount is outstanding at 30 June/30 September; and (ii) all amounts settled between 30 June and 31 July.

(b) Break-even requirement

The Addendum amends the break-even requirements exclusively for the assessment during the 2020/21 and 2021/22 monitoring period.

The break-even rule is considered to be the centrepiece of the FFP Regulations. This rule concentrates on the relevant income (RI) and relevant expenses (RE) (each as defined in the FFP Regulations) of the clubs. The difference between the two financial metrics is the break-even result (BER) (being RI – RE = BER). Such break-even result is an indicator of the financial performance from football related activities. A club complies with the break-even requirement if the difference does not result in a deficit (i.e. negative figure) higher than EUR 5 million (or up to EUR 30 million, provided that such excess is entirely covered by contributions from equity participants and/or related parties). This aims to ensure that clubs operate on the basis of their own revenues and maintain financial discipline.

The changes introduced by the Addendum are focused on eliminating the effect of COVID-19 on clubs’ reporting requirements for 2020 by (i) postponing the assessment of FY 2020; and (ii) adjusting the break-even result for the reporting period ending in 2020 and 2021 which would be considered as a single reporting period (T), as explained below.

The relevant amendments to the reporting requirements are in Articles 59(1), 59(2) and 62(1) and can be summarised as follows:

  • For the licence season 2020/21 the monitoring period will cover two instead of the usual three consecutive reporting periods.
  • For the licence season 2021/22 the monitoring period will cover four instead of the usual three consecutive reporting periods.
  • The break-even information shall be prepared and submitted for the reporting periods ending in 2018, 2019 and the reporting periods ending 2020 and 2021 (i.e. reporting period T).

The break-even result for reporting period T is the sum of the break-even result for each of the reporting periods ending in 2020 and 2021. This enables the clubs to use projections for the reporting period ending in 2021 in order to reach a more beneficial break-even result.

Adjustments to the break-even result are applied in a two-step sequential manner:

(i) If the break-even result calculated for the reporting period T is a deficit, such result should be halved; and

(ii) the remaining break-even deficit can be further adjusted for the adverse financial impact due to COVID-19.

For the purposes of step (ii) above, COVID-19 adverse financial impact is the loss of revenue, calculated as the difference between the actual average revenues for the reporting periods ending in 2020 and 2021 and the corresponding anticipated average revenues for the same periods. For the calculation of the anticipated average revenues for the reporting periods ending in 2020 and 2021, the revenues recognised for the calculation of the break-even result in the reporting period ending in 2019 are taken as a minimum basis. This minimum basis can be additionally increased if evidenced by legal or contractual arrangements concluded before COVID-19 (e.g. new broadcasting or sponsorship deal).

It is important to note that such adjustments are permitted only to the following limited revenue items: Gate receipts, Sponsorship and advertising, Broadcasting rights, Commercial activities and Other operating revenue. A decrease in UEFA solidarity and prize money arising from reduced UEFA distributions due to COVID-19 can also be taken into consideration. However, additional revenue/income, including the net result from the disposal of player registrations, cannot be adjusted.


UEFA’s efforts to smoothen football clubs’ transition through the difficulties of COVID-19 and the licensing procedure is evidenced by these temporary amendments. The regulatory relief introduced by the Addendum is precise and appears to be limited strictly to COVID-19 related economic impact. On the face of it, it does not grant football clubs much flexibility.

It was initially anticipated that any changes to the FFP Regulations would be directed towards the overdue payables rules only. The assessment of the situation back in March was made on the assumption that the lockdown would continue for only one-two months; at the time, UEFA lacked clarity as to the size of the impact of COVID-19 on clubs’ financial stability. Over the ensuing months it became apparent that such limited amendments would be insufficient to cope with the financial fallout. An extension of the reporting date for overdue payables could not alone be the cure for the loss of revenue suffered. The break-even result is considerably affected by loss of revenue, thus it became clear that measures had to be taken with respect to this rule. As a result, the UEFA Emergency Working Group has come up with the adjustments to the break-even calculations as an additional instrument to counter the impact of COVID-19.

We will learn plenty in the coming few months about the sufficiency of the amendments and their effectiveness. Although play has resumed in many leagues, matches continue to be held behind-closed-doors and the current situation remains fragile and uncertain. While that is the case, it will be difficult to predict the success of UEFA’s measures. It is thus not inconceivable that UEFA will have to further relax restrictions and take additional steps to protect European club football.

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