Europe: The reform of financial fair play, the pros and cons for PSG

The Financial Fair Play reform was approved by UEFA yesterday. If it were beneficial for the PSG, in particular thanks to its shareholder’s solvency, controlling expenditure on wages, transfers and commissions would be more problematic.

UEFA approved the new Financial Fair Play (FPF) rules yesterday. This new arrangement will come into effect in June and although it seems more favorable to PSG in certain respects than the old one, even if not everything is in its favour. Limiting spending on agents’ salaries, transfers and commissions to 70% of annual income by 2025 will force PSG to either increase revenues or reduce salaries and other costs.

In the case of PSG, Le Parisien indicates that PSG received 556.2 million euros during the 2020/2021 season, but the payroll was 502 million euros, ie just over 90% of the total receipts, which would have left him out placed the nails without even counting the transfers. However, UEFA has planned that this percentage will fall and should represent 90% by 2023 and 80% by 2024, enough to give clubs time. If a club does not comply with this rule, it risks fines that increase as the threshold is exceeded.

As for the new sanctions provided for in this new version of the FPF, they range from the ban on the use of one or more players who have just signed, a ban on recruitment, the deduction of points that take on its full meaning with the championship formula of the C1 from 2024, while the relegation of a European competition to that one step is discussed below. For UEFA and its FPF chief Andrea Traverso, even if this new financial fair play is more flexible, “Clubs cannot do what they want because they would be severely punished. †

The main purpose of this new arrangement is to guarantee the solvency of the clubs. For example, the threshold of 30 million allowable losses over three financial years has been doubled and rises to 60 million euros, which can be covered by a shareholder guarantee. The team even indicates that these losses could amount to 90 million euros for a club in good financial health. It’s hard not to put PSG in this category.

On the other hand, debts will be more tightly regulated, with the obligation to reduce losses by 10% each season if a club is in deficit. In addition, Le Parisien reports that outstanding payments to other clubs, to employees (players and administration) will also be monitored more closely by UEFA. These two elements do not seem to interest the PSG, which should be protected thanks to the resources of its shareholder.

According to the regional newspaper, these new rules would leave enough to Kylian Mbappé to extend by continuing to recruit. Especially since the PSG could choose to pay the fines imposed, even heavy, if the wage bill and costs are higher than the income.

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