UEFA have announced that they have adopted a new set of rules to replace Financial Fair Play.
At a meeting in Switzerland on Thursday new measures that will be implemented for clubs competing in European competition were introduced, with Financial Sustainability Regulations to replace FFP from June, with the focus being on keeping player wages and transfer fees down.
Liverpool, under the ownership of Fenway Sports Group, have been one of the European clubs to have consistently flown beneath UEFA's recommended wages to turnover ratio of 70 per cent, with the most recent set of accounts showing the Reds to be spending 64 per cent of their overall revenues on wages.
Remaining comfortably under that 70 per cent threshold has proven to be a wise move for the Reds, with the introduction of a new 'squad cost rule' to be introduced, where club spending on wages, agents and transfer fees will be capped at 70 per cent of a club’s revenue, and those who breach the regulation may find themselves subject to 'pre-defined financial penalties and sporting measures'.
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Also being introduced as part of the reforms are the 'no overdue payables' rule, designed to add greater protection for club creditors, with no overdue payables towards football clubs, employees, social and tax authorities and UEFA permitted. Those who miss a 90-day window to pay may find themselves subject to UEFA sanctions, either financial or competitive.
There is also the stability rule that allows for clubs to post €60m in losses over three years as opposed to the previous figure of half that within FFP. The explanation behind this is that it will, according to UEFA, aid the balance sheets of clubs, ensure the fair value of transactions and to reduce debts of clubs. UEFA argue that the changes to the rules encourage equity contributions from owners and shareholders as opposed to placing debt onto a club, something that has been a common occurrence in European football in recent seasons.
"One key feature of the new regulations is that the reframed reporting periods will allow UEFA to identify breaches as they occur," a UEFA statement explained.
"Breaches to the regulations will be sanctioned by the Club Financial Control Body (CFCB) according to a catalogue of sanctions listed in the CFCB procedural regulations.
"The overdue payable sanctions have been strengthened, while the football earnings requirements include the possibility of settlement agreements.
"The squad cost rule sanctions will be progressive based on the severity of the breach and number of breaches committed over a period of four years."
For Liverpool and FSG the rule changes, which will be phased in over a three-year period, have no impact on the operation as it stands. But for some of their Champions League rivals on the continent that haven't been able to grow revenues at the same pace that they have been spending on transfer fees and wages, it applies the brakes somewhat.
UEFA president Aleksander Ceferin said: "UEFA's first financial regulations, introduced in 2010, served its primary purpose. They helped pull European football finances back from the brink and revolutionised how European football clubs are run.
"However, the evolution of the football industry, alongside the inevitable financial effects of the pandemic, has shown the need for wholesale reform and new financial sustainability regulations.
"UEFA has worked together with its stakeholders across European football to develop these new measures to help the clubs to address these new challenges.
"These regulations will help us protect the game and prepare it for any potential future shock while encouraging rational investments and building a more sustainable future for the game."
