UEFA have approved new spending rules that will replace the current Financial Fair Play (FFP) regulations.
At present clubs can spend up to €5million (£4.1m) more than they earn per three-year assessment period, but can exceed this level by €30m (£24.9m) if it is entirely covered by the owner.
Under the new Financial Sustainability Regulations, clubs will be limited to spending 70 per cent of their revenue in a calendar year on wages, transfers and agents’ fees.
UEFA are aware it may take clubs time to adapt to these rules and they will be eased in, with sides allowed to spend 90 per cent of their income in 2023, reducing to 80 per cent in 2024 and then 70 per cent the following year.
The plans, which have been put together with the help of the European Clubs Association (ECA), will also double the permitted losses over a three-year period from €30m (£24.9m) to €60m (£49.9m). Assessments will be performed on a timely basis and breaches will result in pre-defined financial penalties and sporting measures.
UEFA president Aleksander Äeferin 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.”
