What is Financial Fair Play? What happens if a club breaches FFP regulations?

Football fans were taken aback after the Court of Arbitration for Sport (CAS) overturned Man City's two-year ban from UEFA club competitions. Earlier this year, Man City were handed a two-year ban by UEFA after being found guilty of violating Financial Fair Play (FFP) regulations and overstating their sponsorship revenue. However, CAS' verdict stated the evidence proving the accusations of discrepancies in the sponsorship values were "not established or time-barred," hence lifting the ban. The initial €30 million fine has also been reduced to €10 million. 

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What is Financial Fair Play? FFP rules explained

Introduced ahead of the 2011-12 season, the FFP regulations were an attempt from European football's governing body to prevent professional clubs from spending more than they earn and thereby preventing the clubs from threatening their long-term survival. The FFP regulations provide for sanctions to be taken for clubs who exceed their spending limit over several seasons. The FFP limit of a club is calculated in terms of revenue (income from matchday sales, TV rights deal, advertising, player sales and prize money) against a club's spending (activity in the transfer market and employee benefits including player and staff wages). Funds spent by a club on developing infrastructure, training or youth facilities will not be included. 

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What is Financial Fair Play? FFP punishments

According to FFP regulations as mentioned in UEFA guidelines, there are eight separate FFP punishments that can be slapped on a club by the governing body for breach of FFP regulations. The most severe punishment is disqualification from the European competitions (as was the case with the Man City FFP breach). Other penalties include fines, points deduction, transfer bans and withholding of prize money. 

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What is Financial Fair Play? Man City FFP breach explained

Man City were fined €54 million by UEFA in May 2014 after the club failed to adhere to FFP regulations. However, it was later reduced to €18 million. Also, during the 2014-15 Champions League season, the club was allowed to name only 21 players in their UCL squad. The recent case of Man City violating FFP regulations was brought to light in 2018 when German publication Der Spiegel published a series of leaks accusing Man City of manipulating their sponsorship deals in order to show values way higher than the actual amount received. It was reported Man City's ownership company Abu Dhabi United Group funnelled investment into the club under the guise of several sponsorship deals. City were subsequently handed a two-year ban.

As noted above, CAS did not find the evidence conclusive enough to uphold UEFA's verdict. "UEFA notes that the CAS panel found that there was insufficient conclusive evidence to uphold all of the CFCB’s conclusions in this specific case and that many of the alleged breaches were time-barred due to the 5-year time period foreseen in the UEFA regulations," the statement from UEFA read. "UEFA will be making no further comments on the matter." The governing body also confirmed that the case is now officially shut. 

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(Image Credits: Man City Twitter Handle)