Guiding Policy, Regulatory
and Financial Matters
The Guiding Policy, Regulatory and Financial Matters work stream enhances processes for shaping a regulatory environment which ensures that European clubs can thrive and evolve, and that the industry is well governed, transparent and sustainable.
The season kicked off with focus on the transfer system as the FIFA Football Stakeholders Committee, on which we sit as representatives of club football, endorsed a series of recommendations submitted by the Transfer System Task Force, which included the introduction of a cap on agents’ commissions, the limitation of multiple representation and a limit on loaning of players.
As far as loans are concerned, stakeholders deemed it important to prevent player hoarding to avoid limiting clubs’ access to talent by agreeing on limitations to international loans of players aged 22 and older.
When COVID-19 struck and clubs’ revenue streams began to dry up, it became clear that an urgent area to address were the regulatory frameworks governing clubs and players.
We conducted an analysis with PwC on the pandemic’s financial impact on European football clubs. The results demonstrated that, even with most competitions returning to play, there was a seismic shock to clubs’ revenues, which continue into the 2020/21 season.
Club Expenditure as % Revenue
Most of the clubs’ income
is going to cover wages.
In 2020/21, 70.1% of the income of the sample are calculated to go against salaries.
From the 10-league sample, the wage-to-revenue ratio (excluding net gains from player transfers) could increase from 59.6% in 18/19 to a projected 70.1% in 20/21. Without COVID-19, the ratio is estimated to have been 62.9%.
We can assume that lower tier league ratios of more than 100%
could become even more widespread.
Hugo Hamon,
Head of Finance, ECA
The financial impact of COVID-19 does not stop when the game resumes.
Rather, it continues in 2020/21 even if the season is played in full.
At FIFA level, the immediate focus was on employment contracts between clubs and players. Stakeholders created a framework that allowed many clubs to reduce their wage expenses, at least for a time, and this proved important in mitigating the impacts of COVID-19.
We worked closely with UEFA and other stakeholders to review UEFA Club Licensing and Financial Fair Play Regulations. It was critical to introduce sufficient flexibility and pragmatism to the regulatory frameworks to allow clubs to neutralise the negative financial impacts of COVID-19.
This work is ongoing. It’s widely accepted that a different industry will come out of this pandemic and that it’s necessary to reconsider the objectives and purpose of financial regulations going forward. Together with UEFA, we remain prepared to play a key role in the 2020/21 season in devising the most appropriate solutions in this regard.