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Richest clubs benefit from new UEFA rules

Uefa has replaced financial fair play by a sustainability framework of squad cost control with the ratio of player wages, transfers and agent fees being limited to 70% of revenue and profit on player sales.

In reality, the cost control ratio will benefit the wealthiest clubs, who either enjoy big TV money or large commercial deals. This could further cement the dominance of English clubs, who make up 16 of the top 30 richest clubs, according to the Deloitte Money League.

Perhaps a better way of highlighting how the new ratio will widen the gap to the elite clubs is the amount they could spend and still be within the 70% cost control target.  For example, the difference between the Big Six and the rest in England is enormous. Manchester City’s budget would be £481m, while 7th-placed Aston Villa could only spend £193m, which is around 40% as much.

Newcastle United have a very high cost control ratio of 107%. This highlights the challenge for ambitious clubs, which have to invest in their squad in order to have a better chance of success, though revenue growth inevitably lags behind the expenditure.  their ratio will improve as their revenue grows, e.g. with the onset of Champions League money, new sponsorship deals, etc.

UEFA’s wish is clearly to make the new Financial Sustainability more relevant to the modern game via a soft salary cap, which is an attempt to address the continuing high spending of many football clubs. Punishment for any infringement appears to be more transparent, though, as always, the proof of the pudding will be in the eating.

In any case, while it will be challenging for clubs to meet the new cost control target, it should be eminently achievable for the majority, further eased by the gradual implementation over a 3-year period.

As always, the new rules are likely to benefit the richest clubs the most, as the cost control ratio helps perpetuate bigger budgets for clubs benefiting from higher revenue and player sales.

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