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UEFA President targets European elite clubs in bid to address competitive balance

By Jonathan Copping, Sports Lawyer, Bolt Burdon Law Firm, London, United Kingdom Ahead of next month’s UEFA annual general meeting in Helsinki, UEFA President, Aleksander Ceferin, has reiterated his willingness to evolve the football landscape in Europe. Central to his plans is the idea of redistributing power within European football in order to resolve the “decrease in competitive balance”. At a conference held in Lisbon on 22 March, 2017, Ceferin stated that UEFA must: “examine new mechanisms like luxury taxes, squad limitations and far transfer rules to avoid player hoarding and the excessive concentration of talent within a few teams”. UEFA currently has financial restrictions in place, as a result of the implementation of the financial fair play rules; however, these restrictions do not stop clubs from “player hoarding”. Instead, the restrictions focus on controlling the balance between clubs’ spending with their revenues. Presently, UEFA assesses clubs’ spending and revenues over a three-year period, and, subject to a small number of exceptions, if the club does not meet the break-even requirement, UEFA can order sanctions, including warnings; fines; points’ deductions; and disqualification/exclusion from competitions. Manchester City FC was ordered to play in the 2014-15 Champions’ League campaign with 21 players as opposed to the usual 25. One of the problems with UEFA’s current financial fair play rules is that they make it very difficult for a club to obtain a highly-rated young player, because the European elite clubs can “hoard” players to make sure that their less competitive rivals cannot sign such players. If UEFA did bring in controls to stop “player hoarding”, then it is expected that Chelsea FC would be impacted by the rule. Chelsea currently has 56 senior players under contract, 36 of whom are out on loan. By having such a large number of players under contract, Chelsea can prevent rivals from signing those players and choose to which clubs the players are sent out on loan. Unsurprisingly, Chelsea do not loan players to their main rivals. It is not known exactly how a “luxury tax” would be implemented; however, if it is similar to the “luxury tax” used in Major League Baseball in the US, it would mean that each club spending over a certain threshold would be taxed on each pound spent over the threshold, which is paid back to the League. These are certainly interesting times for UEFA in its plan to try to increase the competitive balance within its European competitions. Such a plan, as its purpose is to achieve a sporting objective, should not fall foul of EU Competition Rules, as long as the plan is proportionate.   Jonathan Copping can be contacted by e-mail at ‘This email address is being protected from spambots. You need JavaScript enabled to view it.
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Prof. Guglielmo Maisto
Maisto e Associati, Milano

Dr. Dick Molenaar
All Arts Tax Advisors, Rotterdam

 

Mr. Kevin Offer
Hardwick & Morris LLP, London

Mr. Mario Tenore
Maisto e Associati, Milano

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