The union of European football association’s club licensing and financial fair play regulations - are they working?

Abstract

Good governance of sport is of the highest importance, particularly in professional team sports, which require large expenditure to maintain a club’s position in a league. This has led to a number of clubs, such as Portsmouth in the English Premier League, being forced into administration. Furthermore, the Global Financial Crisis has emphasised the need for more appropriate and robust corporate governance, including for sporting bodies. The Union of European Football Association (UEFA), under its president, Michel Platini, has introduced Club Licensing and Financial Fair Play Regulations. They aim to bring greater security and financial viability to the management of European football. These Regulations focus on the non-payment of liabilities to other clubs, employees, and players, and the break-even requirement. These changes emphasise the need for European football clubs to meet their financial commitments in a timely manner and operate their clubs within their income revenue, rather than from loans or investments from wealthy club patrons or owners. The regulations seek to bring financial integrity and stability to European football. The Regulations seem to have achieved this and have generally been accepted by the clubs, but they are under legal challenge before the European Court. Meanwhile, the use of the Regulations in Australia would not be appropriate, as Australian sports, including football, have developed indirect means of curbing the financial spending of clubs through the use of salary and transfer fee caps.