British media reported that Aston Villa and Chelsea will be fined by UEFA for violating financial regulations. UEFA's club financial control agency (CFCB) has been investigating the excessive spending of the two Premier League clubs before parti...
British media reported that Aston Villa and Chelsea will be fined by UEFA for violating financial regulations. UEFA's club financial control agency (CFCB) has been investigating the excessive spending of the two Premier League clubs before participating in next season's European matches. Officials at the two clubs have been in talks with the CFCB for a long time to try to reach a settlement.
Although the two clubs passed the Premier League's Profitability and Sustainability Rule (PSR) in January, which restricts clubs from losing no more than £105 million in three years, UEFA regulates it based on another set of rules and parameters. Chelsea advanced to the Champions League with fourth place, while Aston Villa, sixth place, will compete in the UEFA Cup and UEFA clubs, they must abide by the cost control ratio rules, which means wages and transfer fees must be within a certain percentage of income and the maximum loss in three years shall not exceed £77 million.
Why are these two clubs punished?
Chelsea was allowed to sell its women's team for £200 million to another company owned by the same family, Blueco 22 Midco Ltd, to account for the Premier League audited accounts. However, UEFA does not allow this practice, resulting in a significant gap in its accounts. Chelsea recorded £128.4 million in pre-tax profit in its accounts ended in June 2024, but that included the sale of the women's team.
In April this year, Chelsea issued a statement saying they had begun discussing "miscuous factors affecting their regulatory submissions". For the latest accounts under consideration (2023-24), the cost control ratio is set to 80%. It dropped to 70% last season and will remain this level for some time to come. The Premier League plans to turn to a similar rule system, but at the shareholders' meeting in February, clubs agreed to continue using the PSR system for the upcoming season. Financial rules for the next season are expected to be consistent with UEFA's regulations.
Aston Villa's accounts for 2023-24 show that the club's total wage expenditure was £252 million, while revenue was £257.7 million. While UEFA only calculates the salary of football staff, Villa has been discussing possible violations with the CFCB. Both clubs were asked to prove to UEFA that they did not ignore financial rules and were working to comply.
How much could they be fined?
In 2023, Manchester United was fined £257,000 for "slight" violation of UEFA's fiscal fair play rules. Manchester United claimed to have lost £240 million in revenue due to the epidemic, but UEFA adjusted that number to £12.8 million. Paris Saint-Germain was fined £56 million according to UEFA's previous financial fair competition rules.
Are these rules sufficient to act as a deterrent?
Whether the financial violation fine is sufficient to act as a deterrent for clubs with billionaire owners is a questionable question. In fact, these fines are more like extra taxes to them on the super rich. Plus the fine is only deducted from the bonus for next season, further weakening the effectiveness of the punishment. Breaking the rules and gaining an unfair advantage, the worst result at the moment is just a little less extra money next season. This is obviously not enough to serve as a warning. Therefore, it is not difficult to understand why the club would choose this route rather than operate within the scope permitted. Those extra millions of pounds spent on transfers and wages could be the key to determining league rankings.
When UEFA introduced cost control ratio rules in 2022, it said that these rules were intended to curb the rapid growth of player spending. UEFA warned that violating regulations would face economic penalties and "sports sanctions".
Barcelona will learn about the results of its suspected violation next week, which will be a touchstone for UEFA's serious attitude towards financial violations. Previously, Barcelona was fined 420,000 pounds for falsely reporting profits. Their appeal filed with the International Court of Arbitration for Sport (CAS) in October was dismissed. Now, Barcelona is expected to be found again in violations and has received a warning from UEFA that multiple violations will face tougher punishments. If UEFA starts deducting points, causing the team to be at a disadvantage in the group stage, this will send a clear signal to the clubs that violating financial rules will have serious consequences.
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