Club licensing and FFP keeps clubs on positive course

Financial fair play is working, and is creating a positive turnaround in European club football finances - a clear message from the annual UEFA Club Licensing and Financial Fair Play workshop in Montenegro.

©Savo Prelević

The Football Association of Montenegro (FSGC) hosted representatives from UEFA, its 55 member associations and guests from FIFA, AFC, CAF, CONCACAF and CONMEBOL confederations for the 16th edition of the UEFA Club Licensing and Financial Fair Play Annual Workshop, which addressed a number of current licensing challenges and financial trends.

UEFA’s head of club licensing, Aleš Zavrl, highlighted the fact that “out of the 555 applications received for UEFA licences, 491 were successfully granted, representing the highest success rate to date since the system was implemented.”

This workshop also saw around 160 licensing and financial experts from across Europe being presented with the latest figures, following a detailed review of over 700 clubs. The conclusion was that in the most recent year, top-division clubs generated higher operating profits than ever before, and that combined club losses (after transfers and financing) have decreased for the fifth consecutive year, reducing from €1,700m before the start of FFP to just over €260m.

Improved financial stability and performance is spreading through Europe, with transfer profits and increased UEFA competition distributions moving more than half of Europe’s leagues into profitability for the first time. Overdue payables assessments likewise continued to produce encouraging results, with just under €7m in overdue payables towards clubs, employees and social tax/authorities registered as of 30 June 2017.

Once again, this provides evidence that financial fair play is working, and is creating a positive turnaround in European club football finances. Other evidence demonstrating the strong effect of the system is the continued decrease of club net debts, which are now at their lowest level on record, representing just 35% of annual revenue.

The workshop featured an update on FIFA club licensing, as well as a panel discussion gathering representatives from FIFA and our sister confederations discussing their different experiences and realities when implementing club licensing in their respective continents.

A significant topic in this year’s gathering was how club licensing can develop going forward, in order to adapt to the ever-evolving landscape of European football.

With that in mind, UEFA presented the participants with the latest results obtained by one of its recent research projects on determinants for successful youth academies in Europe, and how it could be applied using club licensing as a tool to raise standards.

A number of national associations were also invited to present club licensing initiatives they have introduced at domestic level, and how they could be used to improve governance and management at both league and club level.

The representatives from all 55 UEFA member associations joined group discussions during one of the sessions, where they could address issues such as financial polarisation and transfer concentration, so as to share not only their experiences, but also provide new ideas on how and what the system should pay attention to in the future.

UEFA vice-president and Club Licensing Committee chairman Michele Uva encouraged this forward-looking approach, as he said that “when club licensing was introduced in 2004, it aimed primarily to raise minimum standards in European football governance following a large number of cases of mismanagement that have even, in some cases, unfortunately led clubs to ruin. However, we have gone a long way since then, and a great deal has been achieved […] I only ask that we now all continue to show such great dedication, and keep looking ahead in order to tackle anything that would go against these objectives.”