In a move that will certainly bring cheer to the European football clubs, UEFA is all set to make an announcement concerning the relaxation of Financial Fair Play (FFP) rules.
These FFP rules have been the bane of many a small club that has had to shell out exorbitant sums of money in fines.
In fact, UEFA is presently facing 10 different legal challenges on account of this issue and it is likely that this move will be able to defuse the situation.
In fact, just last season, Paris Saint-Germain and Manchester City were each slapped with fines of £49 million in addition to restrictions on their squads.
Chairman, Khaldoon al Mubarak of Manchester City stands by his club’s business model, especially since the club is absolutely debt free.
The FFP rules were put in place in order to ensure that clubs were managed properly with a view to ensuring long term sustainability and financial stability.
As a matter of fact, these rules were voted in by the clubs when they were originally proposed.
Clubs that do not comply with these rules not only face fines, but also expulsion from competition in Europe for certain lengths of time.
The current set of rules has been put in place with a view to promoting austerity, but it has also hampered club growth tremendously.
While these rules have definitely help reduce the losses faced by European clubs, they have proved to be a thorn in the side for many owners as well.
Many of the smaller clubs are eager for UEFA to permit increased owner investment because they simply do not have the heft to generate funds in the manner of the major teams.
At present, behemoths such as Real Madrid, Manchester United and Bayern Munich are taking in the lion’s share of money generated by broadcast rights and match day sales in addition to the sale of merchandise.
It seems likely that the amended rules will permit wealthy club owners to cover losses by writing off loans to their clubs with the understanding that they will not borrow funds in order to do so.
The proposed relaxation of rules has clearly been motivated by the need to attract wealthy people to invest in football clubs over a short to medium time frame.
The smaller clubs will also be able to bid for the bigger names now that restrictions on spending will be eased.
It should not come as a surprise to anyone that many clubs are lobbying hard for these unmistakably draconian rules to be relaxed at the earliest.
UEFA will be sitting down to deliberate on this matter in Prague towards the end of June.
Going by the statements that Michel Platini has been making of late, it seems likely that club owners and management will have much to cheer about.
While the governing body has stated its willingness to consider the opinions of all stakeholders, it remains to be seen whether the rules will really be relaxed substantially enough to make a difference and challenge the status quo in football.