UK football clubs make their money from sponsorships, matchdays and broadcast however often this isn’t enough to keep them out of debt.

The spending of a football clubs on infrastructure, salaries, competitions and more is often far more then the club earns back causing mounting debt and potential breaches of FFP.

 

FFP rules

FFP – Financial Fair Play

The FFP rules cam into force in 2014 to ensure financial sustainability for clubs and prevent financial disaster. It was a common theme that football clubs would be spending far more than they could afford and drowning themselves into debt with the hope of an investor to pull them back.

The UEFA set a budget for clubs and now the rule is they cannot have a loss greater than £105m over three seasons, £35m a season.

 

Debt

Many football clubs are in debt due to spending more than they earn, which is breaching FFP rules and could result in consequences.

According to figures on the BBC current Premier League club debt levels are approximately £3.6bn.

Wages are usually the biggest day-to-day running costs, as well as transfer fees with both absorbing about 90% of total Premier League revenue across the 20 clubs. Clubs have to resort to selling players and relying on owner generosity to cover the losses.

 

The consequences

If a football club is found to break FFP rules then they could face one of the below,

  • Fines
  • Warning
  • Points deducted
  • UEFA could withhold revenue
  • Unable to register a new player
  • Restriction on the number of players
  • Disqualification
  • Exclusion from future competitions

 

Who has been found breaking FFP rules

Everton – Breached FFP by £16.1m they were deducted 10 points which they appealed and this was brought down to 6 points.

Nottingham Forest breaches the rules by £34.5m over two seasons and only had 4 points deducted which they are appealing

Sky Sports tells us that as well as Everton and Nottingham, Sheffield United, Burnley, Luton and Brentford also await their verdict which will impact their Premier League relegation battle.