What are Football’s Financial Fair Play rules?

If you consider yourself a football fan or are even remotely interested in the sport, you’ll be all too familiar with ‘Financial Fair Play’ (FFP). Rules that have been put in place to ensure that football teams aren’t spending more than they’re generating, helping them to be financially stable.

The concept isn’t new to the footballing world with UEFA establishing it back in 2009, and later implementing the rules at the start of the 2011/12 season. But what exactly are the rules and how do they work?

Same rules, different name

Before we jump into it, it’s important that we clear up a couple of details. Firstly, the Premier League has its own version of FFP which is referred to as ‘Profit and Sustainability Rules’ or PSR. With UEFA also rebranding its regulations under ‘Financial Sustainability’.

Whilst they have moved away from the term FFP, the same rules apply. Setting specific loss limits for clubs over an agreed duration of time, with risk of penalties if these are exceeded.

However, for the purpose of this blog, we’ll be taking a look at the Premier League’s FFP regulations and how teams are impacted as a result.

What are the main rules?

Clubs were deemed financially compliant for the 2023/24 season, but what did they adhere to in order to achieve this?

• Limit on losses: Across a three-year period, clubs can’t lose more than £105m
• Secure funding: A huge chunk of this limit on losses must be covered by ‘secure funding’. Clubs can only lose £15m of their own cash during this period, meaning anything above that and up to the £105m must be then guaranteed by owners buying shares - which is known as ‘secure funding’.

Premier League teams will also then need to submit financial plans for the next two seasons, within this they’ll need to have explained how they will be avoiding going into the red.

The list of financial rules doesn’t stop quite there, as alongside this there are also strict requirements surrounding paying transfer fees, salaries and taxes on time. As well as submitting accounts each year and ensuring that they disclose any payments made to agents.

How does this impact the Premier League?

The rules put in place restrict the amount Premier League clubs can spend on transfers and wages, which enforces clubs to spend within their means. Whilst on paper this may seem quite restrictive, the rules are there to protect clubs - by preventing excessive spending that could lead to financial instability.