Club Licensing Disc 701933a

UEFA Club Licensing
Discussion Paper
Private & Confidential
March 2010 - Version 0.98

This is a working document and is subject to amendment and change. This document is confidential to
UEFA and the parties involved in UEFA’s consultation process. The document must not be disclosed,
made available or communicated to any other party.

CONTENTS
INTRODUCTION 1
GENERAL PROVISIONS
1. Scope of application 6
2. Objectives 6
3. Definition of terms 6
RESPONSIBILITIES
4. Responsibilities of UEFA 9
5. Responsibilities of the CFC Panel 9
6. Responsibilities of the licensor 10
7. Responsibilities of the clubs 10
8. Responsibilities of the Organs for the Administration of Justice 11
9. The club monitoring process 11
10. Confidentiality 12
BREAK-EVEN REQUIREMENTS
11. Introduction 13
12. Information to be prepared and submitted by a club 15
13. Definitions of relevant income and relevant expenses 19
14. Assessment of the break-even requirements 23
NO OVERDUE PAYABLES REQUIREMENTS
15. Enhanced No overdue payables requirements 27
FUTURE FINANCIAL INFORMATION REQUIREMENTS
16. Enhanced Future financial information requirements 29
TRANSITIONAL ARRANGEMENTS
17. Implementation of the club monitoring requirements 31
APPENDIX 1: EXPLANATORY NOTES 34
APPENDIX 2: DRAFT TEMPLATE 49
APPENDIX 3: ILLUSTRATIVE BREAK-EVEN SCENARIOS 50
APPENDIX 4: MONITORING PROCESS 55
APPENDIX 5: DEBT MONITORING 57

INTRODUCTION
On 15 September 2009 UEFA’s Executive Committee approved the ‘financial fair play concept’ for the
well-being of European club football. This followed the recommendations made in August by the
Professional Football Strategy Council, which in turn had followed unanimous support by the UEFA
Club Licensing Committee, UEFA Club Competitions Committee and approval by the European Club
Association Board.
In January 2010, UEFA circulated to the football family a draft Discussion Paper (Version 0.93), which
set out a proposed approach for the new club monitoring requirements. We sought, and welcomed,
your feedback which has been taken into consideration during the development of this updated draft
Discussion Paper (Version 0.98).
Purpose
The UEFA club licensing regulations represented a major step forward for higher standards within
European club football. To supplement and complement the existing UEFA Club Licensing
Regulations, some new club monitoring requirements have been drafted to meet the approved
objectives and principles. In developing the new requirements, UEFA has taken into consideration
experience and feedback from European club football’s stakeholders. Therefore, the updated
Regulations will comprise both the ‘club licensing criteria’ (largely as exist at present) and ‘club
monitoring criteria’ (being the new requirements from the ‘financial fair play concept’).
The new club monitoring requirements aim principally to:
• Introduce more discipline and rationality in club football finances;
• Decrease pressure on players’ salaries and transfer fees and limit inflationary effect;
• Encourage clubs to compete with their revenues;
• Encourage investment for the long-term benefit of clubs, such as investment in infrastructure
(sports facilities) and in youth;
• Protect the long term viability and sustainability of European club football; and
• Ensure clubs settle their liabilities on a timely basis.
These approved objectives reflect the view that UEFA has a duty to consider the systemic
environment of European club football in which individual clubs compete, in particular the wider
inflationary impact of clubs’ spending on salaries and player transfer fees and increasing levels of
indebtedness across European club football. In recent seasons, many clubs have reported repeated,
and worsening, financial losses.
Further, the wider economic situation has created difficult market conditions for clubs in Europe and,
in particular, this can negatively impact revenue generation and creates additional challenges for
clubs in respect of availability of financing and assessment of going concern. Many clubs have
experienced liquidity shortfalls, for instance leading to delayed payments to other clubs, employees
and social/tax authorities. Therefore, as requested by the football family, and in consultation with the
football family, UEFA aims to develop sensible and achievable club monitoring requirements to
supplement the existing club licensing requirements and to safeguard the future sustainability of
European club football.
UEFA Club Licensing – Discussion Paper (Version 0.98) Private & Confidential 1

Multi-dimensional and risk-based approach
The consistency of application of club licensing requirements by licensors and the monitoring of clubs
will be overseen by the Club Financial Control Panel that was created in 2009. In order to meet the
above objectives, a multi-dimensional approach is being adopted for assessing a club’s financial
situation, in the wider context of European club football. This approach is illustrated in the diagram
below.
The existing club licensing criteria

and the new club monitoring
requirements will, when combined,
enable a multi-dimensional
assessment of a club across the
different facets of its financial
situation (the die on the left) – the
balance between a club’s income
and expenses, its balance sheet
position (including debt), and ability
to meet liquidity requirements.
The club licensing criteria (in respect of going concern, no overdue payables and liquidity plan) are
primarily designed to enable an assessment of a club’s financial situation in the short term. These
existing criteria have been built on and enhanced in the new club monitoring requirements. In
addition, a new measure has been introduced – the ‘break-even requirement’ – which requires a
club’s relevant expenses to be no more than its relevant income over time. This break-even result will
be calculated annually, but assessed using a multi-year approach. Together, the existing club
licensing criteria and the new club monitoring requirements will involve a multi-year assessment of a
club’s financial situation, enabling a longer term view to be formed and within the wider context of
European club football.
Club monitoring will focus more on those clubs in UEFA club competitions that exhibit warning signs
with less onerous requirements than for other clubs. This risk-based approach uses defined
indicators to bind together existing club licensing and the new monitoring requirements.
In performing the assessment, the CFC Panel will consider each criterion individually, but also in the
context of the multi-dimensional approach in order to appreciate and understand a club’s overall
financial situation. Clubs will therefore be assessed on an individual basis as well as in the wider
context of the European club football environment; i.e. an individual club’s behaviour may be
sustainable for that club, but it may be considered to have a negative impact on the European club
football system as a whole.
Thus a club’s financial situation will be judged via a series of different indicators and requirements
which will take into consideration whether the club is considered to be a going concern, its ability to
meet its liabilities as they fall due, its balance sheet position in particular its debt situation and its
balance between expenditure, in particular salaries and transfer fees, and income generated.

The requirements
Existing club licensing financial criteria:
• Going concern – addressed through the criteria for audited annual financial statements and
interim financial statements;
• No overdue payables criteria; and
• Future financial information.
In conjunction with key stakeholders, UEFA has been working to develop some draft requirements to
meet the approved objectives and principles. These new requirements will supplement, complement
and enhance the current UEFA Club Licensing Regulations. Clubs will continue to prepare their
annual financial statements in accordance with their national accounting practice or IFRS. The new
club monitoring requirements will apply to clubs that are entered into a UEFA club competition and
include:
• The break-even criterion;
• No overdue payables criteria – enhanced version; and
• Future Financial Information – enhanced version.
The approved objectives and principles of the ‘financial fair play concept’ implicitly included the aim of
better controlling clubs’ debt levels to be at sustainable levels. The multi-dimensional approach has
been developed such that club monitoring requirements address debt control in a variety of ways and
from different angles.
A club may also be requested to provide additional information if it is considered to exhibit other
‘warning signs’, such as a ratio of salary costs to revenue greater than 70%.
Within the approved ‘financial fair play concept’ there was also a proposed sporting measure to limit
the number of registered players for each club. This specific matter is being addressed separately and
is not considered in this Discussion Paper.
These new club monitoring requirements aim to have positive benefits for individual clubs and for
European club football. Therefore, UEFA recommends that each member association should
consider also implementing the club monitoring requirements at a national level.
Below is a summary of how the existing club licensing criteria and the new monitoring requirements
will combine to enable a multi-dimensional approach to the assessment of a club’s financial situation.
i) Going concern (club licensing) - the going concern assumption, which is assessed by both
club management and the independent auditor, is a fundamental principle in the
preparation of a club’s audited annual financial statements that are submitted to the
licensor.
ii) No overdue payables (club licensing) - a club must prove that it has no payables overdue
towards other football clubs arising from transfer activities, and towards employees and
social/tax authorities, as at 31 December/31 March of the year preceding the season to
be licensed.

iii) Future financial information (club licensing) - a club must prepare and submit (prior to the
start of the UEFA season for which a licence has been requested) a budgeted profit and
loss account, a budgeted cash flow and explanatory notes including assumptions and
risks, covering at least the period of the season to be licensed.
iv) Break-even criterion (monitoring requirement) - The cornerstone of the new club
monitoring requirements is the Break-even requirement which aims to encourage clubs to
achieve a sustainable balance between their levels of spending and income generation.
The Break-even criterion applies to all clubs that have qualified on sporting merit for, and
been granted a licence to participate in, the next UEFA club competitions. The exception
is that any clubs for whom both relevant income and relevant expenses are below €5m
will not be further assessed.
This is based on a club’s profit and loss account. In principle, a club should always
break-even on an annual basis. Broadly speaking, this means that a club’s expenses
should not be higher than its income. However, under certain specific conditions further
explained in this discussion paper, a club may still be deemed in compliance with this rule
if there is an excess of expenses over income. In particular if such an excess is related
solely to costs that are for the long term benefit of the club (for example, expenditure on
youth development activities or on community development activities, or depreciation of
tangible fixed assets such as a club’s stadium and training facilities) then this excess will
not be considered in compliance with this criterion. The affordability of any such excess
may be assessed by the criteria relating to a club’s liquidity (i.e. the Future financial
information). In this respect, the Break-even result will be calculated for each relevant
reporting period and will be assessed using a multi-year approach.
v) No overdue payables enhanced (monitoring requirement) - enhanced requirements such

that, in addition to the existing assessment date of 31 December for club licensing, two
additional assessment dates of 30 June and 30 September (on a risk basis) will be
introduced to ensure clubs continue to comply with requirements during the season of the
competition.
vi) Future financial information enhanced (monitoring requirement) – enhanced

requirements such that some clubs (selected using a risk based approach) will be subject
to additional assessment during the season of the competition to ensure they have
sufficient liquidity to meet their obligations and will be able to fulfil the Break-even criterion
in the future.
Information to be prepared and submitted by a club
Where possible, the new club monitoring requirements are based, and build, on existing information
that is already prepared under club licensing, in order to minimise the administrative burden on clubs.
UEFA intend to develop a web-based IT tool that can be used by the clubs, licensors, UEFA
administration and the CFC Panel. This will help ensure there is an integrated and efficient process
for information flows between the parties involved. The information requirements in respect of each
criterion are summarised below.
i) Going concern (club licensing) - management’s assessment and the independent auditor’s
opinion is included in the club’s audited annual financial statements, as submitted to the
licensor.
ii) No overdue payables (club licensing) – the reporting templates/formats created for club
licensing for the 31 December assessment date, as submitted to the licensor.

iii) Future financial information (club licensing) - the club’s budgeted profit and loss account,
budgeted cash flow and explanatory notes including assumptions and risks, as submitted to
the licensor.
iv) Break-even criterion (monitoring requirement) - clubs will extract information from their
annual financial statements and underlying accounting records for the required calculations.
v) No overdue payables enhanced (monitoring requirement) - approach and information

requirements for the 30 June and 30 September dates to be consistent with existing
requirements (based on the 31 December/31 March assessment date).
vi) Future financial information enhanced (monitoring requirement) - approach and

information requirements to be consistent with existing requirements.
Timing of implementation and transitional arrangements
The Break-even and future financial information requirements will be implemented as from 2012,
effective for UEFA competition season 2013/14. It is envisaged that there will be earlier
implementation of the enhanced No overdue payables requirements effective for UEFA competition
season 2011/12.
Next steps
This Discussion Paper represents the latest draft of the new club monitoring requirements that has
been distributed as part of the extensive consultation process with the wider European football family.
We welcome constructive feedback about the proposed requirements. UEFA is working towards the
approval of the proposed club monitoring regulations at its EXCO meeting in May 2010.
Within the approved ‘financial fair play concept’ there was also a proposed sporting measure to limit
the number of registered players for each club. This specific matter is being addressed separately and
is not covered in this Discussion Paper.
After May 2010, UEFA will develop the web-based IT tool that will be used to help minimise any
additional administrative burden on clubs and licensors, and will provide additional guidance and
education to licensors and clubs working towards implementation. UEFA is committed to working
together with the key stakeholders to ensure that the new requirements are implemented
appropriately.
These new club monitoring requirements aim to have positive benefits for individual clubs and for
European club football. Therefore, UEFA and the other key stakeholders are recommending that
each member association should consider also implementing the club monitoring requirements at a
national level.
UEFA firmly believes that these club monitoring requirements will help improve financial fairness in
European competitions and the long term stability of club football. Working together we can achieve
these ambitious objectives for the future benefits of European football.

GENERAL PROVISIONS
1 Scope of application
All clubs that received a licence from their national associations and that are entered into a UEFA club
competition must comply with the new club monitoring requirements.
For club monitoring requirements, the reporting entity (or combination of entities) in respect of which
financial information is required to be provided is to be the same as that for club licensing.
The Break-even and Future financial information requirements will be implemented as from 2012,
effective for UEFA competition season 2013/14. During the first three years and up to 2014 a
transitional period is foreseen (refer to Section 17 for further description of the transitional
arrangements). It is envisaged there will be earlier implementation of the enhanced No overdue
payables requirements effective for UEFA competition season 2011/12.
UEFA recommends that each member association should consider also implementing the club
monitoring requirements at a national level.
2 Objectives
As approved by UEFA’s Executive Committee and key stakeholders, the overarching purpose of club
monitoring is to improve financial fairness in European competitions and the long term stability of club
football.
The club monitoring requirements aim principally to:
• Introduce more discipline and rationality in club football finances;
• Decrease pressure on players’ salaries and transfer fees and limit inflationary effect;
• Encourage clubs to compete with their revenues;
• Encourage investment for the long-term benefit of clubs, such as investment in infrastructure
(sports facilities) and in youth;
• Protect the long term viability and sustainability of European club football;
• Ensure clubs settle their liabilities on a timely basis.
3 Definition of terms
In addition to the terms defined below, the explanatory notes provide some further definitions in
respect of terms relating to relevant income/expenses.
Terms marked * have been defined previously for club licensing purposes (as included in the current
UEFA Club Licensing Regulations (Edition 2008) and the Club Licensing Manual version 2.0).

acceptable deviation A club’s aggregate Break-even deficit for three reporting

periods is within an acceptable deviation if it is either (i) no
more than €5 million in aggregate if not covered by
contributions from equity participants and/or related parties, or
(ii) no more than an amount to be determined by UEFA* if
covered by contributions from equity participants and/or related
parties.
* In assessment years 2013 and 2014, the acceptable deviation for a

club is the aggregate Break-even deficit for two/three reporting periods
being no more than €45 million if covered by contributions from equity
participants and/or related parties. In each of assessment years 2015
to 2017, the aggregate level across three reporting periods is reduced
to €30 million.
annual financial statements * A complete set of financial statements prepared as at the

statutory closing date normally including a balance sheet, profit
and loss account, a statement of cashflows and those notes
and other statements and explanatory material that are an
integral part of the financial statements.
CFC Panel UEFA Club Financial Control Panel
club For the purpose of this Discussion Paper, the legal entity that is
the licensee (i.e. a licence applicant that has been granted a
licence) is referred to as a “club”. This is the legal entity fully
and solely responsible for the football team participating in
national and international competitions.
club licensing criteria * The requirements to be fulfilled by a club to be granted a

licence.
club monitoring requirements Requirements to be fulfilled by a club after it has been granted
a licence which, in this Discussion Paper, include the Break-
even requirements, No overdue payables criteria and Future
financial information requirements.
Club Licensing Regulations * UEFA Club Licensing Regulations (current edition is 2008)
costs of acquiring a player’s registration * Payments to third parties for the acquisition of a player’s
registration, excluding any internal development or other costs.
They include:
a) transfer fee payable for securing the registration;
b) transfer fee levy (if applicable); and
c) other direct costs of obtaining the player’s registration.
current financial information Information in respect of the financial performance and position
of the reporting period with a statutory closing date in the year
that the UEFA club competitions commence. In this document,
current financial information is sometimes referred to as the
reporting period T.
historic financial information Information in respect of the financial performance and position
of reporting periods ending in the year(s) prior to
commencement of the UEFA club competitions. In this
document, the historic financial information for the reporting

periods covered by the two most recent audited annual

financial statements are sometimes referred to as T-1 and T-2.
Immediately preceding club licensing cycle The most recent club licensing cycle that has been completed
prior to the commencement of UEFA club competitions. To
illustrate: As at July 2009 the immediately preceding club
licensing cycle was the cycle to May 2009.
International Financial Reporting Standards and Interpretations adopted by the International

Standards (IFRS) * Accounting Standards Board. They comprise:
• International Financial Reporting Standards;
• International Accounting Standards; and
• Interpretations developed by the International Financial

Reporting Interpretations Committee or the former
Standing Interpretations Committee.
management * Describes those responsible for the preparation and fair

representation of the financial statements and other financial
information in respect of the club, including the information in
respect of club monitoring requirements.
Net debt Net debt is defined as the borrowings of the club less any cash
and cash equivalents. A club’s borrowings will include
balances such as bank overdrafts and loans, owner and/or
related party loans and finance leases. For the avoidance of
doubt, net debt does not include accounts payable relating to
player transfers, nor trade and other payables.
Organs for Administration of Justice * UEFA’s Organs for Administration of Justice as set out in
UEFA’s Statutes Art.32-34.
reporting entity * The registered member and/or football company or group which
must provide the information for both club licensing and club
monitoring purposes.
reporting period * The financial reporting period ending on the statutory closing
date, whether this is a year or not.
stadium * Means the venue for a competition match including, but not
limited to, all properties and facilities near to such stadium (for
example offices, hospitality areas, press centre and
accreditation centre).
statutory closing date * The annual accounting reference date of the reporting entity.
training facilities * The venue(s) at which a club’s registered players undertake

football training and youth development activities take place on
a regular basis.

RESPONSIBILITIES
4 Responsibilities of UEFA
In conjunction with licensors, UEFA governs the club monitoring process.
In particular, UEFA must:
• Establish an appropriate club monitoring administration to support the works of the Club Financial
Control Panel;
• Define the club monitoring process; and
• Ensure equal treatment between all clubs subject to the club monitoring process and guarantee
the clubs full confidentiality with regard to all information provided during the process.
The tasks of the UEFA administration shall include:
• Preparing, implementing and further developing the club monitoring process;
• Providing administrative support to the CFC Panel;
• Providing administrative support to the decision-making bodies;
• Serving as a contact point and assisting and advising the clubs and the licensors; and
• Serving as a contact point for and sharing expertise with the licensing departments of UEFA
member associations.
5 Responsibilities of the CFC Panel

The CFC Panel:
• Conducts and/or recommends on compliance audits as defined in Article 55 of the Club Licensing
Regulations; and
• Assesses the documents submitted by the clubs to consider whether this is appropriate and
determine whether each monitoring requirement has been met and what further information, if
any, is needed.
In carrying out its tasks, the CFC Panel may:
• Summon clubs to a hearing;
• Request clubs and/or licensors to provide additional information (such as documents);
• Request clubs and/or licensors to meet a specific condition within a set deadline; and
• If deemed that the club monitoring requirements have not been fulfilled, and taking into
consideration other information in respect of the club, refer the case to the Organs for
Administration of Justice, which shall take the appropriate measure(s) without delay in
accordance with the procedure defined in the UEFA Disciplinary Regulations for urgent cases.

6 Responsibilities of the licensor

UEFA is committed to continue assisting the national associations in their role as licensor and co-
operate with licensors in the assessment of the club monitoring requirements.
In particular, the tasks of the licensor include:
• Assess whether the selected reporting entity/entities is consistent with club licensing and is
appropriate for the club monitoring requirements;
• To receive from its member clubs covered by the scope of the club monitoring requirements the
information in respect of club monitoring requirements;
• To confirm that the information in respect of each club is complete;
• To undertake specific assessment procedures in respect of the information submitted in respect

of each club;
• To communicate each relevant club’s full information in respect of club monitoring requirements to
the CFC Panel, together with confirmation that the licensor has completed the appropriate
assessment procedures in respect of each club;
• To co-operate with the CFC Panel in respect of its requests and enquiries in respect of specific
clubs.
7 Responsibilities of the clubs

The club/licensee must provide the licensor and the CFC Panel with:
• All necessary information fully and accurately completed and/or relevant documents to fully
demonstrate that the club monitoring requirements are fulfilled;
• Any other document requested and deemed to be relevant for club monitoring decision-making;
and
• Co-operation by ensuring relevant persons attend meetings.
A club may at any time submit a written request to the CFC Panel for a clarification of the club
monitoring requirements. Clubs are invited to put all instances of doubt or uncertainty to the CFC
Panel for decision. Any practice or procedure which, in the opinion of the CFC Panel, is calculated to
defeat in any way the overriding objective of these requirements will be deemed to have been
deliberately concealed unless previously submitted to the CFC Panel.
The CFC Panel will make available a summary of any such request for clarification, together with the
CFC Panel’s response (omitting any confidential or commercially sensitive information), to all
licensors and clubs.

8 Responsibilities of the Organs for Administration of Justice

Any non fulfilment of the club monitoring requirements may be sanctioned in accordance with the
UEFA Disciplinary Regulations.
The Organs for Administration of Justice are responsible for rendering a decision based on a case
submitted by a Disciplinary Inspector (who is simultaneously a member of the CFC Panel).
As set out in UEFA Organisational Regulations (Edition 2009), three members of the CFC Panel are
simultaneously Disciplinary Inspectors who are part of the Organs for Administration of Justice
together with the Control and Disciplinary Body and the Appeals Body.
A Disciplinary Inspector represents UEFA in disciplinary proceedings. They may open disciplinary
proceedings, lodge appeals and cross appeals.
9 The club monitoring process

9.1 Overview of the club monitoring process
UEFA will define the club monitoring process for the assessment of the club monitoring criteria.
The clubs to be subject to the monitoring process are those clubs that have received a licence from
their licensor and that are entered into a UEFA club competition. The complete population of clubs
will first be known in June each year.
The monitoring process shall consist of the following key steps:
• Submission of the completed club monitoring documentation by the clubs to the licensor;
• Assessment and confirmation of completeness of each club’s documentation by the licensor and
submission of the documentation to the CFC Panel;
• Assessment of the documentation in respect of relevant clubs by the CFC Panel;
• If appropriate, the CFC Panel requests additional information from the licensor/club;
• For those clubs which have breached defined indicators (risk-based approach), further
information to be provided to their licensor for assessment, and subsequently communicated to
the CFC Panel;
• Monitoring activities by the CFC Panel in respect of certain clubs;
• For those clubs which have not fulfilled the club monitoring requirements, referral of cases by the
CFC Panel to the Organs for Administration of Justice for their assessment and decision.
A diagrammatic summary of the club monitoring process is included in Appendix 4 of this Discussion
Paper.

9.2 Timing
The deadlines of the key monitoring process steps will be clearly defined by UEFA and timely
communicated to the clubs concerned by the licensor.
To illustrate, anticipated dates for monitoring information to be submitted to the CFC Panel are:
• 15th July - the historic financial information in respect of the Break-even requirements (covering
reporting periods described as T-2 and T-1) and the documentation in respect of the No overdue
payables requirements as at 30th June; and
• 15th October – if applicable (i.e. for those clubs that have breached the defined indicators, ref.
12.4), submission of the current financial information in respect of the Break-even requirements
(covering the reporting period described as T), the documentation in respect of the No overdue
payables requirements as at 30th September, and the information in respect of Future financial
information requirements (at least covering the reporting period described as T+1).
9.3 Method of submission of information

UEFA envisage developing a web-based IT tool that can be used by the clubs, licensors, UEFA
administration and the CFC Panel. This will help ensure there is an integrated and efficient process
for information flows between the parties involved, and with confidentiality protections. The IT tool
will have access and security controls built within the tool that only allows restricted personnel to
submit data and have read access to the data submitted.
The IT tool will have functionality to address language and currency translation.
The IT tool will provide templates for completion by the management of each club for information to
be submitted firstly to the licensor, and thereafter from the licensor to the CFC Panel. This approach
aims to improve efficiency for clubs’ management, assist the interpretation of the requirements, and
encourage greater reliability and consistency of the information provided.
For example, the templates may include:
• Calculation of relevant income/expenses for the Break-even requirements and other supporting
templates (see Section 13); and
• Transfer payables table for the No overdue payables requirements (see Section 15).
10 Confidentiality
The licensor, UEFA and the CFC Panel shall guarantee the club full confidentiality with regard to all
information submitted during the process. Anyone involved in the club monitoring process or
appointed by the licensor, UEFA or the CFC Panel must sign a confidentiality agreement before
starting its tasks.

BREAK-EVEN REQUIREMENT
11 Introduction
11.1 Principles
The Break-even requirement has been developed in accordance with the approved objectives (as set
out in Section 2 of this Discussion Paper) and principles.
The Break-even requirements will be an enhancement to the current Club Licensing Regulations and
will build on the existing objectives and purpose of the club licensing financial criteria. In general, the
Break-even requirement utilises information already prepared and disclosed by clubs in their audited
annual financial statements (in accordance with the existing requirements of Article 45 of the Club
Licensing Regulations), and also use terminology consistent with the existing club licensing
requirements.
Clubs will continue to prepare their annual financial statements in accordance with their national
accounting practice or IFRS and there is no obligation for a club’s annual financial statements to
report a profit.
For the purpose of the Break-even requirement, a club’s management will need to calculate ‘relevant
income’ and ‘relevant expenses’ as defined in Section 13. For the vast majority of clubs this will be a
relatively straightforward calculation based on information disclosed in the club’s annual financial
statements and underlying accounting records.
The key principle of the Break-even requirement is that a club should always aim to at least break-
even excluding expenditure for the long term benefit of the club - that is, in a reporting period, a
club’s relevant expenses should be no greater than the club’s relevant income - and must not
repeatedly spend more than the income it generates. In this respect, the Break-even result will be
calculated for each relevant reporting period and will be assessed using a multi-year approach. The
requirements allow a club to have a limited amount of deficit over time, as long as covered by
contributions.
11.2 Purpose
Implementation of the Break-even requirement will help deliver both short and long term
improvements for individual clubs and for European club football in general by:
• Introducing more discipline and rationality in club football finances, with a reasonable balance
between income generated and expenses, and helping to protect the long term viability and
sustainability of European club football, and thereby helping to improve the image and credibility
of European club football;
• Encouraging clubs to compete with their income. There is no obligation imposed on clubs to be
profitable. The multi-year approach aims to encourage more clubs to achieve an improved ratio
between the income they generate and their expenses;
• Limiting inflationary pressure on players’ salaries and transfer fees within European club football.
The break-even requirement aims to achieve a sustainable level of salaries and transfer fees for
an individual club as well as limiting inflationary effects on the whole of European club football and
thereby improving the image and credibility of the game. The requirement allows for contributions

from equity participants and related parties to cover a limited amount of deficit over time, but do
not allow debt-funding to cover a deficit; and
• Encouraging spending on facilities and activities for the long-term benefit of clubs – investment
and expenditure on infrastructure, youth development activities and community development
activities – over shorter-term speculative spending. The existing Club Licensing Regulations
(Edition 2008) set minimum requirements for a club’s infrastructure and youth development
activities and, together with the Break-even criterion, encourage investment and expenditure on
facilities and activities for the long-term benefit of a club. The Break-even requirement does not
prevent clubs benefiting from contributions from an owner/related party, instead encouraging
those to be more directed towards spending on facilities and activities for the long-term benefit of
a club.
11.3 Scope and exemption

All clubs that received a licence from their national association and that are entered into a UEFA club
competition must comply with the Break-even requirement, albeit those clubs that submit information
demonstrating they have relevant income and expenses below €5m in respect of both the reporting
period with a statutory closing date ending in the year before commencement of the UEFA club
competitions and the preceding reporting period will not be required to submit further information and
will not be further assessed (unless otherwise requested by the licensor and/or the CFC Panel) and
will be exempt from the Break-even criterion.
If a club’s annual financial statements are denominated in a currency other than Euros, then to
determine whether a club should be exempt or not from the Break-even requirement the relevant
figures must be translated to Euro equivalent figures at the average exchange rate during the
reporting period, as published by the European Central Bank.
If the reporting period of the annual financial statements are greater than or less than twelve months,
then the thresholds of €5m (relevant income/expenses) will need to be flexed accordingly. The
applicable threshold levels will be flexed up or down for the length of the club’s reporting period and
the flexed threshold levels will be compared to the club’s relevant income and expenses as
appropriate.

12 Information to be prepared and submitted by a club

12.1 Summary of the reporting periods that will be assessed by the
licensor and the CFC Panel
A multi-year and risk-based approach to assessment is foreseen for all licensed clubs in UEFA club
competitions.
Please refer to Appendix 4 that summarises the monitoring process described in sections 12.1 to
12.6.
In July, for all clubs except the exempt clubs, the following reporting periods are assessed:
• A club’s Break-even calculations for the reporting period with a statutory closing date ending in
the calendar year before commencement of the UEFA club competitions (reporting period T-1),
and for the preceding reporting period (reporting period T-2). That is, the reporting periods
covered by the two most recent audited annual financial statements.
In October, only for those clubs in breach of certain indicators, three reporting periods are assessed:
• A club’s Break-even calculations for the reporting period with a statutory closing date ending in
the calendar year before commencement of the UEFA club competitions (reporting period T-1),
and for the preceding reporting period (reporting period T-2). That is, the reporting periods
covered by the two most recent audited annual financial statements; and
• A club’s Break-even calculation for the reporting period with a statutory closing date ending in the
calendar year that the UEFA club competitions commence (reporting period T).
12.2 Historic financial information

A club’s management must prepare the historic financial information for Break-even requirement and
submit to the licensor who will then transfer it to the CFC Panel by no later than 15th July.
The club must prepare and submit the Break-even financial information in respect of the reporting
period with a statutory closing date ending in the year before commencement of the UEFA club
competitions (for the reporting period described as T-1). That is, the reporting period covered by the
audited annual financial statements as submitted to the licensor for the immediately preceding club
licensing cycle
In addition, if a club was not subject to the club monitoring process in the previous year (that is, the
club did not participate in a UEFA club competition for the previous season), the club must also
prepare and submit the Break-even financial information in respect of the reporting period covered by
its preceding audited annual financial statements (for the reporting period described as T-2).
Therefore, all other things being equal, clubs which qualify for a UEFA club competition but had not
qualified for the previous season will be assessed on the same multi-year basis as those clubs which
qualify for a UEFA club competition in consecutive seasons.
A club’s management will need to prepare a reconciliation from the club’s audited annual financial
statements and underlying accounting records to relevant income/expenses for the purpose of the
Break-even requirement.

12.3 Current financial information

If a club has demonstrated compliance with certain conditions, being full compliance with all of the
indicators as described in Section 12.4, then the club is exempt from the requirement to prepare and
submit current financial information for Break-even requirement (for the reporting period described as
T), unless otherwise requested by the licensor or the CFC Panel.
If a club is required to prepare and submit current financial information for Break-even requirement,
then management must submit the information to the licensor who will then transfer it to the CFC
Panel by no later than 15th October.
The current financial information will be in respect of the reporting period with a statutory closing date
ending in the year that the UEFA club competitions commence. To illustrate, relative to the UEFA club
competitions commencing in 2009 (i.e. season 2009/10):
• For a club with a reporting period to 30th June, current financial information (T) will be in respect of
the reporting period ending 30th June 2009; and
• For a club with a reporting period to 31st December, current financial information (T) will be in
respect of the reporting period ending 31st December 2009.
To illustrate, the current financial information for Break-even requirements (covering the period
described as T) will be based on a club’s accounting records as follows:
• For a club with a May or June statutory closing date, a club’s management will need to prepare a
reconciliation from the club’s unaudited actual profit and loss account and underlying accounting
records (or, if available, from the audited annual financial statements and underlying accounting
records) to relevant income/expenses. If a club’s current financial information (submitted in
October) has been based on audited annual financial statements, then, if relevant, the club will
not need to submit duplicate information for the following year’s club monitoring process.
• For a club with a November or December statutory closing date, a club’s management will need
to prepare a reconciliation from the club’s accounting records to relevant income/expenses, using
a combination of actual and budgeted figures. To the extent that the current financial information
uses budgeted financial information (for some months), it shall be based on assumptions that are
not unreasonable.
12.4 Conditions which result in a club having to submit further

information
If a club exhibits any of the conditions described by IND.01, IND.02, IND.03 or IND.04 (below), the
club shall be considered as being in breach of the indicator.
• IND.01: The auditor’s report in respect of the audited annual financial statements (for the
reporting period T-1) submitted in accordance with club licensing requirements includes an
emphasis of matter or a qualified ‘except for’ opinion in respect of going concern, and/or (for
applicable clubs) the auditor’s review report in respect of the reviewed interim financial statements
submitted in accordance with club licensing requirements expresses an emphasis of matter or
qualified conclusion in respect of going concern.
• IND.02: The audited annual financial statements (for the reporting period T-1) submitted in
accordance with club licensing requirements disclose a net liabilities position that has deteriorated

relative to the comparative figure at the preceding statutory closing date. A net liabilities position
will include a club’s debt.
• IND.03: Breach of the No overdue payables criterion as at 30th June, as described in Section 15.
• IND.04: The Break-even calculation for either or both of the reporting periods covered by the two
audited annual financial statements preceding the immediately preceding club licensing cycle (i.e.
for the reporting periods described as T-1 and T-2) has a deficit, as relevant expenses exceed
relevant income. As salaries and player transfer costs are key cost categories for a football club,
in effect the Break-even calculation limits these costs relative to income.
For the avoidance of doubt, IND.01 and IND.02 are already defined indicators for club licensing
purposes, as described in Article 50 of the Club Licensing Regulations (Edition 2008).
In the case that any indicator (defined above) is breached, the club must submit further information to
the licensor who will then transfer it to the CFC Panel by 15th October. In the case that any indicator
is breached, the club must subsequently prepare and submit the following information:
• Current financial information for Break-even requirements for the reporting period described as T
(see Section 12.3); and
• Future financial information covering at least the 12 month period commencing immediately after
the balance sheet date of the current financial information. As further described in Section 16, the
future financial information must include disclosure of the club’s projected Break-even result for
the reporting period described as T+1.
In the case that IND.03 is breached, the club must also submit information to demonstrate compliance
with the No overdue payables requirements as at 30th September.
The CFC Panel will reserve the right to request a club to prepare and submit additional information.
A decision to request a club to prepare and submit additional information may be influenced by, but
not limited to, a club’s financial ratios such as:
• Employee benefits expense (typically referred to as ‘salaries’) as a percentage of total revenue, in

particular for a club for which this figure exceeds 70%; and
• Net debt as a multiple of a club’s total revenue, in particular for a club for which this figure
exceeds a multiple of 1.0.
12.5 Other information to be submitted by a club

Consistent with club licensing requirements, the club must provide the licensor and CFC Panel with
information about the reporting entity:
• The name (and legal form), domicile and business address of the reporting entity and any change
in that information from the preceding statutory closing date;
• Whether the financial information submitted for Break-even requirements covers the individual
licensee or a group of entities or some other combination of entities and a description of the
structure and composition of any such group or combination;
• The statutory closing date and the period covered by the financial information;

• The presentation currency; and
• A brief statement confirming the completeness and accuracy of the Break-even information in
respect of a club completed and signed by:
- The club’s General Manager and Finance Officer;
- At least one member of the executive body of the club, on behalf of the executive body of the
club; and
- At least one member of the executive body of the ultimate controlling party of the club.
12.6 Method of submission of information

As noted in Section 9, UEFA envisage developing a web-based IT tool that can be used by the clubs,
licensors, UEFA administration and the CFC Panel to provide an integrated and efficient process for
information flows and with confidentiality protections.
The IT tool will provide templates for completion by the management of each club for information to
be submitted firstly to the licensor, and thereafter from the licensor to the CFC Panel. This will include
a template for the calculation of relevant income/expenses for the Break-even requirements, and may
also include supporting templates, for example to help clubs’ management appropriately determine
their expenditure on youth development activities and community development activities.
The IT tool will have functionality to address language and currency translation.

13 Definitions of relevant income and relevant expenses

13.1 Summary of the Break-even calculation
Illustrative representation of the Break-even requirement (details set out in Sections 13.2 and
13.3)
The principle of the Break-even requirements is that a club should always aim to at least break-even
(excluding expenditure for the long term benefit of the club) and cannot repeatedly spend more than
the income it generates. A club’s relevant income/expenses to be calculated for each reporting period
and to be assessed using a multi-year approach.
RELEVANT EXPENSES RELEVANT INCOME
Operating expenses **: Revenue **:
• Cost of sales • Gate receipts
• Employee benefits expenses • Broadcasting rights
• •
≤
Other operating expenses Sponsorship and advertising
• Commercial activities
• Other operating income
Player transfer amortisation or expense* Player transfer profit or income*
Finance costs Finance income
Excess proceeds on disposal of

tangible fixed assets
EXPENSES FOR LONG TERM

BENEFIT – NO LIMIT***
Infrastructure costs (depreciation of

tangible fixed assets)
Youth development activities
Community development activities
* : For the purpose of calculating relevant income/expenses, each club will use the same method of accounting for player
registrations as for its annual financial statements.
** : For calculating relevant income/expenses for the Break-even requirements, related party income/expenses to be adjusted
to fair value.
*** : Aim to encourage investment and expenditure on facilities and activities for the long-term benefit of the club.

If a club’s relevant expenses are less than relevant income for a reporting period, then the club has a
Break-even surplus for the reporting period.
If a club’s relevant expenses are greater than relevant income for a reporting period, then the club has
a Break-even deficit for the reporting period.
In addition to the terms defined below, the explanatory notes (Appendix 1) provide some further
definitions in respect of terms relating to relevant income/expenses. An illustrative draft template to
help calculate a club’s relevant income/expense is included in Appendix 2.
Consistent with the approach for club licensing, whilst the development of the Break-even criterion
does, in some respects, draw from the content of certain International Financial Reporting Standards,
UEFA recognises that, at this stage, the total harmonisation of the preparation and presentation of
financial statements by European football clubs is impractical and, therefore, has not been requested.
To facilitate the implementation of the requirements, clubs will continue to prepare their annual
financial statements in accordance with their national accounting practice or IFRS.
13.2 Relevant income

Relevant income is defined as revenue plus either profit on disposal of player registrations or income
from disposal of player registrations*, plus excess proceeds on disposal of tangible fixed assets, plus
finance income, less any non-monetary items.
* For the calculation of relevant income, whether a club includes either (a) profit on disposal of player registrations, or (b)
income from disposal of player registrations, will depend on each club’s method of accounting for player registrations in its
annual financial statements.
13.3 Relevant expenses

Relevant expenses is defined as cost of sales, employee benefits expenses, other operating
expenses, plus either amortisation or costs of acquiring players’ registrations*, plus finance costs.
For the avoidance of doubt, relevant expenses include all expenses in respect of the activities of the
club except depreciation/impairment of tangible fixed assets, amortisation/impairment of intangible
fixed assets (other than player registrations), expenditure on youth development activities,
expenditure on community development activities, and any other non-monetary items.
* For the calculation of relevant expenses, whether a club includes either (a) amortisation/impairment of player registrations, or
(b) costs of acquiring player registrations, will depend on each club’s method of accounting for player registrations in its annual
financial statements.
13.4 Treatment of the acquisition and disposal of players’ registrations

For the avoidance of doubt, the Break-even requirement will not necessitate any changes to a club’s
method of accounting treatment for the acquisition and disposal of players’ registrations in its annual
financial statements.
The calculation of relevant income/expenses must be on a basis consistent with each club’s method
of accounting for player registrations in their annual financial statements, such that (a) some clubs will
report figures using the ‘capitalisation & amortisation’ method, and (b) some clubs will report figures
using the ‘income & expense’ method.

For a club using the capitalisation & amortisation method of accounting for player registrations, the
cost of acquiring player registrations is capitalised (i.e. not immediately expensed) and then amortised
over the period of the player’s registration contract. On the disposal of a player’s registration, any
profit(loss) on the disposal of player registrations will be included within the club’s audited annual
financial statements and should be included within relevant income/expenses. The existing Club
Licensing Regulations set out some minimum accounting requirements in Annex VII, including that
clubs must not re-value upwards the carrying value of a player’s registration nor capitalise youth
development costs.
For a club using the income & expense method of accounting for player registrations, the cost of
acquiring player registrations will be fully included as an immediate expense within the club’s annual
financial statements and should be included within relevant expenses. Similarly, the income from the
disposal of player registrations will be included as income within the club’s audited annual financial
statements and should be included within relevant income. Clubs that are using the income &
expense method in their annual financial statements can elect to apply the capitalisation &
amortisation method for the purpose of the Break-even calculation. If a club elects to adopt this
approach for Break-even purposes, it must be applied on a consistent basis from one reporting period
to the next.
13.5 Other potential disclosures and adjustments

Expenses in respect of the activities of the club not otherwise recorded in the annual financial
statements:
For the calculation of relevant expenses, management must include any expenses incurred in the
reporting period in respect of the activities of the club that are not otherwise recorded in the audited
annual financial statements of the reporting entity that forms of the basis for preparation of the Break-
even calculation.
Given the existing club licensing requirements for financial information to be submitted in respect of
the reporting entity (or combination of entities) that reflect the relevant financial results and position in
respect of the entity which is the member of a licensor, then in practice this type of adjustment is
expected to be rare. Also, as specifically set out in Annex VII of the Club Licensing Regulations
(Edition 2008), all compensation paid to players arising from contractual or legal obligations and all
revenues arising from gate receipts must be accounted for in the books of the licence applicant, i.e. in
the books of one of the entities included in the consolidated perimeter.
Excess proceeds on disposal of tangible fixed assets:
Relevant income does not include the profit or proceeds on disposal of the club’s stadium or training
facilities unless the club’s management demonstrates that the proceeds are in excess of capital
investment requirements (if any) for the club to continue to have use of a stadium and/or training
facilities. In practice, this type of adjustment is expected to be rare.
Finance costs:
If a club has finance costs directly attributable to the construction of tangible fixed assets (up until the
time when the asset is ready for use), then such costs can be excluded from the calculation of
relevant expenses. In practice, this type of adjustment is expected to be rare.

Related party transactions:
Related party transactions are a minimum disclosure requirement for a club’s audited annual financial
statements as set out in Club Licensing Regulations (Edition 2008) Annex VI.
If a club has a related party transaction(s) then the club’s management will need to determine the fair
value of any such transactions in accordance with the approach described herein. If the fair value is
different to the recorded value then, for the purpose of the Break-even requirements, the relevant
income/expenses must be adjusted accordingly.
Non-football operations:
The income and expenses of non-football operations which are clearly and exclusively not related to
the activities, locations or brand of the football club must be excluded from the calculation of relevant
income/expenses. In practice, this type of adjustment is expected to be rare.

14 Assessment of the Break-even requirements

14.1 Licensor’s assessment procedures
Following the submission deadline in July, the licensor undertakes assessment procedures in respect
of the information submitted by relevant clubs which, will be all clubs that received a licence and that
are entered into a UEFA club competition.
Following the submission deadline in October, the licensor undertakes assessment procedures in
respect of the information submitted by relevant clubs which will be those clubs that have breached
one or more of the indicators (IND.01 to IND.04) as described in Section 12.4, or a club that has
otherwise been requested to submit further information as part of ongoing monitoring procedures.
The licensor may decide:
• To assess itself the information submitted by clubs in accordance with specific assessment
processes to be defined by UEFA; or
• To have independent auditors carry out assessment procedures, in which case the licensor must
review the auditor’s report and carry out any additional procedures considered necessary.
In respect of the club monitoring process, the licensor must perform some minimum assessment
procedures, including:
• Assessing whether the selected reporting entity/entities is consistent with club licensing and is
appropriate for the club monitoring requirements;
• Checking that information is complete and arithmetically accurate; and
• Checking the calculation of relevant income/expenses (for Break-even purposes) to a club’s

financial statements and underlying accounting records.
The licensor must communicate to the CFC Panel (via the UEFA administration) the documentation
as submitted in respect of each relevant club, confirmation that the licensor has completed the
appropriate assessment procedures in respect of each club, and any other additional information that
may be of relevance to the CFC Panel’s assessment.
14.2 CFC Panel’s assessment procedures

The CFC Panel will receive from the licensor the information in respect of each club covered by the
scope of the club monitoring requirements.
The CFC Panel will perform the following minimum assessment procedures in respect of each club:
• Assess that the information in respect of each club as submitted by the licensor is accurate and
appropriate;
• As appropriate, request written explanations and/or additional documentation from the licensor
and the club’s management to clarify matters;
• In respect of the Break-even requirement, assess the submitted information and identify the
Break-even result for each relevant reporting period and in aggregate. If applicable, the CFC
Panel will also assess the level of contributions from equity participants and related parties; and

• Identify those clubs for which the Break-even deficit exceeds the acceptable deviation and
thereby have not fulfilled the Break-even requirements, and which will be referred to the Organs
for Administration of Justice.
14.3 Definition of ‘acceptable deviation’

UEFA has defined an acceptable deviation for a club’s aggregate Break-even deficit. A club’s
aggregate Break-even deficit for three reporting periods is within an acceptable deviation if it is either:
• no more than aggregate €5 million if not covered by contributions from equity participants and/or
related parties; or
• no more than an amount to be determined by UEFA* if covered by contributions from equity

participants and/or related parties.
*: The amount determined by UEFA for each year of assessment for the period 2013 to 2017 is set
out in Section 17.3. The limit (aggregate for three reporting periods) for 2018 and following years will
be determined by UEFA in due course and will be an amount less than €30 million.
As set out in Section 12, the three reporting periods for the assessment of a club’s aggregate Break-
even deficit are:
• T-1 and T-2: The reporting periods covered by the two most recent audited annual financial
statements; and
• T: The reporting period with a statutory closing date in the year that the UEFA club competitions
commence.
If a club has an aggregate Break-even deficit for the three reporting periods T-2, T-1 and T that is not
within the acceptable deviation, then the club’s management may demonstrate that the calculated
deficit is mitigated/reduced by an aggregate Break-even surplus in respect of the two reporting
periods prior to T-2 (i.e. the aggregate Break-even surplus for reporting periods T-3 and T-4), which
may or may not reduce the aggregate deficit figure to be within the acceptable deviation.
14.4 Outcomes of a club’s Break-even result

If a club has an aggregate Break-even surplus for reporting periods T-2 and T-1 and has not
breached any of the indicators (IND.01 to IND.04 as described in Section 12.4), then the club has
fulfilled the Break-even requirement.
If a club has breached any of the indicators (IND.01 to IND.04 as described in Section 12.4), but the
club has either an aggregate Break-even surplus or a Break-even deficit within the acceptable
deviation for reporting periods T-2, T-1 and T, then the club has fulfilled the Break-even requirement.
If a club has breached any of the indicators (IND.01 to IND.04 as described in Section 12.4), but the
club has either an aggregate Break-even surplus or a Break-even deficit within the acceptable
deviation having also taken into consideration any aggregate Break-even surplus in respect of the two
reporting periods prior to T-2 (i.e. the aggregate across the five reporting periods T-4 to T), then the
club has fulfilled the Break-even requirement.
If a club has an aggregate Break-even deficit for reporting periods T-2, T-1 and T that exceeds the
acceptable deviation, having also taken into consideration any aggregate Break-even surplus in

respect of the two reporting periods prior to T-2 and/or any contributions from equity participants
and/or related parties, then the club has not fulfilled the Break-even requirements.
For the avoidance of doubt, if a club has an aggregate Break-even deficit that exceeds the acceptable
deviation in respect of reporting periods T-2, T-1 and T, combined with the aggregate Break-even
surplus in respect of the two reporting periods prior to T-2, then regardless of any contributions from
equity participants and/or related parties, the club has not fulfilled the Break-even requirements.
Appendix 3 sets out some scenarios to help illustrate the Break-even requirements.
14.5 Other factors to be considered in respect of the Break-even

requirements
If the Break-even requirements are not fulfilled then, having also taken into consideration other
factors, the CFC Panel may refer the case to the Organs for Administration of Justice, which shall
take the appropriate measure(s) without delay in accordance with the procedure defined in the UEFA
Disciplinary Regulations for urgent cases. For the avoidance of doubt the CFC Panel will not levy
sanctions.
Additional factors (aggravating and mitigating factors) to be considered by the CFC Panel and, if
appropriate, Disciplinary Inspector(s) and the Organs for Administration of Justice include, but are not
limited to, the factors listed below.
Factor Guidance about the possible considerations for each

factor in isolation
Quantum/trend of the Break-even The larger the quantum of a Break-even deficit relative to a club’s
result relevant income, in a reporting period and in aggregate, the less
favourably it will be viewed.
An improving trend in the annual Break-even results is likely to be

viewed more favourably than a worsening trend.
Projected Break-even results (plan As an integral part of its future financial information (covering the
for compliance) reporting period T+1), a club’s management must provide a Break-
even calculation of projected relevant income and expenses.
If the projected relevant expenses are less than income (i.e. a plan
for compliance), this will be viewed more favourably than if the
projected relevant expenses exceeds income.
A club’s longer term business plan may also be requested (say for
reporting periods covering T+1, T+2 and T+3) in which a Break-even
calculation of projected relevant income and expenses will be an
integral component.
If the projected relevant expenses are less than relevant income in

reporting periods T+1, T+2 and/or T+3, then it will be viewed more
favourably than projected deficits.
Budgeting accuracy A club’s Break-even result will be compared to the ‘plan for
compliance’ previously submitted to the licensor/CFC Panel.
The circumstances giving rise to the Break-even result will be

considered e.g. results arising from normal trading,

exceptional items, player trading impact.
If the Break-even result is considered to be favourable

compared to the ‘plan for compliance’, the club’s case will be
viewed more favourably.
If the Break-even result is considered to be adverse compared

to the ‘plan for compliance’, the club’s case will be viewed less
favourably.
Debt situation. In conjunction with review of a club’s longer term business plan,
additional information may also be requested from a club in respect of
its debt situation. This may include aspects such as:
• Source of debt;
• Ability to service interest and principal payments;
• Debt covenant compliance;
• Maturity profile of debt
Debt ratios may be considered as part of the assessment, including

ratios to help assess:
• Degree of leverage – to help assess the capital structure of a

club and the level of debt relative to earnings and underlying
assets;
• Profitability and coverage – to help assess the level of earnings

relative to debt servicing costs;
• Cash flow adequacy – analysis of cash flow patterns can reveal

a level of debt-servicing capability – covering both interest and
principal repayments - that is either stronger or weaker than
might be apparent from earnings.
Appendix 5 illustrates in detail the debt monitoring approach

NO OVERDUE PAYABLES REQUIREMENTS
15 Enhanced No Overdue Payables requirements

15.1 Principle
The principle of the enhanced no overdue payables criterion is to ensure that clubs meet their
obligations to other clubs in relation to transfer activities and to employees in respect of contractual
obligations on a timely basis.
15.2 Purpose
The current Club Licensing Regulations already contain the no overdue payables criteria (Art. 47 and
48) that are aimed at ensuring that clubs have met their financial obligations to players, tax and social
authorities and to other clubs at a given moment in time (i.e. 31st December / 31st March). However,
liabilities coming to maturity after these dates do not fall within the scope of the criteria and so it is
possible that clubs playing in UEFA competitions have overdue debts. It is therefore important that the
criteria are reinforced to help ensure that clubs competing in UEFA competitions have honoured their
debts towards other clubs and employees on a timely basis (according to the contractual terms).
The reinforcement of the no overdue payables requirements foresees one additional assessment date
as of 30th June (after winter transfer window) and one more on a risk basis as of 30th September
(after the summer transfer window).
In contrast to the Club Licensing Regulations, no three month period is given for clubs to report in
respect of the criteria.
The new requirements will further cement and improve the current criteria in the club licensing
system. The existence of overdue payables may also highlight to the licensor and CFC Panel wider
financial issues in respect of a club’s debt situation.
15.3 Criterion
The club must prove that as at 30th June of the year of commencement of the UEFA club competitions
it has no overdue payables towards its employees and nor towards football clubs arising from transfer
activities.
Applying a risk-based approach, if the club has any overdue payables as of 30th June it must also
prove that as at the following 30th September it has no overdue payables towards its employees and
towards football clubs arising from transfer activities. Note: Payables towards tax and social
authorities in respect of contractual and legal obligations with employees will be covered by the check
done by the licensors at 31st December for club licensing requirements.
A club is deemed to be in breach of the criterion if at any of the assessment dates, the club has
overdue payables towards other clubs or its employees. The term ‘employees’ is defined consistently
with the existing Club Licensing Regulations. Also consistent with existing Club Licensing
Regulations, amounts payable to people who, for various reasons, are no longer employed by the
club fall within the scope of this criterion and must be settled within the period stipulated by the
contract and/or defined by law.

15.4 Information to be submitted by a club

Information to be submitted for the assessment dates is as follows:
• For payables towards other football clubs:
- transfer payables table (as defined in the current Club Licensing Regulations, Article 47)
• For payables towards employees:
- self declaration stating the absence/existence of overdue payables towards employees.
15.5 Assessment dates

In addition to the 31st December /31st March assessment date covered by the club licensing criteria,
the enhanced no overdue payables rule introduces two additional assessment dates as follows:
i) 30th June:
• The identity of the licensed clubs entered in UEFA club competitions is known.
• After end of winter transfer window.
ii) Applying a risk-based approach, 30th September:
• For those clubs showing overdue payable as of June 30th (i.e. IND.03 as also set out in
section 12.4);
• After end of summer transfer window.
Based on the information submitted for 30th June and/or 30th September by the club, the CFC Panel
could request further updates of the transfer payables table as well other information helping in the
assessment of the club.
15.6 Other factors to be considered in respect of the No overdue payables

requirements
If the club exhibits overdue payables at either 30th June or 30th September, then the case may be
referred to the Organs for Administration of Justice.
In making a decision about an appropriate sanction in respect of the No overdue payables

requirements, other information (aggravating and mitigating factors) will be considered including, but
not limited to:
• Quantum of the breach;
• Length of delay of payment;
• Number of delayed payments;
• Frequency of overdue payables in past periods; and
• Other relevant aggravating / mitigating factors.

FUTURE FINANCIAL INFORMATION REQUIREMENTS
16 Enhanced Future Financial Information requirements

16.1 Principle
The principle of the enhanced future financial information requirements is that a club should prepare
budgeted information to predict future cash flows and in particular their timing and certainty, and
should demonstrate projected compliance with the Break-even requirements.
16.2 Purpose
The current Club Licensing Regulations (Article 50) contain the obligation for a club to prepare future
financial information in respect of the period commencing immediately after the date of the annual or
interim financial statements and covering the entire season to be licensed (i.e. typically this is the
period of 18 months commencing on the 1st of January and terminating 30th June of the following
year.)
The enhanced requirements build on the existing objectives and purpose of the club licensing criteria.
Financial budgeting and its subsequent monitoring is good business practice. They aim principally to
improve the stability of club football, help protect creditors and ensure clubs settle their liabilities on a
timely basis, and by requiring disclosure of a ‘plan for compliance’ with Break-even requirement, will
also encourage clubs to compete with their revenues.
For the licensor and CFC Panel receiving the future financial information, it can assist in predicting a
club’s future cash flow and ability to meet its financial obligations, including debt servicing obligations,
in the future. The licensor and CFC Panel’s understanding of the financial situation and prospects of
clubs can be improved. In turn this can be used to help protect creditors and safeguard the continuity
of competitions.
For the avoidance of doubt Art 50 of the Regulations will remain in force, while Art. 51 will be
integrated as part of the monitoring requirements.
16.3 Requirements
If any of the indicators as defined in Section 12.4 are breached, then the club shall prepare and
submit to the licensor/CFC Panel in October Future financial information consisting of:
i) A budgeted balance sheet;
ii) A budgeted profit and loss account;
iii) A budgeted cash flow statement (liquidity plan);
iv) Explanatory notes, including assumptions and risks and comparison of budget to actual figures.
There must also be a statement that the future financial information has been prepared on a
consistent basis with the preceding audited annual financial statements; and

v) A ‘plan for compliance’, comprising a Break-even calculation for the reporting period T+1 based
on the budgeted profit and loss account and including adjustments to calculate relevant
income/expenses as appropriate.
The budgeted profit and loss account and cash flow statement (liquidity plan) must be prepared on a
monthly basis for at least the 12 month period starting immediately after statutory closing date of
reporting period T.

TRANSITIONAL ARRANGEMENTS
17 Implementation of the club monitoring requirements

17.1 Proposed implementation of the club monitoring requirements
The Break-even and Future financial information requirements will be implemented as from 2012,
effective for UEFA competition season 2013/14. It is envisaged there will be earlier implementation
of the enhanced No overdue payables requirements effective for UEFA competition season 2011/12.
17.2 First years of implementation of the Break-even requirements

Summary of the clubs’ reporting periods which will be assessed in the first three years of
implementation (2012-2014)
Assessment of UEFA Illustration of relevant financial

financial competition reporting periods for clubs with a
reporting season reporting period ending:
periods ending
in:
June December
2012 (T-1) Year to 30 June 2012 Year to 31 Dec 2012

2013/14 Year to 30 June 2013 Year to 31 Dec 2013
2013 (T)
2012 (T-2) Year to 30 June 2012 Year to 31 Dec 2012

Year to 30 June 2013 Year to 31 Dec 2013
2013 (T-1) 2014/15
Year to 30 June 2014 Year to 31 Dec 2014
2014 (T)
The first year the Break-even requirements will be effective is for UEFA competition season 2013/14.
This will follow the conclusion of the 2012/13 club licensing cycle.
All clubs that receive a licence from their national association and that are entered into a UEFA club
competition for the 2013/14 season must comply with the Break-even requirements. By July 2013
each club must have submitted financial information in respect of their reporting period ending in 2012
(T-1).

By October 2013, those clubs in breach of the defined indicators (see Section 12.4) must also have
submitted additional information including current financial information in respect of their reporting
period ending in 2013 (T) and future financial information including a Break-even calculation in
respect of their reporting period ending in 2014 (T+1).
In the transitional period only, a club accumulated break even result will be calculated and assessed
for the first time over a period of two years. In effect, if a club has an aggregate Break-even deficit
assessed in 2013 that exceeds the acceptable deviation, then the club has not fulfilled the Break-even
requirements and the case may be referred to the Organs for Administration of Justice and a sanction
may be imposed ahead of the 2014/15 UEFA competition season.
The second year the Break-even requirements will be effective is in 2014. This will follow the
conclusion of the 2013/14 club licensing cycle.
(T-1) and in 2012 (T-2). For those clubs who were also entered in the previous season’s UEFA club
competition (i.e. in 2013/14), the Break-even information in respect of the financial period ending in
2012 will already be held by their licensor and the CFC Panel.
submitted current financial information in respect of their reporting period ending in 2014 (T) and
future financial information including a Break-even calculation in respect of their reporting period
ending in 2015 (T+1).
The third year the Break-even requirements will be effective is in 2015. This will follow the conclusion
of the 2014/15 club licensing cycle.
(T-1) and in 2013 (T-2). For those clubs who were also entered in the previous season’s UEFA club
competition (i.e. in 2014/15), the Break-even information in respect of the financial period ending in
2013 (and in 2012) will already be held by their licensor and the CFC Panel.
submitted current financial information in respect of their reporting period ending in 2015 (T) and
future financial information including a Break-even calculation in respect of their reporting period
ending in 2016 (T+1).
17.3 Transitional assessment arrangements for the Break-even requirements

The transitional arrangements for assessment of the Break-even results will be more favourable
requirements for clubs for the first three years of implementation. For each of the assessment years
2013 to 2014 the level of acceptable deviation will be set higher than for 2015 and onwards.
In 2013 a club’s aggregate Break-even deficit for two reporting periods will be within an acceptable
deviation if it is either:
• no more than €5 million if not covered by contributions from equity participants and/or related
parties; or

• no more than €45 million if covered by contributions from equity participants and/or related
parties.
In 2014 a club’s aggregate Break-even deficit for three reporting periods will be within an acceptable
deviation if it is either:
parties; or
parties.
In each of 2015, 2016 and 2017 a club’s aggregate Break-even deficit for three reporting periods will
be within an acceptable deviation if it is either:
parties; or
parties.
Period from 2012 to 2017 – summary of acceptable deviation levels
UEFA Reporting period ending: Acceptable Acceptable

competi- deviation (if deviation (if
tion season covered) not covered)
(1)
€m €m
T-3 and T-2 T-1 T

T-4(4)
2013/14 N/A N/A 2012 2013 45 5
2014/15 N/A 2012 2013 2014 45 5
2015/16 2012 2013 2014 2015 30 5
2016/17 2012 & 2014 2015 2016 30 5

2013
2017/18 2013 & 2015 2016 2017 30 5

2014
Notes:
(1) For each of the assessment years 2018 and onwards, the limit of the acceptable deviation covered by contributions over
three reporting periods will be determined by UEFA in due course, in consultation with the football family, and will be set at
an amount less than €30 million.

Appendix 1: Explanatory notes

Note 1: Revenue
Revenue and the constituent elements described herein are minimum disclosure requirements for a
club’s audited annual financial statements as set out in the Club Licensing Regulations (Edition 2008)
Annex VI.
Revenue is the gross inflow of economic benefits during the period arising in the course of the
ordinary activities of an entity when those inflows result in increases in equity, other than increases
relating to contributions from equity participants and interest income.
Revenue includes amounts derived from such items as gate receipts, sponsorship and advertising,
broadcasting rights, commercial activities and other operating income. Revenue normally excludes
sales taxes, goods and services taxes and value added taxes.
More detailed guidance in respect of each of the component parts of revenue is provided below.
• Gate receipts - include revenue from general admission and corporate customers, for both
season tickets and match day tickets, in relation to national competitions (league and cup), UEFA
club competitions and other matches (friendly matches and tours). Gate receipts also includes
membership fees.
• Sponsorship and advertising - revenue derived from main sponsor, other sponsors, touch-line and
board advertising, and other sponsorship and advertising.
• Broadcasting rights - includes revenue derived from sale of broadcasting rights to television,
radio, new media and other broadcast media, in relation to national competitions (league and
cup), UEFA club competitions and other matches (including friendlies and tours).
• Commercial activities - includes revenue derived from merchandising, food & beverage sales,
conferencing, lottery and other commercial revenue not otherwise categorised.
• Other operating income – all other operating income not otherwise described above, including
revenue derived from other activities such as subsidies, rent, dividends and revenue from non-
football operations.
Revenue includes revenue transactions with related parties (if any), albeit management must assess
the fair value of any such transaction and adjust relevant income accordingly, for the purpose of the
Break-even calculation.
Note 2: Profit or income from the disposal of player registrations
For clubs that use the capitalisation & amortisation method of accounting for player registrations in
their annual financial statements, profit (or loss) on disposal of player registrations in a reporting
period is a minimum disclosure requirement for a club’s audited annual financial statements as set out
in the Club Licensing Regulations (Edition 2008) Annex VI.
Profit (or loss) on disposal of a player registration is calculated by deducting the net book value of the
player registration at the time of the transfer, from the net disposal proceeds received/able.
A club will report a profit on disposal of player registrations if the net disposal proceeds exceed the
net book value of these player registrations at the time of the transfer. Any such profit should be
included within relevant income. A club will report a loss on disposal of player registrations if the net

disposal proceeds are less than the net book value of these player registrations at the time of the
transfer. Any such loss should be included within relevant expenses. The net disposal proceeds
should equate to the monetary income from the disposal of a player’s registration.
For clubs that use the income & expense method of accounting for player registrations in their annual
financial statements, income from disposal of player registrations (net disposal proceeds generated
from the transfer of player registrations to other clubs) is normally disclosed in the profit and loss
account in a club’s annual financial statements, and must be included within relevant income for the
Break-even calculation.
Note 3: Amortisation or costs of acquiring players’ registrations
For those clubs that use the capitalisation & amortisation method of accounting for player registrations
in their annual financial statements, amortisation (and impairment) of the costs of acquiring players’
registrations are a minimum disclosure requirement for a club’s audited annual financial statements
as set out in the Club Licensing Regulations (Edition 2008) Annex VI. Amortisation (and impairment)
costs should be included within relevant expenses for the Break-even calculation. Over time the
amortised/impaired cost in respect of a player should equate to the monetary expense of acquiring
that player’s registration. Annex VII of the existing Club Licensing Regulations already sets out, for
example, that clubs must not re-value upwards the carrying value of a player’s registration.
For those clubs that use the income & expense method of accounting for player registrations in their
annual financial statements, the costs of acquisition of player registrations is normally disclosed in the
profit and loss account in the club’s annual financial statements, and must be included within relevant
expenses.
Note 4: Excess proceeds on disposal of tangible fixed assets
The profit or loss on disposal of tangible fixed assets is a minimum disclosure requirements for a
club’s audited annual financial statements are set out in Club Licensing Regulations (Edition 2008)
Annex VI.
One of the key objectives of the club monitoring requirements is to encourage investment for the long
term benefit of clubs, such as investment in infrastructure (sports facilities).
The profit or proceeds on disposal of the club’s stadium or training facilities will be excluded from
relevant income, unless the club’s management demonstrates that the profit or proceeds are in
excess of capital investment requirements (if any) for the club to continue to have use of a stadium
and/or training facilities.
The profit or proceeds arising on disposal of tangible fixed assets other than a club’s stadium or
training facilities can be included in relevant income.
Note 5: Related party
This definition of a related party is consistent with club licensing requirements and the minimum
disclosure requirements for a club’s audited annual financial statements are set out in Club Licensing
Regulations (Edition 2008) Annex VI.
A party is related to a club/entity if:

a) directly, or indirectly through one or more intermediaries, the party:
i) controls, is controlled by, or is under common control with, the entity (this includes parents,
subsidiaries and fellow subsidiaries);
ii) has an interest in the entity that gives it significant influence over the entity; or
iii) has joint control over the entity.
b) the party is an associate of the entity;
c) the party is a joint venture in which the entity is a venturer;
d) the party is a member of the key management personnel of the entity or its parent;
e) the party is a close member of the family of any individual referred to in a) or d)
f) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which
significant voting power in such entity resides with, directly, or indirectly, any individual referred to in
d) or e); or
g) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any
entity that is a related party of the entity.
Close members of the family of an individual are those family members who may be expected to
influence, or be influenced by, that individual in their dealings with the entity. They may include:
a) The individual’s domestic partners and children;
b) Children of the individual’s domestic partner; and
c) Dependants of the individual or the individual’s domestic partner.
Control is the power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities.
Key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly, including any director (whether
executive or otherwise) of that entity.
Note 6: Related party transaction
A related party transaction is a transfer of resources, services or obligations between related parties,
regardless of whether a price is charged.
‘Not transacted on an arm’s length basis’ means transactions or arrangements entered into by a club
on terms less favourable to either party to the arrangement, than would have been obtained if there
had been no related party relationship.
The disclosure requirements for a club’s audited annual financial statements as set out in Club
Licensing Regulations (Edition 2008) annex VI are as follows:
If there have been transactions between related parties during the period, the reporting entity shall
disclose the nature of the related party relationship, as well as information about the transactions
during the period and outstanding balances at the period end, necessary for understanding of the
potential effect of the relationship on the financial statements.

At a minimum, disclosures must include:
i) The amount of the transactions;
ii) The amount of outstanding balances and:
• Their terms and conditions, including whether they are secured, and the nature of the
consideration to be provided in settlement; and
• Details of any guarantees given or received;
iii) Provisions for doubtful debts related to the amount of outstanding balances; and
iv) The expense recognised during the period in respect of bad or doubtful debts due from
related parties.
Note 7: Fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable willing parties in an arm’s length transaction.
An arrangement or a transaction is deemed to be ‘not transacted on an arm’s length basis’ if it has

been entered into by a club on terms more favourable to either party to the arrangement, than would
have been obtained if there had been no related party relationship.
A club’s management will need to determine the fair value of any such transactions. If the estimated
fair value is different to the recorded value then, for the purpose of the Break-even requirements, the
relevant income/expenses must be adjusted accordingly (other than no upwards adjustments can be
made to relevant income and no downwards adjustments to relevant expenses). The club’s
management will need to demonstrate the estimated fair value of the transaction.
Examples of a related party transaction that would normally require a club’s management to
demonstrate the estimated fair value of the transaction include:
• Sale of sponsorship rights by a club to a related party;
• Sale of corporate hospitality tickets, and/or use of an executive box, by a club to a related party;
and
• Any transaction with a related party whereby goods or services are provided to a club.
UEFA will develop and provide guidance to clubs and licensors about methodologies for a club’s
management to estimate the fair value of the more common types of related party transactions.
Some initial draft guidance has been developed and is included in this Discussion Paper.
A club may at any time submit a written request to the CFC Panel for a clarification of these
requirements. Clubs are invited to put all instances of doubt or uncertainty to the CFC Panel for
decision. Any practice or procedure which, in the opinion of the CFC Panel, is calculated to defeat in
any way the overriding objective of these requirements will be deemed to have been deliberately
concealed unless previously submitted to the CFC Panel. The CFC Panel will make available a
summary of any such request for clarification, together with the CFC Panel’s response (omitting any
confidential or commercially sensitive information) to all licensors and clubs.
The best evidence of the fair value of a transaction is typically a price in a binding agreement in an
arm’s length transaction or a market price in an active market. If there is no binding agreement or

active market, fair value should be based on the best information available to reflect the amount that a
club could obtain or would have to incur (as appropriate), at the transaction date, in an arm’s length
transaction between knowledgeable willing parties. In determining this amount, the club should
consider the outcome of recent similar transactions of the club and/or by comparable clubs.
In respect of related party transactions involving a club obtaining goods and/or services, where more
than one fair value could reasonably be allocated to an expenditure, the highest such figure should be
used to calculate the adjustment to relevant expenses. In respect of related party transactions
involving a club recognising income, where more than one fair value could reasonably be allocated to
the income, the lowest such figure should be used to calculate the adjustment to relevant income.
Examples of other types of related party transaction that would normally require a club’s management
to make an adjustment to relevant income/expenses:
• Monies received by a club from a related party as a donation; and
• Settlement of liabilities on behalf of the club by a related party.
For the avoidance of doubt, monies received by a club in respect of financial instruments – that is, an
arrangement that gives rise to a financial asset for one entity and a financial liability or equity
instrument of another entity, such as monies received by a club for the issue of shares – must be
excluded from relevant income/expenses and there is no requirement for a club’s management to
determine the fair value of any such transactions.
Fair value guidance example 1: Sale of sponsorship rights by a club to a related party
Illustrative scenario:
The sponsorship rights to be a club’s main sponsor (including the rights to advertise on the club’s first
team shirts) are sold to a related party and the club received €5m for the season.
The club’s previous main sponsor contract for the preceding football season, that was for similar
sponsorship rights (including the rights to advertise on the club’s first team shirts), was with a third
party in an arm’s length transaction for €2m per season.
Ahead of entering into the new sponsorship arrangements with the related party, the club’s
management obtained written expressions of interest/offers from two third parties, who were each
interested in becoming the club’s new main sponsor. If one of these written expressions of
interest/offers had progressed to a contract, the club would have received an amount of €3m for the
season.
Based on benchmarking information, the value of main sponsor arrangements for comparable clubs is
an average €2m per season, in the range of €1m to €3m. The ‘comparable clubs’ compete in the
same national competitions, have a similar sized fanbase (in part evidenced by average home match
attendance), and also regularly qualify for one of UEFA’s club competitions.
Separately, and around the same time as the club entered into the arrangement with the related party
for the main sponsorship rights, the club also entered an arrangement with a third party in respect of
secondary sponsorship rights. The secondary sponsorship rights were sold to the third party in an
arm’s length transaction for €0.5m per season (which is around 50% greater than the value to the
club’s secondary sponsorship rights arrangements for the previous football season).
Determination of fair value: methodology

The club’s management should (at least) consider the following three approaches for the
determination of fair value of the main sponsorship rights for the season:
i) Fair value is deemed to be €2m, being the most recent arm’s length value received by the club for
the same/similar main sponsorship rights in the previous football season;
ii) Fair value is deemed to be €3m, being the amount the club could have obtained, in an arm’s
length transaction, from another sponsor, as evidenced by the written expressions of
interest/offers from two independent third parties;
iii) Fair value is deemed to be €2m, being the average amount received by comparable clubs in the
season from their (third party) main sponsors.
Guidance:
The fair value of the transaction should be based on the value that the club could have realistically
expected to obtain in an arm’s length transaction with a willing third party at the time the transaction
was agreed. The fair value should, where possible, make maximum use of market inputs, as this
approach promotes comparability between clubs.
Based on written evidence from two independent parties to become the club’s main sponsor, then
€3m may reasonably be determined as the fair value of the club’s main sponsorship rights for the
season.
The club’s previous main sponsor contract for the preceding football season (of €2m) was an
arrangement entered into at an earlier time, and is therefore less relevant.
The evidence complied by management in respect of the main sponsor values for the season for
comparable clubs (average of €2m and a range of €1 to €3m) provides further support to the fair
value of €3m determined by management.
The evidence complied by management in respect of the 50% increase in secondary sponsorship
values for the club (on an arm’s length basis) provides further support to the fair value of €3m for the
main sponsorship rights (also a 50% increase in value) as determined by management.
Result:
Therefore, solely for the purpose of calculating relevant income/expenses for the Break-even
requirements, club’s management will make an adjustment to reduce relevant income by €2m. The
evidence compiled by club’s management will need to be made available to the licensor and, if
requested in due course, the CFC Panel. For the avoidance of doubt, the club will not have to make
any adjustment to its annual financial statements in respect of the fair value of the related party
transaction.

Fair value guidance example 2: Club provides use of an executive box to a related party
The use of an executive box at a club’s home stadium is sold to a related party and the club received
€1m for the season.
After deduction of relevant discounts and taxes from the prices advertised by the club to customers,
the average amount received from third party customers for use of an executive box is €0.05m. The
maximum amount received from a third party customer for the use of an executive box (with the same
facilities and corporate hospitality offering as for the box used by the related party) is €0.1m for the
season.
Determination of fair value: methodology
The club’s management should (at least) consider the following approach for the determination of fair
value of the use of an executive box for the season:
i) Fair value is deemed to be €0.05m, being the average amount the club obtained, in an arm’s
length transaction, for use of executive boxes for the season, as evidenced by the revenue
obtained from independent third parties;
ii) Fair value is deemed to be €0.1m, being the highest amount the club received from an
independent customer in an arm’s length transaction for the use of what management
demonstrate to be an equivalent executive box facility and corporate hospitality provision.
Guidance:
was agreed.
Based on revenue obtained from independent parties for use of the club’s executive box facilities with
comparable benefits to that sold to the related party, then €0.1m may reasonably be determined as
the fair value of the use of the particular executive box for the season.
Result:
Management demonstrate that the club could have obtained €0.1m from a willing third party for the
specific executive box facilities and corporate hospitality provision sold to the related party for the
season.
requirements, club’s management will make an adjustment to reduce relevant income by €0.9m
(being the difference between €1.0m received from the related party and the fair value of €0.1m). The
evidence compiled by club’s management will need to be made available to the licensor and, if
requested in due course, the CFC Panel. For the avoidance of doubt, the club will not have to make
transaction.

Fair value guidance example 3: Club obtains goods or services from a related party
Free-of-charge, the club has received professional legal services from a related party during the year.
The cost of the services on an arm’s length basis was €1m.
Determining fair value: methodology
The club’s management should (at least) consider the following approach for the determination of fair
value of the receipt of the legal services during the year:
i) Fair value is deemed to be €1m, being the approximate cost of the legal services on an arm’s
length basis, as evidenced by a letter from the legal firm (letter requested by the club’s
management);
ii) The fair value of €1m is further supported by management’s workings of the estimated scale
(time/hours) of legal services received by the club from the related party legal firm, and the
associated market rates for legal firms (evidenced by the quantum of typical market rates of legal
firms to perform such work).
Guidance:
was agreed.
In respect of related party transactions involving a club obtaining goods and/or services, where more
than one fair value could reasonably be allocated to an expenditure, the highest such figure should be
used to calculate the adjustment to relevant expenses.
Based on the written evidence from the legal firm and supported by management’s workings using
market rates for legal work, then €1m may reasonably be determined as the fair value of the legal
services received by the club.
If the club’s management did not have written evidence, then they should have requested an estimate
of the cost of the legal services on a normal commercial basis from the legal firm and/or from other
legal firms independent of the club.
Result:
requirements, club’s management will make an adjustment to increase relevant expenses by €1m
The evidence compiled by the club’s management will need to be made available to the licensor and,
if requested in due course, the CFC Panel. For the avoidance of doubt, the club will not have to make
transaction.

Note 8: Dividends and equity contributions
Dividends are distributions to holders of equity instruments. If dividends are recognised in a club’s
audited annual financial statements then, regardless of whether the dividends are presented in the
club’s profit and loss account or an alternative statement, an adjustment must be made to include the
amount as relevant expenses.
The amount of investment by equity participants in a reporting period as recognised in a club’s annual
financial statements is to be excluded from relevant income. However, it may be appropriate to
consider the amount of any such monies for determining if a club has a Break-even deficit within the
defined acceptable deviation (see Section 14 and Note 17).
Note 9: Non-football operations
The income and expenses of non-football operations are a distinguishable component of the reporting
entity that is engaged in providing an individual product or service or a group of related products or
services that is subject to risks and returns that are different from those of the football club operations.
Factors that should be considered include:
• The nature of the products and services and how they are branded and marketed to customers;
• The type or class of customer for the products or services;
• The methods used to distribute the products or provide the services;
• The nature of the regulatory environment;
• Geographical location of operations;
• Proximity of operations to the club’s stadium, training facilities and other properties used for the
activities of the club;
• The quantitative contribution of operations relative to the football club operations, in terms of
revenue, profit/loss and assets; and
• The way in which operating results are reviewed by the entity’s chief operating decision maker to
make decisions about resources to be allocated to the segment and assess its performance.
If material, the financial results of non-football operations should be disclosed in the information
prepared and submitted to the licensor/CFC Panel in respect of the Break-even requirements.
The income and expenses of non-football operations which are clearly and exclusively not related to
the activities, locations or brand of the football club must be excluded from the calculation of relevant
income/expenses.
In practice, in most cases, relevant income and expenses will not need to be adjusted for the income
and expenses of non-football operations. Examples of activities that would normally be reported as
non-football operations and for which relevant income/expenses would not normally need to be
adjusted include:
• Operations based at, or in close proximity to, a club’s stadium and training facilities such as a
hotel, restaurant, conference centre, business premises (for rental), health-care centre, other
sports teams; and

• Operations clearly using the name/brand of a club as part of its operations.
Note 10: Operating expenses
The constituent elements of operating expenses described herein are minimum disclosure
requirements for a club’s audited annual financial statements as set out in the Club Licensing
Regulations (Edition 2008) Annex VI.
Operating expenses includes amounts in respect of:
• Cost of sales/materials – include cost of sales for catering, merchandise, medical care, kits and
sports materials;
• Employee benefits expenses – includes all forms of consideration in exchange for services
rendered by employees;
• Other operating expenses – includes match expenses, rental costs, administration and overhead
expenses, expenses of non-football operations;
• Depreciation and amortisation – includes depreciation in respect of tangible fixed assets and
amortisation in respect of intangible fixed assets (including both player registrations and other
intangible fixed assets); and
• Impairment of fixed assets – includes impairment of tangible and/or intangible fixed assets.
Operating expenses will include any such transactions with related parties.
For the avoidance of doubt, for the purpose of calculating relevant expenses, the following items are
to be excluded from relevant expenses:
• Depreciation/impairment of tangible fixed assets; and
• Amortisation/impairment of intangible fixed assets (other than player registrations).
Note 11: Expenditure on youth development activities
As set out in Club Licensing Regulations (Edition 2008) Article 17, the club must have a written youth
development programme approved by the licensor.
Expenditure on youth development activities means expenditure by a club directly attributable to

activities to train, educate and develop youth players involved in the youth development programme,
net of any income received by the club directly attributable to the youth development programme.
The Break-even requirements allow a club to exclude expenditure on youth development activities
from relevant expenses because the aim is to encourage investment and expenditure on facilities and
activities for the long-term benefit of the club. The Break-even requirements do not seek to limit the
amount of a club’s expenditure on youth development activities.
Examples of activities that would normally be included as youth development activities include:
• Organisation of a youth sector;
• Youth teams taking part in official competitions or programmes played at national, regional or
local level and recognised by the national association;

• Football education programme for different age groups (e.g. playing skills, technical, tactical and
physical);
• Education programme on the Laws of the Game;
• Medical support for youth players; and
• Non-football education arrangements.
Expenditure on youth development activities comprises all expenditure that is directly attributable to
youth development activities. Directly attributable youth development expenses are those which
would have been avoided if the club did not undertake youth development activities. Examples of
directly attributable expenses are:
• Costs of materials and services used or consumed in undertaking the youth development
activities. For example accommodation costs, medical fees, educational fees, travel and
subsistence, youth team travel costs, kit and clothing, subsistence, facility hire;
• Costs of employee benefits for employees who are youth players who have never played in a
competitive first team match;
• Costs of employee benefits for employees wholly involved in youth development activities. This
will typically include the head of youth development programme and youth coaches, as defined in
the Club Licensing Regulations (Edition 2008) Articles 36 and 37, if their employment by the club
is wholly for the youth development activities.
If a club cannot separately identify the expenditure on youth development activities from other
expenditure by the club, then such expenditure will not be treated as expenditure on youth
development activities. The following are not normally part of expenditure on youth development
activities for the purpose of these requirements:
• Player scouting;
• Fees to obtain the registration of a youth player (e.g. any fees paid to an agent or to another
club);
• Selling, administrative and other general overhead expenditure unless this expenditure can be
directly attributed to the youth development activities;
• Costs of employee benefits for employees only partly involved in youth development activities
(for example, a coach having part-time involvement in youth development activities);
• The cost of property, plant and equipment and/or depreciation thereon. For the avoidance of
doubt, the depreciation of tangible fixed assets (including, but not limited to, any such assets
relating to youth development activities) is separately excluded from relevant expenses.
Note 12: Expenditure on community development activities
Expenditure on community development activities means expenditure directly attributable to activities

for the public benefit to promote participation in sport and advance social development.
The Break-even requirements allow a club to exclude expenditure on community development

activities from relevant expenses because the aim is to encourage investment and expenditure on

facilities and activities for the long-term benefit of the club. The Break-even requirements do not seek
to limit the amount of a club’s expenditure on community development activities.
Examples of the purpose of the activities that would normally be included as community development
activities include:
• The advancement of education;
• The advancement of health;
• The advancement of social inclusion and equality;
• The prevention or relief of poverty;
• The advancement of human rights, conflict resolution or the promotion of religious or racial
harmony or equality and diversity;
• The advancement of amateur sport;
• The advancement of environmental protection or improvement; or
• The relief of those in need by reason of youth, age, ill-health, disability, financial hardship or
other disadvantage.
Expenditure on community development activities comprises all expenditure that is directly

attributable to community development activities. Directly attributable community development
expenses are those which would have been avoided if the club did not undertake community
development activities. Examples of directly attributable expenses are:
• Costs of materials and serviced used or consumed in undertaking the community development
activities;
• Costs of employee benefits for employees wholly involved in community development activities;
• Donations to other entities for which the purpose is promote participation in sport and/or advance
social development.
If a club cannot separately identify the expenditure on community development activities from other
expenditure by the club, then such expenditure will not be treated as expenditure on community
development activities. The following are not normally part of expenditure on community
development activities:
• Selling, administrative and other general overhead expenditure unless this expenditure can be
directly attributed to the community development activities;
• Costs of employee benefits for employees only partly involved in community development
activities (for example, a player having some form of involvement in community development
activities);
• The cost of property, plant and equipment and/or depreciation thereon. For the avoidance of
doubt, the depreciation of tangible fixed assets (including, but not limited to, any such assets
relating to community development activities) is separately excluded from relevant expenses
anyway.
There is no requirement for a club to calculate and/or make adjustment for income from community
development activities.

Note 13: Amortisation/impairment of intangible fixed assets (other than player registrations)
The amortisation and/or impairment loss of intangible fixed assets, other than in respect of player
registrations.
This item is a minimum disclosure requirement for a club’s audited annual financial statements as set
out in the Club Licensing Regulations (Edition 2008) Annex VI.
Note 14: Depreciation/impairment of tangible fixed asset
The depreciation and/or impairment loss in respect of tangible fixed assets.
This item is a minimum disclosure requirement for a club’s audited annual financial statements as set
out in the Club Licensing Regulations (Edition 2008) Annex VI.
The Break-even requirements allow a club to exclude depreciation/impairment of tangible fixed assets
from relevant expenses because the aim is to encourage investment and expenditure on facilities and
activities for the long-term benefit of the club. The Break-even requirements do not seek to limit the
amount of a club’s expenditure on tangible fixed assets.
Note 15: Non-monetary items
Monetary items are defined as units of currency held and assets and liabilities to be received or paid
in a fixed or determinable number of units of currency. The essential feature of a monetary item is a
right to receive (or an obligation to deliver) a fixed or determinable number of units of currency.
Non monetary items are items which do not meet the definition of monetary items. Examples of non-
monetary items include:
• Revaluations of tangible and intangible fixed assets;
• Revaluations of inventories;
• Depreciation/amortisation/impairment of fixed assets;
• Write-backs of depreciation or amortisation charges in respect of fixed assets (including player

registrations); and
• Foreign exchange gains/(losses) on non-monetary items.
Note 16: Finance costs directly attributable to the construction of tangible fixed assets
A club may exclude from relevant expenses any finance costs that are directly attributable to the
construction of an asset for use for the club’s football activities that have been expensed in a reporting
period rather than capitalised as part of the cost of the asset, up until when the asset is ready for use.
For the calculation of relevant expenses, all finance costs are to be included within relevant expenses
except those that are directly attributable to the construction of an asset that forms part of the football
operations, which form part of the cost of that asset. If such finance costs have been capitalised in
the annual financial statements of the club, then no further adjustment is required. If such finance
costs have not been capitalised, then an adjustment can be made to calculate relevant expenses.

The amount that is capitalised/adjusted is the actual interest expense less any investment income on
the temporary investment of the amount borrowed in respect of which the interest relates.
The interest is capitalised from the date when the entity incurs expenditure for the asset, incurs
borrowing costs, and undertakes activities that are necessary to prepare the asset for its intended use
or sale.
Post completion of the construction of an asset, entities will/should recognise all finance costs as an
expense in profit or loss in the period in which they are incurred.
Note 17: Contributions from equity participants and/or related party contributions
Contributions from equity participants meaning the buying of shares through the share capital or
share premium reserve accounts (i.e. investing in equity instruments in their capacity as owners).
For the avoidance of doubt, contributions from owners in respect of instruments classified as liabilities
are not to be included in the amount that may cover a Break-even deficit.
Contributions from a related party may include:
• Capital contributions – meaning a contribution by owners, i.e. an unconditional gift made to a club
by an owner or a related party, which increases the club’s equity without any obligation for the
club to repay it or to do anything in consideration for receiving it. For example, a waiver of inter-
company or related party debt would constitute a capital contribution, as it results in an increase
in equity.
• Income transactions from a related party. The amount to be considered as a contribution will be
no more than an amount equivalent to the difference between the actual income and the fair value
of the transaction as already recognised in the club’s Break-even calculation. For the avoidance
of doubt, the monies must have been received by the club.
Types of transactions that are not to be considered as ‘contributions from equity participants and/or
related party contributions’ include, for example:
• Positive movement in net assets/liabilities arising from a revaluation;
• Creation, or increase in the balance, of other reserves where there is no contribution from equity
participants;
• A transaction whereby the club has a liability in that the entity has a present obligation to act or
perform in a certain way.
Timing of recognition of contributions from equity participants and/or related party contributions:
In order to be taken into consideration in respect of the assessment of whether a Break-even deficit is
within acceptable deviation, the transaction(s) must have either:
• occurred and been recognized in the club’s audited annual financial statements for one of the
reporting periods T-2 and/or T-1; or

• occurred and been recognized in the club’s financial statements and accounting records for the
reporting period T;
• occurred and been recognized in the club’s financial statements and accounting records during
the time between the statutory closing date of reporting period T and 15th October. The onus will
be on the club to demonstrate the substance of the transaction. For the avoidance of doubt, the
transaction must have been completed in all respects. An intention or commitment from owners
to make a contribution is not sufficient for an amount to be considered for covering (in whole or in
part) a Break-even deficit.

Appendix 2: Draft template for the calculation of relevant income/expenses for

a reporting period for the Break-even requirements
Note: For the purpose of illustrating the Break-even requirements, two columns have been included in the draft template below.
Column A is for use by those clubs that use the ‘capitalisation and amortisation’ method of accounting for player registrations.
Column B applies to clubs that use the ‘income and expense’ method of accounting for player registrations.
Column A Column B
CLUB DETAILS:
Capitalisation & Income &
Player Trading - accounting method used: amortisation expense
Entity name: xxxxxxxxx xxxxxxxxx
Reporting period: xx/xx/xxxx xx/xx/xxxx
Currency: xxx xxx
CALCULATING RELEVANT INCOME:

Gate receipts x x
Broadcasting rights x x
Sponsorship and advertising x x
Commercial activities x x
Other operating income x x
Income from non-football operations x x
Revenue x x
Add: Profit on disposal of player registrations x n/a
Income from disposal of player registrations n/a x
Profit or proceeds on disposal of tangible fixed assets x x
Finance income x x
Less: Non-monetary credits (x) (x)
Adjustment to reflect fair value of income transactions w ith related parties (x) x
Income from non-football operations (clearly not related to club) (x) (x)
RELEVANT INCOME x x
CALCULATING RELEVANT EXPENSES:

Cost of sales/materials x x
Employee benefits expense x x
Other operating expenses x x
Expenditure on non-football operations x x
Depreciation/ impairment of tangible fixed assets x x
Amortisation/impairment of players' registrations x n/a
Costs of acquiring players' registrations n/a x
Amortisation/ impairment of other intangible fixed assets x x
Expenses x x
Add: Finance costs x x
Adjustment to reflect fair value of expense transactions w ith related parties x x
Any other expenses incurred in respect of the activities of the football club x x
Less: Depreciation/impairment of tangible fixed assets (x) (x)
Amortisation/impairment of other intangible fixed assets (x) (x)
Expenditure on youth development activities (x) (x)
Expenditure on community development activities (x) (x)
Non-monetary items (x) (x)
Finance costs directly attributable to the construction of tangible fixed assets (x) (x)
RELEVANT EXPENSES x x
BREAK-EVEN RESULT:
Surplus/(deficit) of relevant incom e/expenses x/(x) x/(x)
FINANCIAL RATIOS
Employee benefits expense as a percentage of Revenue x% x%

Employee benefits expense plus net player transfer result as a percentage of Revenue x% x%

Appendix 3: Illustrative scenarios in respect of a club’s Break-even results, the

assessment and the outcomes
For the purpose of these illustrative scenarios (in respect of UEFA competitions for 2022/23 season),
it is assumed, for the purpose of this illustration, that a club’s aggregate Break-even deficit for three
reporting periods (or five reporting periods, if it is appropriate to also consider T-3 and T-4) will be
within an acceptable deviation if it is either:
parties; or
parties.
Scenario 1: Break-even surplus

For clubs in UEFA competitions for 2017/18 season
Information submission July 2017 October 2017
Reporting period ending 2015 2016 2017 2018

(T-2) (T-1) (T) (T+1)
Break-even result (€m) +2 +1 N/a N/a
Aggregate (€m) N/a +3 N/a N/a
Decision Break-even requirements fulfilled. N/a

The club does not need to submit
further information (unless other
indicators have been breached)
Break-even surplus for T- 4 and T-3 (€m) N/a
Aggregate Break-even result for T- 4 to T (€m) N/a
Contributions from equity participants and/or related parties N/a
Uncovered deficit N/a
Decision N/a

Scenario 2: Break-even deficit <5M

(T-2) (T-1) (T) (T+1)
Break-even result (€m) +1 -2 -3 +1
Aggregate (€m) N/a -1 -4 N/a
Decision Break-even deficit in T-1 (i.e. breach Aggregate deficit is within the
of IND.04), so club must submit acceptable deviation. Break-even
further information in October. requirements fulfilled.
Break-even surplus for T- 4 and T-3 (€m) N/a
Aggregate Break-even result for T- 4 to T (€m) N/a
Decision N/a
Scenario 3: Break-even deficit covered by accumulated surplus

(T-2) (T-1) (T) (T+1)
Break-even result (€m) -4 -5 -3 -2
Decision Deficit in T-1 and T-2 (i.e. breach of Deficit in T-2 to T exceeds the
IND.04), so club must submit further acceptable deviation, so consider T-
information in October. 4 and T-3 result and also any
contributions
Break-even surplus for T- 4 and T-3 (€m) 8
Aggregate Break-even result for T- 4 to T (€m) -4
Contributions from equity participants and/or related parties N/A
Uncovered deficit -4
Decision The aggregate Break-even deficit for

T- 4 to T is within the acceptable
deviation (as sufficiently covered by
accumulated surplus). The Break-
even requirements are fulfilled and
the case is not referred to OAJ.

Scenario 4: Break-even deficit covered by equity contributions

(T-2) (T-1) (T) (T+1)
contributions
Contributions from equity participants and/or related parties 10
Decision The aggregate Break-even deficit for

T- 4 to T is within the acceptable
deviation (as sufficiently covered by
contributions). The Break-even
requirements are fulfilled and the
case is not referred to OAJ.
Scenario 5: Break-even deficit covered by accumulated surplus and equity contributions

(T-2) (T-1) (T) (T+1)
Decision Deficit in T-1 and T-2 (i.e. breach of Deficit in T-2 to T exceeds
information in October. 4 and T-3 result and any
contributions.
Decision As there are sufficient surplus and

contributions, the aggregate Break-
even deficit for T- 4 to T is within the

acceptable deviation. Requirements

are fulfilled and the case is not
referred to OAJ.
Scenario 6: Break-even deficit uncovered

(T-2) (T-1) (T) (T+1)
contributions.
Decision As there are not sufficient

contributions, the aggregate Break-
even deficit for T-4 to T is not within
the acceptable deviation. The
Break-even requirements are not
fulfilled and the case may be referred
to OAJ.
Scenario 7: Break-even deficit

(T-2) (T-1) (T) (T+1)
Break-even result (€m) -25 -15 -10 +2
IND.04), so club must submit further acceptable deviation, so first
information in October. consider T-4 and T-3 result and also
any contributions.
Break-even surplus for T-4 and T-3 (€m) 3
Aggregate Break-even result for T-4 to T (€m) -47

Decision Regardless of whatever contributions

may have been received by the club,
the aggregate Break-even deficit
(after consideration of accumulated
surplus) exceeds the acceptable
deviation. Break-even requirements
not fulfilled and the case may be
referred to the OAJ.

Appendix 4: Monitoring process
page 1
Dates Disciplinary CFCP Licensor Club
Licensors send the list of licensed clubs to the UEFA

Licensing decision administration - incl. information about going concern
(for IND.01) and deterioration of net liabilities (for
IND.02).
31.05 UEFA receive list of

Licence granted
licensed clubs
Clubs that receive a licence and qualify for UEFA club
competitions must submit financial information –
being Break-even calculation in respect of T-1 and T-
30.06 2 (information based on audited annual financial
Upload financial statements and underlying accounting records) and
Validation
information payables information as at 30.06. Submission via an
Receipt of financial IT tool to the national licensor for initial validation and
information then submitted to CFCP.
15.07
Break-even (T-2, T-1)
Payables (30.06)
The CFCP assesses the information to determine
whether or not a club is in breach of certain warning
indicators (risk based approach).
No indicator Assessment of Yes, indicator
OK
triggered indicators triggered
If a club is in breach of one or more indicators then it
IND.01: Going concern must submit additional financial information – being
Break-even calculation in respect of reporting period
IND.02: Net liabilities Request for more
T and future financial information (at least covering
information
If existence of overdues IND.03: Overdues (30.06) reporting period T+1).
IND.04: Break-even deficit
(T-2, T-1) Furthermore, if a club has overdue payables at 30.06
it may be referred to the Organs for Administration of
Justice and must submit payables information at
Breach 30.09.
of criterion
Refer to
disciplinary Between July and September the CFCP may ask
Upload additional specific questions to the licensor/club to better
Validation understand the club’s financial situation.
financial information
30.09
In October the club submits the Break-even
calculation for reporting period T. The Break-even
results can then be determined for the three reporting
Receipt of additonal periods T-2, T-1 and T.
15.10 financial information
It also submits future financial information (covering
Break-even (T) reporting period T+1). Budgeted information will be
FFI (T+1) useful to determine the club’s plan for the future, its
capability to comply with Break-even and its debt and
Overdues (30.09) liquidity position.
If the club had overdue payables as at 30.06 then it

must also submit payables information as at 30.09.
1

page 2
Dates Disciplinary CFCP Licensor Club
Payables are assessed as at 30.09. If the club has overdue

1 payables, it will trigger a decision from the CFCP and may be
referred to the OAJ.
Assessment of The future financial information is assessed (profit & loss,

monitoring criteria balance sheet and cash flow). If these show worrying signs,
such as liquidity shortfalls or a deficit, the club is kept under
Break-even result Deficit monitoring and the information is submitted to the licensor in
Surplus
(T-2, T-1, T) (over 3 years) view of the following licensing cycle. Furthermore such
FFI (T+1) information is also taken into consideration should the club be
OK Submission of info deemed not in compliance with the break-even rule .
No overdues to licensor in view
Payables 30.09 of next licensing
If existence of overdues The break-even result for three reporting periods (T-2, T-1
cycle and T) is assessed. If the club has a break-even surplus, the
criterion is fulfilled. If the club has a break-even deficit, then
the case is investigated further.
Breach of
criterion
Refer to
disciplinary
Aggregate Assuming the acceptable deviation (AD) is €30M (higher in
Aggregate Aggregate deficit the transition period) if covered by contributions or €5M if not
deficit
deficit €5M< X < €30M covered by contributions. Therefore:
> €30M
< €5M
8 if the aggregate deficit is <€5M (for either three reporting
periods T-2 to T or five reporting periods T-4 to T) then
the criterion is fulfilled;
8 if the aggregate deficit is more than €5M but below
€30M (higher in the transition period) and having also
OK Yes Covered by
contributions? considered any Break-even surplus for T-3 and T-4,
then the criteria is considered as fulfilled only if the
No Request for aggregate deficit is sufficiently covered by contributions
hearing, additional from equity participants or related party contributions
documentation, etc (e.g. new equity, donation; not debt funding);
8 if the aggregate deficit after including any surplus for T-3
and T-4 is >€30M then the club has not fulfilled the
Yes Is deficit sufficiently covered Break-even requirements and may be referred to the
by aggregate surplus in T-4
and T-3? OAJ by the CFCP.
No, breach of criteria
Assessment of
A disciplinary inspector will be appointed. He will consider
other factors
other factors such as the quantum and trend of the deficit, the
club’s plan for compliance (in part demonstrated in FFI
Quantum and trend
covering T+1), actual compared to budget results, and the
Decision debt situation.
FFI (T+1)
Before These factors are taken into account to determine the gravity
Refer to
31.05 of the breach. The case is referred to the OAJ. Decision is
disciplinary Debt situation
taken before the start of the following UEFA club
competitions season.

Appendix 5: Debt monitoring
Principle
The approved objectives and principles of the ‘financial fair play concept’ implicitly included the aim of
better controlling clubs’ debt levels to be at sustainable levels. The multi-dimensional approach has been
developed such that club monitoring requirements address debt control in a variety of ways and from
different angles.
Purpose
In respect of debt control, a reasonable and balanced approach has been developed such that the
implementation of the club monitoring requirements will help deliver both short and long term
improvements for individual clubs and for European club football in general by:
• Introducing more discipline and rationality in club football finances and helping to protect the long
term viability and sustainability of European club football by requiring a club to have no more debt that can
reasonably be supported by its financial results and cashflows. The image and credibility of the game will
be improved if there are fewer cases of financial distress and business failure amongst the clubs;
• Encouraging clubs to compete with their income and not to fund shorter-term speculative spending
through debt financing. By limiting debt-funded spending on players’ salaries and transfer fees it helps
lessons debt-funded distortion of the competition and such ‘unfair’ behaviour causing damage to the
image and credibility of specific competitions and the game in general;
• Limiting debt-funded spending by clubs thereby helping to limit inflationary pressure on players’
salaries and transfer fees within the European club football market.
• Encouraging spending on facilities and activities for the long-term benefit of clubs – such as
investment and expenditure on infrastructure, youth development activities and community development
activities – over shorter-term speculative spending. It is acknowledged that it is reasonable business
behaviour for a club to fund facilities investment by way of debt financing, if the level of debt can
reasonably be supported by the club’s financial results and cashflows.
• Encouraging clubs to settle their liabilities on a timely basis.
Approach
The multi-dimensional approach has been developed such that various aspects of the club licensing and
club monitoring requirements address debt control as described below
Going concern assessment
The going concern assumption, which is assessed by both a club’s management and the independent
auditor, is a fundamental principle in the preparation of a club’s audited annual financial statements that
are submitted to the licensor. Assessment of a club’s debt situation is a fundamental part of the going
concern assessment.

As set out in Section 12.4, if the auditor’s report in respect of the audited annual financial statements (for
the reporting period T-1) submitted in accordance with club licensing requirements includes an emphasis
of matter or a qualified ‘except for’ opinion in respect of going concern, and/or (for applicable clubs) the
auditor’s review report in respect of the reviewed interim financial statements submitted in accordance with
club licensing requirements expresses an emphasis of matter or qualified conclusion in respect of going
concern, then:
• The club is required to provide additional information to the licensor, to enable the licensor to make
further assessment of the club’s financial situation (including, but not limited to, its debt situation) for the
purpose of club licensing; and
• This condition is a breach of an indicator (IND.01) and therefore the club is required to prepare and
submit additional information, for the licensor and the CFC Panel to make further assessment of the club’s
financial situation (including, but not limited to its debt situation) for the purpose of club monitoring.
Therefore, having assessed if a club’s debt can reasonably be supported by its financial results and
cashflows, if management and/or the independent auditor has doubt about a club’s ability to continue as a
going concern in the foreseeable future such that the matter is included in the auditor’s report, then the
club licensing and monitoring requirements will address the matter. Assessment of the club’s debt
situation will include aspects such as the financial results and cashflows in the club’s future financial
information (see below), a club’s ability to service any interest and principal payments under the borrowing
terms, debt covenant compliance, and the maturity profile of the debt.
Net liabilities position
As set out in Section 12.4, if the audited annual financial statements (for the reporting period T-1)
submitted in accordance with club licensing requirements disclose a net liabilities position that has
deteriorated relative to the comparative figure at the preceding statutory closing date, then:
• The club is required to provide additional information to the licensor, to enable the licensor to make
further assessment of the club’s financial situation (including, but not limited to its debt situation) for the
purpose of club licensing; and
• This condition is a breach of an indicator (IND.02) and therefore the club is required to prepare and
submit additional information, for the licensor and the CFC Panel to make further assessment of the club’s
financial situation (including, but not limited to its debt situation) for the purpose of club monitoring.
Therefore, even if the going concern indicator (IND.01) has not been breached, then IND.02 provides an
additional ‘warning sign’ that is related to the liabilities/debt situation of the club.
All other things being equal, debt-funded spending on players’ salaries and transfer fees would lead to a
deterioration of a club’s net assets/liabilities position and (if the club has net liabilities) will mean the club
will be in breach of IND.02 and therefore subject to additional assessment and monitoring.
Net debt as a multiple of a club’s total revenue
As set out in Section 12.4, if the net debt as a multiple of a club’s total revenue is higher than one (for the
reporting period T-1), then:
• The club may be required to provide additional information to the CFC Panel to make further
assessment of the club’s debt situation for the purpose of club monitoring.

In performing this assessment the CFC Panel would need to take into consideration the following
elements:
• The legal form of the club;
• The accounting and financial reporting requirements;
• The market conditions for debt funding;
• The nature of how debt funding has been spent, e.g. spent on players’ salaries and transfer fees,
or invested in facilities; and
• The individual circumstances of the club, e.g. shareholder debt or non-shareholder debt, the term of
the loan and timing of repayment, interest cost, asset security provided to the lender, covenant
compliance.
Future financial information
For club licensing a club must prepare and submit (prior to the start of the UEFA season for which the
licence has been requested) a budgeted profit and loss account, a budgeted cashflow and explanatory
notes including assumptions and risks, covering at least the period of the season to be licenced.
As set out in Section 16, the enhanced requirements for the purpose of club monitoring are such that
some clubs - selected using a risk based approach, being those clubs in breach of any of the defined
indicators (IND.01 – IND.04 inclusive) - will be subject to additional assessment during the season of the
competition to help ensure that they have sufficient liquidity to meet their obligations and demonstrate that
they have an adequate plan for compliance with the Break-even requirements.
Under the club monitoring requirements, those clubs in breach of the indicators described in Section 12.4
will be required to prepare and submit future financial information in October. Each of the indicators act as
‘warning signs’ in respect of a club’s debt situation and will lead to a licensor and the CFC Panel assessing
and monitoring the individual circumstances of such a club in greater detail.
No overdue payables
As set out in Section 15, the current Club Licensing Regulations already contain no overdue payables
criteria that are aimed at ensuring that clubs have met their financial obligations to employees, tax
authorities and to other clubs at 31st December. The proposed new requirements reinforce the No
overdue payables requirements through an additional assessment date (30th June) for all clubs, and a
further assessment date (30th September) for any club in breach at the previous dates (i.e. indicator
IND.03).
These requirements aim to ensure that clubs competing in UEFA competitions exhibit ‘fair’ behaviour and
have honoured their debts towards employees and other clubs on a timely basis.
Whilst the club licensing and monitoring requirements focus on particular types of liabilities, if a club
exhibits overdue payables in respect of debts towards employees, tax and social authorities and other
clubs it may be indicate wider financial issues in respect of a club’s debt situation, which will be further
investigated by the licensor and/or CFC Panel.

Break-even requirements
As set out in Section 11, the key principle of the Break-even requirements is that a club’s relevant
expenses (excluding expenditure for the long term benefit of the club) should be no greater than the club’s
relevant income, and it must not repeatedly spend more than the income it generates. The Break-even
requirements aim to achieve a sustainable level of costs.
For the Break-even calculation, relevant expenses include finance costs in respect of a club’s debts. As
part of its overall cost management, a club will need to cover its annual debt servicing costs in order to
fulfil the Break-even requirements. Therefore, a club is required to have no more debt that can reasonably
be supported by its financial results. It is part of the role of the licensor and the CFC Panel to ensure that
the Break-even calculation is based on the appropriate reporting entity (or combination of entities), that will
include all financing arrangements and costs associated with a club.
As set out in Section 13.5, the Break-even requirements also include a specific concession such that if a
club has finance costs directly attributable to the construction of tangible fixed assets (up until the time
when the asset is ready for use), then such costs can be excluded from the calculation of relevant
expenses. It is acknowledged that it is reasonable business behaviour for a club to fund facilities
investment by way of debt financing, if the level of debt can reasonably be supported by the club’s
financial results and cashflows.
As set out in Section 14, UEFA has defined an acceptable deviation for a club’s aggregate Break-even
deficit. This definition includes a higher acceptable level of deviation if covered by contributions from
equity participants and/or related parties. In principle, committed contributions without any obligation for a
club to repay are deemed to be preferable to debt funding. For the avoidance of doubt, the Break-even
requirements also limit the amount of Break-even deficit that can be covered by contributions from equity
participants and/or related parties, without the deficit being considered a breach.
Club monitoring assessment
As set out in Section 14, in addition to the specific information obligations outlined, the assessment of a
club’s case may also entail additional factors. This may include:
• Review of a club’s longer term business plan; and
• Review of more detailed information relating to the circumstances of the club’s debt situation and
its ability to support its level of debt.

Club Licensing Disc 701933a

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Club Licensing Disc 701933a

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UEFA Club Licensing

March 2010 - Version 0.98

NO OVERDUE PAYABLES REQUIREMENTS

15. Enhanced No overdue payables requirements 27

FUTURE FINANCIAL INFORMATION REQUIREMENTS

16. Enhanced Future financial information requirements 29

17. Implementation of the club monitoring requirements 31

APPENDIX 1: EXPLANATORY NOTES 34

APPENDIX 2: DRAFT TEMPLATE 49

APPENDIX 3: ILLUSTRATIVE BREAK-EVEN SCENARIOS 50

APPENDIX 4: MONITORING PROCESS 55

APPENDIX 5: DEBT MONITORING 57

The new club monitoring requirements aim principally to:

• Introduce more discipline and rationality in club football finances;

• Encourage clubs to compete with their revenues;

• Ensure clubs settle their liabilities on a timely basis.

Multi-dimensional and risk-based approach

The existing club licensing criteria

Existing club licensing financial criteria:

• No overdue payables criteria; and

• Future financial information.

• The break-even criterion;

• No overdue payables criteria – enhanced version; and

• Future Financial Information – enhanced version.

v) No overdue payables enhanced (monitoring requirement) - enhanced requirements such

vi) Future financial information enhanced (monitoring requirement) – enhanced

Information to be prepared and submitted by a club

v) No overdue payables enhanced (monitoring requirement) - approach and information

vi) Future financial information enhanced (monitoring requirement) - approach and

Timing of implementation and transitional arrangements

The club monitoring requirements aim principally to:

• Introduce more discipline and rationality in club football finances;

• Encourage clubs to compete with their revenues;

• Ensure clubs settle their liabilities on a timely basis.

acceptable deviation A club’s aggregate Break-even deficit for three reporting

* In assessment years 2013 and 2014, the acceptable deviation for a

annual financial statements * A complete set of financial statements prepared as at the

CFC Panel UEFA Club Financial Control Panel

club licensing criteria * The requirements to be fulfilled by a club to be granted a

a) transfer fee payable for securing the registration;

b) transfer fee levy (if applicable); and

c) other direct costs of obtaining the player’s registration.

periods covered by the two most recent audited annual

International Financial Reporting Standards and Interpretations adopted by the International

• International Financial Reporting Standards;

• International Accounting Standards; and

• Interpretations developed by the International Financial

management * Describes those responsible for the preparation and fair

training facilities * The venue(s) at which a club’s registered players undertake

In particular, UEFA must:

• Define the club monitoring process; and

The tasks of the UEFA administration shall include:

• Preparing, implementing and further developing the club monitoring process;

• Providing administrative support to the CFC Panel;

• Providing administrative support to the decision-making bodies;

5 Responsibilities of the CFC Panel

In carrying out its tasks, the CFC Panel may:

• Summon clubs to a hearing;

• Request clubs and/or licensors to provide additional information (such as documents);

6 Responsibilities of the licensor

In particular, the tasks of the licensor include:

• To confirm that the information in respect of each club is complete;

• To undertake specific assessment procedures in respect of the information submitted in respect

7 Responsibilities of the clubs

Operating expenses : Revenue :