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FOOTBALL – FINANCIAL FAIR PLAY: AMENDMENTS AS OF 1ST OF JULY 2015

I. Financial fair play regulations

UEFA’s Executive Committee unanimously approved a financial fair play concept for the game’s well-being in September 2009. The concept principal objectives are:

  • to introduce more discipline and rationality in club football finances
  • to decrease pressure on salaries and transfer fees and limit inflationary effect
  • to encourage clubs to compete with(in) their revenues
  • to encourage long-term investments in the youth sector and infrastructure
  • to protect the long-term viability of European club football
  • to ensure clubs settle their liabilities on a timely basis

Hence, UEFA has introduced an obligation for clubs, over a period of time, to balance their account books. Under the concept, clubs may not repeatedly spend more than their generated revenues, and clubs will be obliged to meet all their transfer and employee payment commitments at all times.
Higher-risk clubs that fail certain indicators will also be required to provide budgets detailing their strategic plans.
The UEFA Executive Committee approved the formation of the two-chamber Club Financial Control Body (CFCB) in June 2012 to oversee the application of the UEFA Club Licensing and Financial Fair Play Regulations.
It is also competent to impose disciplinary measures in the case of non-fulfillment of the requirements, and to decide on cases relating to clubs’ eligibility for UEFA club competitions.
The disciplinary decisions in relation to the implementation of the UEFA Club Licensing and Financial Fair Play Regulations are made by the, initially via the investigatory chamber but potentially also by the adjudicatory chamber, with all decisions published.
The significant early success of the project implementation, with overdue payables reduced by 80% and Europe-wide club losses reduced by more than €900 million, has answered many of the critics who considered the project too ambitious and challenging to implement, and has led to almost universal support amongst football stakeholders.

II. The new provisions under the 2015 regulations

A new regulation adopted by the UEFA’s Executive Committee on the 29th of June 2015 which has come into force on the 1st of July 2015, is related to the 2015-2018 period. This new regulation does not substantially amend the Financial fair play’s spirit. The rule remains the following: European clubs which want to participate to the UEFA’s competitions cannot spend more than their generated revenues under penalties, as recruitment limitations (ex: PSG, Manchester City), or disqualification of the European Cups (ex: Dynamo Moscow).

The Financial fair play regulations development aim at taking into account the European economical situation and the accumulated experience for the last five years.

The main new rules are:

The Voluntary agreements (Appendix XII): when a club is restructured or when a new investor repurchases it, the latter can go to the CFCB to present his case and to take part to a voluntary agreement which shall be carefully controlled by the CFCB to make sure that there is no loss suffered by this club. Even before the club qualifies to any of the European competitions, a follow-up will be implemented during a four-year period.

From the 2016-2017 season, clubs sustained by shareholder able to cover temporary losses could be allowed to have deficits over the one imposed (up to 30 M €). Nevertheless, clubs will have to follow the obligation of respecting the financial objectives at the end of the three following seasons and to achieve a balance budget at the agreement’s term (Article 61, paragraph 2).

The measure of flexibility related to the first season of supervision: from now on, a club, which has a realistic project of development, can declare itself volunteer for signing a four-year agreement (no more three year). This agreement will make him avoid penalties if it is unprofitable at the end of the first season.

Redefinition of the related Parties: for now on, a sponsor accounting for more than 30% of the club’s incomes, is considered to be a related Party. It means that the very important investors can alter the sport equity.

Currently sentenced clubs: their sentences will not be suspended. The changes do not apply to clubs that are already sentenced.

However, the sanctions against PSG have been suspended on the 1st of July 2015 due to the fact that the club had fully satisfied its commitments by achieving the financial equilibrium one year in advance.

31 August 2015 ndiservice 16,011 Responses ,

Consumers protection: jurisdiction of the French Courts in a case versus Facebook

Facebook had been brought before the Paris Tribunal de Grande Instance by one of its users, for censoring his profile on which he posted a picture of Gustave Courbet painting “L’origine du monde” showing a female sex.

Facebook invoked the lack of jurisdiction of the Paris Tribunal de Grande Instance since a choice of court clause is present in the general conditions that all users accepted during registration. The choice of court clause gives jurisdiction to Californian courts.

The claimant alleged that the choice of court clause was an abusive clause according to French consumer law[1]. Facebook tried to dispute this point, arguing that the service provided is free for the user, element that should exclude the application of consumer law.

The Paris Tribunal de Grande Instance asserted its jurisdiction and stated, “A consumer can bring his case either before the court of his residence or the place where the damage occurred”. Also, “if the service proposed by Facebook is free for the user, it is unquestionable that the social network earns important benefits from its activity and as a consequence, Facebook acts as a professional [according to consumer law]. Furthermore, the contract concluded between the parties is an adhesion contract, since the user has no ability to negotiate.”

To the judges opinion, the adhesion clause that compel the subscriber to bring his action before an over sea court, to pay costs out of proportion with the economic stake of the subscribed contract, is meant to dissuade the consumer to bring any action against Facebook. This clause sets an “imbalance between the parties” and must be considered abusive according to consumer law.

The substance of the case will be discussed on the 21st May.

[1] Article L. 132-1 of French consumer law code: In the contracts concluded between professional and non-professional or consumers, are considered abusive the clauses, which has as their object or effect, at the expense of the non-professional or consumer, a significant imbalance between the rights and obligations of the parties.

According to the annex of this article, point q) the clauses which has as their effect: Delete or affect the right of action or the judicial remedy for the consumer, especially when the consumer is forced to take the case exclusively before an arbitral court non set by legal texts, wrongly limits the evidence means at the disposal of the consumer or place an unreasonable burden of proof on him that should, according to the governing law, be placed on another party.

20 April 2015 ndiservice 1 Response ,