UEFA's Executive Committee unanimously approved a financial fair play concept for the game's well-being in September 2009. The concept has also been supported by the entire football family, with its principal objectives being:
• 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
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, and in particular the wider inflationary impact of clubs' spending on salaries and transfer fees.
In recent seasons, many clubs have reported repeated, and worsening, financial losses. The wider economic situation has created difficult market conditions for clubs in Europe, and this can have a negative impact on revenue generation and creates additional challenges for clubs in respect of the availability of financing and day-to-day operations. Many clubs have experienced liquidity shortfalls, leading for instance 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 is introducing sensible and achievable measures to realise these goals. They include an obligation for clubs, over a period of time, to balance their books or break even. Under the concept, clubs cannot 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 financial fair play measures involve a multi-year assessment, enabling a longer-term view to be formed and within the wider context of European club football. They reach beyond the existing UEFA club licensing system criteria that are primarily designed to enable an assessment of a club's financial situation in the short term, and is primarily administered by the governing bodies in each UEFA national association.
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 System and Financial Fair Play Regulations.
The CFCB replaced the Club Financial Control Panel, which had monitored clubs since the first introduction of the regulations in May 2010, with the main evolution being that the CFCB is an UEFA Organ for the Administration of Justice. It is also competent to impose disciplinary measures in the case of non-fulfilment of the requirements, and to decide on cases relating to clubs’ eligibility for UEFA club competitions.
Under the procedural rules governing the UEFA Club Financial Control Body, CFCB members remove themselves from cases, on their own initiative or upon request if they themselves, their association or a club belonging to that association, or another club with which they are connected in any other way, are directly concerned, or if their independence or impartiality is in doubt.
The UEFA Club Licensing and Financial Fair Play Regulations, which were approved in May 2010 after an extensive consultation period and updated in the 2012 edition, have been implemented over a three-year period, with clubs participating in UEFA club competitions having their transfer and employee payables first monitored during the summer of 2011, and the break-even assessment was first made during 2013/14.
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.
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