Manchester United has been fined €300,000 (£257k, $337k) by UEFA for breaching the Financial Fair Play (FFP) rules. The club reported a “minor break-even deficit” during the three-year monitoring period from 2019 to 2022. The punishment was based on the previous version of UEFA’s FFP regulations, with a new framework now in force. In a statement, United accepted the fine for a minor technical breach and expressed their support for financial fair play and sustainability in football.
United’s breach of the rules was due to failing UEFA’s ‘break-even’ test, which aims to prevent clubs from overspending. Under the old regulations, clubs could lose a maximum of €30m over three years if the difference was covered by an owner. However, United’s owners, the Glazer family, have not previously covered club losses with their own money, meaning United had to meet UEFA’s lower €5m limit. The club recorded a pre-tax loss of €197m (£150m) in their full-year accounts for the 2021-22 season, including Covid-19 losses.
Changes to UEFA’s FFP rules were introduced to help clubs cope with the effects of the pandemic. The 2019-20 and 2020-21 seasons were treated as one, and clubs could claim back their Covid-related losses from these seasons. United claims that an unforeseen change in the way UEFA treated Covid-19 losses during the transition to its new FFP rules led to their breach. They argue that without this change, they would have comfortably met the break-even threshold.
United will face less risk of breaking UEFA’s new rules, as their 2021-22 losses will not be considered in the next monitoring period. The new ‘football earnings’ rule will be in effect, and clubs in European competition will only have to submit their accounts for the 2022-23 financial year. However, United still need to be cautious with their spending to stay within UEFA’s limits.
The club also needs to be wary of the Premier League’s Profit and Sustainability (P&S) rules. Although they passed the P&S test at the end of the 2021-22 season, it is yet to be revealed whether they successfully passed last season’s test. If United breaches the Premier League’s £15m limit on either test, they will need to cover those losses through ownership funding.
To stay within the rules, United can sell players during this summer’s transfer window. They are actively seeking to sell several members of the first-team squad and are willing to listen to offers for others. Selling players for a price commensurate with their market value would significantly impact United’s FFP compliance. The club is also considering the departure of academy graduates and players without an amortized transfer fee listed in the accounting books.
In conclusion, Manchester United has been fined for breaching UEFA’s FFP rules, but the club remains committed to financial fair play and sustainability. They have taken precautions during the transfer window to ensure compliance with both UEFA’s FFP regulations and the Premier League’s P&S rules. Selling players is one way United can improve their FFP standing. As they navigate the new FFP rules, the club must continue to be cautious with their spending to meet financial obligations.