A breakdown of UEFA’s Financial Fair Play announcement and what it means for Milan

By Oliver Fisher -

With Coronavirus wreaking havoc on club finances, UEFA was forced to come up with with a solution to give time to clubs to adjust their balance sheets.

A very important tool UEFA use to monitor club is the Financial Fair Play system, something introduced in the last decade. Wit FFP, UEFA have been able toput a stop to reckless and unsustainable spending and save smaller clubs from bankruptcy.

Here is a summary of the new rules, confirmed after a video teleconference meeting on Thursday:

– There will be no assessment for the financial year 2019-20 for clubs. Together they will be assessed in 2021: i.e. clubs will be monitored for the period 2019-2021.

– Clubs will be monitored for four years instead of the usual three in 2021, so 2017-18,2018-19, 2019-20, 2020-21. This gives time for clubs to adjust their break even calculation.

– All clubs in UEFA competitions have to submit their account receivables (money due to them) and money to be paid to different clubs by July 31st so that there will be no debts as such.

– UEFA has kept October 6th as the last date to conclude transfer windows for its member nations. It has asked its member nations to work out a solution to have aligned dates for transfer window so as to not have conflict.

What does it mean for Milan? Well, in the most basic terms it means Elliott Management Corporation and CEO Ivan Gazidis – among the other key figures at the club – have another year in which they can work on cutting unnecessary costs at the club and growing revenues to move back towards the green.

However, it does raise another question. Milan were excluded from participating in the Europa League due to the state of their accounts largely due to the Chinese ownership in 2017-18, but as part of that the trade-off is that they would essentially have no restrictions for a year.

Pietro Balzano Prota recently reported that Milan could hold talks with UEFA to ease the pressure ahead of the upcoming summer window, as the agreement between UEFA and the Rossoneri was to have a ‘free year’ spending-wise.

However, due to the Coronavirus effect, it seems that all clubs will be able to take part in this. Milan will thus attempt to get one more year besides this one, with further discussions expected in the near future.

In the meantime, they are planning for the imminent youth revolution at the club, which most likely will be led by Ralf Rangnick, and the more money available for that the better.

Tags AC Milan
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