Financial experts details why UEFA’S FFP announcement is good news for Milan

By Oliver Fisher -

The announcement that UEFA have made regarding changes to Financial Fair Play is music to the ears of AC Milan, a journalist has claimed.

Milan have been under the watchful eye of FFP ever since the Chinese ownership from 2017 to 2018, where excessive spending damaged the club’s accounts and led to expulsion from the Europa League this season as a voluntary agreement to wipe the slate clean.

The UEFA Executive Committee met by videoconference this morning and approved some temporary changes to Financial Fair Play system with the aim of reducing the negative economic effects on club budgets following the Coronavirus emergency.

To try to clarify how these changes are articulated and what benefits Milan can draw, MilanNews spoke to Luca Pagni, the Economics Correspondent for newspaper La Repubblica.

What do you think of the changes to the Financial Fair Play that approved UEFA?

“It is a dutiful measure, as an out of the ordinary event has occurred. The clubs have had to face dramatic drops in revenues, in some dramatic cases, which will lead them to have big imbalances,” he began.

“This year becomes a sort of exceptional year of transition and everything is translated by one year, as if the 2020-2021 season were a unique year.

“I quote verbatim: ‘the negative impact of the pandemic is neutralised by averaging the combined deficit of 2020 and 2021, as well as allowing further specific adjustments related to COVID-19’ leaves me perplexed.

“If anything, the impact is limited, not neutralised. Then I hope that in the future they will explain what these further adjustments are.

“As some economists have proposed regarding state public debts and interventions related to the COVID emergency, the debt that is contracted for COVID interventions must be cancelled. UEFA should do the same in my opinion.

“I give a trivial example pretending that this season will end without an audience: a club has had 6-7 games without takings from the public and that non-collection is removed from the calculation.”

“UEFA is too rigid and bureaucratic, as if it were a custodian of a dogma. On the one hand, the FFP worked at the beginning, on the other, it further increased the gap between those who are rich and have the possibility of making masked ‘self-sponsorships’ and who instead it has less financial resources. If one finds a legislative hole, they have to intervene. Instead, the same rules remain.”

What advantages can Milan have from this temporary reduction of the rules of the FFP?

“Milan, like all clubs, will have a year more to settle the accounts. For the Rossoneri it is good, given that they will close the next balance sheet with a big deficit,” Pagni continued.

“When Milan qualifies for the European competitions, they will have to present before UEFA in Nyon to agree on a Settlement Agreement and doing it with current numbers is a toll.

“If, however, there will be a cost cut in the next season, the Diavolo will therefore be able to present a much better budget and will have the possibility to pitch less restrictive intermediate targets in the return plan to be agreed with UEFA.”

 

Tags AC Milan