Warning lights, Liverpool the possible next victim of Financial Fair Play

Chelsea, on the other hand, looks set to be completely immune. There has been huge amounts of chatter about Financial Fair Play over the last week or two. The Premier League must be kicking itself for bad branding. The division’s rules aren’t in fact known by the snappy FFP moniker at all. Liverpool watched on as its near-neighbor and Nottingham Forest were actually charged with Profitability and Sustainability (PSR) breaches, far more of a mouthful than the UEFA equivalent.

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Yet while the name might not be so catchy, the Premier League is showing that its regulations arguably have more teeth, even if many were anticipating Chelsea might be charged after an unprecedented spending spree. FSG, Liverpool’s owners, have long since hoped for a real regulation system, and there’s a perception that UEFA never really delivered that with FFP.

Of course, it attempted to ban Manchester City from all European competition for two seasons, but saw that overturned by a 2-1 majority at CAS. Interestingly, there is a requirement within Premier League rules to comply with UEFA’s FFP regulations, and that forms part of the 115 charges that the independent commission will hear. Liverpool and indeed all of Manchester City’s league rivals will obviously watch the outcome of that case, whenever it comes, with huge interest. Meanwhile, however, UEFA rules are changing.

In fact, we’re technically already in a post-FFP era. No doubt UEFA’s financial rules will continue to be colloquially referred to as such, but as of last season the Financial Sustainability and Club Licensing Regulations (FSCLRs) are in play. Aside from making the Premier League’s PSR look like a branding masterstroke, what exactly is this successor to FFP? There are a few strands to it. One of those is actually a relaxing of the rules: allowable losses over a three-year period have been doubled, from €30m to €60m.

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The way to reduce debt

A second pillar stamps down on overdue payments of debts. These will now be assessed quarterly, and there will be fixed penalties for non-compliance. But the most interesting new measure is the ‘squad cost rule’. This dictates that clubs in UEFA competition cannot spend more than a certain percentage of their revenue on key playing costs: player and coach wages, transfers and agent fees. For 2023/24, the percentage stands at 90. But Liverpool and other clubs in Europe will need to be on their guard, as this figure is set to drop over the next couple of campaigns. For next season, it will be down at 80 per cent, and will then drop to the final intended number for 2025/26: 70 per cent.