Does anyone know the current position regarding the ruling from EUFA
on the timescale Premiership clubs have to address their debt?
ATB
The following is taken from the official UEFA documents covering Licensing of Clubs. I have highlighted what I believe are the relevant dates or cut off points Clubs must comply with. You can also find the dates at the end of which these mandates became or become active. It's not an easy read and in many places about as clear as mud.
I. BREAK-EVEN REQUIREMENT
Article 58 – Notion of relevant income and expenses
1 Relevant income is defined as revenue from gate receipts, broadcasting rights, sponsorship and advertising, commercial activities and other operating income, plus either profit on disposal of player registrations or income from disposal of player registrations, excess proceeds on disposal of tangible fixed assets and finance income. It does not include any non-monetary items or certain income from non-football operations.
2 Relevant expenses is defined as cost of sales, employee benefits expenses and other operating expenses, plus either amortisation or costs of acquiring player registrations, finance costs and dividends. It does not include depreciation/impairment of tangible fixed assets, amortisation/impairment of intangible fixed assets (other than player registrations), expenditure on youth development activities, expenditure on community development activities, any other non-monetary items, finance costs directly attributable to the construction of tangible fixed assets, tax expenses or certain expenses from non-football operations.
3 Relevant income and expenses must be calculated and reconciled by the licensee to the annual financial statements and/or underlying accounting records, i.e. historic, current or future financial information as appropriate.
4 Relevant income and expenses from related parties must be adjusted to reflect the fair value of any such transactions.
5 Relevant income and expenses are further defined in Annex X.
Article 59 – Notion of monitoring period
1 A monitoring period is the period over which a licensee is assessed for the purpose of the break-even requirement. As a rule it covers three reporting periods:
a) the reporting period ending in the calendar year that the UEFA club competitions commence (hereinafter: reporting period T), and
b) the reporting period ending in the calendar year before commencement of the UEFA club competitions (hereinafter: reporting period T-1), and
c) the preceding reporting period (hereinafter: reporting period T-2).
As an example, the monitoring period assessed in the licence season 2015/16 covers the reporting periods ending in 2015 (reporting period T), 2014 (reporting period T-1) and 2013 (reporting period T-2).
2 By exception to this rule, the first monitoring period assessed in the licence season 2013/14 covers only two reporting periods, i.e. reporting periods ending in 2013 (reporting period T) and 2012 (reporting period T-1).
Article 60 – Notion of break-even result
1 The difference between relevant income and relevant expenses is the breakeven result, which must be calculated in accordance with Annex X for each reporting period.
2 If a licensee’s relevant expenses are less than relevant income for a reporting period, then the club has a break-even surplus. If a club’s relevant expenses are greater than relevant income for a reporting period, then the club has a breakeven deficit.
3 If a licensee’s financial statements are denominated in a currency other than euros, then the break-even result must be converted into euros at the average exchange rate of the reporting period, as published by the European Central Bank.
4 The aggregate break-even result is the sum of the break-even results of each reporting period covered by the monitoring period (i.e. reporting periods T, T-1 and T-2).
5 If the aggregate break-even result is positive (equal to zero or above) then the licensee has an aggregate break-even surplus for the monitoring period. If the aggregate break-even result is negative (below zero) then the licensee has an aggregate break-even deficit for the monitoring period.
6 In case of an aggregate break-even deficit for the monitoring period, the licensee may demonstrate that the aggregate deficit is reduced by a surplus (if any) resulting from the sum of the break-even results from the two reporting periods
prior to T-2 (i.e. reporting periods T-3 and T-4).
Article 61 – Notion of acceptable deviation
1 The acceptable deviation is the maximum aggregate break-even deficit possible for a club to be deemed in compliance with the break-even requirement as defined in Article 63.
2 The acceptable deviation is EUR 5 million. However it can exceed this level up to the following amounts only if such excess is entirely covered by contributions from equity participants and/or related parties:
a) EUR 45 million for the monitoring period assessed in the licence seasons 2013/14 and 2014/15;
b) EUR 30 million for the monitoring period assessed in the licence seasons 2015/16, 2016/17 and 2017/18;
c) a lower amount as decided in due course by the UEFA Executive Committee for the monitoring periods assessed in the following years.
3 Contributions from equity participants and/or related parties (as specified in Annex X D) are taken into consideration when determining the acceptable deviation if they have occurred and been recognised:
a) in the financial statements for one of the reporting periods T, T-1 or T-2; or
b) in the accounting records up to 31 December of the year of the reporting period T.The onus is on the licensee to demonstrate the substance of the transaction, which must have been completed in all respects and without any condition attached. An intention or commitment from owners to make a contribution is not sufficient for such a contribution to be taken into consideration.
4 If contributions from equity participants and/or related parties occurring up to 31 December of the year in which the UEFA club competitions commence are recognised in a club’s reporting period T+1 and have been taken into consideration to determine of the acceptable deviation in respect of the in that same calendar year, then for later monitoring periods the contributions will be considered as having been recognised in reporting period T.
Article 62 – Break-even information
1 By the deadline and in the form communicated by the UEFA administration, the licensee must prepare and submit:
a) the break-even information for the reporting period T-1;
b) the break-even information for the reporting period T-2, if not already previously submitted;
c) the break-even information for the reporting period T, if it has breached any of the indicators defined in paragraph 3 below:
2 The break-even information must:
a) concern the same reporting entity as that for club licensing as defined in Article 46;
b) be approved by management, as evidenced by way of a brief statement confirming the completeness and accuracy of the information, and signature on behalf of the executive body of the licensee.
3 If a licensee exhibits any of the conditions described by indicators 1 to 4, it is considered in breach of the indicator:
i) Indicator 1: Going concern
The auditor’s report in respect of the annual financial statements (i.e. reporting period T-1) and/or interim financial statements (if applicable) submitted in accordance with Articles 47 and 48 includes an emphasis of matter or a qualified opinion/conclusion in respect of going concern.
ii) Indicator 2: Negative equity
The annual financial statements (i.e. reporting period T-1) submitted in accordance with Article 47 disclose a net liabilities position that has deteriorated relative to the comparative figure contained in the previous year’s annual financial statements (i.e. reporting period T-2), or the interim financial statements submitted in accordance with Article 48 disclose a net liabilities position that has deteriorated relative to the comparative figure at the preceding statutory closing date (i.e. reporting period T-1).
iii) Indicator 3: Break-even result
The licensee reports a break-even deficit as defined in Article 60 for
either or both of the reporting periods T-1 and T-2.
a) Articles 35, 53 to 56 and 64 to 68, which enter into force on 1 June 2011;
b) Articles 57 to 63, which enter into force for the financial statements of the reporting period ending in 2012, as specified in Article 59(2).CWL
I've seen Newcastle United win silverware!
Know the feeling Canny, I lost the will to live a quarter way through ;D
