M.1 Other factors to be considered in respect of the club monitoring requirements - Club Licensing

Other factors within the meaning of Article 96 to be considered by the CFCB (non-exhaustive list):

1. Quantum and trend of non-compliance

   The larger the quantum of the non-compliance with a monitoring requirement, the less favourably it will be viewed. An improving trend in respect of a monitoring requirement will be viewed more favourably than a worsening trend.

2. Football earnings surplus

   As part of its assessment of the squad cost ratio, the CFCB may view more favourably a licensee that demonstrates that it has a football earnings surplus in each of the reporting periods T and T+1 (based on audited financial statements).

3. Impact of conversion of accounts from local reporting currency into euros

   If exchange rates have changed such that there is an adverse impact on the licensee’s aggregate football earnings in euros compared to the currency used by the licensee for its annual financial statements, then the quantum of the impact of changes in exchange rates will be taken into account.

   If the aggregate football earnings in the local currency are positive, then the licensee should in principle not be sanctioned.

   For the avoidance of doubt, this mitigating factor does not address the impact of currency exchange differences (exchange gains and/or losses as recognised in the annual financial statements) resulting from transactions denominated in foreign currencies but solely to the conversion of football earnings from a local reporting currency into euros in the CL/FS IT solution.

4. Short-term forecast and long-term business plan

   As part of its considerations, the CFCB may request from the licensee its short-term forecast and long-term business plan. The required information consists of a balance sheet, a profit and loss account and a cash flow statement, which must be based on reasonable and prudent assumptions and submitted in the form communicated by UEFA.

   A long-term business plan that indicates a licensee’s ability to comply with the club monitoring requirements will be viewed favourably by the CFCB.

5. Debt situation

   Additional information may also be requested from a licensee in respect of its debt situation. This may include aspects such as the source of debt, the ability to service interest and principal payments, compliance with debt covenants and the maturity profile of debt.

   As part of its considerations, the CFCB may evaluate among others the following debt ratios to assess a licensee’s capital structure and debt-servicing capability:

   1. Degree of leverage – the level of net debt relative to revenues and underlying assets;

   2. Profitability and coverage – the level of revenues relative to net debt servicing costs;

   3. Cash flow adequacy – the capacity to cover both interest and principal repayments of net debt.

6. Force majeure

   The CFCB may take into account extraordinary events or circumstances beyond the control of the club which are considered as a case of force majeure.

7. Major and unforeseen changes in the economic environment

   The CFCB may take into account the quantifiable financial impact on the club of extraordinary national economic events which are temporary and considered to be beyond the general fluctuation of the economic environment. Such events were beyond the control of the club and the club had no reasonable chance to mitigate the significant negative financial impact. Such quantifiable financial impact on the club must be covered by contributions not already considered in the club monitoring requirements.

8. Operating in a structurally inefficient market

   The CFCB may consider whether the licensee is operating in a structurally inefficient football market. The inefficiency of a football market (defined as the territory of a UEFA member association) is determined by UEFA on a yearly basis by means of a comparative analysis of the top-division clubs’ total gate receipts and broadcasting rights revenues relative to the population of the territory of the UEFA member association concerned. Such structurally inefficient market factor must be covered by contributions not already considered in the club monitoring requirements.