J.2 Relevant income - Club Licensing

UEFA Club Licensing and Financial Sustainability Regulations

Content Type
Technical Regulations
Category
Specific Regulations
Subject
Club Licensing
Edition
2023
Language
English
Enforcement Date
1 July 2023
J.2.1

Definitions for the calculation of relevant income are as follows:

  1. Revenue – Gate receipts

    Revenue derived from general admission and corporate match attendance, from both season tickets and matchday tickets, in relation to the club’s matches. Gate receipts also include membership fees.

  2. Revenue – Sponsorship and advertising

    Revenue derived from the main sponsor, other sponsors, pitch-perimeter and other board advertising, and other sponsorship and advertising.

  3. Revenue – Broadcasting rights

    Revenue derived from the sale of broadcasting rights to television, radio, new media and other broadcast media, in relation to national competitions and other matches, excluding UEFA club competitions.

  4. Revenue – Commercial activities

    Revenue derived from merchandising, food and beverage sales, conferencing, lottery and other commercial activities.

  5. Revenue – UEFA solidarity and prize money

    Revenue derived from UEFA in respect of participation in a UEFA club competition and/or solidarity distributions.

  6. Revenue – Other operating income

    All operating income not otherwise described above, including operating income derived from other sources such as grants and/or subsidies from a national football body or government of the territory of the licensee, rent, dividends and income from non-football operations.

  7. Profit on disposal of player registrations and/or income on disposal of player registrations

    For the calculation of relevant income, whether a club includes either (i) profit on disposal of player registrations or (ii) income on disposal of player registrations will depend on the club’s method of accounting for player registrations in its financial statements, in application of the requirements defined below:

    1. For a club that uses the capitalisation and amortisation method of accounting for player registrations, profit on disposal of a player’s registration is calculated by deducting the net book value of the player’s registration at the time of the transfer, from the net disposal proceeds received and receivable.

    2. A profit on disposal of a player’s registration is reported if the net disposal proceeds exceed the net book value of the player’s registration at the time of the transfer. Any such profit must be included in relevant income for the calculation of football earnings.

    3. For a club that uses the income and expense method of accounting for player registrations, income from disposal of a player’s registration is the net disposal proceeds generated from the transfer of the player’s registration to another club. The net disposal proceeds should equate to the monetary income from the disposal of the player’s registration.

      For the calculation of football earnings:

    4. A club that uses the capitalisation and amortisation method of accounting for player registrations in its annual financial statements must apply the same method to relevant income and relevant expenses;

    5. A club that uses the income and expense method of accounting for player registrations in its annual financial statements can elect to apply either the income and expense or the capitalisation and amortisation method (to be set out in restated financial statements as per Annex G). The selected method must be applied consistently from one reporting period to the next.

      Appropriate adjustments must be made such that any profit or income in respect of a player whose registration the licensee retains is excluded from the calculation of football earnings.

  8. Excess proceeds on disposal of tangible assets

    Profit on the disposal of tangible assets in a reporting period (including, but not limited to, a club’s stadium and training facilities) must be excluded from the football earnings with the following two exceptions:

    1. If a tangible asset other than a stadium or training facilities is not being replaced, then the profit on disposal recognised in the profit and loss account can be taken into account as relevant income up to the difference between the proceeds on disposal and the historical cost of the asset which was recognised as a tangible asset in the reporting entity’s financial statements.

    2. If the club demonstrates that it is replacing a disposed tangible asset, then the profit on disposal recognised in the profit and loss account can be taken into account as relevant income up to the difference between the proceeds on disposal and the full cost of the replacement asset which is recognised, or to be recognised, as a tangible asset in the reporting entity’s financial statements.

  9. Other non-operating income

    All other non-operating income not otherwise included in another non-operating line in the profit and loss account.

  10. Finance income

    Finance income is in respect of interest revenue arising from the use by others of entity assets yielding interest.

  11. Foreign exchange result

    The net of gains and losses on monetary items, whether realised or unrealised. Foreign exchange gains and losses on non-monetary items, whether realised or unrealised, are non-monetary items and must be excluded from football earnings (see Annex J.2.1(l) and Annex J.3.1(k)).

  12. Non-monetary credits/income

    Appropriate adjustments must be made such that non-monetary credits are excluded from relevant income for the calculation of football earnings.

    Non-monetary items (e.g. tangible assets and intangible assets such as goodwill and inventories) are items which do not meet the definition of monetary items. Monetary items are defined as units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. The essential feature of a monetary item is a right to receive (or an obligation to deliver) a fixed or determinable number of units of currency.

    Examples of non-monetary credits/income:

    • Upwards revaluations of tangible assets, intangible assets (including player registrations) and inventories;

    • Write-backs of depreciation/amortisation or impairment of tangible assets and intangible assets (including player registrations); and

    • Foreign exchange gains on non-monetary items.

  13. Income transaction(s) above fair value

    For the calculation of football earnings, the licensee must reflect any income transaction, irrespective of whether it is with a related party, at fair value. If the estimated fair value is different to the recorded value, then the relevant income must be adjusted accordingly, bearing in mind, however, that no upward adjustments can be made to relevant income.

    Examples of income transactions that may require a licensee to demonstrate the estimated fair value of the transaction:

    • Revenue from sponsorship arrangements;

    • Revenue from corporate hospitality tickets and/or use of executive boxes;

    • Any transaction whereby goods or services are provided by the club.

      Examples of income transactions that are not relevant income:

    • Monies received as a donation; and

    • Waivers of liability.

  14. Income from non-football operations not related to the club

    Income from non-football operations not related to the club (i.e. not related to the football activities, locations or brand of the football club) must be excluded from the calculation of relevant income.

    Examples of non-football operations related to a club (which are included in the calculation of relevant income):

    • Operations based at, or in close proximity to, the club’s stadium or training facilities, such as a hotel, restaurant, conference centre, business premises (for rental), health centre or other sports team; and

    • Operations clearly using the club’s name/brand.

  15. Credit in respect of a reduction of liabilities arising from procedures providing protection from creditors

    Any credit in respect of a reduction of liabilities arising from procedures providing protection from creditors must be excluded from the calculation of football earnings.