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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.
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Short-term forecast and long-term business plan
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 stability requirements will be viewed favourably by the CFCB.
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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:
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Degree of leverage – the level of net debt relative to revenues and underlying assets;
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Profitability and coverage – the level of revenues relative to net debt servicing costs;
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Cash flow adequacy – the capacity to cover both interest and principal repayments of net debt.
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