The Euroleague has officially presented the new regulations for the Financial Fair Playwith the aim of being fully implemented from 2027.
The terms were approved by the 13 groups – shareholders (among them Panathinaikos and Olympic) and basically the teams that spend enough should return money to the Euroleague as a… luxury tax. This money will be distributed to the teams that have fully complied with the limits.
The example of the Euroleague
To understand the changes, the organization presented an example:
If one group spends 15.1 million euros in salaries (excluding taxation), with a Basic Remuneration Level of €8 million and a High Level of €13.5 million then he will be required to pay 900,000 euros in the Euroleague as a luxury tax.
At the same time, it is pointed out that there is no limit to the money a club can spend on player wagesas long as it can respond paying the corresponding luxury tax.
The exceptions
Excluded from the new Euroleague policy are:
- The contracts of two players to be determined by each club. He can of course use both “heavier”.
- Players under the age of 23.
- 25% of the salaries of players who have completed three seasons in the same team.
- To players who have been injured for more than two months in one season.
The Euroleague announcement
“The Shareholders’ Meeting of Euroleague Commercial Assets (ECA) has approved the implementation of the Competitive Balance Standards (CBS), a new set of regulations that strengthens the scope of the current Financial Fair Play regulations.
These regulations were implemented for the first time in the 2014-15 season with the aim of protecting the collective interests of teams from the financial risk that a club can create, limiting the financial contribution of club shareholders and promoting business performance. The new regulations will coexist with the already active ones, such as the overdue liabilities control system or controls on the overall financial position of clubs, among others, in order to:
- To align the objectives of the interested parties by setting minimum and maximum levels of remuneration to the unions according to the collectively generated income, strengthening the commercial cooperation between them.
- To promote sustainability and competitive balance between clubs based on the total revenue they all generate together.
- To prevent unfair practices by monitoring each club’s compliance with predetermined financial levels before signing players each season.
- Increasing transparency between the groups participating in the event.
The new CBS system was developed over the last two seasons under the responsibility of a committee of clubs and was presented and agreed by the EuroLeague Players’ Association (ELPA).
CBS represents the natural evolution of the existing Financial Fair Play Regulations to meet current club and league realities by providing equal pay levels for all clubs based on the average collective revenue of EuroLeague clubs rather than the revenue of each individual team. This concept is based on the pan-European ecosystem of the league, harmonizing the impact of different tax models across the continent, valuing all indicators in net amounts.
The updated FFP will introduce three common salary levels for all teams – Basic, High and Low – which will be calculated using clubs’ average defined revenue (matchday revenue, advertising and other) generated over a two-season period.
These levels will mark the minimum and maximum spending for each club on player contracts, while allowing exemptions for certain players with the aim of attracting, developing and retaining the best talent.
This is the first time that a mandatory spending floor has been established for player fees in FFP, ensuring that a minimum net 32% of total collective revenue is spent on sportspersons, thus strengthening partnership with players whose contribution to increase in revenue will directly affect their salary levels.
Basic concepts of CBS
Low Pay Level “LRL” (32% of the clubs’ average fixed revenue, calculated at fair market value over a two-season period): The minimum net amount that clubs must spend on the wages of registered players. Affiliated clubs, i.e. clubs that do not participate with a long-term contract in the Euroleague, will have the possibility to reduce the Low Fee Level.
Basic Level of Fees “BRL” (40% of the clubs’ average specified revenue): The maximum net amount that all clubs can spend on all registered player salaries, excluding the categories: Anchor Players, Players under 23, Players with extended tenure, long-term injured and medium range exception.
High Level of Rewards “HRL” (60% of Clubs Average Determined Revenue): The maximum net amount that each club can spend on wages of registered players, including Anchor Players, and excluding players under the age of 23, players with extended-tenure players, the long-term injured and the average exception.
“CBC” Competitive Balance Reimbursement: Any club that spends above the specified Basic or Premium Levels of Fees will be required to reimburse all other clubs that remain within the specified limits.
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