What are the Different FFP Rules Around Europe?

Amongst the Big 5 European leagues, the Premier League has the most well-known financial regulations. 

This has been particularly true in recent years, with various transfer windows featuring discourse surrounding the Profit and Sustainability Regulations (PSR) framework, though the move to the Squad-Cost Ratio (SCR) system from the 2026/27 season will align the league a little more with UEFA.

But what about the rest of the Big 5?

This article will provide a broad understanding the systems in place in France, Germany, Spain and Italy so that students can better understand the regulatory systems that European football operates within.

La Liga

Spain’s top-flight operates a Squad Cost Limit (SCL) system—a financial control mechanism that sets a limit as to how much each club is allowed to spend on its squad.

Each season, the club proposes a budget to La Liga, which is either approved or rectified based on its financial stability. The ultimate maximum budget calculated by La Liga is based on taking the club’s projected revenues and subtracting non-squad expenses and debt repayments.

Another aspect of La Liga’s SCL regulations is the 1:1 spending rule. In essence, this is where clubs who remain below their SCL throughout the season can therefore reinvest every 1€ they earn. In comparison, clubs who exceed the limit are forced to adjust their spending until they get back within their limit. Until then, no new contracts can be registered.

A notable example of La Liga’s rules being enforced was Lionel Messi’s departure from Barcelona in 2021, after the club was unable to register a renewed contract under these rules.

Ligue 1

In France, each club’s books are monitored closely by a separate body rather than the league itself.

The Direction Nationale du Contrôle de Gestion (DNCG) was created in 1984 by LFP—the governing body for professional football in France—to oversee the financial operations of French clubs. 

Responsible for monitoring accounts and ensuring each team is in good financial health, the DNCG’s primary objective is to ensure that clubs have enough resources to cover their expenses.

The organisation examines club accounts throughout the year to verify their solvency, as well as their compliance with UEFA’s regulations if they compete in Europe.

Included in the examination are detailed financial statements relating to revenue from sources such as broadcast rights, ticket sales, sponsorships, etc, and their expenses, including salaries and infrastructure. Clubs must also provide projected accounts and cash flow forecasts for the following season.

The DNCG also conducts financial risk assessments, analysing the ability of each club to meet its long-term financial commitments, overall ensuring the club is not spending beyond its means.

Player contracts must also go through the DNCG before they are approved, while the organisation has further power to impose sanctions on teams who fall short of the regulations such as transfer embargoes or even relegation.

Bundesliga

In the Bundesliga, clubs must each apply for a license that permits them to compete the following season.

To achieve this license, which must be renewed each year, clubs must submit information such as budgets, projected revenues, debts, wage commitments, and cash-flow forecasts to the Bundesliga.

Based on these figures, they are awarded a Bundesliga license if they are deemed solvent and in good financial health, and no further spending caps apply. 

Serie A

Similarly to the Bundesliga, the FIGC—Italian football’s governing body—operates a licensing system for Serie A clubs.

To obtain a license, clubs must provide annual financial statements, future economic-financial information, and proof they have no outstanding payments.

These regulations are implemented by Covisoc, which is the body responsible for monitoring the financial health of Italian clubs. As an extension of the FIGC rather than a separate body (like the DNCG), Covisoc’s role is to recommend which measures the FIGC should take when clubs are not compliant with the regulations.

Summary

Overall, European leagues have significantly different financial frameworks in place compared to England’s stringent PSR system. Bundesliga and Serie A both enforce financial review systems where clubs need a license to compete, Ligue 1 clubs are monitored by the DNCG, while La Liga operates a system that deters clubs from overspending in the first place by allocating clearer budgets.

It is worth noting that clubs who qualify for European competition must also comply with UEFA’s Club Licensing and Financial Sustainability Regulations, which include the Squad cost rule. Again, this will be implemented by the Premier League to replace PSR from the 2026/27 season, and will be accompanied by further Sustainability and Systemic Resilience rules.

Unbeknownst to most fans, there are numerous regulatory frameworks that ultimately govern the final product we see on the pitch. To learn more about the behind-the-scenes of football, view GIS’ bespoke MSc Football Business programme, designed for those who wish to develop an appreciation of key areas shaping the current landscape of the football industry.

Article by Zakaria Anani