Questions and Answers on Financial Fair Play: AS Roma is Subject to a Settlement Agreement
Why is today`s date so important for Roma?
June 30th marks the end of the financial year. It`s the final day to finalize operations, particularly player transfers, that will impact the current fiscal period. Roma must meet specific seasonal targets set by their UEFA settlement agreement.
What is the settlement agreement?
It`s the settlement agreement signed with UEFA on August 31, 2022. This followed the Club Financial Control Body (CFCB) finding the club had not met the break-even requirement – the core UEFA Financial Fair Play rule – for the 2019-22 period. Due to the pandemic`s impact and the introduction of new financial sustainability rules in 2022, UEFA offered Roma and other clubs (like Inter, who subsequently complied) these settlement agreements.
What did the settlement agreement entail?
It set financial targets for 2022, 2023, 2024, and 2025 to gradually bring the club into compliance with the new UEFA rules by the 2025-26 season. Breaches could result in financial and sporting sanctions. UEFA already withheld an unconditional contribution of 5 million in 2022-23. For the 2022-25 period, failing to meet specific objectives could lead to fines up to 30 million, plus potential sporting restrictions for significant deviations: limiting the UEFA squad size, banning the registration of new players, or exclusion from competitions.
What penalties has Roma received?
Financial penalties, but not sporting ones. Based on the 2022-23 results, the Giallorossi paid a 2 million fine. Another 3 million was incurred for 2023-24. In anticipation of a new penalty for the 2024-25 season, 3.5 million was set aside in the previous budget.
So, will there be another fine?
Roma is close to the 2024-25 target but hasn`t quite reached it yet. A potential sale of Abraham to Besiktas would be a positive step, provided it`s registered by today. Concluding other minor outgoing operations by today would also help the Giallorossi record the capital gains needed to balance the 2024-25 accounts. However, the final calculations are still pending.
Couldn`t Friedkin inject his own funds?
He will do so to cover the deficit, as UEFA requires shareholders to cover losses. However, the main Financial Fair Play rule (the old `break-even rule` replaced by the `football earning rule`) focuses on revenues and costs generated by the club, based on the principle of sustainable management: a club can only spend what it earns, with an `acceptable` deviation. Under the settlement agreement, Roma committed to a maximum aggregate deficit of 60 million euros over the 2023-24 and 2024-25 seasons. The primary goal of the agreement is to ensure compliance with the `football earning rule` during the monitoring period in the 2026-27 season, based on the financial years ending June 30, 2024, 2025, and 2026.
What is Roma`s situation, specifically?
Firstly: UEFA`s calculations differ from official balance sheets because the European body deducts certain costs (infrastructure, youth academies, women`s teams, etc.). Regardless, Roma has reported significant operating losses in the past: -185 million in 2020-21, -219 million in 2021-22, -103 million in 2022-23, and -81 million in 2023-24. The trend is improving. The deficit will be further reduced in 2024-25 and 2025-26. The club`s goal is to fully comply with UEFA regulations by 2026, thereby successfully concluding the settlement agreement. How? By focusing on player sales and further reducing wages, without compromising team competitiveness. Sporting results are the other key lever for fixing the finances.
