UEFA has notified football giants FC Barcelona and Real Madrid that they must alter their revenue reports under the new terms of Financial Fair Play (FFP).
The warning stems from both Spanish clubs using ‘lever’ activations and reporting them in their reports of revenue streams to balance out the debt of the financial record.
Barcelona in particular was fined €500,000 recently for misreporting profits on disposal of tangible assets which are not relevant income under FFP regulations, discounting player transfers.
The Blaugrana was criticised by many for activating levers to fund transfers for players whilst also asking registered players to take significant wage cuts to meet La Liga’s salary rules.
Barcelona also made a questionable decision to sell its in-house production studio for €266m for more money to alleviate some of the mounting debt the club has accrued over several years.
This deal with Sixth Street however was not deemed a legitimate source of revenue when it came to reporting its financial records to UEFA, going against FFP measures.
UEFA has also taken issue with Real Madrid’s financial reporting of a €122m finding which was outlined as ‘other operating expenses’, which relates to a previous deal with Providence.
Under the new revised FFP rules, both clubs will have to inform UEFA that any future sales of future revenue streams must not be stated as revenue, rather to be listed as debt.
The new FFP rules will also assess both Barcelona and Real Madrid’s expenditure over the next calendar year which will be capped at a 90% revenue benchmark before being lowered to 70% in the next two years.