Wolverhampton Wanderers have been fined and slapped with a squad limit in European competition next season after breaching FFP rules, it has been revealed.
Wolves have been ordered to stump up €200,000 for contravening profitability and sustainability rules.
UEFA say the fine will rise by a further €400,000 if the club does not get its finances in order by the year ending 2021.
Wolves have also been told it will have to stick to a 23-man squad cap, rather 25, if the club qualifies for next season’s Champions League, by winning the Europa League later this month.
They must also comply with a set spending pattern after reaching a settlement with UEFA.
UEFA’s Club Financial Control Body (CFCB) Adjudicatory Chamber said the club must ‘report a maximum break-even deficit of €30 million (£27 million) in the financial year ending 2020’
The club has pledged to record ‘an aggregate break-even result’ for the financial years ending in 2019, 2020 and 2021, in accordance with UEFA’s directive.
And it has also vowed that for ‘the financial year ending in 2020, its employee benefits expenses are restricted’, the Chamber said.
The fine and squad cap will not be viewed as too debilitating by the Wolves hierarchy.
The real issue is how the £27 million losses Wolves are restricted to in the 2020/21 season, impact on the club’s transfer budget and approach to the summer window.
As perilous as the situation has become for UEFA to take this step, it’s thought the club is on relatively strong financial footing having reportedly made a £20 million profit last season despite spending big.
FFP rules vary across different leagues and competitions, with the Premier League adopting a very different policy on spending to the English Football League.
UEFA’s interpretation is to ‘prohibit clubs from making an aggregate loss in excess of €30 million over three seasons’.
The application and enforcement of these rules is the responsibility of the UEFA Club Financial Control Body, which can ‘impose a wide range of penalties for non-compliance, including bans from European competitions’, with final decisions of the CFCB appealed to the Court of Arbitration for Sport (CAS) in Lausanne.