EuroLeague introduces ground-breaking Financial Fair Play Regulations

16/09/2024 10:35

A first in European sports, the regulations tie players´ remuneration levels to the clubs´ collective business performance

A first in European sports, the regulations tie players´ remuneration levels to the clubs´ collective business performance

The regulations have been agreed upon with clubs and ELPA

The Assembly of Syndicate Shareholders of Euroleague Commercial Assets (ECA) has approved the implementation of the Competitive Balance Standards (CBS), a new set of regulations that amplifies the scope of the current Financial Stability & Fair Play Regulations (FSFPR).

The Financial Stability & Fair Play Regulations were first deployed in the 2014-15 season with the objective of protecting the collective interests of the clubs from the financial risk of individual clubs by limiting the contribution of club shareholders and promoting business performance. The CBS will coexist with the already-active Financial Stability & Fair Play Regulations, like the overdue payables system or controls on the clubs’ overall financial position, among others, in order to:

1. Align stakeholders’ objectives by referencing minimum and maximum remuneration levels to the clubs’ collective generated revenue, strengthening the commercial partnership between players and clubs.

2. Promote sustainability and competitive balance by establishing player expenditure ranges that are equal for all teams in the competition based on the clubs’ collective generated revenue.

3. Prevent inappropriate practices by monitoring each club’s compliance with pre-established levels prior to the registration of players each season.

4. Grow transparency among the participating teams.

The new Competitive Balance Standards have been developed over the last two seasons following a collaborative process with a committee of clubs and has been discussed and agreed to by the EuroLeague Players Association (ELPA). The CBS represents a natural evolution of the existing Financial Stability & Fair Play Regulations to meet the current realities of the clubs and league by providing equal remuneration levels for all clubs based on the average collective revenues of EuroLeague clubs, rather than each individual club’s revenue. This concept builds on the pan-European ecosystem of the league, harmonizing the impact of the different taxation models around the continent by valuing all indicators on net amounts.

The updated FSFPR will introduce three common remuneration levels for all teams – Base, High and Low – that will be calculated using the clubs’ average defined revenues (LCDR: game day, commercial and others) generated over a two-season period. These levels will mark the minimum and maximum spend for each club on remunerations while allowing exceptions for certain players with the aim of attracting, developing and retaining the best talents. This is the first time that a mandatory minimum spend on players’ remuneration has been introduced within the FSFPR, guaranteeing that a minimum net of 32% of all collective revenues will be spent on EuroLeague athletes, thereby strengthening the partnership with the players whose contribution to revenue growth will directly impact their remuneration levels.

Key Competitive Balance Standards (CBS) concepts:

Low Remuneration Level ‘LRL’ (32% of the average Licensed Clubs’ Defined Revenues (LCDR), calculated at fair-market value over a two-season period): The minimum net amount that any given club must spend on registered players’ salaries. Associated clubs, meaning clubs not participating under a long-term license, will be allowed a reduction on the Low Remuneration Level.

Base Remuneration Level ‘BRL’ (40% of the average Licensed Clubs´ defined revenues (LCDR)): The maximum net amount that all clubs may spend on all registered player salaries, excluding: Anchor Players, U23 Players, Extended-Tenure Players, Long-Term Injured Players and Medium-Range Exceptions.

High Remuneration Level ‘HRL’ (60% of the average Licensed Clubs´ Defined Revenues (LCDR): The maximum net amount that any given club may spend on registered players’ salaries, including Anchor Players, and excluding U23 Players, Extended-Tenure Players, Long-Term Injured Players and Medium-Range Exception.

Competitive Balance Compensation ‘CBC’: Any given club that spends above and beyond the set Base and/or High Remuneration Levels will be required to compensate all the other clubs that stay within the set limits.

PRACTICAL EXAMPLE

The Competitive Balance Standards will have a transition period of one full season (2024-25) for the participating clubs to adapt to the new regulations, while measures will be progressively introduced over the following two seasons, reaching full implementation for the 2027-28 season.

Euroleague Basketball, on behalf of its clubs, thanks the ELPA for their collaboration in bringing this initiative to fruition, as it strongly believes it is a critical step towards a fully sustainable future, a greater protection of players from financial instability, and a partnership that aligns clubs, players and the league office under the common, overarching objective of growing the EuroLeague.

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