SPORTING BANS UNDER UEFA FINANCIAL SUSTAINABILITY REGULATIONS AND EU COMPETITION LAW
The introduction of the new UEFA Club Licensing and Financial Sustainability Regulations (FSR), in force since 1 June 2022, has reinvigorated the legal debate on the compatibility of sporting sanctions with European Union (EU) Competition Law. Replacing the earlier Financial Fair Play (FFP) framework, the FSR regime maintains strict financial oversight, whilst introducing a more robust mechanism to ensure that football clubs operate within their financial means.
At the heart of this debate lies a fundamental tension over whether sports governing bodies can legitimately impose sporting sanctions, such as bans from European competitions, whilst still respecting the principles of free and fair competition established under EU Law.
Under the UEFA revised framework, football clubs must now comply with the squad cost rule, which limits spending on player wages, transfers and agent fees relative to revenue. Article 94.01 of the FSR, applicable from 1 June 2024, sets this cap at 70% over a licence season. The limit is being phased in progressively: 90% in 2023/24; 80% in 2024/25; and 70% from 2025/26. Whilst designed to encourage financial discipline, this rule raises questions about its impact on football clubs’ ability to invest, compete and challenge dominant teams in a sporting and in a financial sense.
Breaches of these Financial Regulations may trigger a broad range of disciplinary measures, as outlined in Article 29 of the Procedural Rules governing the UEFA Club Financial Control Body. These include warnings, fines and restrictions on player registrations, but may also extend to harsher sanctions, such as points deductions, withholding of competition revenues, or financial caps on squad costs. In the most severe cases, clubs may face disqualification from current competitions or exclusion from future UEFA tournaments. Although intended to preserve financial integrity, these measures can significantly affect a football club’s sporting and commercial prospects. As such, they have attracted growing scrutiny under EU Competition Law, particularly when their application appears to be disproportionate, opaque or discriminatory.
EU Competition Law prohibits anti-competitive agreements and abuses of dominance (Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU)). Whilst sport enjoys a degree of regulatory autonomy, EU Law does not recognise a blanket “sporting exemption” for sporting rules. To qualify, these regulations must pursue a legitimate objective, such as financial stability, and be proportionate and necessary to achieving that aim, as confirmed by the Court of Justice in Meca-Medina (C-519/04 P).
This is particularly relevant where sporting regulations have a clear economic impact, as is the case with financial restrictions and competition bans. Legal commentators and stakeholders have warned that the FSR, although intended to promote sound financial management, may inadvertently distort competitive balance.
By limiting the ability of emerging football clubs to invest ambitiously, the FSR risk creating barriers to entry that prevent new challengers from competing with established teams. In doing so, they may reinforce existing hierarchies by favouring clubs with historically higher revenues and stronger financial infrastructures.
Perhaps most controversially, the possibility of automatic or rigid sanctions, including bans from UEFA competitions, has raised concerns about proportionality. Where such measures fail to account for the specific context of each football club or the nature of the breach, they may fall short of the flexibility and fairness required under EU Competition Law.
These concerns are not just theoretical. In practice, football clubs have challenged FFP Regulations, arguing that they violate EU Competition Law — particularly by targeting investment models based on ownership wealth or limiting clubs’ ability to compete. These challenges highlight the ongoing tension between financial oversight and market access, which continues under the new FSR framework.
The principle of the so-called “specificity of sport”, recognised in Article 165 TFEU, confirms that sport deserves tailored governance, but this doctrine does not shield sports rules from antitrust scrutiny where significant economic effects are involved.
Recent judgments from the Court of Justice of the European Union (CJEU) have reinforced these concerns. In both the ISU case (C-124/21 P) and the European Super League case (C-333/21), the CJEU has stressed that sports federations cannot rely on unchecked discretion when excluding competitors or imposing sanctions. Rules that restrict competition must be based on clear, objective and transparent criteria, and be subject to effective review.
These rulings have reshaped the legal landscape for sports governance in Europe. The message from the CJEU comes through with increasing clarity: sporting authorities are expected to exercise their regulatory powers in full compliance with EU Competition Law, especially when their decisions have significant economic consequences. The mere fact that a rule pursues a sporting objective is not sufficient to shield it from antitrust scrutiny. Instead, its design and enforcement must comply with the principles of necessity, proportionality and non-discrimination.
In the context of the FSR, this means that sanctions, such as bans from UEFA competitions, must not only be grounded in a legitimate financial rationale, but also applied in a transparent and objective manner, with adequate safeguards for procedural fairness. Blanket or automatic exclusions, especially those affecting football clubs with less established financial structures, could amount to an unlawful restriction of competition if they limit access to the market or reinforce structural advantages.
As financial and sporting stakes continue to grow, so too does the likelihood of legal challenges. Clubs adversely affected by these regulations may increasingly look to competition law as a means of contesting decisions that appear excessive, opaque or selectively enforced. The tension between financial sustainability and economic freedom is unlikely to disappear, but what is certain is that sports governing bodies must now exercise their authority with greater legal discipline and accountability.
We act in all cases of European Union Competition Law in football and other sports, and further information may be obtained from Dr Estelle Ivanova by emailing her at ivanova@valloni.ch