Club Licensing

The original impetus for club licensing was a request made by football clubs themselves back in 1999. They wanted some form of regulation to tackle many of the commonly cited problems that existed in European football, such as financial transparency, inadequate stadia, overdue payables, lack of youth investment, amongst others.

It was never going to be possible to fully eradicate all of those problems through club licensing but there was a strong feeling that all the clubs competing in the same UEFA competitions should be bound by the same minimum requirements, with the aim of:

• promoting and continually improving the standard of all aspects of football in Europe and to give continued priority to the training and welfare of young players in every club;

• promoting participation in football and contributing to the development of women's football;

• adapting clubs’ sporting infrastructure to provide players, spectators and media representatives with suitable, well-equipped and safe facilities;

• protecting the integrity and smooth running of the UEFA club competitions;

• safeguarding each club’s identity, history and legacy;

• encouraging co-operation between licensors and clubs enabling the development of benchmarking for clubs in financial, sporting, legal, football social responsibility, personnel, administrative and infrastructure-related criteria throughout Europe;

• embracing social responsibility in football;

• promoting a healthy relationship between clubs and supporters, increasing accessibility in football.

This led to the implementation of a system whereby clubs have to respect certain conditions in order to participate in UEFA club competitions, subsequently expanding into domestic football across Europe.

1999: Initial discussions about the introduction of a club licensing system begin

2001: Eight member associations chosen to participate in a pilot project aimed at developing the club licensing system

2002: The UEFA Club Licensing Manual – Version 1.0 is approved by the UEFA Executive Committee

2003: UEFA establishes its HatTrick assistance programme for its member associations

First version of UEFA’s Club Licensing Quality Standard is established

2004: First licensing decisions taken with licensors deciding whether to grant or refuse clubs the licence necessary to participate in the 2004/05 UEFA club competitions, resulting in the first non-participation of sportingly qualified clubs due to non-fulfilment of licensing criteria

2005: The UEFA Club Licensing Manual – Version 2.0 is approved by the UEFA Executive Committee

2006: Second version of UEFA’s Club Licensing Quality Standard is produced

The first benchmarking report is produced providing a unique analysis of European club football

The Irish Football Association Executive Committee, upon the recommendation of UEFA, asked the Club Licensing Committee to consider implementing its own domestic club licensing scheme

2007: The first IFA domestic licensing cycle was implemented for award of licences for season 2008-09 to participate in the top division of domestic competition in Northern Ireland

2008: The UEFA Club Licensing Manual is replaced by a more legally robust set of regulations

2009: The UEFA Executive Committee approves the financial fair play model and creates the UEFA Club Financial Control Panel to oversee its implementation

2010: Financial fair play is approved and integrated into the club licensing regulations

The extension of the domestic club licensing scheme to Championship clubs was endorsed by both the IFA Premier League Committee and the IFAC Championship Committee. The requirements of a Championship Licence were approved by the IFA Executive Board in October and were applied to clubs seeking promotion to the top division of domestic competition in Northern Ireland.

2011: Clubs across Europe are required to appoint a supporter liaison officer (SLO) to ensure a proper and constructive discourse with their fans

First sportingly qualified club not admitted to a UEFA club competition by UEFA due to incorrect granting of a licence

2012: The 2012 edition of the Club Licensing and Financial Fair Play regulations are approved, as are the Procedural rules governing the UEFA Club Financial Control Body (which replaces the UEFA Club Financial Control Panel)

First sportingly qualified clubs not admitted to a UEFA club competition because of non-fulfilment of financial fair play requirements

2012 edition of UEFA’s Club Licensing Quality Standard is established

2013: First full implementation of the financial fair play rules with clubs being assessed against the break-even requirement for the first time

2014: UEFA’s sixth benchmarking report is published, having become an authoritative review of the financial performances and positions of 700 European clubs

Member clubs of the Northern Ireland Football League (NIFL) agree to the introduction of a mandatory licence for Championship 1 clubs during 2015-16 for the award of licences for season 2016-17 to coincide with the full implementation of the NIFL restructure to create a second senior tier of football in Northern Ireland.

2015: The 2015 edition of the Club Licensing and Financial Fair Play regulations are approved, as are the Procedural rules governing the UEFA Club Financial Control Body.

First club not admitted to a UEFA club competition due to the non-fulfilment of break-even requirement

2019: NIFL made the decision to extend mandatory licensing to all clubs participating within its third tier, the Premier Intermediate League (PIL). This was implemented for the first time during the 2020-21 season for the award of licences for season 2021-22.

2022: UEFA Club Licensing and Financial Fair Play Regulations, introduced in 2009, were reviewed and replaced by the new UEFA Club Licensing and Financial Sustainability Regulations 2022.

NIFL extended mandatory licensing to all clubs participating in the NIFL Women’s Premiership for the award of licences for season 2024.

In order to participate in UEFA and domestic club competitions, it is not enough to qualify on sporting merits alone. One of the admission criteria in the competition regulations is that a club must also have been issued a licence by its national association. Licenses are issued on the basis of national club licensing regulations, which must themselves contain the minimum criteria established by UEFA in the UEFA Club Licensing and Financial Sustainability Regulations.

By setting minimum standards that must be integrated into national regulations, UEFA allows its member associations to apply and manage the licensing system in accordance with their own national rules and regulations and safeguards the principle of subsidiarity, as the national associations are responsible for actually granting the licenses.

The dynamic nature of the club licensing system, which focuses on continually improving standards across all areas of football in Europe, is reflected in the nine editions of UEFA regulations that have been approved since the first UEFA Club Licensing Manual was approved in 2002.

It has been necessary to regularly update the UEFA regulations in order to strengthen certain areas and to introduce new criteria over the years, with clubs now being assessed against criteria in six distinct areas:

• SPORTING – the sporting criteria are primarily aimed at encouraging investment in quality-driven youth development programmes which not only support the football education of youth players but also place the necessary emphasis on non-football education, medical care, fair play on and off the pitch, with the overall objective of attracting into football more and better-educated boys and girls.

• FOOTBALL SOCIAL RESPONSIBILITY - The football social responsibility criteria are aimed at ensuring clubs focus on improving their sustainability in key areas such as equality and inclusion, anti-racism, child and youth protection and welfare, football for all abilities and environmental protection.

• INFRASTRUCTURE – clubs must have an approved stadium which fulfils the requirements of the relevant infrastructure regulations and provides spectators and media representatives with a well-equipped, well-appointed, safe and comfortable environment. In addition, they must have suitable training facilities for their players to help them improve their technical skills.

• PERSONNEL & ADMINISTRATIVE – the personnel and administrative criteria aim to provide the framework for clubs to acquire well-educated, qualified and skilled specialists with a certain know-how and experience to run operations in an efficient and effective manner and to ensure that both youth and first-team players are trained by qualified coaches and supported by the necessary medical staff. 

• LEGAL – the legal criteria are aimed at ensuring clubs have a legally robust basis for applying the regulations, as well as ensuring transparency in terms of the legal entity responsible for the football team participating in national and international competitions, to establish a complete picture of the overall legal group structure and how it operates.

• FINANCIAL – the scope of the financial criteria is quite extensive in that they aim to deliver both short and long-term improvements for the clubs by safeguarding the financial health of European club football as a whole. The criteria should improve standards and the quality of financial management and planning, which should in turn increase transparency and credibility, protect creditors and provide a basis for fair competition.

Despite the undoubted success of club licensing, the ever evolving environment of European football meant that there was a general feeling among stakeholders that additional financial regulation, going beyond what is requested by the club licensing system, was necessary in order to address the increasingly precarious financial situation of European club football.

Clubs were reporting repeated, and worsening, financial losses culminating in €1.7bn net losses being reported by European clubs in 2011. Furthermore, and as a result of spiralling spending on salaries and transfer fees, it was becoming increasingly difficult for clubs to honour their debts.

Calls for action led to the UEFA Executive Committee unanimously approving a financial fair play concept for the game’s well-being in September 2009. The concept, supported by the entire football family, has centred on the obligation for clubs, over a period of time, to balance their books or break even. Under the financial fair play concept, clubs cannot repeatedly spend more than the revenue they generate, owners must regularly inject capital to cover losses and prevent a build up of debt and clubs are obliged to meet their financial commitments in relation to transfers and employees.

In order to direct clubs towards financial stability overdue payables were enforced and increased focus has been put on long term financial plans. A fundamental element of the financial fair play requirements is the break-even requirement, which is intended to accomplish the following:

• Limit large capital injections which created inflationary spikes that also had knock on effects for competing clubs (i.e. via the notion of acceptable deviation);
• Staunch the chronic losses generated by clubs (i.e. by breaking eve over a period of time);
• Lower the “dependence” of clubs on solitary revenue streams (i.e. via the restriction on related party contributions)
• Continue the evolution of club licensing which has focused on good governance and raising the standards for professional football (i.e. by allowing for expense exemptions for investment in youth development and infrastructure).

Whilst clubs in Northern Ireland are exempt from the break-even requirement as none of them meet the EUR 5 million threshold in respect of relevant income and relevant expenditure, they must comply with additional monitoring requirements enforced across UEFA club competitions. Enhanced assessment of overdue payables towards football clubs, employees and social/ tax authorities continue to be monitored during the licence season.

Just as clubs are required to fulfil minimum criteria, licensors also have to comply with minimum requirements in operating the club licensing system and performing their responsibilities in respect of the financial sustainability requirements.

Originally based on the internationally recognised quality management system, ISO 9001:2000, the UEFA Club Licensing Quality Standard was devised to ensure consistency in the assessment principles and methods followed by all licensors. It also aims to improve the efficiency and effectiveness of licensors’ internal administration by promoting professional management and continual development in the running of the club licensing systems and club monitoring process.

In order to ensure the credibility of the club licensing system and club monitoring process, licensors must correctly apply the core process, the set deadlines, the catalogue of sanctions and the consequences of a licence refusal, while guaranteeing the principles of independence confidentiality and equal treatment of all licence applicants/licensees.

Each year, an independent certification body assesses compliance with all the requirements contained in part ll of the Club Licensing Quality Standard. If the requirements are met, the certification body issues a certificate which is valid for one season. However, should a licensor not be issued the certification, other than not receiving the related HatTrick incentive payment, the implementation of the club licensing system by the licensor will be placed under greater scrutiny with stricter compliance activities being performed. Any non-conformities identified by the independent certification body need to be promptly rectified with repeated non-certification potentially leading to the licensors’ clubs not being able to participate in future UEFA club competitions.