FC Barcelona v. Union of European Football Associations (UEFA)

At a glance

Parties

Futbol Club Barcelona v. Union des Associations Européennes de Football (UEFA)

Case no.

CAS 2024/A/10310

Forum and rules

Court of Arbitration for Sport, appeals arbitration under the CAS Code (2023 edition)

Treaty

None; UEFA Club Licensing & Financial Fair Play Regulations (2018) and UEFA Club Licensing & Financial Sustainability Regulations (2022)

Tribunal

Manfred Nan (President), Jeffrey G. Benz, Raphaëlle Favre Schnyder

Sector

Football; club financial regulation

Outcome

Appeal dismissed (18 September 2024); the CFCB Appeals Chamber decision of 30 October 2023 and its EUR 500,000 fine were confirmed.

Amount

Fine of EUR 500,000 confirmed. Amount misclassified: EUR 267,089,000 (break-even result overstated by EUR 267 million). FC Barcelona sought CHF 20,000 in costs and UEFA sought CHF 30,000; the costs rulings are redacted in the published award.

The dispute

On 30 June 2022 FC Barcelona sold 10% of its LaLiga audiovisual rights for 25 years. The Sale produced a profit of EUR 267,089,000. Its audited Financial Report classified this profit as "profit from intangible fixed assets". In its UEFA break-even submission of 18 October 2022, however, the Club reported it as "other operating income", which counts as relevant income. After a PwC compliance audit, the UEFA Club Financial Control Body First Chamber found breaches of Articles 58(1) and (2) CL&FFP and Article 77.01(e) CL&FS and fined the Club EUR 500,000. The CFCB Appeals Chamber confirmed the decision. On appeal to CAS, FC Barcelona argued that its classification was correct and made in good faith, relying on its auditors, its experts, LaLiga's financial fair play system and Spanish and EU law. It also invoked its non-profit association structure and its reasons for the Sale, and argued that the fine was disproportionate compared with the EUR 100,000 recommended by the CFCB Reporting Member. UEFA argued that the misclassification was deliberate and that the fine was lenient.

Key holdings

1. The profit from the Sale is profit on disposal of intangible assets under Article D(b) of Annex X CL&FFP and is not relevant income. Annex X must be read as a whole, and as the specific rule (lex specialis), Article D(b) prevails over the general "other operating income" category in Article B(f). ¶¶ 93–105
2. By classifying the profit as other operating income, FC Barcelona overstated its break-even result by EUR 267 million. Reporting it differently from its audited Financial Report, and certifying information that was inaccurate, breached Articles 58(1) and (2) CL&FFP and Article 77.01(e) CL&FS. The LaLiga rules and Spanish and EU law have no bearing on this classification. ¶¶ 111–116
3. The Club's association structure does not change the rules. Whether to set different rules for clubs with different legal forms is a policy choice for the regulator. FC Barcelona did not show that its structure is unique; UEFA's uncontested evidence was that 41% of European clubs have a similar structure. The regulations discourage selling intangible assets for short-term capital, and they apply equally to all clubs. ¶¶ 123–134
4. The Club's reasons for the Sale are irrelevant. The Sale itself was lawful and may have been a rational business decision, but that does not justify classifying its proceeds differently from what the regulations require. ¶¶ 140–144
5. CAS reviews the proportionality of a sanction de novo, but should not easily 'tinker' with a well-reasoned sanction. The CFCB was not bound by the Reporting Member's recommendation of EUR 100,000, which under Article 13.03 of the CFCB Procedural Rules is only a recommendation. ¶¶ 186–187, 194
6. The infringement was intentional and had a major impact, so the EUR 500,000 fine is relatively mild, not disproportionate. Intent showed in the classification differing from the Financial Report and in the Club persisting with it after being offered a chance to correct it for a EUR 80,000 fine. A first offence is not a mitigating factor. The fine was confirmed and the appeal dismissed. ¶¶ 189–200

Procedural history

1. 30 June 2022FC Barcelona concludes the sale of 10% of its LaLiga audiovisual rights for 25 years. On 21 July 2022 it sells a further 15% for EUR 400,400,000.
2. 18 October 2022FC Barcelona files its 2022/23 break-even submission, reporting the Sale profit as "other operating income".
3. 9 February 2023The PwC compliance audit report finds the Sale profit misclassified. On 17 February 2023 the CFCB First Chamber opens proceedings.
4. 13 July 2023The CFCB First Chamber imposes a fine of EUR 500,000 and EUR 1,000 in costs.
5. 30 October 2023The CFCB Appeals Chamber rejects the Club's appeal and confirms the First Chamber decision. Its reasoned decision is notified on 12 January 2024.
6. 22 January 2024FC Barcelona files its Statement of Appeal with CAS. The Panel is constituted on 10 April 2024.
7. 5 June 2024Hearing held at the CAS Court Office in Lausanne.
8. 18 September 2024CAS award: appeal dismissed and the EUR 500,000 fine confirmed.

Tribunal, counsel and experts

Decided by

• Manfred Nan President, CAS Panel — appointed by the institution
• Jeffrey G. Benz Co-arbitrator, CAS Panel — appointed by the claimant
• Raphaëlle Favre Schnyder Co-arbitrator, CAS Panel — appointed by the respondent

For the claimant

Lucas Ferrer · Luis Torres · Pere Lluís Mellado

For the respondent

Saverio Lembo · Emanuel Cortada · Alice Williams · Pablo Rodriguez

Experts

Oriol Amat (claimant) · Andrei Boar (claimant)

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Keywords

• UEFA Financial Fair Play
• break-even requirement
• CL&FFP
• CL&FS
• Club Financial Control Body
• audiovisual rights sale
• LaLiga TV rights
• relevant income
• profit on disposal of intangible assets
• Annex X
• lex specialis
• proportionality of sanction
• de novo review
• fine
• legal structure of clubs
• football
• disciplinary sanction

Summary generated with AI from the published documents — refer to the award for the authoritative text.