Sevco is facing trouble with UEFA at the end of this month, as they try to satisfy Financial Fair Play requirements, and there’s little chance that they will come up with an answer which the European governing body will accept.
Let’s go through this bit by bit. Last year, the SFA, when questioned about Sevco, said that they would issue a license as they do to all Scottish clubs; those clubs then face a separate audit at UEFA. I don’t believe this an accurate reading of the regulations, but let’s give the SFA the benefit of the doubt for a moment and say it is.
UEFA’s audit allows club to post losses of around £4.5 million over a three year period. Sevco is far in excess of this as everyone is aware. Their latest accounts are from two years ago. Last year’s numbers are yet to be published, but they are expected to be horrendous.
Now, UEFA’s regulations allow for a club to vastly exceed those kind of losses if – and this is the big if – those clubs have owners who inject capital up to a sum of around £25 million. Sevco fans have said a few times that their own debts to directors and other outside parties doesn’t equal this number; they are, as usual, missing the point.
To satisfy FFP any debts to directors have to be converted into equity, and although Sevco has bumped its gums about this several times in the last few years it is yet to even attempt it. The three year UEFA monitoring period we’re in right now will see Sevco significantly in debt, and with no debt for equity swap in sight.
The next set of accounts, for the satisfaction of UEFA, have to be in the hands of the SFA by the end of this month.
Even with the best will in the world, and even if Sevco was not sitting on a volcano over King and his court case, there’s just no way they are going to be able to turn those debts into shares in time to meet UEFA’s strict guidelines.
They will enter the evaluation period massively in breach.
Now the SFA managed to pass the buck last year when they said the licensing process and the FFP process at UEFA was not linked; it is their responsibility to let UEFA know if there are clubs in this country which do not comply with the regulations.
The granting of a license is not automatic, and the rules are clear. Harper and McLeod have an article on FFP on their website, which reads thus; “Clubs within the SPFL Premiership have to meet the requirements set by UEFA, partly in order that they are licensed to qualify and play in European competition.”
The SFA cannot help Sevco here though.
Even in the case where they have it right, unless they’re willing to forge documents on the club’s behalf, or blatantly lie for them the figures will all be with the UEFA licensing committee by the end of this month … and when they see the state that club is in, there will be questions.
Will they get answers?
Not ones that will satisfy them, I’ll bet.
Watch this story. This one is going to be a runner.
We might not have FFP here in Scotland – but we do need it – at UEFA it’s a different story, and they are watching.
A lot of people are.
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