Is there a rule somewhere in Serie A, fifa or uefa that wouldn't allow a team to get a loan, to pay another loan they have?
Edit(This is what AI says):
No explicit rule in Serie A, FIFA, or UEFA regulations directly prohibits a football club from obtaining a loan to pay off another loan, provided the club operates within the broader financial regulations and constraints set by these governing bodies. However, there are strict financial oversight mechanisms that could indirectly impact a club's ability to take on additional loans, especially if they are already in financial distress or failing to meet existing obligations. Below is a detailed breakdown based on the relevant regulations:
1. Serie A Financial Regulations
Serie A, governed by the Italian Football Federation (FIGC), imposes financial regulations on clubs to ensure fiscal responsibility. These include:
- Financial Fair Play (FFP) and Squad Cost Ratio Rules: Serie A clubs must comply with UEFA’s Financial Sustainability Regulations (FSR), which have largely replaced the older Financial Fair Play rules. These regulations limit spending relative to revenue, requiring clubs to maintain a squad cost ratio of 85% (i.e., spending on wages, transfers, and agent fees cannot exceed 85% of revenue). Taking out a loan to pay another loan would increase a club’s debt and could push them closer to or beyond this threshold, triggering scrutiny or penalties.
- FIGC Oversight: The FIGC’s Financial Supervisory Commission (COVISOC) monitors clubs’ financial health. Clubs must submit financial statements and demonstrate they can meet their obligations, including debt repayments. If a club seeks a new loan to pay an existing one, COVISOC could flag this as a sign of financial instability, potentially leading to sanctions such as transfer bans, fines, or points deductions if the club fails to meet other financial criteria.
- No Specific Prohibition: There is no explicit Serie A rule that bans taking a loan to pay another loan, but such a practice could be viewed as unsustainable and lead to penalties if it results in non-compliance with financial regulations or failure to meet debt obligations.
2. UEFA Financial Sustainability Regulations (FSR)
UEFA’s FSR, applicable to clubs participating in European competitions (e.g., Champions League, Europa League), imposes strict financial controls:
- Debt Management: UEFA’s rules focus on ensuring clubs live within their means. Clubs must prove they have no overdue payables (e.g., to players, other clubs, or tax authorities). A new loan to pay an existing one could raise red flags if it indicates the club is struggling to meet these obligations.
- Squad Cost Ratio: Similar to Serie A, UEFA’s FSR limits squad-related expenditure to 85% of revenue. Additional loans increase financial liabilities, and if they push a club beyond this ratio, UEFA could impose sanctions like fines, squad size restrictions, or exclusion from competitions.
- No Direct Ban: UEFA does not explicitly prohibit taking a loan to pay another loan, but the practice could complicate compliance with FSR, especially if the club’s overall debt becomes unsustainable or if it fails to balance its books over the three-year monitoring period.
3. FIFA Regulations
FIFA’s Regulations on the Status and Transfer of Players (RSTP) and other financial guidelines primarily focus on player transfers, loans, and contractual stability, rather than club financing. However:
- No Specific Rule on Loans for Debt: FIFA does not have a rule explicitly preventing clubs from obtaining loans to pay off existing loans. FIFA’s focus is more on ensuring transfer-related payments (e.g., transfer fees, solidarity payments) are made on time, monitored via the FIFA Transfer Matching System (TMS).
- Financial Oversight: If a club’s financial practices (e.g., taking loans to pay loans) lead to unpaid transfer fees or wages, FIFA’s Dispute Resolution Chamber (DRC) could intervene, potentially imposing sanctions like transfer bans.
- Club Licensing: FIFA requires member associations to implement club licensing systems, which include financial criteria. Excessive debt or reliance on new loans to cover old ones could lead to a club failing to meet licensing requirements, resulting in penalties or loss of professional status.
4. Practical Considerations
- Bankruptcy and Insolvency Laws: Beyond football regulations, clubs are subject to national financial laws. In Italy, insolvency laws could prevent a club from taking on unsustainable debt if it risks bankruptcy. Lenders may also be reluctant to provide loans to a club already struggling with debt, especially if it’s to pay off another loan, due to the high risk of default.
- Market Practices: In practice, clubs sometimes refinance debt (e.g., taking a new loan to pay off an existing one) to manage cash flow, especially to spread costs over time or secure better interest rates. However, this must be done transparently and in compliance with financial reporting requirements to avoid sanctions.
- Examples of Financial Scrutiny: Clubs like AC Milan and Inter Milan have faced scrutiny from UEFA and FIGC in the past for high debt levels and reliance on loans from owners or third parties. While not directly related to loans-for-loans, these cases highlight the strict oversight applied to debt management.
5. Context of Player Loans
Your question might also be interpreted as relating to player loans (temporary transfers) rather than financial loans. If this is the case, FIFA and UEFA have specific rules on player loans, but these do not directly address using financial loans to facilitate player loan deals:
- FIFA Loan Rules: Since July 2022, FIFA limits clubs to six international professional players loaned in and six loaned out per season (as of 2024-25), with exemptions for players aged 21 or younger and club-trained players. These rules aim to prevent talent hoarding and ensure competitive balance but do not address financial loans used to fund player loan fees or wages.
- Serie A Player Loan Rules: Serie A aligns with FIFA’s international loan limits and has additional domestic rules, such as limits on the number of players a club can register. There’s no rule preventing a club from taking a financial loan to cover costs associated with player loans (e.g., loan fees or wages), but such costs must fit within Serie A’s squad cost ratio and financial reporting requirements.
- UEFA Integrity Rules: UEFA prohibits clauses that prevent loaned players from playing against their parent clubs in European competitions to ensure competitive integrity (e.g., the case of Thibaut Courtois’ loan from Chelsea to Atlético Madrid). This is unrelated to financial loans but shows UEFA’s focus on fair competition.
6. Conclusion
There is no specific rule in Serie A, FIFA, or UEFA regulations that explicitly prohibits a club from taking out a loan to pay off another loan. However, such a practice would be subject to:
- Financial Oversight: Serie A’s squad cost ratio, UEFA’s FSR, and FIGC’s COVISOC monitoring could penalize clubs if additional loans lead to unsustainable debt or breaches of financial limits.
- National Laws: Italian financial and insolvency laws may limit a club’s ability to take on new debt if it risks insolvency.
- Practical Risks: Excessive debt could lead to sanctions like transfer bans, points deductions, or exclusion from competitions, as seen in cases of clubs breaching FFP or FSR.
If you meant player loans rather than financial loans, the rules focus on limiting the number of player loans and ensuring transparency in loan agreements, but they don’t address using financial loans to fund such deals, provided clubs stay within financial limits.