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May 16, 2014

Man City, PSG accept FFP punishments

Manchester City and Paris Saint Germain have both agreed to pay 60 million euros and reduce their squads for the Champions League next season as part of their punishment for violating Financial Fair Play rules, in a settlement announced by UEFA on Friday.

Marcotti: What does this mean?

Also receiving lesser penalties were seven other clubs: Galatasaray, Trabzonspor and Bursaspor from Turkey; Russian sides Zenit St Petersburg, Anzhi Makhachkala and Rubin Kazan; plus Levski Sofia from Bulgaria.

The European governing body will limit City and PSG to 21 available players in their Champions League squad, instead of the standard 25. This past season, both clubs only used a total of 21 players in games.

The English and French champions also agreed not to increase their current wage bill for two years, and to "significantly limit spending" in the transfer market, based on a calculation of their "net transfer position."

Man City said on their website that they agreed not to exceed spending 60 million euros net in the upcoming summer transfer window.

Should City and PSG comply with the regulations over the next two seasons, many of the penalties can be ended, and UEFA will return up to 40 million euros. If, however, they continue to operate in violation of the FFP rules, the squad limitations and other penalties will be extended to the 2015-16 season.

The FFP rules require clubs who play in the Champions League and Europa League to balance their finances, and are meant to curb huge investments by owners and excessive spending on transfers. According to FFP regulations, to avoid penalty, a team's losses backed by an owner's own pocket, rather than debt, must be less than 45 million euros in 2013-14 and 2014-15 and less than 30 million euros for seasons 2015-16, 2016-17 and 2017-18.

City must show that they have operated at a loss of no more than 20 million euros this year and no more than 10 million euros in 2015 for the penalties to be rescinded.

PSG must operate at a loss of no more than 30 million euros next year, but in 2016 they will be given no leeway and must break even.

In a statement released on their website, City maintained that they were on course to break even at the end of the current financial year that ends this month, and said the spending limits "will have no material impact on the club's planned transfer activity."

"The nature of conditions that will result in the lifting of sanctions means that the club expects to be operating without sanction or restriction at the commencement of the 2015-16 season," the club statement said.

City insisted they have complied with FFP regulations but revealed they would not pursue the matter further and accepted UEFA's ruling.

"At the heart of those discussions is a fundamental disagreement between the Club's and UEFA's respective interpretations of the FFP regulations on players purchased before 2010. The club believes it has complied with the FFP regulations on this and all other matters," the statement read.

"In normal circumstances, the club would wish to pursue its case and present its position through every avenue of recourse. However, our decision to do so must be balanced against the practical realities for our fans, for our partners and in the interests of the commercial operations of the club."

All of the clubs had settlements announced on Friday. Manchester City proved the most difficult club with whom to secure an agreement, according to Press Association.

The three Russian clubs -- Zenit, Anzhi and Rubin Kazan, all received restrictions on their transfer spending and a wage freeze for two years. Zenit were fined 12 million euros and saw their Champions League squad cut to 22. Anzhi and Rubin Kazan's squads were cut to 21, with Rubin paying 6 million euros and Anzhi 2 million.

Levski Sofia and the three Turkish clubs -- Galatasaray, Bursaspor and Trabzonspor -- received a  200,000 euro fine and a one-year wage freeze.

No club was expelled from next season's Champions League or Europa League, which had been billed as the harshest punishment available.

It is little surprise that Galatasaray, Zenit and Anzhi all failed FFP rules, given the level of spending by the clubs in recent years compared to their income.

That spending caused a financial crisis at Anzhi, who were relegated from the Russian top flight earlier this week.

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