The case involves Waterford Football Club (WFC) appealing UEFA’s decision to deny it a license for participation in the UEFA Europa League, citing the "three-year rule" under UEFA’s Club Licensing and Financial Fair Play Regulations (CL&FFP). This rule mandates that clubs must have been members of a UEFA-affiliated association for at least three consecutive years before qualifying for a UEFA license. WFC argued it was a new entity unrelated to the dissolved Waterford United (WUFC) and sought an exception, claiming it had no legal or financial ties to WUFC and had voluntarily settled some of WUFC’s debts as a goodwill gesture. The dispute highlighted the distinct roles of national federations and UEFA in licensing, with the Football Association of Ireland (FAI) responsible for domestic licenses and UEFA’s Club Financial Control Body (CFCB) Investigatory Chamber having sole authority to grant exceptions to the three-year rule.
WFC contended that UEFA’s refusal was unjust, but the arbitrator clarified that the club conflated these separate roles. The three-year rule is designed to deter financial misconduct, protect creditors, encourage investment, preserve club identity, and maintain competition integrity. It prevents clubs from restructuring to evade financial obligations while leaving debts unpaid in another entity. The arbitrator emphasized that exceptions must be strictly interpreted to avoid unequal treatment and arbitrary decisions, with the burden on the club to justify why an exception should be made. UEFA maintained that WFC’s circumstances did not warrant an exception, as the rule aims to prevent circumvention of financial fair play principles.
WFC also argued that UEFA had granted exceptions in similar cases, such as Sporting Fingal, but the arbitrator found no evidence of unequal treatment, as the factual scenarios differed. The arbitrator upheld UEFA’s refusal, reinforcing the strict application of the three-year rule to safeguard competition integrity and financial fairness. The ruling underscored the importance of regulatory consistency and the need for clubs to meet established criteria unless exceptional circumstances are convincingly demonstrated.
WFC’s appeal to the Court of Arbitration for Sport (CAS) was dismissed, with the Sole Arbitrator finding no procedural unfairness or misinterpretation of the rules. The arbitrator noted that WFC had delayed submitting its exception request, contributing to time constraints, and that UEFA later provided detailed reasons for its decision, allowing WFC a fair opportunity to respond. The decision reaffirmed the importance of strict adherence to financial regulations to preserve competition integrity and prevent clubs from evading financial responsibilities through structural changes. The appeal was dismissed, upholding UEFA’s original decision and confirming the need for clubs to comply with established regulatory frameworks. The case highlights the complexities of sports governance and the challenges clubs face in navigating licensing disputes, particularly when attempting to distinguish ownership and liability in restructuring scenarios.