Champions League contender Malaga has been banned from European club competitions for one upcoming season for failing to pay players wages and tax bills on time.
The European Football Union (UEFA) said the Qatari-owned Spanish club could be banned for a second season within the next four years if it misses a March 31 deadline to pay its debts, which are reported to include €9 million (NZ$14.4m) in unpaid player wages.
Malaga immediately published a statement criticising "disproportionate and unjustified" actions by UEFA, which wants clubs to pay debts and attempt to break even on football business to meet "Financial Fair Play" rules.
UEFA announced the sanctions on Friday, local time, a day after Malaga was drawn to play FC Porto in the Champions League last-16 round. It will be barred from the first Champions League or Europa League it qualifies for in the next four seasons.
UEFA's club finance judicial body also fined Malaga €300,000 (NZ$481,000).
The club can appeal the sanctions direct to the Court of Arbitration for Sport, and Malaga spokesman Vicente Casado said it would do so when it "receives documentation from UEFA about the decision".
Late on Friday Casado said the club "did not know why" it had been banned, adding that "as of today all our players have been paid their wages for this year and previous years."
He added that Malaga had paid off all its pending debts for transfers and was suffering a "campaign of harassment" from European football's governing body.
Malaga is set to collect around €25m (NZ$40m) from UEFA in prize money and share of television revenues from playing in this season's Champions League.
Malaga qualified for world football's most prestigious club competition for the first time by finishing fourth in the Spanish league last season.
The club's rise was fuelled by a takeover by Qatari investor Sheik Abdullah Bin Nasser Al-Thani and a spending spree on players.
Malaga said in its statement that Sheik Abdullah Bin Nasser Al-Thani was still fully committed to the team, as shown in his "recent injection of €7m (NZ$11.2m) into the entity."
Malaga is currently fourth in the league which - before Friday's sanction - would have been enough to earn the right to play in the Champions League playoff round in August, needing to beat one opponent to enter the lucrative 32-team group stage.
Malaga plays Real Madrid on Saturday, local time. Madrid coach Jose Mourinho said he hoped a solution could be found for his team's rival.
"If a team wins the right (to play in European competitions) on the pitch, it would be sad that it is sanctioned for reasons that have nothing to do with its performance," Mourinho said.
Osasuna club president Miguel Archano confirmed Malaga had paid the €1m (NZ$1.6m) it owed its fellow Spanish club for the transfer of Spain defender Nacho Monreal.
Clubs must pay their football and tax debts as a condition of getting a license from their national association to play in UEFA competitions.
UEFA has enforced a licensing system for almost a decade, but the rules and potential sanctions have gained a higher profile in the "Financial Fair Play" era.
Since 2011, UEFA has been monitoring clubs' finances more closely and now requires them to aim toward breaking even on their football-related business as a condition of entry for the Champions League and Europa League.
Eight other European clubs were also punished on Friday by UEFA's financial control body.
Five clubs - Bucharest clubs Dinamo and Rapid, Serbian club Partizan Belgrade, and Croatia's Hajduk Split and Osijek - face a one-year ban from European competition within the next three years if they miss the March 31 deadline to settle debts.
What do you make of Tommy Smith's decision not to play for the All Whites?Related story: (See story)