Nyon, Switzerland – Malaga has been banned from the Champions League and all other UEFA competitions for the next season it qualifies for the next four years, it was announced on Friday.
The punishment was handed down by UEFA's Club Financial Control Body, which has warned Malaga that it must make changes to the way it conducts business or it could face further sanctions.
Malaga is struggling financially and is guilty of having outstanding debt to other clubs and players which must be paid.
According to UEFA the Spanish side will face another one-year ban from European competition if it fails to prove by March 31, 2013 that no outstanding payments exist.
A statement from UEFA read: "The club is excluded from participating in the next UEFA club competition for which it would otherwise qualify in the next four seasons (i.e. 2013/14, 2014/15, 2015/16, 2016/17).
"In addition, Malaga will be excluded from a subsequent UEFA competition for which it would otherwise qualify (in the next four seasons) if it does not prove, by March 31, 2013 that it has no overdue payables toward football clubs or toward employees and/or social/tax authorities, in accordance with the UEFA Club Licensing and Financial Fair Play Regulations."
The club has also been fined $395,000, but the sanctions will have no effect on this season's Champions League, where Malaga will face FC Porto in the round of 16.
Entering the weekend Malaga is on course to qualify for next season's Champions League as it sits in fourth place in La Liga.