Uefa threatens spendthrift clubs

[Knackers 0]

From BBC

 

Portsmouth's financial meltdown has highlighted the problem

Profligate clubs face being banned from the Champions League and Europa League after European football's governing body Uefa approved new plans.

 

The example of Portsmouth, who became the first Premier League team to go into administration, has highlighted the financial excesses in England.

 

Uefa president Michel Platini has now passed rules which would force clubs to operate within their means.

 

Clubs will only be able to spend what they themselves generate.

 

Big cash injections from wealthy benefactors like the owners of Chelsea and Manchester City would also be restricted under Uefa's Financial Fair Play plan.

 

The system is being phased in and bans would not be able to be imposed theoretically until the 2014-15 season at the earliest.

 

Clubs are required to restructure themselves over the next three seasons so they are financially solvent.

 

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The devil is in the detail but, basically, it means clubs' financial returns will be monitored over a three-year period and they will be expected, on average, to spend no more than they earn

 

Uefa general secretary Gianni Infantino said: "The main rule is the break-even requirement which will be phased in over the next three years.

 

"It is not as easy to swallow for everyone but everyone understands it is necessary. They are there not to punish clubs, they are there to help clubs. We don't want to kill anyone, this is why we have a phased-in approach."

 

But money invested in stadiums and youth development will not be included in the number-crunching.

 

The rules will also forbid clubs owing money to their rivals, players and staff or the tax authorities at the end of the season.

 

Portsmouth were a glaring example of a club which owed millions in unpaid transfer fees, image rights, tax and VAT.

 

Earlier this year, Infantino estimated 50% of clubs in Europe were making losses and 20% were in financial peril.

 

Big transfer fees can still be paid but clubs will need to generate sufficient funds through ticket sales, TV money and commercial revenue.

 

"If clubs want to spend €50, 60 or 70 million, why not, provided they have the money coming from their revenues, this will continue in the future. The problem is when you don't have the money," Infantino added.

 

The European Clubs' Association's president, former German international Karl-Heinz Rummenigge, welcomed the move, commenting: "The measures will shape the future of European football into a more responsible business and ultimately a more sustainable one."

 

 

 

 

Platini has been after this for years

[ChezGiven 0]

'Threatens'?

 

Uefa president Michel Platini has now passed rules which would force clubs to operate within their means.

 

Am surprised there is not more debate around this since it means that club's outside the top 4 with large loyal folowings are going to be better positioned to compete for players.

 

This ruling will mean massive expenditure for those clubs with benefactors between now and 2012/13 to bolster their commercial and footballing positions before it becomes law. By that i mean you cant compete in a UEFA competition unless you comply.

[NJS 4431]

Making it "illegal" for businesses to speculate commercially with loans sounds dodgy from an EU law pov.

[ewerk 31313]

I don't see why.

[ChezGiven 0]

I thought that this directive was only made possible after special pleading to allow football to be considered seperately under EU law because of 'specificities in the market'? I believe Platini has laid the groundwork already to pass this through UEFA in line with the commissions rules on freedom of capital etc.

 

Its fucking huge this if its gone through (the OP suggests its not 100%).

[Happy Face 29]

OK, so let us cut to the chase. How would your club stand at the moment?

 

Looking at the latest figures, Arsenal, Blackburn, Tottenham, Manchester United, Hull City and Stoke all tabled profits, so they are fine.

 

Fulham, Everton, Wigan and Wolves made losses of between £5m and £8m before factoring in academy, infrastructure and community spend, so that's OK, covered by the "immaterial losses" clause.

 

Bolton, West Ham and Birmingham made losses of between £13 and £20m, again before the permitted items. Considering the 'benefactor' clause allowing up to 15m Euros per season, they would be pretty much OK as well.

 

Aston Villa, Chelsea, Liverpool, and Manchester City would have some thinking to do as their losses are at a level that would trigger concern at Uefa.

 

It would not, however, suddenly mean they were not allowed to play Champions League or Europa League football at a stroke. The new measure is being added to the regulations as a "monitoring" item, which, if I've got this right, means they would be put under review and given warnings before being hit with the ultimate sanction.

 

Finally, none of this will cut in before the 2012/13 season, although the 2011/2012 financial returns will be the first benchmark for averaging out profit and loss over the next three years.

 

Never has your club needed a creative accountant more urgently - or a talented currency speculator given all this rationale has been worked out in euros.

 

And, as we know, the value of the pound in your pocket can go up as well as down!

[ChezGiven 0]

So it ignores current debt, just accounts for direct expenditure and revenues? What about asset amortisation etc?

[Guest alex]

This must be what the 5 year plan is all about.

[Guest]

In theory this would be good for us long-term, right?

[Happy Face 29]

In theory this would be good for us long-term, right?

 

 

Seems to be weak as piss to me, if you can still lose £20m a season and it doesn't matter what your overall debt is.

[Guest alex]

Also, Uefa need the Champions League clubs more than the clubs need Uefa if it comes to the crunch. That's how we ended up with the Champions League.

[ChezGiven 0]

In theory this would be good for us long-term, right?

 

 

Seems to be weak as piss to me, if you can still lose £20m a season and it doesn't matter what your overall debt is.

 

Better than nowt though?

[Happy Face 29]

In theory this would be good for us long-term, right?

 

 

Seems to be weak as piss to me, if you can still lose £20m a season and it doesn't matter what your overall debt is.

 

Better than nowt though?

 

 

Aye.

 

Definitley a pisser for Man City fans who were looking forward to spending £100m a year for the next 5 seasons.

[peasepud 59]

Surely though there are easy ways round this for the clubs with rich owners.

 

For instance, whats to stop Man Citys owners simply sponsoring the club for £100m a season?

[sandman02uk 0]

Surely though there are easy ways round this for the clubs with rich owners.

 

For instance, whats to stop Man Citys owners simply sponsoring the club for £100m a season?

 

Nothing from what I can gather, also It doesn't mention anything about money thats loaned and written off (not sure what the correct terminology is) ie. where it doesn't need to be paid back

[Happy Face 29]

Attempts to bypass the rules by owners handing out huge sponsorship contracts to their clubs from other companies they own will be checked by an independent watchdog panel appointed by UEFA to ensure they are not paying above the market rate.