"Worried UEFA to put brakes on clubs' reckless spending"

[coco]

Breaking News

Worried UEFA to put brakes on clubs' reckless spending.

With half of Europe's leading clubs losing money and more than 20 percent facing huge deficits, UEFA is set to call time on their lavish spending.

On Thursday, the executive committee of European soccer's governing body is expected to approve new financial regulations which will ultimately throw clubs out of European competition who consistently do not operate within their means.

President Michel Platini's "Financial Fair Play" plan, approved in principle last September and fine-tuned by former Belgium Premier Jean-Luc Dehaene, would come into force in 2012 and impel clubs to break even over a three-year period.

The rules will not affect domestic leagues, which fall under the responsibility of national associations but clubs that do not conform could ultimately be excluded from European competition.

UEFA said this week that there would be exceptions where losses happen because a club is building a new stadium or investing money in a youth academy.

SPENDING RECKLESSLY

The new policy is not just aimed at the big clubs with rich benefactors but also stopping smaller ones spending recklessly in an attempt to try and join the big fish.

"We're not trying to level the playing field," said a UEFA spokesman. "We want to make sure that the middle-ranked clubs don't go spending millions which they don't have as they try to compete with the big clubs."

"The underlying principle is that clubs cannot repeatedly spend more than their generated revenues."

The European Clubs Association (ECA), which includes all of the continent's biggest clubs, has supported and agreed to the proposals.

UEFA has become increasingly alarmed at the financial situation of the continent's clubs.

Portsmouth became the first Premier League club to go into administration earlier this season and have debts of more than 119 million pounds.

They were docked nine points by the Premier League and were eventually relegated after finishing bottom of the league.

They are not the only club in the world's most followed soccer league where spending far outbalances their income.

In an interview with Reuters in March, general secretary Gianni Infantino said that a UEFA report had analysed 650 clubs all over Europe and found that half were making losses every year, with 20 percent losing more than 20 percent of their revenue.

Platini said recently that financially responsible clubs had been at a disadvantage on the playing field.

"The many clubs across Europe that continue to operate on a sustainable basis are finding it increasingly hard to co-exist and compete with clubs that incur costs and transfer fees beyond their means and report losses year-after-year," he said.

"For the health of European club football, those many clubs that operate with financial discipline and sustainable business plans must be encouraged and this is why the entire football family requested and expressed full and unanimous support for the principles of financial fair play."

[dkw]

I wonder if this will include levelling the playing field in Spain where Real Madrid and Barcelona negotiate their own tv deals and let the rest scrabble about for whatevers left, usually a tiny amount compared to their £150 million or so.

[coco]

I wonder if this will include levelling the playing field in Spain where Real Madrid and Barcelona negotiate their own tv deals and let the rest scrabble about for whatevers left, usually a tiny amount compared to their £150 million or so.

Its pretty obvious that this ruling will only do one thing, propel Real and Barca into the stratosphere, they will become richer and richer.

Uefa must know this, it doesnt take long to work it out, they're protecting the '2 gems'.

[ddrblue]

would i be correct in saying that both barcelona and real madrid both owe fortunes to

respective banks

but the banks out in spain will never call the loans in which in turn will put a spanner

into the works of both teams,which the knock on effect would be massive for banks involved as

general public would give them banks a wide birth if they was to cause strees to their beloved clubs

hardly a even wicket is it

ok the prem has its problems too which sooner or later will have to be faced

[Barry Bridges]

Heres my question

Since most of the biggest and best clubs in Europe would be disqualified due to this rule...... whose going to watch a "Champions League" full mediocre teams? Do we not already have a Europa League? (of which many teams in the compeition would likely not be eligible due to these finiancial rules)

and who thinks that some ambitious organiztion/billionaire wont simply step in and try to fill the void by offering a "Super League" where all the best clubs can compete regardless of finiances? (Im sure there are some rules to prevent this, but where there is a will backed by mass funds and the promise of even greater return....there is a way!)

[ddrblue]

Heres my question

Since most of the biggest and best clubs in Europe would be disqualified due to this rule...... whose going to watch a "Champions League" full mediocre teams? Do we not already have a Europa League? (of which many teams in the compeition would likely not be eligible due to these finiancial rules)

and who thinks that some ambitious organiztion/billionaire wont simply step in and try to fill the void by offering a "Super League" where all the best clubs can compete regardless of finiances? (Im sure there are some rules to prevent this, but where there is a will backed by mass funds and the promise of even greater return....there is a way!)

from a fans point of view what is the worst thing about CL???

put it this way how many times have chelsea played at camp nou in last few terms....3 i think

so when does it become boring and a drag going out to watch chelsea at camp nou?

sooner or later the same will be said for milan,munich,lyon,madrid etc etc,and thats with the present CL set up

the day CL splits/breaks up the downfall of european football day comes closer.

football 'WAS' a workingmans class game,but today that aspect is getting more far from that FACT.

the PREM and CL dont help matters along with sky tv or any tv hold on the game.sooner or later something is going

to give and it will back down to the workingman class to pick up the pieces.

how many people off here would love to go back to standing and 15.00 sat kick offs?

sky tv has done football good,but it's got to the point that its taking football too far away from the normall fan

[mimilee]

This rule is nonsense. Financial "Fair Play" my @rse. It is a fact that a club, any club, needs money to compete, and it's also obvious that leveling the income with the outcome of money won't happen only in a couple of years, it takes time. So it's a clear big boys club, with no one else allowed in.

Besides, one owner investing in a Club is not allowed, but "borrowing" ridiculous amounts from banks are? Where's the fair play again? ¬¬

[Virosh]

When this idea first came around, I remember someone saying, and I'm yet to hear a good answer against this - what will stop Roman from buying a J50mln signed shirt ?

[icecoolguy22]

I wonder how many big teams meet this criteria to participate in the Cl. if Platini had his way, in a few years time we will seee Boredaux vs Everton in the CL final, that will be a match watched by all around the world. ;)

[abramovich]

This fine piece at Vital Football comes to mind. La Liga are a mess.

http://www.chelsea.vitalfootball.co.uk/article.asp?a=518887

[undertow]

When this idea first came around, I remember someone saying, and I'm yet to hear a good answer against this - what will stop Roman from buying a J50mln signed shirt ?

from sky:

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

what i'd like to see is to sort out the tv deals in spain. what's going on there is anything but 'financial fair play'...

[Virosh]

from sky:

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

what i'd like to see is to sort out the tv deals in spain. what's going on there is anything but 'financial fair play'...

I read that as well, but unless they try to say an independent entity cannot price its products the way it wants to, I still don't see why anyone can't buy a limited edition shirt, signed by all players and encrusted with gold., for 40mln.

[undertow]

i would argue that the serious overpricing and the reason of it would be obvious, and i bet that uefa would do the same. maybe the CAS would clear the club but until then we could well be banned from the CL.

anyway, there are still years ahead of us before the ruling comes in and we are already on the way to a good financial balance. plus, abramovich can simply pour a couple hundred millions to the club's accounts before this, which could be invested and used to bail us out if the club needs cash.

[Spiller86]

I don't really have a problem with these rules from a Chelsea perspective. I think our people and all those from big clubs are smart enough to get around them. Undertow has come up with a decent suggestion already.

Thinking about it from an economic perspective, I'd imagine it will manifest in some form of wage/transfer fee ceiling. With UEFA hoping to cut back on some of the fees/wages that are around in European football. It's all apart of Platini's silly little pipe dream in which everyone will still be playing for the club they started with because noone will be able to afford the cost of transfer's anymore.

Now I don't have a problem with that as such, except for my belief that this will only further embed the European club hegemony that is currently present. The biggest clubs are being given a massive advantage from these new rules as they are the clubs that have the best youth facilities and can attract the best youth players. Furthermore they are likely to be the ones with an established global fanbase from which to draw revenue, furthermore as others have mentioned in Spain they happen to have a bigger share of the TV revenues as well.

The clubs that are really being targeted here are the more shall I say 'Nouveau Riche" kind of clubs, who become a force in football due to a large influx of cash from an owner, and then spending that on players in the system. UEFA would view this as distortionary saying that these clubs have bid up the transfer fees and wages that can be paid, pushing the business models of other clubs to the brink, in order to compete in these markets. But there is nothing to say that this is any different from say the growth of the Chinese economy in the last 10 years in particular that has bid up commodity prices and certain national currencies. Of course there is an inflation of prices, but that is natural for any the input prices of any industry, that is seeing an increase in competition in the product market.

My problem is, if UEFA are now planning to prohibit clubs from outside the top eschelon competing for trophies by spending to compete with the top clubs; They are essentially saying to these clubs, "No, you can't do that." In my belief, If clubs are willing to pay the price for success, and they are aware of the risks, then so be it. Plenty will say that for every Chelsea, Wolfsburg, Hoffenheim, Palermo and Sampdoria, there are plenty of Portsmouth's etc. But what UEFA are essentially saying is that if you are not Barcelona, Man United or Bayern Munich, then you will have to wait for the money you invest now in youth facilties, to slowly build into a good team, and then after many years of slowly gaining fans you will make it big. Maybe. Not many owners are going to sign up for that, and short of outside investment of this kind the money to do that won't be available.

I'm sure there will be plenty who disagree. One argument that I can understand is one that says Portsmouth's fans never got a chance to say whether they wanted to take the risk. That I agree with and thats why the ownership tests need to be strengthened. But a wage/transfer ceiling which make no mistake about it, is what this means, will only further enshrine 'the already haves' at the expensive of the have not's. It will do absolutely nothing to level the playing field overall in Europe, and is nothing more than an attack on the private ownership model that is developing throughout Europe.

EDIT: Sorry I got a little carried away there.

Edited May 29, 2010 by Spiller86

[dkw]

Im not reading all that, who do you think you are, Dorset. Sum it up for lazy gits like me please. ;)

[Spiller86]

Im not reading all that, who do you think you are, Dorset. Sum it up for lazy gits like me please. ;)

Fine :P . My point briefly is that the whole thing despite being aimed at leveling the playing field and chopping down the transfer fees and wages is only going to solidify the few really big clubs in Europe. They've already got the revenue from having established global fanbases and also have excellent youth academies, meaning they have the financial strength to make a profit and keep playing in the Champions League.

I think the system is going to make it impossible, (unless a club wants to miss out on the CL)to break down the big club hegemony in European football, because lets face it without outside investment (which is included in the 'losses' column) you simply can't compete. UEFA say they want to level the playing field financially but all they are doing is enshrining the current state of affairs on the pitch, which I think is ridiculous.

Edited May 30, 2010 by Spiller86

[dkw]

Fine ;) . My point briefly is that the whole thing despite being aimed at leveling the playing field and chopping down the transfer fees and wages is only going to solidify the few really big clubs in Europe. They've already got the revenue from having established global fanbases and also have excellent youth academies, meaning they have the financial strength to make a profit and keep playing in the Champions League.

I think the system is going to make it impossible, (unless a club wants to miss out on the CL)to break down the big club hegemony in European football, because lets face it without outside investment (which is included in the 'losses' column) you simply can't compete. UEFA say they want to level the playing field financially but all they are doing is enshrining the current state of affairs on the pitch, which I think is ridiculous.

Exactly what my thinking is, basically it will make for a closed shop for the top teams. The only way any team can get upto that level at the moment is by throwing a lot of money at it, either through risking it without really having the money (leeds) or getting in a rich benefactor (us). This will basically mean that will now be impossible and the big will get further away from the small.

[Spiller86]

Exactly what my thinking is, basically it will make for a closed shop for the top teams. The only way any team can get upto that level at the moment is by throwing a lot of money at it, either through risking it without really having the money (leeds) or getting in a rich benefactor (us). This will basically mean that will now be impossible and the big will get further away from the small.

Which is why there have been no complaints from any of the big clubs. They now know in the long run teams like Sampdoria, Palermo or Wolfsburg who have made a run on the CL spots in recent years mainly through investment from owners, aren't going to be able to do this. It's typical UEFA shortsightedness.

Edited May 30, 2010 by Spiller86

[Barry Bridges]

Which is why there have been no complaints from any of the big clubs. They now know in the long run teams like Sampdoria, Palermo or Wolfsburg who have made a run on the CL spots in recent years mainly through investment from owners, aren't going to be able to do this. It's typical UEFA shortsightedness.

I dont think it is shortsightedness.....I think they know exactly what will occur.... I think this is just their way or ensuring maximum profits every year....

I mean, whats going to draw a bigger audience/sponsors/profit for EUFA? A final with Wolfsburg and Palermo? or one with AC Milan and Real Madrid?