Clubs who fail to balance books could be suspended from Europe

[the wes 7,212]

Michel Platini, the Uefa president, yesterday named Roman Abramovich among the leading instigators of his campaign for “financial fair play” in European football.

Platini identified Chelsea’s billionaire Russian owner, along with Silvio Berlusconi, the AC Milan owner and Prime Minister of Italy, as examples of club proprietors who wanted Uefa to end the inflation in transfer fees and salaries held responsible for increasing debts.

With England in a dominant position in the Champions League and two recent winners, Manchester United and Liverpool, carrying hundreds of millions of pounds of debt each, it is widely perceived that Uefa’s agenda is aimed at the Premier League. Platini denied this. “I have to do what is best for the 53 countries,” he said. But he did add that Abramovich was one of those to whom he had promised to “do something about it”.

The detail of the proposals, to be introduced across European competition in the 2012-3 season, will not be finalised for another ten months, but the essence is that clubs will be expected to “break even” on their football budgets. In other words they will have to spend on transfers and salaries only as much as they bring in through ticket sales, television rights, sponsorship and prize money. Losses will be tolerated only on long-term investments such as stadium rebuilding and youth development.

Sanctions will be drawn up in conjunction with an independent panel and will be proportionate. A club £1 million in debt would be treated more leniently than one £50 million in arrears. A scale of fines could be imposed and other punishments could range up to suspensions from European competitions. So a club such as Manchester City at present, spending far in excess of their income, could be expelled from the Champions League.

Arsenal are seen as the ideal. With Arsène Wenger in charge, they more than balance the books on their football account, while their debts, though considerable, are largely because of the Emirates Stadium and are therefore approved by Uefa.

Chelsea’s financial model is hardly comparable, but Abramovich, who last season reduced an estimated £600 million debt to him by converting half of it into equity, is also moving the club in Uefa’s direction by requesting that they start breaking even within a year. The three-year deadline set by the European governing body is more realistic and gives Abramovich a chance of stemming the flow of his money (only about £8 billion these days) down the drain that top-class football has become.

When Abramovich and other club owners complained about high running costs, Platini said the remedy was simple: just don’t give the players so much money. “They told me, ‘We can’t do it alone because everyone else gives them the money — it’s easier if you make a rule.’ Now we are giving clubs three years to abide by the simple sentence that you cannot spend more than you own or generate.” While the immediate thought is of how regulation would affect the likes of United and Liverpool, who find it difficult to break even on football because of interest payments on their American owners’ loans, the effect could also be to discourage a future Manchester City; Sheikh Mansour might not have been so keen to throw his money around if, instead of buying Carlos Tévez and the rest, he could only have built a new stadium and expanded City’s already productive academy in the hope of gradual progress.

Until the plan is finalised, everything will be conjecture, but the prospect envisaged is that football will become so profitable that investors will be content to build from the bottom up. Local investors, perhaps.

Since existing arrangements will not be affected, the new regime at the City of Manchester Stadium will be able to spend and spend for at least two more seasons. This rather dampens a theory doing the rounds that Abramovich had talked him into handicapping Mansour as City prepare to break into England’s Champions League elite.

Platini’s fight for more fairness appears genuine. He even wants to limit the size of squads in the interests of “sporting equilibrium”. His instincts are admirable. And it is not as if the status quo can be tolerated. Ask the experts.

timesonline.co.uk

[Kez 2,727]

Thats absolute bollocks, just another way to try force us out the competition

[We Hate Scouse 10,286]

Bollocks will this happen! They say they will do something every 3 months and nothing ever goes through.

[EskWeston 696]

This is an awful idea, it will keep the big clubs on top and will effectively stop any team ever breaking into the top 4 barring a miracle.

The only true way to level the playing field is to impliment transfer and salary caps....