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  • A Yahoo! User Jan 22, 2010 19:22 Flag

    Uefa - CL ban for 'Debt-ridden clubs'

    Debt-ridden clubs face axe

    Uefa general secretary Gianni Infantino insists that Europe's top clubs could be thrown out of the Champions League if they have considerable debt.

    European football's governing body president Michel Platini's 'financial fair play' initiative revolves around clubs only spending what they earn through football revenue.

    Uefa have compiled a study, with the full results set to be published next month, which states that half of Europe's professional clubs are running at a loss while 20 per cent are recording 'huge' deficits.

    From 2012-13 clubs will have to break even - spending only what they earn - if they want to play in the Champions League or Europa League. This would make it harder for clubs like Chelsea and Manchester City as both rely on their owners to pay players' wages and bring in new talent.

    Manchester United would also struggle with huge debts totalling more than £700million, as the new rules state that clubs can have debt but only if it is affordable. In fact the majority of the Premier League would fail to meet the new criteria needed to compete in Europe with 14 of the 20 top flight clubs making a loss in 2008.

    "What we are doing, with the support of all the stakeholders in the game including the major professional clubs, is to try and improve the long-term stability of the European club football by encouraging clubs to live within the revenues that they generate," Infantino told the Daily Telegraph.

    "We are concerned, and many of the clubs and owners are concerned about the sustainability of the game.

    "We survey more than 650 clubs all over Europe, and found that 50 per cent of those clubs are making losses every year, and 20 per cent of them are making huge losses, spending 120 per cent of their revenue every year."

    Infantino pinpointed the major reason for spiralling debts was the increasing transfer fees and mammoth wages clubs were prepared to pay.

    "Around one third of the clubs are spending 70 per cent or more of their revenues on wages," he added.

    "Revenues across European football grew by 10 per cent last year, but the salaries of the players and coaches have gone up by around 18 per cent.


    "It is clear that if we continue like this it will end up with a spiral of inflation, so we need to bring a more rational and reasonable approach to this crazy game."

    Premier League chief executive Richard Scudamore has voiced his opposition to Uefa's policy by declaring it will only favour the big clubs, but Infantino disagrees.

    "Our intention is not to make all clubs equal with the same money to spend," he highlighted.

    "What we see is that the rich owners already go to the big clubs because they make more money.

    "We want a healthier environment which will allow smaller clubs to invest in their infrastructure and be able to compete with the bigger clubs, knowing that they can only spend what they earn."

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    • Arsenal have the third highest debt in the Premiership, but that is totally Stadium related debt. But that debt does reduce possible spending on players transfer fees and wages.

      In the short term splashing the cash won Blackburn the league and Chelsea a few trophies, but even Abramovich has limits to his spending.

      Liverpool tried to compete without decent ticket revenue. They have no more right to a top four position than Tottenham, Villa, Everton or City. A new stadium is a must for their long term success.

      Utd had the perfect formula, top manager, excellent youth policy, the highest revenue, top capacity, massive brand success, and twenty years success on the pitch. It made all other football fans sick. Then came the Glaziers and we all have hope.

      You sold Ronaldo and let Tevez go and debt rose to its highest ever. The only answer is the Glaziers finding a buyer.

    • So Arsenal, who are at least £ 360 million in debt, according to Whinger, will be banned too.

    • I think this is wrong, for two reasons. The first is that I don't think UEFA should be concerning itself with clubs' finances any more the FA Cup entry does.

      The second is illustrated by an example. Supposing you are an aspiring club owner. There are two big clubs in a particular city - Monster City and Monster United. It so happens that Monster United has been successful for a couple of decades and built up its squad to CL level. Monster City hasn't been so successful and has a weaker squad.

      Monster United is available for £500m. Monster City is available for £200m and would take another £200m of investment in players, spread over several seasons, to get it up to United level.

      As far as I can see, UEFA says you can buy United and compete, but not City and compete. And yet, from a commercial point of view, City may be the better investment. From a sporting point of view, isn't it better that another club starts to compete with those who are currently successul, rather than entrenching the current leaders?