Champions League - European club losses grow before new rules bite

European clubs made record losses of 1.7 billion euros in 2011 before new rules designed to force them to clean up their finances took full effect.

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Clubs which fail to move towards break-even face exclusion from European competition from 2014-15. Critics say that clubs will circumvent the rules through generous sponsorship deals with companies linked to team owners.

English Premier League champions Manchester City have an Abu Dhabi owner and are sponsored by the country's Etihad Airlines, while Qatari-owned PSG are reported to be on the verge of a 200-million-euro deal with the Qatar Tourism Authority.

"Everyone including Paris Saint Germain or any other club, they know the rules, they know when they kick in and they know what they have to demonstrate," UEFA general-secretary Gianni Infantino told reporters in a video conference.

Infantino said clubs had to show they could bring costs and revenues into balance "without cheating".

"A related party cannot just inject money into a club directly or indirectly though different systems," he said, adding that sponsorship deals would be scrutinised to ensure they represented fair value.

UEFA agreed in 2010 to phase in a raft of measures to try to stop European clubs from getting into financial trouble. The figures for 2012 will be the first ones to be assessed as part of the break-even requirement.

UEFA said owners of 46 loss-making clubs would have had to invest in more shares to improve their balance sheets had the rules been in force between 2009 and 2011.

Infantino said he believed the rules were beginning to bite, noting that the gap between revenues and costs had begun to close, albeit marginally.

Financial Fair Play is dominating the thoughts of executives at leading European clubs who must try to ensure their teams stay competitive while mindful of budget constraints.

Showing it was serious about enforcing the rules, UEFA said in December that it was banning Spanish club Malaga from future European competition for at least a season over unpaid bills.

UEFA said there had been a 47 per cent fall in overdue transfer fees and unpaid wages in the year to June 2012. It welcomed the drop as a sign that the rules were starting to have a positive impact.

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