UEFA Financial Controls Show Newcastle On Right Track


There is a report in the Times today detailing UEFA President Michel Platini’s plans to regulate European football and curb the financial excesses of European football clubs.

Michel Platini – UEFA President bringing in financial controls

The regulations are in a draft 60-page document seen and reported on today by The Times, and it seems to mark a much needed change to more financial common sense.

It should help curb the woes of clubs like Portsmouth and others, who have gone bankrupt by spending money they didn’t have.

And it hopefully will curb the antics of owners like Roman Abramovich at Chelsea and Manchester City’s Sheikh Mansour, from pouring hundreds of millions of pounds into their clubs.

It make a complete mockery of competition and these new rules are long overdue.

The clubs will be now be forced to live within their means – what a concept that is – and outlays will largely be limited by the revenues the clubs make  each year.

The Times article goes meandering on with their opinions all over the place,  but from what we can tell, these are some of the new rules Platini will be pushing for:

  • Safeguards will be introduced to prevent a rich owner from sponsoring a team beyond a fair market price to inflate the club’s worth
  • There will be a concession to clubs who rely on a rich owner with a weaning-off period – each club can lose up to €45M over an initial three-year spell as long as the owner covers that loss.
  • By 2015, the maximum loss permitted will be €30M over three years provided – again if  paid by the owner.
  • Without the support of a rich owner, losses at clubs are restricted to €5 million over three years. Clubs exceeding those limits over a three-year cycle could be barred from the Europa League and Champions League.
  • UEFA will target clubs carrying excessive and unsustainable debts such as the massive loans at clubs like Real Madrid, Barcelona and Manchester United. The interesting legal wording there is whether those current loans are sustainable or not.
  • UEFA will target clubs with debt is in excess of annual revenues
  • Billionaire owners will be restricted to putting up to £9M each year into the clubs – steady state.

But it seems like the Premier League may not be too fond of these proposed rules as a source told the Times.

“The idea of preventing what the likes of Dave Whelan, Jack Walker, Steve Gibson, Roman Abramovich and Sheikh Mansour have done to take their clubs on is not something that appeals to us,”

Roman Abramovich and Sheikh Mansour have made a complete mockery of football by being allowed to come in and spend hundreds of millions on their  clubs.

It’s nonsense, plain and simple, and these clubs must be run like businesses, which is what they are,  and financial controls have to be put in place – and sooner rather than later.

The draft proposal set out in the March 2010 UEFA Club Licensing paper is to be implemented by the executive committee this summer.

And while the rules apply only to those clubs competing in Europe, Platini is also encouraging European leagues to embrace these standards for all their clubs.

To support these proposals, UEFA published The European Club Footballing Landscape Report, which as we reported, revealed that 47 per cent of Europe’s top clubs made a loss in 2008 despite having record revenues.

Premier League clubs owed almost £4B in debts, even though the League reported their highest revenues ever.

Interestingly, Platini is a fan of the German model in which at least 51 per cent of every club must be owned by the supporters, so that should be of interest to the NUST.

The rules seem to make sense but the challenge  will be how they will be implemented, and whether rich  owners can find ways around the rules.

It also shows th way the Newcastle United club is being run at the moment is a sensible approach, and in line with these proposals.

That can hardly be said by far too many PL clubs at the moment.

Comments welcome.


17 comments so far

  • geoff777

    Mar 27, 2010 at 11:03 AM

    Comment #1

    If Ashley had been the “billionaire owner” we all hoped for instead of the inept skinflint we got.
    Would we be so pleased about the proposed changes?

    As it stands it does makes sense.
    Wages and transfer fees should plummet which won’t be a bad thing.

    However rules involving finances are always full of loopholes and rich owners and agents can always find alternative ways to finance deals.

    I’d love to see something done about agents too.

    Years ago (pre-agents) all transfer money stayed in the game.
    A club sold a player for £1m … they went out and spent the £1m received on another player.
    Now at least 10% of all transfer cash leaves football and goes into agents bank accounts.
    They really don’t do enough to earn the sort of cash that they get.
    Can you imagine how much Ronaldo’s agent got from Real Madrid for just a few weeks of negotiations.

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  • Captain Beefheart

    Mar 27, 2010 at 11:25 AM

    Comment #2

    A very sensible and timely article, Ed. Readers of this blog might well recall some talk of this last summer as well, and how the painful measures NUFC were taken (although enforced via relegation) would do no harm long term, But the consensus even at that time was that the Prem would try to block the proposed regs.

    The collapse of Pompey makes the case for common sense so much stronger, but it will not be until a major player starts to struggle that this rule will be welcomed. However, as Chelsea currently break every rule on sustainable financial practice don’t expect it to be a forgone conclusion.

    In our case it had to be done, Ashley was simply at the helm when it happened. I credit him only with the good business sense of actually doing it – not that he had much choice in the matter! Whether Ashley stays or goes, the new club policy on spending and wages is fine – so let’s not throw out the baby with the bathwater. It would be all too easy to drift back into trophy signings and an escalating wage spiral.

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  • Sav

    Mar 27, 2010 at 12:09 PM

    Comment #3

    Should be good news for well-supported clubs with large capacity grounds. But the new rules create a rush to expand stadia to the maximum and spiral ticket prices? Presumably capital investment on infrastructure is not included. But there are so many ways it seems this could be circumvented, if its like so many other crazy FIFA/UEFA schemes there’s a good chance none of it will ever see daylight.
    Our own FA is a shambles, Platini is lampooned worldwide and Blatter is a complete autocratic joke. The big clubs are laughing at them all. Like our own cathartic relegation, it will probably take the collapse of several big clubs before anything realistic will be done. The demise of Pompey and a whole lot of other fine old clubs won’t even register. It will take the top half dozen to hit the buffers before there is change.

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  • OHurley

    Mar 27, 2010 at 3:33 PM

    Comment #4

    Ok, I simply MUST toot my own horn for a moment because:

    I PREDICTED THIS EXACT EVENT OVER A YEAR AGO.

    That’s right- I’m pretty awesome 😀

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  • yorkshire toon

    Mar 27, 2010 at 3:56 PM

    Comment #5

    GEOFF WHY DID YOU MENTION INEPT SKINFLINT , WHATS ALL THIS NEWS TO DO WITH MIKE ASHLEY , ITS SO SO GETTING BORING NOW GET OFF HIS BACK AND CONCENTRATE ON GETTING BEHIND THE TEAM AND MOVE ON .

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  • yorkshire toon

    Mar 27, 2010 at 4:05 PM

    Comment #6

    Tell you what geoff lets say ashley donates 50 million for transfers and we can go get another few superstars that just want to come and milk us lets say shall we give 90k a week to each one of them thats great we might get 5-6 games out of em but williamson , rouetledge and co will pick up the pieces on a fraction what there on , WHAT WILL YOU SAY ABOUT ASHLEY THEN GEOFF done a good job there mike BORING GEOFF BORING

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  • iain

    Mar 27, 2010 at 4:15 PM

    Comment #7

    take one look at italian football its never recovered from the days they spent money for fun, 30m hear and there for a club like lazio was nothing.

    things got so bad corruption took hold in italian football, and that is the last thing we want over here.

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  • Tel

    Mar 27, 2010 at 4:22 PM

    Comment #8

    Love or loathe Ashley the way the club is being run now is right at least on a financial footing. However lets not forget this man has admitted to deliberately misleading the fans, lying, is involved in fraud and price fixing investigations and in my opinion will make sure he gets his money back before selling up. Applaud him for sorting out the finances, but if he had been upfront and honest to his customers I doubt he would be disliked the way he is. It is the lies and deceit which makes him unpopular.

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  • yorkshire toon

    Mar 27, 2010 at 4:34 PM

    Comment #9

    dont think he dare get it wrong again tel lets give him another chance mate

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  • Tel

    Mar 27, 2010 at 4:39 PM

    Comment #10

    Jury’s out at the minute, I no longer verbally chant against him, but I am still a little weary of anything he says or does, you know the once bitten twice shy thing,having said that I was pleasantly surprised in Jan window, By the way, I am near selby, with a name like yorkshire toon you mustnt be a million miles away.

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  • Tel

    Mar 27, 2010 at 4:54 PM

    Comment #11

    Full time Reading 1 West Brom 1.
    Not a loss but at least points dropped. Beat Forest on mon and one step closer to being champions.

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  • geoff777

    Mar 27, 2010 at 8:05 PM

    Comment #12

    RUDE YORKSHIRE TOON RUDE.

    Williamson, Routledge & co will get us relegated again because they’re Championship quality.

    Yes I’d rather watch someone of Shearer’s quality or Ferdinand’s than Best, so I’d like the inept Ashley to splash the cash.

    Our team’s crap but the books balance wayhay!

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  • nden85

    Mar 27, 2010 at 8:12 PM

    Comment #13

    tel, whereabouts do you live mate? i’m near selby, you know cawood?

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  • chuck

    Mar 27, 2010 at 9:50 PM

    Comment #14

    Undoubtably there has to be changes made, in regard to the amount of debt being taken on by EPL clubs.
    With many of the leagues present members over leveraged despite the enormous sums being earned from tv. revenue
    Mainly due to the fact if you dont spend, you can`t compete and cannot survive in the worlds most competitive and highest paying league.
    It has become a catch 22# type situation.
    However, Platini and EUAFA would be carefull as to what they propose, there has in the past been hints of the top clubs in Europe (Group of 18 or whatever number) forming their own super league.
    If the proposals are rejected it could cause chaos throughout the footballing world.
    The present billionaire owners are not about to knuckle under to any organization that tells them how to run their businesses and without them there is no longer a rule-making group.
    Careful what you ask for.

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  • Charlietoon

    Mar 28, 2010 at 12:52 AM

    Comment #15

    geoff77 how many Shearers or Ferdinands do you think are out there? And why the hell would they want to join us? and if they did how much would we have to pay them?

    We need more Milners not more Luques.

    It was that sort of mentality that got us relegated. You cant buy team spirit

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  • Tel

    Mar 28, 2010 at 6:27 AM

    Comment #16

    nden85: Osgodby, Its 100 miles to st james. Train for Sat games and drive to everything else.

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  • marshy

    Mar 28, 2010 at 10:58 AM

    Comment #17

    charlietoon it was ashley that got us relegated,him and nothing else.if he had backed keegan we would have been ok in the premiership and i agree with everything geoff777 says.

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