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.