UEFA is expected to ratify the “financial fair play” rules drawn up by the European football’s governing body today.
Michel Platini – behind most of the new financial rules
That will finally require all clubs to break even from 2012 – what a concept – or they will risk being excluded from all European competitions.
We have found it hard to believe that most English Premier clubs have refused to put their own financial houses in order, and will therefore now be forced to do just that – before more of them become bankrupt like Portsmouth did earlier this year.
Michel Platini, the UEFA President, suggested these moves way back in 2007, and it was to curb the ridiculous over-spending by European football clubs, especially those in the Premier League in England.
These rules should have an immediate impact on clubs like Chelsea and Manchester City, because they run up huge losses each year, but are being bankrolled by billionaire owners.
The same is also true – to a lesser extent at Newcastle – where English owner Mike Ashley has loaned the club at least £111M, with an interest free loan – but at least Newcastle have voluntarily started to get their financial house under their own control – to the club’s credit.
The new rules will disallow club owners to continue to carry enormous debts – such as the owners of Manchester United and Liverpool, as just two examples, where the US owners of these clubs borrowed enormous sums to buy the clubs in the first place – and still carry massive debts.
Manchester United have debts of around £750M, and are owned by the Glazer family in Tampa, Florida, and Liverpool have debts of around £240M, and are owned by Tom Hicks and George Gillette Jr. Neither of these American owners is very popular with the fans, we may add.
The many financial restrictions proposed, could also lead to players’ wages being reduced, simply because these are the largest costs at any club, and some PL clubs currently have wage bills which are over 90% of their revenues – which is quite simply financial suicide.
Owners will be able to invest in their clubs, but only in areas that are good for the club (rather than good for themselves), like in developing new stadiums or building up the club youth academies.
A UEFA spokesman said today:
“We’re not trying to level the playing field,” “We want to make sure that the middle-ranked clubs don’t go spending millions that they don’t have as they try to compete with the big clubs.”
“The underlying principle is that clubs cannot repeatedly spend more than their generated revenues.”
As we said before what a concept – and it’s quite simply business 101.
It’s always hard to give praise to Newcastle owner Mike Ashley, because he is still immensely disliked by many fans, and Mike refuses to communicate sufficiently well with the club’s loyal fan base – which we have to add is his lifeline at the club.
Make Newcastle fans happy and everything else takes care of itself on Tyneside would be a good thing to drum into Mr. Ashley.
But it’s got to be said to his credit, that he seems to have saw all this coming, and has already imposed some sensible financial restraints at the Newcastle club.
Remember that in times gone by, spending huge transfer fees on trophy singings each summer – money the Tyneside club didn’t have by the way (picky, picky) – seemed like the popular sport.