UEFA President Michel Platini has said today that the European Football’s governing body and its new rules on spending will end what he calls the ‘total anarchy’ that has surrounded player transfers in the past.
Michel Platini – crazy transfers will end
Indeed, this summer’s transfer window is expected to show a drop once again in spending by English Premier League clubs – and that is despite Manchester City spending a ridiculous £126M and overpaying for their players big time.
It’s hard to think that the Eastlands club are doing themselves any real good, as all their top youngsters now are superfluous, and that at a club which had one of the very best Youth Academies in the country. These youngsters will now have to be loaned out as “big” signings come in to play for the club.
If that’s not evidence of a club losing its soul, we don’t know what is.
Thank goodness for the UEFA and their new financial fair play rules, which are aimed at ensuring all clubs in European competition only spend what they earn – wow – what a concept that is.
The new rules are due to come into force from next season, although they will be introduced gradually to allow clubs time to align with the new rules. Indeed, Newcastle are already being financially sensible and seem to be in decent shape, even though the club still owes owner Mike Ashley too much – at around £130M.
Good job Mike doesn’t want that money back any time soon.
Last summer English Premier League clubs spent £450M on transfers, and the drop this summer is expected to be about 25%, so they’ll spend around £338M. And last January only £30M was spent – and that was the lowest figure since the January window was introduced back in 2003.
This is what Michel Platini said today:
“For years and years we were in total anarchy but the clubs asked for the rules because they knew they could not continue.” ‘We can see already that the clubs are spending less as they look to balance their books.”
“‘This is because the first time the break-even rule will kick in is in the coming year, the 2011/2012 season.” “It’s very soon and this means that the strategy to say “I can now go and spend hundreds of millions” doesn’t work because we will see it in two years at the latest.”
“Transfers have not been as crazy as in the last few years, they are pulling up their socks and the clubs are making special efforts to comply with the rules.”
Owners of European football clubs will still be allowed to inject up to 15M euros (about £12.3M) each year into their clubs, but only for the next five years, and then 10M euros (about £8.2M) from 2015 until 2018, but that cannot be a loan, and after that we’re not sure what will happen.
UEFA general secretary Gianni Infantino said they will monitor the progress of the new rules:
“In 2018 we will assess it and the objective is to go further down.” “It cannot be a loan however it must be a capital injection or donation.”
So it’s still true that benefactors such as Sheikh Mansour and Roman Abramovich (and Mike Ashley?) can still pour money into their clubs, but the amounts will be restricted.
The position of clubs with owners (usually American) carrying huge debts, like at Manchester United and Liverpool, is unclear. These clubs pay out huge interest payments each year on the hundreds of millions of pounds they have borrowed to buy the clubs.
The Red Devils say they would be able to meet the new rules to only spend what they earn, but Infantino confirmed the interest payments will be part of the money spent at the clubs, as he added:
“The costs to finance the debt are included,”
Manchester City’s football administrator Brian Marwood said the club were OK with the new UEFA rules:
‘It’s a concern, it’s something that every club has got to be aware of but we are fairly comfortable in terms of where we are at and moving forward, and that element is something that not just Manchester City will face but everybody.”
The Eastlands club may be comfortable with the new rules, but surely that’s not true at Manchester United, who are paying interest on something like £730M in loans, so it’s not clear how the club can keep buying top players.
The interest payments alone must be around £110M (at 15% interest rates on £730M), and that will be taken into consideration as money spent by the club, so the Red Devils need to rack up their revenues, if they want to keep buying top players.