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UEFA Financial Fair Play Rules Huge Test For Top English Clubs

UEFA President Michel Platini today warned Europe’s top football clubs, that they will have to abide by the new UEFA Financial Fair Play rules, due to take effect next season, or face the consequences.

Michel Platini – new rules go into effect next season in Europe

UEFA’s latest financial figures on European clubs, not surprisingly, show that financial problems affecting European clubs are getting worse rather than better, with spending on player wages up almost 10% – and increasing at a much faster rate than revenues coming in.

Under the new UEFA rules, clubs will face bans from European competition, beginning in the 2014-2015 season,  if they spend more than their revenues in the three preceding years.

In short, and in simple financial terminology, the clubs are being forced to balance their books – and it’s about time too.

Manchester City’s recent £121M loss, which they reported as good – what a joke – means that the richest club in the world are facing the greatest difficulties to abide by the new rules.

That’s because all of their money for transfers and the like is coming from the owner, and is not being generated by revenues of the club, in terms of gate receipts, TV revenues, strip sales, and the like – hence the huge loss being reported.

UEFA President Platini said the European governing body would not hesitate to take action when necessary, whichever club failed to abide by the new rules.

Speaking at UEFA’s headquarters in Nyon, Switzerland today, this is what Michel Platini said:

“If a club doesn’t fall in line and follow the same rules as everyone else then it will be time to face the music.”

“Certainly it is not something we want to see. Our objective is not to put clubs into financial difficulty.”

“Financial fair play is to help them escape from this devilish spiral and have a viable economic strategy in the long term.”

“This is not a witch-hunt, this is so they no longer continue blindly and mindlessly.”

“Last year in Abu Dhabi I met up with the owner of Manchester City, and he promised they would live with the new rules and regulations.”

UEFA’s General Secretary Gianni Infantino admitted that most of the new rules, that go into affect starting next season,  are aimed specifically at keeping the amount of money spent on the club wage bills to manageable proportions.

In some clubs in England,  the wages right now are more than 100% of the revenues, which is simply ridiculous and financial suicide.

That means clubs in England are paying out wages to their players, which exceed all revenues coming into the club, and that’s one reason why Mike Ashley is being extra careful in the new wages he is paying out to players getting new contracts at the Newcastle club.

General Secretary Infantino said.

“It is about better cost management, in particular the wages of players – it is an indirect salary cap,”

UEFA allocated a whole day to explain the system to the global media, and Infantino pointed to Arsenal as an example of a well-run club, who have increased their income without ever overspending like a lot of other English clubs.

And unfortunately, at the same time, he implicitly contrasted it to Newcastle United, who have hardly been well run financially, since 2000 – sorry Freddy:

Infantino continued:

“Ten years ago, Arsenal reported less income than Chelsea, Liverpool and Newcastle. Now it is more than those clubs and in 2009 was more than double Newcastle’s.”

“This shows what is possible with good management and careful investment.”

“What kind of healthy business model is it to wait for a knight rider on a horse with a lot of money to throw around and then one day jump back on his horse and ride away?”

The news is that Manchester City have already sent some of their executives to meet UEFA officials about complying with the new Financial Fair Play rules.

Andrea Traverso, UEFA’s head of licensing, said:

“We are in talks with the club – they are aware of the rules and they probably have a strategy to raise their income.”

“They have been to see us and they are confident that they can manage this challenge.”

Under the new system, UEFA will  start to put clubs who are not meeting the new rules into a special category, and the various warning signs include:

  • Recording a loss in the financial year
  • Spending more than 70% of  the revenue on wages alone
  • Not being able to pay  football-related payments or taxes on time
  • Having a level of debt higher than the annual revenue (called  turnover in England)

With these new warning signs, both Chelsea and the  Manchester clubs, would be put into  the special category of clubs being monitored.

The European Clubs’ Association (ECA), which had Newcastle United as one of the five clubs representing England, before we were relegated two years ago, have thrown their full support behind the new Financial Fair Play rules.

It’s almost a joke that UEFA have been forced to do this, and that football clubs, especially in England, have continued to spend way over what they bring in in revenues.

We can only assume that the financial people in charge of  most of the top English clubs have never read Charles Dickens’ book David Copperfield, in which Mr. Micawber gives the very sound advice:

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness.”

“Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”

It seems that Platini and the new UEFA rules could make it quite miserable for some top English clubs, if they don’t get their financial act together.

It’s also good that Newcastle are trying to follow the Arsenal model, as the London club have been branded as one of the best run clubs in Europe, although most people in football already knew that.

Newcastle have also to  become as successful as Arsenal have been over these last 10 years, that’s the hard part.

Comments welcome.

57 comments so far

  • Toonkistan

    Jan 12, 2011 at 9:29 AM

    Comment #41

    Celtic are about to sign Eric Husslepp from Brann for 1M ….we could’ve done with him as we need a short pacey striker

  • toonboyjake

    Jan 12, 2011 at 9:33 AM

    Comment #42

    correct me if im wrong but i thought husslekepp was a tall striker like andy carroll??

  • Toonkistan

    Jan 12, 2011 at 9:41 AM

    Comment #43

    yeah he’s tall but quite pacey and not the kind of striker who would hold the ball but rather play behind a striker…atleast this is what i have seen him do for norway a couple of times

  • ls

    Jan 12, 2011 at 9:49 AM

    Comment #44

    Hope Ziani isn’t going to sign for us. Never looked like a part of the team in Wolfsburg and it is said that he is lazy player.

  • The Leazus End

    Jan 12, 2011 at 9:52 AM

    Comment #46

    i am starting to get a little worried now with the injurys we have .
    god help us if we pick up any in the battle with the unwashed on sunday, this is why you need depth, wich newcastle just dont have.
    surely ash and co can see this, come get some signings in before its to late and the window is shut, we get linked with player after player but thats all it ever seems to be links, we need a boost before the sunday game


  • toonboyjake

    Jan 12, 2011 at 9:53 AM

    Comment #47

    oh right fair enough, would prefer a smaller striker though. having two 6ft plus lads up front is gonna mean one way of football and its seen at the brittania stadium every other weekend, kick and rush. I’d prefer someone like Shane Long/ Juan Albin, small and pacey. Prefer Long if either though because although not a lot he has premiership experience

  • sweendog

    Jan 12, 2011 at 9:55 AM

    Comment #48

    toonboyjake .. or a tall fast striker .. better than a small fast one IMO

  • Toonkistan

    Jan 12, 2011 at 9:59 AM

    Comment #49

    anyways i think if we sort out our injuries we are fine with strikers atleast for this season especially if lovenkrands get his sharpness back and sort out his first touch….i think we are in dire need of 2 wingers each side who can actually cross the ball…i am afraid larrson isnt pacey but he can cross but looks like that deal is off too 🙁 I am worried for the match against unwashed

  • toonboyjake

    Jan 12, 2011 at 10:02 AM

    Comment #50

    sweendog i think a tall fast striker will just mean long balls hoofed up to carroll and whoever it is, height is good but not when you know theres already carroll as a target and if theres 2 target men then everyone will have sore necks from watching the ball go up it the air to either of them, at least with a small nippy striker through balls will be played more often

  • The Leazus End

    Jan 12, 2011 at 10:06 AM

    Comment #51

    i still think keane could have done a job for us i know ile get shot down for this but he could pick up all the scraps in and around the box, something we just dont have until arfa is back, i would have stuck a 3 mill bid in

  • lesh

    Jan 12, 2011 at 10:06 AM

    Comment #52

    In principle, Ashley’s strategy should be taking us in the right direction if the aim is to qualify for Eurpean competitions.

    However and I hope the point’s not lost on him, we’ve got to qualify and to do so, we must have the players to get us there.

    To get players of the right calibre, we’ll be competing with other clubs for those players’ signatures and, and this is the point, other clubs will offer better terms than Ashley’s target of £20k max!

    Larsson’s clearly turned us down (and he’s on £10k!), we can’t get an assistant for Pardew……. could Ashley’s reward policy be out of kilter with the rest of top-flight football? If it is, then let’s look forward to mid-table mediocrity at best>

    Will Ashley ever come into the real world of Premier league?

  • Toonkistan

    Jan 12, 2011 at 10:11 AM

    Comment #53

    Leazus …i fully agree with you and esp the fact the Keane has proven his goal scoring in epl year after year…whereas i dont have high hopes with benarfa atleast in this season as i dont see him starting again till mid march and much wont be left in the season till then …..

  • hitman

    Jan 12, 2011 at 10:14 AM

    Comment #54

    leas,ashley is in a world of his own m8,this fka will never learn,the sooner were bought out the better ,we will go know were under this man..

  • lesh

    Jan 12, 2011 at 10:19 AM

    Comment #55

    Agree 100% hitman…. what ever happened to the Quataris (?) who were supposed to be looking to buy a Prem club?

    I wonder if Ashley’s still waiting for them to turn up for a drink in the Strawberry?

  • The Leazus End

    Jan 12, 2011 at 10:22 AM

    Comment #56

    i just cant see ash and his mob shipping out any time soon, our club is a game to him and he just seems to be doing his best to pi!! off his assets wich are the fans, if only i could have a chat with him and 52,000 others i guess

  • The Leazus End

    Jan 12, 2011 at 10:23 AM

    Comment #57

    on twitter lesh they drink in the black bull lol


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