Debt Ridden Clubs Face European Competition Axe

Glico Man

wrote:

Uefa general secretary Gianni Infantino insists that Europe's top clubs could be thrown out of the Champions League if they have considerable debt.

European football's governing body president Michel Platini's 'financial fair play' initiative revolves around clubs only spending what they earn through football revenue.

Uefa have compiled a study, with the full results set to be published next month, which states that half of Europe's professional clubs are running at a loss while 20 per cent are recording 'huge' deficits.

From 2012-13 clubs will have to break even - spending only what they earn - if they want to play in the Champions League or Europa League. This would make it harder for clubs like Chelsea and Manchester City as both rely on their owners to pay players' wages and bring in new talent.

Manchester United would also struggle with huge debts totalling more than £700million, as the new rules state that clubs can have debt but only if it is affordable. In fact the majority of the Premier League would fail to meet the new criteria needed to compete in Europe with 14 of the 20 top flight clubs making a loss in 2008.

Encouragement

"What we are doing, with the support of all the stakeholders in the game including the major professional clubs, is to try and improve the long-term stability of the European club football by encouraging clubs to live within the revenues that they generate," Infantino told the Daily Telegraph.

"We are concerned, and many of the clubs and owners are concerned about the sustainability of the game.

"We survey more than 650 clubs all over Europe, and found that 50 per cent of those clubs are making losses every year, and 20 per cent of them are making huge losses, spending 120 per cent of their revenue every year."

Infantino pinpointed the major reason for spiralling debts was the increasing transfer fees and mammoth wages clubs were prepared to pay.

"Around one third of the clubs are spending 70 per cent or more of their revenues on wages," he added.

"Revenues across European football grew by 10 per cent last year, but the salaries of the players and coaches have gone up by around 18 per cent.

Inflation
"It is clear that if we continue like this it will end up with a spiral of inflation, so we need to bring a more rational and reasonable approach to this crazy game."

Premier League chief executive Richard Scudamore has voiced his opposition to Uefa's policy by declaring it will only favour the big clubs, but Infantino disagrees.

"Our intention is not to make all clubs equal with the same money to spend," he highlighted.

"What we see is that the rich owners already go to the big clubs because they make more money.

"We want a healthier environment which will allow smaller clubs to invest in their infrastructure and be able to compete with the bigger clubs, knowing that they can only spend what they earn."

http://www.skysports.com/story/0,19528,11669_5877650,00.html


Could clubs be forced to miss out on Champions League and Europa League spots due to the debt they have?

How would clubs cope without the revenue generated from those games and also the money gained from being in the competition itself?

If this does happen, I can see the major clubs breaking away and forming their own super competion

Liam O

aaronh007 wrote: »

http://www.skysports.com/story/0,19528,11669_5877650,00.html


Could clubs be forced to miss out on Champions League and Europa League spots due to the debt they have?

How would clubs cope without the revenue generated from those games and also the money gained from being in the competition itself?

If this does happen, I can see the major clubs breaking away and forming their own super competion

No

leninbenjamin

This has popped up from time to time. Most recently here:

Pepe LeFrits wrote: »

Interesting new article on Premiership Finances on the Guardian:

http://www.guardian.co.uk/football/blog/2010/jan/17/premier-league-owners

I haven't heard of this before. Is it official or just in the talkshop stage?

If I understand it right, that'd mean that Man United, Liverpool, Chelsea and Man City would be banned from European football in two years time? Or would they be able to sell star players (as United did last year), bringing their yearly results into the black to gain access?

leninbenjamin wrote: »

Talkshop, although it's not new. Platini's made plenty of noises in the past about this, but he seems to have stepped it up a gear recently. It's definitely on the agenda although they are going to face stiff opposition to it, and they will have to be very careful not to encroach on EU fair trade laws and that.



The Times ran with it today too (I think that's where the original story came from actually). They suggested a time scale of 3 years before this can be approved and enacted. And it wont be possible to enact it retrospectively so clubs will have a bit of warning to sort their houses out.

It has to be very carefully enacted though not to restrict clubs either. The actual size of debt is irrelevant, it's the ability to repay that's what matters. For example Arsenal's debt is greater than Liverpools yet it does not impact the running of the club to the same extent as the majority of it is in the form of a long term loan with easily manageable repayments.

And it's not just English clubs who will fall foul of this, Roma, Real Madrid and Milan I believe are struggling with debt, and even Bayern, in a league famous for it's fiscal responsibility, are struggling to balance the books. Almost all the big teams could be wiped out in one fell swoop if this were enacted irresponsibly.

They will struggle basically, both from opposition of the clubs and EU law to implement this imo, but they will probably pass some token gesture through in a couple of years.

redout

This was brought up in the United thread yesterday.

Sounds like a good idea though is it realistic ?

Liam O

redout wrote: »

This was brought up in the United thread yesterday.

Sounds like a good idea though is it realistic ?

Big clubs wont allow it. They'll create a breakaway superleague. UEFA would lose a ton of advertising that the competition generates. End of story.

therokerroar

It'll never happen!

dreamers75

Its been done in ireland altho badly for the last few years.


In theory if the UEFA licence was implemented and followed tru on, you would have a level playing field for clubs.

No way UEFA or anyone would have the balls to kick someone out.


Altho the EU would be for it and clubs wouldnt be able to use them as a backup.

x in the city

hmm

with Man U about 800million in the red, cant see them being chucked out anytime soon lolz

JeanClaude

Liam O wrote: »

Big clubs wont allow it. They'll create a breakaway superleague. UEFA would lose a ton of advertising that the competition generates. End of story.

Exactly right, same thing happened in the 90's, the G14 threatened to form their own break away Europen super league, they wanted to expand the Champions league to include (some) league runners-up, U.E.F.A. caved in to them and gave the extra spot per ("elite") country,which eventually, over the following years, lead us to the current format of 4 per country.

U.E.F.A. will threaten expulsion, but when push comes to shove they'll bow to the clubs because lets face it they're not going to shoot the goose which lays the golden egg, i.e. the fans are loyal to, the Milans, Real, Barca, United, liverpool, etc..and will follow them to the new league ..and will have no interest in the U.E.F.A.'s C.L. lite....football hasn't learnt from the Leeds United debacle and we are now seeing clubs in massive unsustianable debt just becauce of a fear of missing out on C.L. football. The distrubtion of money within Europen football has to be fairer,so if any team goes without C.L. football for a few seasons they wouldn't go into free fall over it, like Leeds.

super_furry

Blatter and Platini have a massive hard-on for stopping English clubs.

Pepe LeFrits

English clubs aren't the only ones losing money tbf.

pickarooney

Uefa general secretary Gianni Infantino

Little Baby Johnny? Best name ever!

stovelid

Yeah right.

I can really see debt-ridden mega-clubs getting left out of competitions whose very structures are based around their participation.

UEFA push this and there will just be further impetus toward a super-league: the very thing that the Champions League was created to try and head off in the first place.

Dont be at yourself

With regards to a breakaway league, the big clubs need UEFA just as much as UEFA need the big clubs. UEFA have the brand, they have the network, the sponsorship, the logistics, the agreements, the TV deals around the world.

The G14 couldn't form a breakaway championship overnight, and couldn't begin to match the revenue UEFA brings in for them.

PHB

The G14 doesnt have as much support as it used to to be honest. The CL is a pretty good league for them, and ultimately, people realise that a G14 would ultimately become uncompetitive if it went badly. It's a huge huge huge risk.

These financial rules should have been in place years ago.

Any takeover that involves leverging the club in order to just take it over should be banned. Simple as that.

The rules need to allow for people like Arsenal who take on huge debt to build a stadium, but by in large, they would be good.

Will be interesting to see the effect it'd have on City. I'd imagine the new rules have stopping the emergence of clubs like Chelsea again in mind, as it takes money away from the already big powers of Madrid etc.

redout

Lads the G-14 disbanded about 2 years ago so no longer exists. It was replaced by the European Club Association which represents pretty much all the clubs in europe and not just the elite.

ilovelamp2000

G14 disbanded in 2008.

It was replaced by the European Club Association, which has more than 100 members. As opposed to G14 which had 18 members. So it's hard to say it has not got much support anymore.

Also it's quite obvious there isn't a huge amount of opposition to this from the clubs. Look at the efforts Liverpool, United, Chelsea and Man City are making at the moment to sort out their various situations.