Chelsea & Manchester City could face Euro expulsion
Fri 8th Apr 2011 | Club & Country Competitions
Chelsea and Manchester City could be excluded from entering European competition if they fail to bring their spending under control according to a report by the BBC.
Clubs in Europe must meet UEFA’s Financial Fair Play regulations if they wish to take part in the Champions League & Europa Cup competitions from 2013. The regulations come into force from 1st June this year and will take into account a clubs finances over a 3 year period.
A study of recent accounts by BBC Sport shows Chelsea and Manchester City would fall well short of the rules if they were being applied today.
Clubs will be permitted up to £38.5million in losses in the first monitoring period of 2011-12 and 2012-13. But Manchester City’s accounts showed they were £110m in the red while Chelsea showed a deficit of over £50m.
Clubs will face sanctions if they are unable to meet the financial obligations of the new rules. However, if they are able to meet two requirements: the trend of losses is downward and that any overspend is caused by commitments on wages and transfer fees that were made before June 2010 they will escape sanctions.
Liverpool’s Managing Director, Ian Arye warned last week that UEFA must impose sanctions ‘hard and fast’ for clubs to take the regulations seriously.
The guidelines aim to measure a club's football business. Any revenue earned from side businesses such as property, hotels or media are excluded. So too are any costs not directly associated with the football club - such as huge interest payments like the ones incurred by Manchester United's owners the Glazer family.
United made a pre-tax loss of £79m in 2010 but, by UEFA's measure, actually returned a positive break-even result of £42m.
Arsenal would also easily meet the guidelines, posting a surplus of £55m. With no single wealthy owner at the Emirates Stadium, they pride themselves on running a sustainable football business.
UEFA general secretary Gianni Infantino said he was optimistic that English clubs would be able to comply with the rules though.
"I don't think it will be difficult for the English clubs to comply because they are very well managed and very well aware of what is coming," he told BBC Sport.
"There is sufficient time in order to implement the regulations. The English clubs are among those generating the highest revenues in Europe.
"The basic rule is the break-even rule that says you cannot spend more than you generate, so if you generate more than the others you have an advantage. So I am not worried at all about the English.
"I'm sure the managers of the English clubs are thinking about this, because they know the regulations are coming into force.
"They know what these rules mean and how we will implement them. I am sure that tomorrow they will put their finances in order so they are able to break even.
"Our president spoke to Manchester City's owners over a year ago when we started with this process and they were very happy with it."
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