UEFA's plan to limit club spending
Mon 25th Jan 2010 | UEFA
UEFA seek to introduce new regulations to monitor the financial plans of soccer clubs across Europe because nearly half of them are running at a loss despite the fact that the game is generating record levels of revenue. Nearly 20 percent of the clubs have huge deficits and UEFA will be publishing the figures it has already collected in the coming month.
In an interview with the Daily Telegraph, UEFA's general secretary Gianni Infantino, said, "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 European club football by encouraging clubs to live within the revenues that they generate. 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 believes that the main reason for this is a reliance on financing by owners or debt. "Around one third of the clubs are spending 70 per cent or more of their revenues on wages. Revenues across European football grew by 10 per cent last year, but the salaries of players and coaches have gone up by around 18 per cent. 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."
European Club Association is supporting the UEFA proposal although the Premier League in England has reservations. Richard Scudamore, chief executive of the Premier League, has said that he is opposed to any limits being set on the ability of owners such as Sheikh Mansour to invest money in their clubs. He feels that making it mandatory for clubs to break even may end up making the big clubs dominant permanently. Infantino does not agree with this assessment and feels that the Premier League clubs will be fined. "Our intention is not to make all clubs equal with the same money to spend. What we see now 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."
UEFA wants to limit club's reliance on debt and benefactor spending to underwrite transfer fees or player wages. The experiences of Portsmouth and West Ham are seen as warning bells which indicate a need for change in money management at the clubs. UEFA is also wary of owners like Manchester City's Sheikh Mansour bin Zayed al-Nahyan trying to create a short cut to success by providing a influx of cash for the club's spending which the club's revenues will not be able to keep going in the long-term.
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