New curbs on clubs debts

[down the slope]

From the BBC.



Ronaldo and Kaka joined Real Madrid for a combined fee of about £136m
Uefa president Michel Platini has vowed to bring in regulations that ensure football clubs manage their finances so they "live within their means".
The key to Platini's vision of what he has called "financial fair play" is for all clubs to be made to only spend what they earn in football revenues.
And he claims he has the backing of Chelsea owner Roman Abramovich and other rich club owners.
The rules are still being formulated and would not be in place before 2012.
Platini said: "We have everyone on board with this, the owners, the players, the leagues, the national associations.
"If a club can get loans from a bank to buy players and is able to pay back bank loans then it is not a problem. But if a club gets a lot of money or subsidies from a big backer and is still in deficit in two years then it is a problem and we don't want that."
It would mean owners such as Manchester City's Sheikh Mansour bin Zayed al Nahyan would not be able to make huge gifts of cash to their clubs.
Platini added that an independent panel would be set up to judge whether clubs had broken the rules.
"The panel will refer any matter to the disciplinary committee and sanctions will be taken from a reminder to a fine to expulsion from the Champions League," he said.
Many of Europe's top clubs have huge debts, with Real Madrid's an estimated debt of £500m up to the end of the 2007-08 season. Financial experts have estimated Real's current debt could run to about £800m following their summer spending spree.

Man City's new owners have brought plenty of cash with them
Premier League club Chelsea reported losses of £65.7m up to June last year while Red Football, Manchester United's parent company owned by the Glazer family, recorded a £21m loss last year and has a total debt of £575m.
Platini added: "It's mainly the owners that asked us to do something - Roman Abramovich, (AC Milan's) Silvio Berlusconi, (Inter Milan's) Massimo Moratti. They do not want to fork out from their pockets any more.
"I have told Mr Abramovich about this and he said nothing against it."
Uefa would also look at losses incurred by clubs' parent companies who have to service loans, said Platini.
Sanctions - if implemented - would depend on the size of a club's losses, said Uefa deputy general secretary Gianni Infantino, who is in charge of the detailed planning process.
He said around 20 clubs had been sanctioned in the past few seasons and not given a Uefa licence because their finances were not in order.
But Infantino insists the new rules would not stop clubs like Manchester City breaking up the domination of the 'big four' in the Premier League - as long as they were run on the right lines.
"We think that the opposite will happen because if you have a rich sugar daddy coming in and throwing money around this is unhealthy in the medium and long-term," he said.
"For the club to be healthy it has to live on its own means and generate income and this is not impossible.
"Clubs have generated revenues by investing in stadiums otherwise it is an artificial bubble which inflates the system and is unhealthy and unsustainable."

Maybe the end of the spending madness ?.

[Hibbyradge]

"Clubs have generated revenues by investing in stadiums otherwise it is an artificial bubble which inflates the system and is unhealthy and unsustainable."



Build it and they will come. :agree:

[NAE NOOKIE]

Interesting post.

A case of better late than never from UEFA.

They need to take this even further and find a way to limit players wages, transfer fees and money paid to agents.

They also need a fairer distribution of TV money, linking it directly to what fans are asked to pay at the gate. The amount of money some English clubs charge fans is mind blowing when you consider the TV revenues they generate.

UEFA need to come up with a model based on the total turnover of the whole of European football devised only on what revenue is generated through TV and gate money.

The amount member clubs could pay in wages and transfer fees could then be linked to the average turnover. If that means the likes of Ronaldo could only earn £30,000 per week instead of £150,000 per week I am sure he would survive. I know football would.

The net result would be that clubs would have even more spare cash to invest in stadiums and lowering admission prices.

Even better, the clubs like Real Madrid who are spending way beyond their means or like Man City who have a bottomless pit of cash not generated through football would be curbed, allowing the rest to compete on a level playing field.

The hopefull outcome of all of this would be that the likes of Ajax, Feynoord, Benfica, Sporting Lisbon, Red Star Belgrade and yes even Smeltic and Rankgers who have dropped off the European radar ( at least in Champions League terms ) would be able to mount a decent challenge.

Its a fact that the Champions League is getting more and more boring, its the same clubs more or less every year who make up the final 8 and it is only going to get worse. Man City not withstanding. Oh yes, another English club in the quarters, just what UEFA want.

Even clubs like Hibs would then have a chance, at least in domestic competition. If the largest amount a club could pay to buy a player was £8,000,000 instead of £80,000,000 and more. It would only take a multi millionaire to bring us up to speed instead of a Zillionaire.

The unavoidable problem with all of this is that the clubs with most to lose would either find a way to cheat the system or form a breakaway association to protect their monopoly of cash and trophies.

Maybe that would be a good thing

:blah:

[Leithenhibby]

Looks like the yams have until 2012 to get the financial house in order :wink:
Michel Platini plans for a crack down.....

http://news.bbc.co.uk/sport1/hi/football/europe/8225941.stm

[TheEastTerrace]

I'm not articulate enough to present a comprehensive case against this, but Martin Samuel has been a harsh critic of Platini's proposals and would urge people to read some of his articles in response to these proposals.

Platini says that the whole of Europe should follow the French and German models where spend on players and wages is a specified ratio to income and turnover, and clubs are not at the behest of rich sugar daddies who can plough excessive sums into the transfer kitty in a short time period. This should, according to Platini, level the playing field in the long term and restore a higher level of competitive balance with clubs not spending above and beyond their means.

However, and according to MS, this will actually result in the more successful clubs become even more stronger. Take, for example the French Ligue 1. Lyon have won the title on numerous occasions in the last ten years, with only Bordeaux breaking that sequence for the first time in 7 years last season. The reason clubs in the French Ligue 1 have found it difficult to break Lyon's dominance is because Lyon naturally have earned much more money and income from subsequent participation in the UCL and therefore have a higher ratio of disposable income than the other French clubs in the league who do not have the luxury of that additional income. The result is more money spent on acquiring better players and having a much stronger squad than domestic rivals.

The same can be argued by Platini's rule to abolish seeding in the last round of the UCL qualifying round so that clubs from less strong leagues around Europe have a better chance of making it to the more lucrative UCL group stages. However, these leagues have only one club submitted to the UCL qualifiers and therefore, should they make it through to the group stages, they will earn income and riches never seen before by clubs from the winners of these leagues. The result is that these clubs will have much more income to make their squads stronger and as such exert dominence over the remaining clubs earning substantially less income in that league .

Finally, it seems the EPL is being penalised for, like it or loathe it, a very successful and attractive product that earns the league and constituent clubs a lot of money. We didn't see the same clamour from UEFA when Italian and Spanish clubs dominated Europe, a few of which aren't exactly squeaky clean e.g. the Serie A ref scandal.

I guess, long story short, it goes to show former great footballers don't make great administrative leaders.

[Keith_M]

Looks like the yams have until 2012 to get the financial house in order :wink:
Michel Platini plans for a crack down.....

http://news.bbc.co.uk/sport1/hi/football/europe/8225941.stm

Yes, but surely that doesn't apply to loans that you owe to yourself...

:dunno:

[jgl07]

Interesting post.

A case of better late than never from UEFA.

They need to take this even further and find a way to limit players wages, transfer fees and money paid to agents.

They also need a fairer distribution of TV money, linking it directly to what fans are asked to pay at the gate. The amount of money some English clubs charge fans is mind blowing when you consider the TV revenues they generate.

UEFA need to come up with a model based on the total turnover of the whole of European football devised only on what revenue is generated through TV and gate money.

The amount member clubs could pay in wages and transfer fees could then be linked to the average turnover. If that means the likes of Ronaldo could only earn £30,000 per week instead of £150,000 per week I am sure he would survive. I know football would.

The net result would be that clubs would have even more spare cash to invest in stadiums and lowering admission prices.

Even better, the clubs like Real Madrid who are spending way beyond their means or like Man City who have a bottomless pit of cash not generated through football would be curbed, allowing the rest to compete on a level playing field.

The hopefull outcome of all of this would be that the likes of Ajax, Feynoord, Benfica, Sporting Lisbon, Red Star Belgrade and yes even Smeltic and Rankgers who have dropped off the European radar ( at least in Champions League terms ) would be able to mount a decent challenge.

Its a fact that the Champions League is getting more and more boring, its the same clubs more or less every year who make up the final 8 and it is only going to get worse. Man City not withstanding. Oh yes, another English club in the quarters, just what UEFA want.

Even clubs like Hibs would then have a chance, at least in domestic competition. If the largest amount a club could pay to buy a player was £8,000,000 instead of £80,000,000 and more. It would only take a multi millionaire to bring us up to speed instead of a Zillionaire.

The unavoidable problem with all of this is that the clubs with most to lose would either find a way to cheat the system or form a breakaway association to protect their monopoly of cash and trophies.

Maybe that would be a good thing

I don't see how that could be enforced.

The people putting the money in could pay it direct to players in the form of sponsorship rather than via wages. It could also be done by giving large signing on large fees paid in installments over the period of the players contract with reduced wages.

Could the Abu Dhabi investment group not buy 10,000 premium prices season tickets from Man City and give them away to local schools? That would be after increasing the stadium capacity by adding the third tier all the way round.

Could they not form a TV subsidiary and pay ridiculous sums to televise Man City matches not covered by existing deals such as League Cup and FA Cup.

Even if it was possible it would have to be phased in as club could argue that they had signed long term contracts with players.

A better approach is to deal with unsustainable debts either in the club as in the case of Rangers or with the owners/parent companies as in the case of Liverpool and Man Utd.

Any club with a debt greater than their annual turnover would be kicked out of the League.

Would that effect any clubs in Scotland?

[Brando7]

Yes, but surely that doesn't apply to loans that you owe to yourself...

:dunno:

If u read on it does say

It would mean owners such as Manchester City's Sheikh Mansour bin Zayed al Nahyan would not be able to make huge gifts of cash to their clubs.

[NAE NOOKIE]

I don't see how that could be enforced.

The people putting the money in could pay it direct to players in the form of sponsorship rather than via wages. It could also be done by giving large signing on large fees paid in installments over the period of the players contract with reduced wages.

Could the Abu Dhabi investment group not buy 10,000 premium prices season tickets from Man City and give them away to local schools? That would be after increasing the stadium capacity by adding the third tier all the way round.

Could they not form a TV subsidiary and pay ridiculous sums to televise Man City matches not covered by existing deals such as League Cup and FA Cup.

Even if it was possible it would have to be phased in as club could argue that they had signed long term contracts with players.

A better approach is to deal with unsustainable debts either in the club as in the case of Rangers or with the owners/parent companies as in the case of Liverpool and Man Utd.

Any club with a debt greater than their annual turnover would be kicked out of the League.

Would that effect any clubs in Scotland?

Thats why I ended my post the way I did. I agree that the big clubs will find a way by fair means or foul to get round any new system.

It would take a convention of Philidelphia lawyers to draw up any set of rules as per what I posted and make them watertight.

The hoped for effect of what I was proposing would be to level the playing field to stop the super rich clubs dominating domestic and European football.

Some hope I agree.

[jdships]

I don't see how that could be enforced.
The people putting the money in could pay it direct to players in the form of sponsorship rather than via wages. It could also be done by giving large signing on large fees paid in installments over the period of the players contract with reduced wages.Could the Abu Dhabi investment group not buy 10,000 premium prices season tickets from Man City and give them away to local schools? That would be after increasing the stadium capacity by adding the third tier all the way round.

Could they not form a TV subsidiary and pay ridiculous sums to televise Man City matches not covered by existing deals such as League Cup and FA Cup.

Even if it was possible it would have to be phased in as club could argue that they had signed long term contracts with players.

A better approach is to deal with unsustainable debts either in the club as in the case of Rangers or with the owners/parent companies as in the case of Liverpool and Man Utd.Any club with a debt greater than their annual turnover would be kicked out of the League.

Would that effect any clubs in Scotland?


Agree totally with what you say .
I played under the SFA "wage cap" system and we got our "extra's" as expenses , cut price goods at certain shops , working two night's in a supporter owned bar (and got paid for four nights) , signing on fees etc etc .