Wed, Feb 06, 2013 - Page 19 News List

UEFA will not let clubs flout financial rules

Reuters, LONDON

The UEFA Champions League trophy is pictured on Dec. 20 last year after the draw for the last 16 of the UEFA Champions League in Nyon, Switzerland.

Photo: AFP

UEFA will vet sponsorship deals struck by clubs such as Paris Saint-Germain and Manchester City to ensure they are not flouting new rules designed to force clubs to clean up their finances, European soccer’s governing body said on Monday.

European clubs made record losses of 1.7 billion euros (US$2.3 billion) in 2011, UEFA said in an annual analysis of club accounts, underlining the scale of the problem that its Financial Fair Play rules are designed to tackle.

Clubs that fail to move toward break-even face exclusion from European competition from next year to 2015. Critics say that clubs will circumvent the rules through generous sponsorship deals with companies linked to team owners.

English Premier League champions Manchester City have an Abu Dhabi owner and are sponsored by the country’s Etihad Airlines, while Qatari-owned PSG are reported to be on the verge of a 200 million euro deal with the Qatar Tourism Authority.

“Everyone including Paris Saint Germain or any other club, they know the rules, they know when they kick in and they know what they have to demonstrate,” UEFA general-secretary Gianni Infantino told reporters in a video conference.

Infantino said clubs had to show they could bring costs and revenues into balance “without cheating.”

“A related party cannot just inject money into a club directly or indirectly though different systems,” he said, adding that sponsorship deals would be scrutinized to ensure they represented fair value.

UEFA agreed in 2010 to phase in a raft of measures to try to stop European clubs from getting into financial trouble. The figures for last year will be the first ones to be assessed as part of the break-even requirement.

UEFA said owners of 46 loss-making clubs would have had to invest in more shares to improve their balance sheets had the rules been in force between 2009 and 2011.

Infantino said he believed the rules were beginning to bite, saying that the gap between revenues and costs had begun to close, albeit marginally.

Financial Fair Play is dominating the thoughts of executives at leading European clubs who must try to ensure their teams stay competitive while mindful of budget constraints.

Showing it was serious about enforcing the rules, UEFA said in December last year that it was banning Spanish club Malaga from future European competition for at least a season over unpaid bills.

UEFA said there had been a 47 percent fall in overdue transfer fees and unpaid wages in the year to June last year. It welcomed the drop as a sign that the rules were starting to have a positive impact.

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