Tough new guidelines from UEFA will make clubs operate within their means from the start of the 2012/13 season. The move is set to bring more discipline to club finances and also take the pressure off player’s wages and transfers fees. Clubs will have to compete within their revenue. UEFA believes it will encourage investment in infrastructure, sport facilities and youth academies. It also believes it will help the clubs to sustain themselves in the long term and settle their liabilities in the good time.
The break even clause is a new departure for UEFA whereby the clubs will be monitored for 3 years. They will not be allowed to spend more than they earn from revenue give or take 5 million. They will be able to spend what they like on their stadiums, training facilities, youth academy and their communities.
The huge investments of billionaire owners will be severely cut though. Over the 3 seasons they will only be able to put in 45 million euro over the break even point to help pay wages and transfer fees. This means that if the clubs owners want to go and buy their way into the Champions League they can’t. Sounds good in principle to stop the big clubs splashing the cash but it also stops the smaller clubs like Fulham who have a mega rich owner. They won’t be able to spend anymore of Al Fayeds money above the 45 million euro, the same amount as Mr Abramovich down the road at Chelsea. So suddenly it’s not so fair anymore as Fulham wouldn’t have the same revenue stream as Chelsea or the ways of increasing it either.
At the moment most of the Premier league clubs are alright. But Aston Villa, Chelsea, Man City and Liverpool would all set alarm bells ringing at UEFA with the huge losses they are incurring. It seems the huge debts some of the big clubs are holding won’t be taken into account at the moment. The system will only be used as monitoring tool for the moment and clubs won’t be banned from UEFA competitions. They would first be warned and put under review before been banned.
Another part of the clause states that clubs will not be able to owe money to rivals, players, staff or tax authorities at the end of the season. They’re hoping to avoid what happened at Portsmouth who went into administration owing millions in transfer fees, tax and VAT to name a few. I think I read somewhere yesterday that they had offered to pay their creditors 20% of what they owed them. A recent report on European clubs said that 50% of them where making a loss and that 20% where in serious financial danger.
In other World Cup Spread Betting football news. Michael Essien has failed to recover from injury and has been omitted from Ghana’s squad. Javier Hernandez will become a Man Utd player on 1st July after receiving a work permit and World Cup hosts South Africa beat Colombia 2-1 in a friendly at the Soccer City stadium.
And finally, while South Africa were beating Colombia, the Colombians were having their hotel rooms inspected by two of the employees who relieved them of their money. They were later arrested. Hope security is ramped up just a little bit during the next few weeks. Bonjour.