UEFA Fair Play Policy

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Uefa to pass 'financial fair play' test

By Martyn Ziegler, PA

Wednesday, 26 May 2010

Manchester United insist they will pass the new UEFA 'financial fair play' test which is set to become part of European football's rules tomorrow.

Under the regulations to be rubber-stamped by UEFA's executive committee tomorrow, clubs in European competition will only be allowed to spend what they earn - although some leeway will be given for the first six years of the scheme.

Clubs will also still be permitted to have large debts, but only if they can service the interest payments as part of their overall spending.

In the Premier League, the new rules would threaten the participation of Manchester City, who made a £93million loss last year in European competition as well as Chelsea - who made a £47million loss - unless they change their spending habits.

Arsenal and Tottenham both made a profit and would pass the test, and Manchester United claim they would too - despite payments of £45million annually to service the interest on the owners' £507million bond scheme.

United officials have carried out a 'dummy test' of their finances and are sure they would pass.

A United spokesman told Press Association Sport: "We support the financial fair play measures. We are confident that we pass them and that we will continue to do so."

United made a £22million profit last year after interest payments but much of that was due to the sale of Cristiano Ronaldo to Real Madrid for £80million.

Even had they made a loss, United say under the UEFA rules they would be able to write off around £38million a year for 'goodwill' payments - an accounting practice that reflects the amount overpaid by the Glazer family to buy the club compared to the paper value of the club's assets.

Furthermore, the interest on the Glazers' PIK (payment in kind) loans will not be taken into account because that is not paid out, but merely added to the debt - they now total £225million.

The new UEFA scheme will come into effect in 2012, although some flexibility is afforded for an introductory period.

Initially, clubs must not return losses of more then 45million euros (£38million) for the 2012-15 period. After 2015, clubs are given a leeway of 30million (£26million) for three-year losses after which the figure will be reduced still further.

If clubs breach the rules then they will not be granted a UEFA club licence to take part in European competitions.

Liverpool could also use the 'goodwill' accounting practice to argue they too should pass the test, and Everton's losses of £7million last season would see the Toffees within the leeway bracket, while in Scotland both Celtic and Rangers should also qualify.

Aston Villa, however, who returned £46million losses last season, would fail the test.

UEFA's intention is for the Football Association and Premier League to rule on which clubs pass the test - in the same way that they now issue UEFA club licences.

The independent Club Financial Control Panel appointed by UEFA would carry out spot checks to ensure that the rules were being implemented correctly.

The financial fair play rules would also prohibit 'sugar daddies' being allowed to pour money into clubs to buy players or fund high wages.

Benefactors would be allowed to make capital investments in their clubs, however, such as building stadiums or youth academies.

UEFA's executive committee meeting in Nyon will not just rule on the financial fair play proposals - on Friday they will vote on the host country of Euro 2016.

France is viewed as the favourite ahead of Turkey with Italy way behind in third.
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Highlighted some important points, if you don't feel like reading the whole thing.

We've known about this for some days now, but I thought I'd get your opinions on the matter.

Discuss.
 
looks like a good set of rules to me, especially with the scum failing the test ;)
 
I wonder if there's anything in place that stops, for example, the owners of Man City sponsoring their own team for £100m.
 
This is just another way to get at English clubs.
 
Lee said:
I wonder if there's anything in place that stops, for example, the owners of Man City sponsoring their own team for £100m.
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I hope so, they are too rich for their own good. But if Liverpool get this takeover I'd be wnting that to happen, then again it is only fair to hold thos rule in high regard. It is afterall Financially protecting the teams, if it were introduced last year, Pompey could still be in financial security.
 
So glad these rules have come into effect. The only problem I have with this now is clubs like Man City will struggle to break into the champions league. Clubs ahould always be living within their means anyway.
 
Lee said:
I wonder if there's anything in place that stops, for example, the owners of Man City sponsoring their own team for £100m.
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Irish Scouse said:
I hope so, they are too rich for their own good. But if Liverpool get this takeover I'd be wnting that to happen, then again it is only fair to hold thos rule in high regard. It is afterall Financially protecting the teams, if it were introduced last year, Pompey could still be in financial security.
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On Sky Sports News it said that there will be rules to re-inforce this kind of thing.
 
Madrid are untouchable.

Not only are they not registered as a business as Malilk mentioned, but they benefit from huge amounts of income generated out of dodgy poperty and land sales from the pre-Euro era, at least when Perez is in charge anyway.

Its interesting to note that Germany and Spain are the only two major european economies who have written into law the requirement for their banks to continue to accept (and exchange into Euro currency) the old currency; German Marks or Spanish Pesetas. This exchanging of essentially worthless currency for Euros must continue forever as written into the 2 countries laws. I cant speak for germany, but i do know a little bit about Spain, and Real Madrid in particular.

Around 8 years ago the small Spanish resort town my family has holidayed in for about 20 years began a major development program, with ambitions to attract a much larger number of foreign visitors. The developmet and building work continued at a rapid rate year on year, with noted success in that there were certainly more visitors to the resort. Around 5 years ago there was little room left for any further building, in the centre of town at least. There was an area of wasteland jsut outside the town centre and around 500 metres back from the beachfront, it was clear to everyone that this land was next in line for development. And so building work began, with a new hotel quickly being erected.

It emerged however, that about a year before the building started, Real Madrid (or Perez, or whoever Madrid/Perez were using as a front) had purchased the land for around €400,000. Nothing dodgy so far... Well the land was quickly sold off for about 800 million pesetas (roughly equivalent to €4.8 million) and thanks to Spains central bank still exchanging pesetas to Euros, this amount would have been deposited into Perez's and eventually Madrids accounts. Not a large transaction considering the £80 million acquisition of Ronaldo, but this was a relatively small property deal, and Perez is a man known to have many sticky fingers, in many large pies.

Back onto the main topic. It worries me that United are already scrabbling to finds ways around the rule by using loopholes like goodwill payments.
 
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Personally I feel that Platini will stop at nothing to help get Juventus back to where he thinks they belong........
 
chelsea's spending is less and less now days anyway so im not worried at all. decent rule though i think.
 
You still made a loss of around £50 million last season, CJACKO.

That is not going to be allowed with this policy.
 
Billy Redrup said:
You still made a loss of around £50 million last season, CJACKO.

That is not going to be allowed with this policy.
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i know that but what im trying to say is its been getting less and less every season, we are writting off our debt and the near future looks bright for chelsea.
 
The issue is, you're punching above your weight given the size of your club.

You own a relatively small stadium, extremely high wages, large squad, and have only recently become a successful club.

That said, you are going to continue making losses until something changes.
 
Billy Redrup said:
The issue is, you're punching above your weight given the size of your club.

You own a relatively small stadium, extremely high wages, large squad, and have only recently become a successful club.

That said, you are going to continue making losses until something changes.
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like i said we arnt as big worldwide as man utd but we have only been known for 5odd years so their is work to do, wages can be slashed easily i.e ballack, joey cole etc. its just another thing were people are happy and jumping on a story that could spell **** for chelsea.
 
I think it's a great idea, hopefully will stop massive spendings from the big clubs
 
I'm not anti-Chelsea, but I'm talking sensibly, whereas you are not.

This policy will affect Chelsea more so than almost every other club in the division. If you can't see that, then you're deluded beyond belief.
 
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