Taken from BBC page
Football scrambles to tackle debt problem
Uefa president Michel Platini described it as the start of an important journey for European football that would eventually lead to a return of "economic common sense".
Thursday's approval of Uefa's new financial fair play rules means that, for the first time, clubs wishing to compete in the Champions League or Europa League must aim to break even each season.
In addition, club owners will be limited to investing just £38m in the three seasons after the regulations come in, starting in 2012/2013.
The aim is to create a more level playing field but the impact on England's biggest clubs could be very serious. The super rich owners of Chelsea and Manchester City, for example, will no longer be able to pour in hundreds of millions of pounds to write off losses and buy star players.
Uefa president Michel Platini wants a more level playing field in Europe
At the same time, the Premier League - which has been so resistant in the past to the slightest suggestion that its clubs should face a tougher system of regulation than that experienced by all other businesses - is introducing a raft of new financial rules.
The Premier League's annual general meeting next week is set to rubber-stamp a set of laws designed to prevent another Portsmouth-style collapse.
These include new measures which will allow the Premier League to intervene or withhold TV rights payments if it is unhappy with the financial direction the club is travelling in.
For the first time, it will have the power to:
*Assess clubs' financial sustainability through regular monitoring of accounts;
*Block a takeover if there were any doubts over funding;
*Demand full details of all loan agreements;
*Meet any potential new owner to assess their suitability.
But I have learned that next week's Premier League meeting will also include a discussion about introducing even tougher measures to deal with club debts.
With top-flight teams owing a combined £3bn, debt has become the dirtiest word in football, and smaller clubs - such as Wigan and Stoke - are asking whether the Premier League should be doing more to tackle the problem.
Some of the ideas due to be discussed include:
*A ban on all so-called leveraged buy-outs where the club is used as security to borrow the money needed to complete the takeover; (This would have prevented the Glazer acquisition of Manchester United or the sale of Liverpool to Tom Hicks and George Gillett.)
*Limiting the amount clubs can borrow to 25% of their income;
*Introducing a ban on borrowing from any institutions that are not approved by the Financial Services Authority;
*Restricting owner investment to equity and not loans (there is obviously some overlap here with Uefa's new rule);
*Breaking all player transfers down into two instalments - 50% up front with 50% left to pay.
These proposals go way beyond what Uefa passed on Thursday and what the Premier League itself will vote on next week.
Some of the bigger clubs are sure to resist any further measures that bound them in more red tape.
What all this reflects is a realisation, at last, that the vast sums of money being made in football are in danger of being thrown away by those clubs willing to gamble their long-term future on short-term success.
Football may take a while to arrive in Platini's land of common sense but it seems there is at least a will to try and get there.
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Comments
The move to stop leverage buy-outs is key IMHO
I look forward to the "Sky four" friendly British press getting their briefings from the "Sky four" bosses and totally rubbishing this, mainly by claiming that it's all anti-English and that Platini is French and so hates us.
In selfish Charlton terms in might hinder any mega rich buyer pumping more than £38m in to the club but as there don't seem to be many of those about and we're not going to be too worried about a ban from UEFA competitions for a while...... ; - )
i wish we shown some common sense, instead of giving Dowie a shit-load of money we didn't have for him to blow on a bunch of useless geedy unfit rejects.
The transfer thing will help I think and will, probably, serve to drive fees down a little.
It would be interesting to see these regulations tested in court if someone objected to them. Although the ruling that we got over the sending off in our relegation season might make clubs wary about that option as it clearly suggested that the courts should not get involved in the regulations of governing bodies of sports competition, using the principle that they know best how to manage their own sport.
I am sure clubs will have their accountants and lawyers looking at ways to get round the situation, and I am equally sure thye will find some.
The move to stop leverage buy-outs is key IMHO
I look forward to the "Sky four" friendly British press getting their briefings from the "Sky four" bosses and totally rubbishing this, mainly by claiming that it's all anti-English and that Platini is French and so hates us.
In selfish Charlton terms in might hinder any mega rich buyer pumping more than £38m in to the club but as there don't seem to be many of those about and we're not going to be too worried about a ban from UEFA competitions for a while...... ; - )[/quote]
The big four (Arse excepted, they need do nothing) can restructure accordingly I am sure but it will be interesting to see if this devalues the wannabe clubs in the next couple of years.
For us, if only worrying about less than £38m of investment was the issue.
I read this in the press but what evidence is there of it? Platini has criticised clubs with big debts and that includes but is not exclusively English clubs. But where has he been anti-English?
Something makes me feel a bit uneasy about the Premier League making financial decisions for the member clubs.
Leveraged buy outs get football fans and sports journalists worked up because they don't really understand them properly. We've obviously benefited (or been saddled with) directors loans, so these regulations would affect small clubs like us as well as the big boys. As redman says the borrowing rule doesn't quite work unless there's some kind of carve out for long term debt. If - as normal individuals or business owners - we were limited to being able to borrow 25% of our income we'd mostly be homeless.
If owners are only allowed to put in £38m each season how will Madrid get round spending £100-200m each summer. People go on about Chelsea and City but surely Madrid are the worst club for debt. Didn't the Spanish government have to bail them out a few years back and pay about £400m to clear their debts?
What about clubs in Russia and the Ukraine who are suddenly attracting lots of Brazilians and paying good wages, they're not getting money in from tv deals or gate money, it has to be coming from the owners. How will they cope?
I think this goes beyond one person. I would refer to the organization rather than one individual. My view just seems to stem from comments over the last few years. Can't source them so essentially this is just my opinion. But I do remember senior Uefa officials saying something has to be done about clubs buying success in Europe after the Man U Chelsea final a couple of years back.
Football has never been about each club having a level playing field.
Lets hope the wages of those who work for UEFA are made level and that Platini et co are paid the same as their secretaries and tea ladies.
On another note I distinctly remember Uefa bod say the Premiership was not representative of English football and that it did not benefit the game. My point is these issues did not come up and Italy had the best and most successful league.
On the flip side I tend to agree with this view and thing English football would be better off without the Premiership. We might then be able to stop this boom and bust cycle for clubs like Charlton, Leeds, Sheff Wed, Crystal Palace etc
Must admit i agree with this as well. Who cares if Man City want to spend 100 million, 200 million or 500 million on players, they're putting money back into the game.
What i don't agree with is the Man utd situation where you can buy a club by using the actual club as security against the debt. That is wrong.
Because it has a cascading effect on wages going all the way down the leagues. Effectively meaning clubs are paying inflated wages for all their players.