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Almost a quarter of European clubs in the red
By RAF CASERT, AP Sports Writer 1 hour, 22 minutes ago
BRUSSELS (AP)—Almost a quarter of Europe’s top division soccer clubs reported major financial losses last year, UEFA said Thursday, with a third of the teams in the rich and successful English Premier League losing at least 20 percent of income.
UEFA secretary general David Taylor warned a conference on financial responsibility in sport that more red ink is expected this year as leagues feel the full weight of the sputtering global economy.
Of the top leagues in the world, the Premier League was by far in the worst position when it came to the number of clubs with major losses. Only Romania, Ukraine, the Czech Republic and Poland had more clubs losing money among Europe’s 53 federations.
Italy was in 15th position on the 2008 club losses list, with Spain ranked 35th and France and Germany among those in the best financial shape.
Across Europe, barely half of teams break even or make a profit, UEFA reported.
The financial problems come despite income that’s tripled for clubs since 1997, largely through marketing and media revenue.
The problem is costs are rising, too. For instance, while income rose 5 percent last year, player costs increased 9 percent. “The huge spending on players produces constantly an inflationary effect with consequences on the whole club football movement,” Taylor said.
On top of that, “the current financial crisis has exacerbated the situation.”
This offseason alone, Real Madrid and Manchester City combined to spend more than $487 million on new talent.
In an attempt to contain such massive spending, UEFA has imposed new rules for clubs to break even on soccer-related businesses by 2012 or be stripped of their licenses. The governing body of European soccer appointed former Belgian Prime Minister Jean-Luc Dehaene to lead its campaign to control excessive spending.
On Thursday, the European Union, often at loggerheads with soccer when it comes to imposing sports-specific rules, embraced UEFA’s efforts.
“I welcome and support these,” EU Sports Commissioner Jan Figel said. “I look forward to the implementation.”
Taylor said the system will teach leading clubs to compete for European titles with their revenues instead of their debt, and to protect the long-term future of the sport. UEFA’s financial fair play policy has also been endorsed by most club owners.
Early this week, the Premier League also announced a new financial plan to regulate its 20 clubs. The league will take temporary control of clubs that run into financial problems and ban them from buying players or raising salaries. Clubs will have to submit accounts each March to ensure they can begin the next season in August.
Copyright © 2009 2009 STATS LLC and The Associated Press.
By RAF CASERT, AP Sports Writer 1 hour, 22 minutes ago
BRUSSELS (AP)—Almost a quarter of Europe’s top division soccer clubs reported major financial losses last year, UEFA said Thursday, with a third of the teams in the rich and successful English Premier League losing at least 20 percent of income.
UEFA secretary general David Taylor warned a conference on financial responsibility in sport that more red ink is expected this year as leagues feel the full weight of the sputtering global economy.
Of the top leagues in the world, the Premier League was by far in the worst position when it came to the number of clubs with major losses. Only Romania, Ukraine, the Czech Republic and Poland had more clubs losing money among Europe’s 53 federations.
Italy was in 15th position on the 2008 club losses list, with Spain ranked 35th and France and Germany among those in the best financial shape.
Across Europe, barely half of teams break even or make a profit, UEFA reported.
The financial problems come despite income that’s tripled for clubs since 1997, largely through marketing and media revenue.
The problem is costs are rising, too. For instance, while income rose 5 percent last year, player costs increased 9 percent. “The huge spending on players produces constantly an inflationary effect with consequences on the whole club football movement,” Taylor said.
On top of that, “the current financial crisis has exacerbated the situation.”
This offseason alone, Real Madrid and Manchester City combined to spend more than $487 million on new talent.
In an attempt to contain such massive spending, UEFA has imposed new rules for clubs to break even on soccer-related businesses by 2012 or be stripped of their licenses. The governing body of European soccer appointed former Belgian Prime Minister Jean-Luc Dehaene to lead its campaign to control excessive spending.
On Thursday, the European Union, often at loggerheads with soccer when it comes to imposing sports-specific rules, embraced UEFA’s efforts.
“I welcome and support these,” EU Sports Commissioner Jan Figel said. “I look forward to the implementation.”
Taylor said the system will teach leading clubs to compete for European titles with their revenues instead of their debt, and to protect the long-term future of the sport. UEFA’s financial fair play policy has also been endorsed by most club owners.
Early this week, the Premier League also announced a new financial plan to regulate its 20 clubs. The league will take temporary control of clubs that run into financial problems and ban them from buying players or raising salaries. Clubs will have to submit accounts each March to ensure they can begin the next season in August.
Copyright © 2009 2009 STATS LLC and The Associated Press.