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Wednesday, March 30, 2011
UEFA wants to end 'financial doping'
Associated Press
MANCHESTER, England -- The European soccer association pledged Wednesday to keep a close eye on clubs losing money to make sure they don't find loopholes in new financial rules.
In a bid to end an era of so-called "financial doping" by teams with wealthy owners, clubs that want to play in the Champions League or Europa League are required to stop spending more than they earn starting next season.
Clubs persistently losing money can be barred from the 2014-15 season under UEFA president Michel Platini's flagship "financial fair play" regulations.
UEFA's head of club licensing, Andrea Traverso, told The Associated Press on Wednesday that the organization is looking for "clubs putting in place specific structures that allow them to easily go around some of the principles that we didn't think about."
The UEFA regulations limit the ability of owners to subsidize losses incurred by paying high transfer fees and salaries, making them only spend what they earn from soccer-related income if they want to play in European competitions.
But owners will be allowed to cover losses of up to a maximum of $63 million over an initial three-year spell, starting in 2012. In the three years from 2015, just $42 million in losses can be covered.
"We will monitor how the clubs react and if necessary, if we notice there are measures that need to be taken to address particular problems then we will address those to the executive committee for consideration and then eventually [make] some modifications," Traverso said on the sideline of the SoccerEx conference. "It's very difficult to anticipate all possible scenarios. There might be scenarios that we didn't think of, so if this would be the case we could amend the rules to catch up with these situations that we hadn't identified before."
Liverpool managing director Ian Ayre warned at SoccerEx that the regulations would be "killed" if they are not applied equally across Europe. National associations issue clubs with a license to play in Europe, but UEFA has the final approval.
"These rules should be rules and should be hard and fast," Ayre said. "What will kill the initiative or certainly stifle it is people easing themselves into it rather than the rules applying and everyone operating within them. The rules should be clearly defined, you cannot have a half-rule process."
The spending limits encouraged the Boston Red Sox ownership group headed by John Henry to buy Liverpool in October. Henry and Tom Werner bought the team for $476 million through their New England Sports Ventures.
"We see it as a positive step but the reservations around it are the proof of the pudding being in the application, how it will be applied -- will people be given grace periods, will the sanctions be applied?" Ayre said. "If it is not managed well and delivered well, we would all question the outcome of it."
UEFA will allow progressively smaller losses from 2015 before the break-even rule is mandatory.
Traverso said UEFA will not pander to top clubs like Manchester City that might not meet the requirements. The Abu Dhabi-owned club lost $191 million in the 12 months up to May 31, 2010, having spent more on wages alone than it earned.
"They might have a strategy to maximize their revenues in the next couple of years ... to balance their books," Traverso said.
"Rather than saying we will amend the rules because too many clubs will fail and therefore we will lower down the rules, this is absolutely not the case, if anything they will be made stricter," Traverso said. "No rule is perfect and there is a constant evolution of the rules. I would be surprised if four years from now the rules will be the same as they are now. Probably some fine-tuning will be necessary."
UEFA wants to end 'financial doping'
Associated Press
MANCHESTER, England -- The European soccer association pledged Wednesday to keep a close eye on clubs losing money to make sure they don't find loopholes in new financial rules.
In a bid to end an era of so-called "financial doping" by teams with wealthy owners, clubs that want to play in the Champions League or Europa League are required to stop spending more than they earn starting next season.
Clubs persistently losing money can be barred from the 2014-15 season under UEFA president Michel Platini's flagship "financial fair play" regulations.
UEFA's head of club licensing, Andrea Traverso, told The Associated Press on Wednesday that the organization is looking for "clubs putting in place specific structures that allow them to easily go around some of the principles that we didn't think about."
The UEFA regulations limit the ability of owners to subsidize losses incurred by paying high transfer fees and salaries, making them only spend what they earn from soccer-related income if they want to play in European competitions.
But owners will be allowed to cover losses of up to a maximum of $63 million over an initial three-year spell, starting in 2012. In the three years from 2015, just $42 million in losses can be covered.
"We will monitor how the clubs react and if necessary, if we notice there are measures that need to be taken to address particular problems then we will address those to the executive committee for consideration and then eventually [make] some modifications," Traverso said on the sideline of the SoccerEx conference. "It's very difficult to anticipate all possible scenarios. There might be scenarios that we didn't think of, so if this would be the case we could amend the rules to catch up with these situations that we hadn't identified before."
Liverpool managing director Ian Ayre warned at SoccerEx that the regulations would be "killed" if they are not applied equally across Europe. National associations issue clubs with a license to play in Europe, but UEFA has the final approval.
"These rules should be rules and should be hard and fast," Ayre said. "What will kill the initiative or certainly stifle it is people easing themselves into it rather than the rules applying and everyone operating within them. The rules should be clearly defined, you cannot have a half-rule process."
The spending limits encouraged the Boston Red Sox ownership group headed by John Henry to buy Liverpool in October. Henry and Tom Werner bought the team for $476 million through their New England Sports Ventures.
"We see it as a positive step but the reservations around it are the proof of the pudding being in the application, how it will be applied -- will people be given grace periods, will the sanctions be applied?" Ayre said. "If it is not managed well and delivered well, we would all question the outcome of it."
UEFA will allow progressively smaller losses from 2015 before the break-even rule is mandatory.
Traverso said UEFA will not pander to top clubs like Manchester City that might not meet the requirements. The Abu Dhabi-owned club lost $191 million in the 12 months up to May 31, 2010, having spent more on wages alone than it earned.
"They might have a strategy to maximize their revenues in the next couple of years ... to balance their books," Traverso said.
"Rather than saying we will amend the rules because too many clubs will fail and therefore we will lower down the rules, this is absolutely not the case, if anything they will be made stricter," Traverso said. "No rule is perfect and there is a constant evolution of the rules. I would be surprised if four years from now the rules will be the same as they are now. Probably some fine-tuning will be necessary."