UEFA pass financial rules for clubs

On the same day as the PL Chief Executive Officer Richard Scudamore presented hints of financial rules for teams in the PL, UEFA executive committee passed a set of financial rules on how clubs should be run.
UEFA says that these rules are put in place to "improve the financial fairness in European competitions, as well as the long-term stability of European club football".
The rules, packaged under the catchy name "Financial Fair Play Concept", will be implemented over three years and have one fundamental object.

Clubs who's turnover is over a certain threshold cannot repeatedly spend more than they make.

Disguised as the best friend of clubs in financial difficulties UEFA then offers help on how to set salaries and how to spend just right on transfers...

These rules are presented as being suggested to UEFA by the Professional Football Strategy Council (PFSC) and supported by the Club Competitions Committee following approval by the European Club Association Board (ECA), mainly, I think, to show us all that UEFA has a heavy backing. (Read about the agreement between PFSC and ECA HERE)

UEFA does not go into any detail, leaving the field open to speculation, e.g. about what is the turnover threshold and what steps will be taken during the first two years.
It's clear, however, that UEFA will implement the first step of the rules for the UEFA competitions of 2012/13 i.e. they will not let teams enter their tournaments unless obliging to them. The level of the turnover threshold will most likely be around what is common for clubs qualifying for the Champions and Europa league.

One may say that UEFA, by holding the key to their lucrative tournaments, pretty much can dictate the rules for how clubs are run in Europe and I'm sure that "le président de l'UEFA" feels this is the natural way of things.

As the UEFA set of rules unfortunately may not affect us as we most likely will not qualify for any UEFA competition, the PL rules is of greater interest for West Ham fans. I'll be back on the financial rules suggested by the PL when there is decent information on it.


PL said...

A couple of questions arise when I read about this. I don´t know if you´re able to answer them but anyway... :-)

Does this mean that the times when owners can buy success due to their own fortune is over? If funds generated by the clubs are the only money you could spend on players and salaries that wouldn´t be possible, right?

One more thing is how they´ll consider debts? There´s a lot of teams with far more debts than West Ham. What´ll happen to them?

Hakan said...

These rules are supposed to be implemented in the interest of financial stability, but the way I see it they are in fact designed to protect the dominant positions of the leading clubs. If clubs are not allowed to spend more than their income it will be virtually impossible for new clubs to break inte the top echelons, as Chelsea have done in recent years and City are now trying to do.

Joppe - said...

In my ignorance I can’t see why private money can’t be invested in the clubs. What it may prevent though, is the pretty common situation were a new owner say they put money in the clubs but actually they only set up and provide security for another loan.

Wich is exactly what BG did in West Ham.

Need to study this further when the fine print is available.

PL said...

And it seems like that´s what they did at Liverpool and ManUre to when new owners bought the clubs?

If you´ll only be able to spend what you generate than it´d be quite difficult to spend private money one would think. Though I don´t know what they have in mind on this one.

I´m looking forward to your further penetration of the subject. :-)

That was my first thought as well.

Joppe - said...

But obviously it would be possible to put private money into the clubs. Just call it shirt sponsor money or whatever. There will be zillions of more intricate ways to get around that.
I think the main problem would be to find someone that wants to. Much easier to find a BG/Frazier/Hicks kind of a person and in that way it likely cement things.
In some way finance an increase in stadium capacity could be another way to grow, granted that the clubs sell tickets (wich, I know, is doubtful at the moment). That was one of the original thoughts when BG took over.