LIVERPOOL and Manchester United would be banned from the
Champions League if Michel Platini’s “Financial Fair Play” criteria
for European club competitions were introduced, according to senior
sources within Uefa. Manchester City and Chelsea would also be at
risk, despite their owners having paid off their debts
recently.
Rules governing the amount of debt clubs can accrue are being
discussed within Uefa committees and though they are far from
fixed, and at least three years away from being implemented, it is
clear that many of Europe’s biggest clubs would fall foul of the
criteria being proposed by Platini, the Uefa president. His guiding
principle is that over a period of time clubs cannot spend more
than they earn.
“Manchester United and Liverpool would be barred from the
Champions League and the Europa Cup because they have debts piled
directly on the club as a result of their owners’ takeovers,” a
Uefa executive told The Sunday Times.
“Chelsea and Manchester City would fail to meet the requirements
because we want to prevent a situation where you can overspend a
great deal, then inject cash to balance the budget at the end of
the season. Arsenal would qualify. They make more than they spend,
including debt repayments. So do Tottenham.”
However, it is not just English clubs that would be affected.
Some of Europe’s most celebrated clubs have built up huge debts and
they too face exclusion from the Champions League. “As things
stand, Real Madrid would fail and Inter Milan. But for now it’s all
theory, based around a principle that needs to be made into
something workable,” the source said.
Debt in English football has been highlighted again because
United’s new financial figures, released last week, showed they
made an annual profit of £48.2m only thanks to the £80m summer sale
of Cristiano Ronaldo, inset. United paid £41.9m in interest in the
year on debts that are now above £700m. Chelsea’s most recent
figures showed a £44.4m loss, while City’s showed they lost £92m.
Both those clubs’ owners have wiped out debts in excess of £300m to
clean up their balance sheets. Liverpool’s debts are £240m-plus.
Arsenal have £297m of debt, but this was acquired mainly for
building Emirates stadium, now a cash cow that helps fuel profits.
Arsenal’s repayments are easily serviced.
England’s Big Four plus City can take solace in that Uefa’s
plans are far from complete. Even Uefa officials are uncertain
whether rules will be applied retrospectively. “That might not be
possible,” the source said. All clubs will have to meet
requirements to balance income and spending, but grey areas and
loopholes will remain.
Uefa’s only public statement on the subject so far is nebulous,
saying there is an “obligation for clubs whose turnover is over a
certain threshold, over a period of time, to balance their books or
break even”.
The rules will be framed by an independent 11-man Club Financial
Control Panel, chaired by the former prime minister of Belgium,
Jean-Luc Dehaene. The aim is to introduce the rules in the 2013-14
season. Most of the CFCP, and Platini, accept that debt is not to
be outlawed per se, but want it to be manageable if it is on a
club’s books.
Uefa insiders are aware that if it banned most of the biggest
clubs from its competition there would be a danger of a breakaway
league. They also accept that its rules are susceptible to legal
challenges. For now, there are three more years of work before
proposals turn to rules.
THE BIG DEBTORS
£727m Manchester United
£609m Real Madrid* (Real claim only £296m)
£436m Barcelona*
£386m Internazionale*
£348m AC Milan*
£297.7m Arsenal
£240m approx Liverpool
£147m Juventus*
£136m Roma*
£96m Bayern Munich*
£0 Chelsea, after £340m write-off, announced Dec
2009
£0 Man City, after £305m debt-to-equity write-off,
announced Jan 2010