27-05-2010, 06:57 AM
Premier League clubs prepare for strict new financial rules
Quote:Uefa is expected to ratify new financial rules tomorrow that should bring an end to Premier League clubs running up huge debts.
The “financial fair play” rules drawn up by European football’s governing body will require all clubs to break even from 2012 or risk being excluded from continental competition.
The restrictions were first proposed by Michel Platini, the Uefa president, in 2007 and have been developed with the aim of curbing excessive spending among clubs.
They are likely to have a huge impact on teams in the Barclays Premier League, where clubs such as Chelsea and Manchester City operate at a huge loss and are bankrolled by supremely wealthy owners.
The rules will also prevent owners from piling debt on to clubs in the manner of the Glazer family at Manchester United or Tom Hicks and George Gillett Jr at Liverpool. The restrictions should also lead to clubs lowering players’ wages.
However, owners will be permitted to invest permanently in clubs if it is to develop new stadia or academy structures. Similarly, clubs will not be penalised if they have incurred debts by spending money in either of those two areas.
The rules, which should be approved by a meeting of Uefa’s executive committee, are aimed at profligate middle-ranking clubs too, such as Portsmouth, who went into administration last season after running up debts of £120 million.
“We’re not trying to level the playing field,” a Uefa spokesman said. “We want to make sure that the middle-ranked clubs don’t go spending millions that they don’t have as they try to compete with the big clubs.
“The underlying principle is that clubs cannot repeatedly spend more than their generated revenues.”
Source: The Times Online UK
United say they will meet new Uefa spending criteria
Quote:United claim they would pass the test, despite payments of £45m annually to service interest on the owners' £507m bond scheme. A club spokesman said: "We support the financial fair play measures. We are confident that we pass them and that we will continue to do so."
The new scheme will come into effect in 2012, although some early flexibility is afforded. Initially, clubs must not return losses of more than €45m (£38m) for the 2012-15 period. After 2015, clubs are given a leeway of €30m (£26m) for three-year losses after which it will be reduced further.
Source: Independent.co.uk (Full story here)