28-05-2010, 05:05 PM
English clubs face a "battle to qualify for European competition" in future under regulations this week rubber-stamped by UEFA's executive committee, with sides involved in the continent's premier competitions only allowed to spend what they earn from 2012.
Clubs will still be permitted to have large debts, but only if they can service the interest payments as part of their overall spending.
source: dialymail.co.uk http://tinyurl.com/2wm4w9j
Clubs will still be permitted to have large debts, but only if they can service the interest payments as part of their overall spending.
Quote:"The new rules would threaten the participation of Manchester City, who made a £93million loss last year, in European competition as well as Chelsea - who made a £47m loss - unless they change their spending habits. "
But Manchester United insist they will pass the new UEFA 'financial fair play' test, despite making a £93m loss last year.
Q: What are UEFA's financial fair play proposals?
A: UEFA have decided that all clubs who want to play in European competition can only spend what they earn.
Q: Does that mean if any club makes a loss they are barred from European competition?
A: Not exactly - they have to show they are breaking even over a three-year period. There is also some flexibility with losses of up to £38million over three years allowed from 2012-15, and then £26m over a three-year period from then.
Q: What do the financial fair play rules say about debt?
A: The rules will not outlaw debt, but they do insist that any interest payments are taken into account when working out spending against income.
Q: Which Premier League clubs have most to fear?
A: Manchester City, who made a £93m loss last year, and Chelsea who made a £47m loss. Arsenal and Tottenham are fine, while Manchester United say they will pass the test, while Liverpool could do so too.
Q: What about clubs in the rest of Europe?
A: Barcelona do have big debts - around £420m - but they have been able to service them. Real Madrid's position is unclear - they say their debt is less than £300m, while some analysts put it at £609m, which would cause them problems passing the test.
Q: Who will actually decide which clubs have passed the financial fair play rules?
A: The Football Association and Premier League initially will issue the licence to English clubs. An independent panel appointed by UEFA called the Clubs Financial Control Panel will make spot-checks to ensured the rules are being adhered to.
Q: What about 'sugar daddies' such as Sheikh Mansour at Manchester City - can they write off the club's losses?
A: No, because that would be seen to be an unfair advantage. Rich benefactors will be allowed to invest in the fabric of clubs however, such as building new stadiums or academies.
source: dialymail.co.uk http://tinyurl.com/2wm4w9j