The Sweeper: UEFA Demands Clubs Break Even
It’s not exactly breaking news that from 2012 onwards, UEFA are planning to introduce stringent financial regulation that will not allow clubs making a loss to enter European competition. But the Telegraph does have some interesting details today, and confirms that interest payment on debt will be included. Uefa’s general secretary Gianni Infantino told the Telegraph that:
What we are doing, with the support of all the stakeholders in the game including the major professional clubs, is to try and improve the long-term stability of European club football by encouraging clubs to live within the revenues that they generate. We are concerned, and many of the clubs and owners are concerned, about the sustainability of the game.
We survey more than 650 clubs all over Europe, and found that 50 per cent of those clubs are making losses every year, and 20 per cent of them are making huge losses, spending 120 per cent of their revenue every year. Around one third of the clubs are spending 70 per cent or more of their revenues on wages. Revenues across European football grew by 10 per cent last year, but the salaries of players and coaches have gone up by around 18 per cent. It is clear that if we continue like this it will end up with a spiral of inflation, so we need to bring a more rational and reasonable approach to this crazy game.
14 of the 20 clubs in the Premier League made a loss in 2008, but it appears that even though a few clubs might protest the new regulations, the broader base — as Infantino implied — of clubs in the European Clubs Association accepts the need for some sanity to prevail in financial regulation. But it will be a major challenge to clubs with severe interest payments eating up any profit they are making.
- Speaking of which….it looks as if the Glazers’ bond issue at Manchester United has been a success, in financial terms, as the Times reports: “More than 50 low-risk investors, primarily insurers and pension-fund providers, have stumped up the cash at a fixed annual interest rate of 9 per cent.” Unfortunately, as Helen Power explains, this isn’t actually good news for the club or its fans: “The problem for United fans — who have long detested the Glazers for their perceived addiction to debt — is that it is a bad thing to give the family more freedom. The family will also almost certainly take advantage of that new freedom to spend as they wish to pay off some of the £202 million they owe to hedge-fund investors under the club’s payment-in-kind notes. If they do not, the interest rate on that debt will rise from 14.25 per cent to 16.25.” The Telegraph, meanwhile, looks at the latest effort by United fans to save the club from the Glazers, as they seek wealthy backers for a prospective consortium.
- American soccer writer Steve Davis tells us why the fact less American media outlets will be able to send as many journalists to the World Cup this year might actually be a good thing for the quality of the coverage, if not the quantity: less general writers who know nothing about the game will be going, leading to less embarrassing incidents like the writer Davis saw at the last World Cup identifying US defender Jimmy Conrad by the credential around his neck (thanks to William for the tip).
The Sweeper appears every weekday, and once at the weekend. For more rambling and links throughout the day every day, follow your editor Tom Dunmore @pitchinvasion on Twitter.