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UEFA threatens clubs in debt of Champs League ban

UEFA threatens clubs in debt of Champs League ban

UEFA warned European football clubs on Thursday that they must break even in the future or face being barred from the Champions League.
UEFA president Michel Platini said he wants new financial rules in place by 2012 to stop clubs from spending more on buying players and paying wages than they generate in football-related income. That includes selling players, match tickets and merchandise, and money from television and sponsorship deals.
"The clubs simply can't spend more than they generate by way of income," Platini said. "We have three years to see how clubs can get back to break even."
Platini spoke hours before 32 European clubs attended the draw for this season's Champions League.
UEFA's stand could threaten Manchester United and Liverpool _ whose American owners borrowed heavily to buy the clubs _ and Real Madrid, which used bank loans to fund a recent spending spree.
"If a club can get loans from a bank to buy players and then pay it back, that is not a problem," Platini said. "If a club gets a lot of money in subsidies from a big backer and is still in deficit in two years, that is a problem and we don't like that."
Man United reported a pretax loss of 44.8 million pounds ($73 million; ⁈lion) in its most recent annual figures despite a profit in operations when it won the Premier League and Champions League in 2008.
Owner Malcolm Glazer borrowed money to buy the club in 2005 and repayments pushed the club's overall debt to 649.4 million pounds ($1.052 billion; ⁈llion).
Liverpool has debts of 250 million pounds ($405 million; ⁈llion) after Tom Hicks and George Gillett Jr. bought the club two years ago. It made a profit in the financial year ending July 2008 but debt repayments pushed the parent company's losses to 42.6 million pounds.
Madrid borrowed from Spanish banks before spending more than ⁈llion ($356 million) on players this offseason, including Cristiano Ronaldo from Man United and Kaka from AC Milan.
UEFA is creating an independent financial control panel, which would warn and fine clubs before expelling them from the competition.
Platini said he is still looking for an "eminent personality" to chair the panel.
UEFA also wants to stop "sugar daddy" benefactors, such as the owners of Manchester City from Abu Dhabi's ruling family, from driving up the cost of transfers and wages.
UEFA deputy general secretary Gianni Infantino said its key principle is that clubs must break even. However, clubs in debt could still play in the Champions League if the money had been spent on long-term projects.
"If the loss corresponds to the money which is invested in youth and infrastructure, this will certainly be tolerated," Infantino said.
UEFA plans to stop benefactors from gifting large amounts of money under sham sponsorship deals worth well above the market rate.
"This would have to be analyzed by the club financial control panel ... to see whether this was done to circumvent the rule or not," Infantino said. "In which case there would be very strict rules."
UEFA's proposals for controlling club spending will be discussed Friday by the Professional Football Strategy Council, a panel of experts from Europe's clubs, leagues and players' unions.
Platini, who will chair the meeting, has asked for a draft set of rules which can be approved by the UEFA executive committee when it meets next month, and phased in by 2012.


Updated : 2020-12-05 13:16 GMT+08:00