Clubs who recklessly overspend face tough sanctions as Platini calls for end to "devilish spiral"

By Andrew Warshaw in Nyon

January 11 – UEFA President Michel Platini (pictured) today issued his strongest warning to date that clubs who recklessly overspend risk being heavily sanctioned until and unless they get their houses in order.

Platini said Europe’s biggest clubs will have to “face the music” if they fail to comply with strict new financial fair play rules that come into effect in July – the start of the financial year for many clubs – aimed at forcing all of them to live within their means.

Under the blueprint, clubs who repeatedly flout the rules could be thrown out of the Champions League from the 2014-15 season if they spend more than they earn in the two years immediately before.

According to UEFA, 56 per cent of European clubs made a loss in 2008-9 – the latest season available – mainly because of inflated wages.

Platini said such a trend could not continue.

“If a club doesn’t fall in line and follow the same rules as everyone else then it will be time to face the music,” he said.

“The objective is not to put a club at risk – on the contrary, it is supposed to help them.

“But we have to escape from this devilish spiral.

“I will leave no stone unturned.

“We can’t ignore a problem that everyone is aware of but that no-one wishes to admit to.

“The future of club football is at stake.

“Those who do not live by the law will have to face the consequences.”

During the first three years of the phased-in break-even rule, clubs will be allowed to overspend by a maximum of €45 million (£37 million) – but only if the money goes in as equity, not loans.

Thereafter, subsidised losses have to fall to €30 million (£25 million), then €15 million (£12 million), and keep falling.

As with a tax declaration, the onus is on the clubs to provide the correct information.

They will be subject to spot checks by UEFA’s newly-established nine-member Club Financial Control Panel and face sanctions if they are economical, so to speak, with the truth.

The new initiative will send shock waves through European clubs paying top-heavy salaries and building up substantial losses in the process.

One in three European clubs currently spend 70 per cent or more of their income on salaries and one in four spend six Euros for every five they earn.

Significantly, if the new crackdown was applied today, no fewer than 11 clubs currently competing in Europe would break the rules.

Platini hopes to stop money-no-object owners with no or limited knowledge of football’s finances from taking over clubs and causing more harm than good, giving way to more responsible proprietors with sound business backgrounds.

“This is not a witch hunt,” he said.

“It is so clubs no longer continue blindly and mindlessly.

“All of us who love football have no interest in seeing clubs disappear because of risky management.

“We want to protect a type of football that is fairer and more ethical.

“From now on, when clubs decide on their strategy and meet with agents, they will have these rules in mind.”

UEFA general secretary Gianni Infantino revealed that 183 clubs in Europe – almost one in five – have been making “huge” losses.

“What kind of healthy business model is it to wait for a night rider on a horse with a lot of money to throw around and then, one day or another, to jump back on his horse and ride away?” he asked.

UEFA’s head of licensing, Andrea Traverso, said it was important to understand the thinking behind the revolutionary concept which could totally change the footballing landscape of Europe.

“The whole spirit behind the financial fair play measures is to redirect certain funds from short-term speculative spending towards long-term investments,” he said.

“If an owner puts a lot of money into a club directed to wages and salaries and then leaves, the club is gone – there is nothing left.”

So seriously are UEFA taking the new rules that they allocated an entire day at their headquarters in Nyon to explaining the complexities of the system – covered in a painstakingly detailed 111-page report – to a specially-invited global media audience.

Exact sanctions have yet to be worked out but they will almost certainly include warnings, preventing irresponsibly-purchased players from competing in UEFA tournaments, withdrawing prize money and, ultimately, being banned from Europe completely.

Stadium development and youth spending will be exempt as will any club earning less than €5 million (£4 million) per year.

The scheme was backed by European clubs’ leader Karl-Heinz Rummenigge, who warned of “complete meltdown” if things continue as they are.

“I am convinced this is the right path,” said Rummenigge, head of the European Clubs’ Association and chairman of Bayern Munich.

“It’s time to apply the brakes.”

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