By Andrew Warshaw in Nyon
January 25 – Europe’s major professional clubs continue to rack up staggering losses despite warnings of sanctions under UEFA’s financial fair play rules.
Figures released by European football’s governing body today revealed that collectively clubs lost more than €1.6 billion (£1.3 billion/$2 billion) in 2010 and that their debts keep rising as well.
Covering 650 clubs from across the continent, UEFA’s so-called Benchmarking Report disclosed that 56 per cent of clubs posted losses in the 2009-10 financial year and their total debt was €8.4 billion (£7 billion/$11 billion).
“This is the last wakeup call for everyone, this trend has to change very quickly to safeguard European football,” warned UEFA general secretary Gianni Infantino.
“We must end this negative spiral and gamble for success.
“These losses cannot continue.”
At a landmark briefing at UEFA headquarters, the full extent of clubs’ relentless spending, often for quick-fix success, was given stark exposure.
Despite persistent warnings that financial fair play would spare no one, the UEFA study showed clubs’ combined annual losses rose by 36 per cent.
This was despite revenues shooting up by 6.6 per cent.
Under UEFA’s rules, clubs are allowed to make a maximum loss of €45 million (£38 million/$58 million) between 2011 and 2014, moving ultimately towards breaking even.
Clubs who ruthlessly overspend without good reason can potentially be excluded from its competitions from the 2014-15 season.
Heavy fines and transfer embargos are also possible sanctions which, said Infantino, would be “severe but proportionate” for any persistent offenders.
UEFA revealed that 13 clubs would have failed its break-even tests based on their 2010 accounts.
And, significantly, 31 clubs, including four this season, have been refused entry to its two main club competitions since financial licensing was introduced in 2004.
The extent of clubs’ overspending can be summed up best perhaps by the fact that Europe’s top 10 clubs spent €2.2 billion (£1.8 billion/$2.9 billion) on transfers in 2010.
Hardly surprising, therefore, that of the 30 largest leagues in Europe, only four were living within their means in 2010 – compared to 15 two years earlier.
Jean-Michel Aulas, President of Lyon, said there had to be a distinction between clubs spending “easy money and money for investment”.
“Tomorrow’s paradigm must be built on building stadiums and building youth academies – tangible assets that can benefit football in general,” Aulas added.
Aulas was joined by Ernesto Paolillo, chief executive officer of Inter Milan, who compared overspending in football to the European financial crisis.
“I can compare the situation of the football industry to exactly the situation of Italy, Spain and Greece’s balance sheet,” Paolillo said.
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