Financial fair play ensures football's stability

UEFA has emphasised that its financial fair play concept is crucial in helping to ensure football's long-term stability, and will help clubs free themselves from the cost spiral that has seen many of them experience severe financial difficulties in recent times.

UEFA president Michel Platini was joined on Tuesday by other senior UEFA officials and the chairman of the European Club Association (ECA), Karl-Heinz Rummenigge, to explain the far-reaching notion.

The measures are designed to protect European football's long-term health and viability, as well as the integrity and smooth running of the competitions. They also aim to stimulate long-term investment in areas such as youth development and the upgrading of sports installations.

Last year UEFA issued Club Licensing and Financial Fair Play Regulations, in which the requirements and criteria were laid down for the implementation and functioning of UEFA's financial fair play measures.

Phased implementation will take place over a three-year period, and the main element of the regulations – the 'break-even' requirement – will come into force for financial statements in the reporting period ending 2012, to be assessed during the 2013/14 UEFA club competition season. Initial sanctions against clubs who do not fulfil the break-even requirement can be taken in the 2013/14 season.

Under the break-even requirement, clubs may not spend more than the income they generate. Clubs will also be assessed on a risk basis, in which debt and salary levels are taken into consideration. They will have to ensure from next summer that their football liabilities are paid punctually.

"It is a complex project, but one which I consider vital for football's future," said Mr Platini. "Financial fair play is not aimed at putting clubs in difficulty. On the contrary, it aims to help them exit an infernal spiral which prevents certain of them from having a viable medium-term or long-term model.

"Supporters and lovers of football have no interest in seeing clubs that are part of European football's heritage disappear as a result of hazardous management. It was necessary for an authority to intervene, and this is what we are doing." The UEFA president added that UEFA would have the courage to take the requisite measures against clubs which failed to comply with the regulations being put in place.

The concept and related measures have been introduced with the support of the major stakeholders in European football – in particular, the clubs. "From the first moment onwards, I supported this idea, because it was already clear at that time that European club football was going in the wrong direction from a financial point of view," said Mr Rummenigge. "We have reached a good moment to take our foot off the pedal and put on the brakes, to come to more rationality in club football." The ECA comprises 197 European clubs.

UEFA general secretary Gianni Infantino stressed the need for greater financial discipline. Football revenues had continued to rise – in the 2009 financial year, total revenues for top division clubs reached a record €11.7 billion. However, increased costs had created net losses of €1.2 billion – almost double the previous record. Many clubs were spending massive amounts on player wages. Total transfer debts amounted to €2.2 billion, with almost €800 million not due to be paid for more than 12 months.

More than one in eight club auditors expressed uncertainty about whether the club could continue as a going concern. Clubs have been urged to begin preparing now for the financial future by reviewing their operating strategies, in particular the break-even rule encouraging them to live within their own revenues, while also promoting investment in infrastructure and youth policies.

"I am convinced that all clubs, including the top clubs in Europe, will do everything to fulfil the rules," said Mr Rummenigge, who underlined the negative impact of a club qualifying for the UEFA Champions League on sporting terms, but being unable to play in the competition for financial reasons and Mr Platini added: "If clubs do not respect what has been the will of European football, they will have to face the consequences. There is no going back."