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Clubs told to balance books or else.

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Clubs told to balance books or else.

Post  Panda on Fri 27 Jan - 16:44

Clubs Told To Balance Books - Or Else

Sky News

January 26, 2012 10:00 AM

Chris Skudder, Sky News sports presenter
credit crunch, financial crisis? Familiar terms over the past four
years or so? No-one needs any reminding. Yet while all this has been
going on football has enjoyed a major boom time. Revenue has been
steadily climbing, bucking the global trend. While the world's economy
grew, just, by one single per cent between 2006 and 2010, European
football's income mushroomed by more than 40 times that figure.
for every boom, a bust is lurking. More money is now going out of
football than coming in. And it's getting worse. Figures just released
for 2010 show Europe's top division clubs suffered collective losses of
1.6 billion euros, a worrying, unsustainable rise of 36 per cent on the
previous year's 1.2 billion. In 2010 no less than 78 top league clubs
paid out more in wages than all of their income. A recipe for disaster,
UNLESS you're sustained by mega rich owners like Manchester City,
Chelsea, Paris Saint Germain and now clubs from Russia, all bankrolled
to excess in pursuit of glory.
But European governing body UEFA
has seen the warning signs. Overspending might be fine for clubs like
City with bottomless pits of cash but it spells big trouble for clubs
trying to compete with limited resources.
Enough is enough say
UEFA. Financial Fair Play is now in place and demands that clubs balance
their books, break even, or face the consequences. By 2014 any club
that records anything over a 45 million euro loss, decreasing to 30
million by 2016 will be punished. For context, Manchester City last year
posted staggering losses of 197 million pounds in their pursuit of the
top prizes in the English game and beyond. A huge discrepancy.
figure has to come down. If not, City, and other clubs who promise that
losses on that scale will not be repeated will face sanctions that
could go as far as expulsion from the UEFA Champions League.
UEFA mean business. They believe they have the backing of European law to enforce the new regulations.
only in 2014-15 will we know which clubs have transgressed. And only
then will we know if football's biggest battles could be fought out in
European courtrooms.

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