Posted: Wed Mar 14, 2012 12:51 pm Post subject: GG Citeh
March 8 - A European Parliament report today called on UEFA to ensure that football clubs cannot be sponsored by organisations closely related to their owners, thus circumventing the new Financial Fair Play rules (FFP).
The FFP rules have been brought in to prevent European teams running annual deficits, with debt becoming an increasing concern for UEFA.
Under these rules – coming in from 2013-14 – UEFA allow teams to record losses of up to €45 million (£38 million/$59 million) over the first two financial years, based on 2011-12 and 2012-13 accounts.
This figure can remain for the third year but must reduce over time, eventually requiring clubs to break even.
European football's governing body is determined to reduce debts on the continent, having recently outlined figures which show that a total of €1.6 billion (£1.34 billion/$2.11 billion) in 2009-10 was lost by teams across the top leagues of European football.
The European Parliament shared their concern, noting that player salaries are largely to blame for the current situation, saying that "roughly half of European clubs are in deficit and the five most important leagues are in debt".
They reported that European champions Barcelona lost €77 million (£64 million/$101 million) in 2009-2010 and are £321 million ($499 million/€371 million) in debt.
The report by the Council of Europe's Committee on Culture, Science, Education and Media, was written by François Rochebloine and approved in Paris.
Manchester City were picked out as an unacceptable example of a team sponsored by an organisation that has close links to its own owners.
"Manchester City... has entered into a contract estimated at £400 million (€479 million/$630 million) with the airline Etihad," it read.
"Etihad belongs to the Abu Dhabi royal family, and the Abu Dhabi United Group – led by Suleiman Al-Fahim – owns Manchester City.
"In order to avoid improper transactions of this kind, UEFA should prohibit clubs from sponsoring themselves or using associated bodies to do so."
Paris St Germain (pictured above), bought by Qatar Sports Investments last summer, announced a deal last month with the Qatar National Bank, while their President holds the same position with Al Jazeera, who purchased French league television rights at the start of the season.
The report also said that deals should be monitored to prevent organisations overpaying for such sponsorships, though UEFA says it has built in a mechanism to do precisely that.
Real Madrid was also a focus for attack for selling its training ground to the City of Madrid for over €400 million (£334 million/$526 million) in the early 2000s when the Spanish giants were struggling with debts.
The report said that some clubs could "enjoy an undue advantage" from such arrangements with public authorities.
"There is a need for strict application of the ban on state aid for professional sports companies which are, by definition, engaged in economic activities," the report said.
Though there are concerns that UEFA's FFP rules can be circumvented through crafty accounting, the initiative was praised, with the report adding that they "could serve as a model for other European federations".
France's Direction Nationale du Contrôle de Gestion (DNCG) was also heralded as a model licensing system.
The DNCG monitors club finances and has the power to sanction teams whose finances are not in order by relegating or barring them from promotion, as well as implementing transfer bans.
Joined: 29 Feb 2012 Posts: 97 Location: In Ur Head
Posted: Thu Mar 15, 2012 1:31 pm Post subject: Re: GG Citeh
It just encourages more corruption in the game. The rich will always find a way to invest large sums into their team. What's peoples thoughts on salary caps?
Salary caps come up on forums all the time, morally wrong imo.
At first reading it certainly is of course. But i don't think it's that simple although i'm not 100% sure where i stand on the matter either. I mean the current financial situation in the EPL isn't sustainable without huge investment from private owners. Now that's all well and good but it puts huge pressure on the smaller clubs trying to commpete. You just have to look at Pourtsmouth as an example.
At the moment it's not as if loads of clubs are facing a financial crisis and going into administration but it's certainly heading that way if something isn't done. So is it morally wrong to sit back and allow that to happen? I'm not sure. Personally i think there will be a European Super league in the future where all the big clubs (with their rich owners) will compete in the ultimate league. I hope i'm wrong about that.
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