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UEFA to crack down on debt-ridden clubs

UEFA, soccer's European governing body, beginning in 2012-13 plans to ban clubs from its competition that do not balance their books. The idea is to stop clubs spending on players' wages beyond their income.

According to the most recent accounts, 14 of the 20 English Premier League clubs made substantial losses. Spanish La Liga clubs have recently posted more than $3 billion in annual debts. Italy's top clubs, one of which, Juventus have long been addicted to financial fixes from owners.

The UEFA clampdown calls for individual clubs to pay their players and other costs out of the money they earn, from TV, sponsorships and ticket prices – not from "benefactor" owners. Chelsea owner Roman Abramovich, for example, has spent more than $1 billion on players. But UEFA President Michel Platini said the owners themselves, including Abramovich, Silvio Berlusconi of Milan and Massimo Moratti of Inter Milan asked him to introduce regulations, so that they themselves are not endlessly drawn into subsidising their clubs.

The rule does not outlaw debt in itself, but heavily indebted clubs, such as Manchester United and Liverpool, must ensure they can meet their heavy interest payments, not be drawn into losses.

Read the whole story at The Guardian »

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