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HOME arrow WSC DAILY arrow September 2009 arrow Reducing football's debt
Reducing football's debt

Image Monday 7 September ~

You might expect to react with amazement at the jaw-dropping hubris of FIFA and UEFA, to laugh at their petty politics or to wonder at the creative geography of their World Cup groupings. So the realisation that statements and actions by both organisations might actually make sense is a strange feeling. Few would argue with FIFA’s attempts to control the traffic in underage players, particularly across international boundaries. A harder task will be to get domestic associations to apply the same contractual policies, which would make enforcement easier.

It would be good to think that the FA might follow FIFA’s lead and introduce controls to prevent bigger clubs simply collecting the best young talent, seemingly as much to prevent other clubs from making the signing as to support the young player’s development. In the same way, it is difficult to argue against UEFA’s enforcement action on diving, but whether or not their approach to act retrospectively only in cases “of blatant simulation which, for example, might lead to a penalty or a red card for an opponent” goes far enough remains to be seen.

Perhaps the most far-reaching idea is the proposal to be considered by UEFA’s Executive Committee later this month, which will require clubs to break even by the start of the 2012-13 season or face the risk of exclusion from the Champions League and the Europa League. The “fair play policy” will require clubs to finance their activities through football-related incomes – ticket sales and television revenues – rather than running up debt.

Michel Platini has been critical of Premier League clubs that have built up debt, whether it is loaded on to them as part of a change of ownership (Manchester United and Liverpool) or if it is in the form of a “soft loan” from a benevolent owner (Chelsea). More recently, Platini has also targeted Real Madrid’s approach to team building based on borrowing. The UEFA position stands in stark contrast to the Premier League view of debt which is, essentially, that it isn’t inherently a bad thing, so long as it can be serviced.

UEFA claim to have support from the majority –“85-90 per cent” – of club owners, including Roman Abramovich and Silvio Berlusconi. The proposal includes the establishment of a group to police any new arrangement, which will have to grapple with any exceptions that might be made. These may include how to treat football-related commercial activity and whether clubs can incur significant debt to support ground redevelopment or for soft loans to morph into equity.

If clubs are forced to rely more on ticket and television incomes, there is also a risk that this will put further pressure on ticket prices or, in the Premier League case, lead to the break-up of the collective sale of television rights. There seems little doubt that the Big Four could get a better rights deal acting independently, but with obvious consequences for the rest of the clubs. The end result might be the opposite of that intended by UEFA. The international football authorities might be in the process of getting something right, for a change, but there’s still plenty of scope for things to go badly wrong. Brian Simpson

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