Europe's most spendthrift football clubs are "coming under pressure" from UEFA to show that they are abiding by the governing body's financial controls, as "losses across the game’s top sides grow," according to Roger Blitz of the FINANCIAL TIMES. UEFA’s annual report on the health of 679 clubs in Europe’s top divisions said that net losses in '11 had "reached a record" €1.7B ($2.3B), half of which came from 10 clubs. Wages have risen 38% since '07, compared with a 24% increase in turnover. Clubs must abide by UEFA's Financial Fair Play rules "in order to play in the governing body’s competitions." The rules are "designed to ensure they live within their means," although they will be allowed to incur losses of up to €45M ($61M) over three years. UEFA said that a simulation of the model over the past three years showed that 20 clubs "would have failed to comply with the regulations" (FINANCIAL TIMES, 2/4).
DOWNWARD TREND: BLOOMBERG's Tariq Panja reported 46 European clubs "would require equity infusions to meet incoming fiscal control regulations." The report showed that sales of €13.2B in '11 were eroded by €9.4B worth of spending. UEFA President Michel Platini said, "Numerous football clubs, including some prestigious ones, have experienced severe financial difficulties, leading to top division clubs’ aggregate losses increasing again." The report added that the trend of growing losses "has affected clubs of varying sizes across Europe." The 10 largest loss-makers increased their combined deficits to €856M ($1.2B) from €596M in '07. Clubs at risk of failing to meet UEFA’s requirements include Manchester City, Inter Milan and Ligue 1 side Paris St. Germain (BLOOMBERG, 2/4). The PA's Martyn Ziegler reported Man City and PSG "have been warned" by UEFA they must prove they are not "cheating" the new FFP system by having sponsorship deals with companies closely associated with their owners. Man City has a £400M ($629M) deal with Etihad airline, "closely linked to its Abu Dhabi-based owner." Qatar-owned PSG has recently announced a £125M ($197M)-a-year deal with the Qatar Tourist Authority (PA, 2/4).
NARROWING THE GAP: In London, Owen Gibson reported UEFA General Secretary Gianni Infantino said that despite the record losses, "there were signs that rules already in force to ensure clubs paid their bills on time and the looming enforcement of the break-even rule were having an effect." He said that the gap between revenue and costs "was narrowing for the first time since it started compiling the figures" -- although by just 0.1% to 12.7%. Revenues and attendances "have also held up across European football despite the financial crisis." UEFA's team of 15 accountants "will begin analysing figures" next spring for the years '11-12 and '12-13, the first period to be monitored under the new break-even regime. Infantino confirmed that the fact that PSG is donating David Beckham's salary to charity meant that it "could be discounted from the FFP calculation" (GUARDIAN, 2/4). The AP's Rob Harris reported Infantino said that he was confident the record losses "are at their peak," and the increase in the number of sanctions handed to clubs for failing to settle overdue payments indicated that FFP "has teeth." More than 60% of clubs "breached at least one of the rules designed to ensure debts are paid" as they attempt to break even on football business -- a condition of entry for the Champions League and Europa League (AP, 2/4).
