UEFA helps clubs avoid financial pitfalls

BY foxsports • September 10, 2010

After financial troubles cost Portsmouth and Mallorca a $12.7 million shot at the Europa League, UEFA has been helping European clubs avoid the same fate next year.

Europe's 53 football associations on Friday completed a workshop on managing a license system that demands clubs are sufficiently well run to enter UEFA's club competitions.

Portsmouth and Mallorca were among five clubs who qualified for the Europa League but were kicked out for failing the license tests, which also require minimum standards of club infrastructure and qualified staff.

UEFA is making places in the Champions League and Europa League even tougher to earn by introducing financial fair play rules that will control clubs' spending as a condition of entry.

"The associations have to carefully communicate and inform the clubs about the new rules," said Andrea Traverso, UEFA's club licensing director. "Because the action of the club today will have an impact on the accounts tomorrow which are the ones that will be checked."

UEFA's licensing system, designed to promote and reward clubs' good governance, has operated for seven years and blocked 27 clubs from its top two competitions, including Bulgaria's CSKA Sofia which was ousted from the 2008-09 Champions League.

UEFA sets a June deadline for 235 clubs who reach the Champions League and Europa League to prove they have paid all salary and transfer debts.

The system gained prominence in recent months when it affected clubs from Europe's wealthiest football nations which had taken refuge in bankruptcy protection.

England's FA refused to give Portsmouth a license, and the Spanish FA's approval for Mallorca was overturned by UEFA. Liverpool and Villarreal entered the Europa League instead.

Both excluded clubs looked for much-needed revenue from playing in the Europa League, which earned last season's runner-up Fulham more than €10 million in UEFA bonuses and prize money.

UEFA told its national members over the two-day session in Geneva that clubs must pay their football commitments on time.

"They know this is a black and white rule. If you don't pay your debts you are out. The once-a-year licensing check will now be extended next year with additional checks for clubs competing in UEFA competitions that will cover each transfer window," Traverso said.

UEFA ruled in Mallorca's case following advice from an independent panel of experts it created to monitor the financial fair play system, which is designed to curb clubs' reckless spending and limit bailouts by wealthy owners.

The panel chaired by former Belgian prime minister Jean-Luc Dehaene will study club accounts from 2011 onward to ensure they spend only what they earn from football-related business.

Clubs which fail to break even face being barred from UEFA's competitions beginning in 2014-15.

UEFA's Sefton Perry said national associations had a responsibility to help clubs understand the rules, and change the spending culture.

"There is nothing we can do to stop a club over-stretching," Perry said. "However, financial fair play will hopefully make them - the clubs' owners, directors and the supporters - think twice about whether they can afford their spending."

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