Soccer Body Must Enforce Penalties for Club Overspending, Bayern CEO Says

Bayern Munich officials say it would be “a total disaster” should European soccer’s governing body fail to release tough sanctions for clubs that violate new rules on spending.

The four-time European champion has made a profit in each of the last 20 years, and is counting on UEFA’s Financial Fair Play rules to penalize teams that spend more than they earn, President Uli Hoeness said. The body now needs to put the policies in place after much discussion, he said.

“It’s now time to finalize everything because clubs have to know what is happening in case they break the rules and that is very important,” Chief Executive Officer Karl-Heinz Rummenigge, who also chairs the European Club Association, a body representing 200 top teams, said at Bayern’s training ground this week. “The rules can’t be on a very low level because then you have nothing.”

UEFA has told clubs they may be barred from its Champions League and Europa League competitions should they fail to meet targets stipulating maximum losses of as much as 45 million euros ($58.1 million) for a three-year stretch starting last July. The stipulation must now be written into the Swiss-based organization’s rule book, Rummenigge, 56, said.

UEFA next week will announce results of an audit of European soccer teams. Last year it found more than half of the near-650 teams it looked at reported losses, with 28 percent spending 12 euros ($15.56) for every 10 euros they received, while auditors reported concerns about future trading for more than one in eight of them.

Russia and Gulf

The arrival of wealthy owners from Russia and the Middle East has increased the number of teams willing to spend. Russian billionaire Roman Abramovich and Sheikh Mansour bin Zayed Al Nahyan have used almost $1 billion each to add players at Chelsea and Manchester City.

Qatar’s royal family is now spending millions of euros on Paris Saint-Germain and FC Anzhi Makhachkala of Dagestan is bringing in players including Samuel Eto’o, who’s being paid 10 million euros a year.

Rummenigge said he’ll meet with UEFA President Michel Platini to remind him about his backing of the regulations, saying he feels the Frenchman isn’t as committed to financial fair play as when he first announced the plans in 2009.

“He, as a president and coming from France, maybe should remind certain clubs that the rules are running since July 1,” Rummenigge said.

Not Happy

Bayern won the last of its four European Cups in 2001 and came close to adding a fifth when it was beaten in the 2010 final by debt-laden Inter Milan, which announced a 69 million- euro loss the same year.

“I would not be happy if I win a Champions League like that,” Hoeness said at a restaurant in Munich this week. “If I win a Champions League, I want to be in profit.”

Since swapping the playing field for the boardroom in 1979 Hoeness, 60, has increased Bayern’s sales to 320 million euros from 6 million euros. The team has balanced its budget this year and is now moving into profit, he said.

Bayern isn’t willing to overspend to win or acquire players, Hoeness said. He said his team was offered Sergio Aguero, who now plays at City, for about 15 million euros when Felix Magath coached the team four seasons ago. Aguero joined City for 38 million pounds in July 2011.

“Those are prices we would normally never do,” he said.

Hoeness said he didn’t like how Manchester City has spent to built its team, which resulted in a record $312 million loss for the year ending May 2011.

Investors

Still, he said he prefers the Arab owners to investors such as the Glazer family, which owns Manchester United, and former Liverpool owners Tom Hicks and George Gillett who took control of their teams using borrowed funds.

“Before Mr. Glazer bought Manchester United, he didn’t know there was air in the ball,” Hoeness said. “That’s not something that I accept. His target is making money. I would accept Mr. Glazer immediately if he says ‘OK, the price of Manchester United is 800 million pounds ($1.2 billion). That’s my money, my risk and now we are working.’ But what did he do? He bought the club and said ‘OK, I don’t have the money, how can we finance it?’ That’s something that I never accept.”

United’s parent company had a pretax profit of 29.7 million pounds in the year through June, compared with a loss on that measure of 15 million pounds a year earlier, as revenue climbed 16 percent to 331.4 million pounds and net debt dropped to 308.3 million pounds.

“Hoeness has a right to an opinion, but results over the last seven years speak for themselves and Manchester United is in a healthy position, both on and off the pitch,” Philip Townsend, a spokesman for Manchester United, said in an e-mail. “The Glazer family have been integral in boosting the club’s revenues, which have seen United become world leaders in the breadth and depth of our commercial partnerships.”

To contact the reporter on this story: Tariq Panja in London on at tpanja@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.

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