UEFA Uses Champions League Draw to Warn Soccer Clubs on Spending

Europe’s most senior soccer administrator used the Champions League draw to warn teams they’ll be kicked out of the sport’s biggest club competition if they flout rules on fiscal discipline.

Delegates from teams including Manchester City, Chelsea and Paris Saint-Germain, whose owners have bankrolled more than $1 billion in player trades, were told in Monaco yesterday by UEFA General Secretary Gianni Infantino that the governing body’s Financial Fair Play regulations shouldn’t be taken lightly.

“It’s the most important forum where all clubs are, where everybody is listening and it’s important that this message gets heard,” Infantino said last night in an interview.

Nyon, Switzerland-based UEFA is trying to curb club losses at a time when revenue in the sport has never been higher. In the 2010 fiscal year, losses by top-level European clubs widened by 36 percent to 1.6 billion euros ($2 billion), UEFA said. Sales rose 6.6 percent to 12.8 billion euros during the same period and costs rose by 1 billion euros to 14.4 billion euros.

Clubs could face the ultimate sanction of being excluded from the elite Champions League in 2014 if they spend above a maximum deviation of 45 million euros. That figure must be invested as equity by owners and not in the form of loans. Teams that show a positive trend toward meeting break-even targets will be treated more leniently, according to UEFA’s rules.

Former Belgian Prime Minister Jean-Luc Dehaene has been hired to investigate club finances. Two judges from the European Court of Justice will join UEFA in October and be responsible for meting out the penalties.

Manchester United Chief Executive Officer David Gill said the majority of clubs are in favor of limiting losses.

‘Sensible Return’

“These aren’t rules that have been forced down on the clubs,” Gill said in an interview in Monaco. “These are rules that have been worked on together for the betterment of the game. In the current world climate with the recession, etcetera, there’s enough money coming into football to make sure clubs do make a sensible return.”

England’s Premier League is also discussing whether to implement UEFA-style regulations of its own. Soccer’s richest league announced in May that it had agreed on a new domestic television contract worth 3.02 billion pounds ($4.7 billion), 70 percent more than the current three-year agreement.

“There’s a real opportunity to introduce some sensible rules that effectively improve and enhance the long-term or medium-term financial stability,” Gill added. Some of the league’s 20 teams oppose greater regulation, he said, without naming specific clubs.

City’s Spending

Manchester City, which won its first Premier League title in May following a $1 billion outlay by a member of the Abu Dhabi royal family, had a record $311 million loss for the year ended May 31, 2011, according to a club filing.

This season, manager Roberto Mancini has complained about not being able to sign the players he wants after club executives said spending would be pared down once the team was able to compete for major honors.

Infantino said he’d noticed the difference in City’s activity in the transfer market.

“There’s quite an important change,” he said. “Let’s not forget, it’s now where the financial fair play break-even rules kick in.”

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

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

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