UEFA official suggests debt-laden clubs facing red card

DEBT BURDEN: Man Utd player Rio Ferdinand's club has been saddled with debt since the 2005 takeover. (AFP)

A top UEFA official suggested on Wednesday that clubs with excessive debt could be excluded from the Champions League and UEFA.

David Taylor, the general secretary of European football's governing body, told a conference in London that the organisation would next week begin discussions on possible changes to the way clubs are licensed with a view to introducing stricter guidelines on how they run their finances.

In comments that reflect concern about English clubs' current domination of European competitions and a perception that their higher debt levels are creating an uneven playing field, Taylor said: "We cannot let things stay as they are."

The Scot went on to stress that exclusion would only ever be introduced as a last resort, but made it clear that UEFA's leadership intends to push ahead with moves which could have repercussions for the likes of Manchester United, Liverpool and Chelsea.

"There would be forms of communication, even warnings, even reprimands before one would ever get to a situation of exclusion but it's absolutely possible," Taylor said. "That is the ultimate sanction."

He added: "In some countries like Germany and Switzerland, stronger requirements are put on clubs in terms of bank guarantees and having no negative equity.

"These are the models we have to look at."

Taylor's comments came a day after the chairman of England's Football Association, David Triesman, warned of the "very tangible dangers" faced by English Premier League clubs, whose combined debt he put at three billion pounds ($5.17 billion), in the current, uncertain financial climate.

The Premier League however has made it clear it regards Triesman's comments as unnecessarily alarmist, arguing that overall debt in the 20-club league is only slightly higher than annual revenues and therefore sustainable.

That argument would be put very forcefully to UEFA in the event of the governing body attempting to impose any ceiling on debt levels. A UEFA refusal to license a financially viable club on the basis of their debt would face a legal challenge on restraint of trade grounds.

The global credit crunch and its fallout have created specific problems for individual clubs: Liverpool have put plans for a new stadium on hold while West Ham's spending will be curtailed after the club's owner Bjorgolfur Gudmundsson lost money in the collapse of Landsbanki, Iceland's second largest bank.

Overall however, English clubs are seen as well-placed to weather an economic downturn because of the relative reliability of their revenues.

Television rights, which account for the bulk of clubs' income, are guaranteed for this season and next while the inherent loyalty of fans makes a sharp downturn in ticket sales appear unlikely.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM