English clubs adopt Uefa rules
The 72 English league clubs outside the Premier League hope to cut insolvencies by adopting Uefa’s financial fair rules, Football League chairman Greg Clarke said on Friday.
The regulations, to be introduced for clubs taking part in European competitions like the Champions League or Europa League, will be followed by English clubs in the lower leagues as they seek long-term financial sustainability.
Saddled with around 700 million pounds ($1.14 billion) of debt and many examples of clubs going into administration, Football League clubs have decided they can get their houses in order by adhering to Uefa’s break-even rules.
“Too many clubs have got too much debt and this is designed to try to take costs to below the levels of revenues so that we can afford to stay in business in the long term,” Clarke told Reuters in an interview.
“That will significantly reduce insolvencies in the game.”
The decision to follow the rules was agreed at the League’s summer conference and comes in the wake of a spate of clubs going into administration in recent years such as Plymouth Argyle and Crystal Palace.
“Our clubs have decided they want to put regulations in place that take Football League Clubs towards financial sustainability and the Uefa rules are designed to do that so we are going to adopt them,” said Clarke.
“Regulation of our financial performance is important to reduce the amount of financial risk in our game.”
Football League clubs are bracing themselves for a drop in television revenue after a deal signed in April for the three years from 2012-13 represented a 26 percent fall.
Adding to the financial pressures on the clubs outside the Premier League, a report by business advisory firm Deloitte this week showed a third of Championship (second division) clubs were paying out more in wages than they received in revenue.
Adopting the European governing body’s rules, which aim to curb reckless spending by clubs and encourage them to live within their means, could also help those clubs who get promoted to the top tier of English soccer.
“They will go into the Premier League with a manageable cost structure which they can then chose how to invest and be competitive in the Premier League,” Clarke said.
Uefa approved the rules last year and some of the regulations came into force this month with clubs banned from owing money to other clubs, players, tax and social security departments.
The break-even requirement, which stops clubs spending more than their generated revenues, kicks in from 2013-14.
The Football League clubs will be on a similar timetable with Clarke saying Championship clubs will use next season to work towards introducing the rules.
“They are defining their perimetres, the definitions and the sanctions during this season with the objective of putting sanctions in place for the 2012/13 season,” he said.
“It will take a while to reduce debts and get finances under control but we can certainly get to a point where we are making financial insolvency the rarity.”