EU kicks off Italy football probe

Mario Monti has Serie A in his sights

The European Commission has launched an inquiry into how Italy's football clubs are funded.

The Commission believes that Italian laws allowing top teams to spread their debts over 10 years may constitute illegal state aid.

Clubs in other European Union (EU) countries are not allowed to spread their debts over more than three years.

But Italian football authorities say many debt-laden clubs could go bust if they are forced to toe the EU line.

Repealing the 10-year amortisation arrangement would pose a particular threat to stock market-listed clubs such as Lazio and AS Roma, which are obliged to publish their accounts.

Cash crunch

The EU said the probe would focus on whether state aid and accounting rules are being violated.

"If certain sports clubs are in effect being granted financial advantages over others in Europe, this distorts competition both in business terms... and by extension, on the field of play," the EU said.

The probe comes as Italian football is facing a full-blown financial crisis, with the elite Serie A division losing 948m euros (£644m) last season.

We certainly need to come into line but in a well-thought out way Mario Pescante, Italian under-secretary of state for sport

The loss largely reflects spiralling wage bills, with players' salaries absorbing an estimated 85% of football club revenues.

The 10-year debt amortisation deal, passed in February by the Italian parliament as an amendment to a finance bill, has thrown many struggling clubs a lifeline.

European competition commissioner Mario Monti signalled at the time that the amendment - dubbed the "Salve Calcio", or Save Soccer amendment - could be in breach of EU state aid rules.

There was also strong criticism from some who claimed there was a conflict of interest for the Italian prime minister Silvio Berlusconi who also owns AC Milan.

Mario Pescante, Italian under-secretary of state responsible for sport, told Reuters the EU's investigation had been expected.

"We certainly need to come into line but in a well-thought out way," he said.

"We are already working on this... There is no optimism or pessimism and this isn't a catastrophe."