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Page last updated at 12:36 GMT, Wednesday, 8 October 2008 13:36 UK

Uefa could ban debt-ridden clubs

By David Ornstein
BBC Sport at Stamford Bridge

Uefa general secretary David Taylor
Taylor was speaking at the Leaders in Football conference at Stamford Bridge

Uefa general secretary David Taylor has warned that football clubs with heavy debts could be excluded from future European competitions.

Entry to the Champions League and Uefa Cup is subject to licences issued by European football's governing body.

And Taylor says clubs must address debts or face the "ultimate sanction".

"There would be forms of communication, even warnings or reprimands, before one got to a situation of exclusion but it is absolutely possible," Taylor said.

Taylor was speaking at the Leaders in Football conference at Stamford Bridge.

On Tuesday, Football Association chairman Lord Triesman estimated the total debt of English clubs to be about 3bn.

Lord Triesman said the Premier League's four top clubs - Manchester United, Liverpool, Arsenal and Chelsea - are believed to account for a third of that debt.

However, Chelsea say their "unique ownership structure" means that monies owed are "internal and in the form of interest free loans from the owner that have no repayment time frame attached".

Taylor believes clubs with such huge debts are putting their future in jeopardy and feels they have to bring their finances under control.

"There is concern about these numbers, particularly in an era of financial crisis," Taylor told BBC Sport.

Clubs must not expose themselves to such an extent that the whole future of the club is jeopardised unless some white knight comes over the horizon

Uefa general secretary David Taylor
"Debt in itself is not necessarily a bad thing. Just because I have a mortgage it doesn't mean I'm bankrupt. But the debt does have a requirement to be properly serviced.

"Clubs must work within all available means and they must not expose themselves to such an extent that the whole future of the club is jeopardised unless some white knight comes over the horizon with millions and millions of pounds.

"That is a very dangerous and risky financial strategy for any organisation and as far as football is concerned we have to consider whether we should take further measures to regulate against that."

Taylor says making Uefa's licensing system more robust, and preventing some clubs from playing in Europe, could be one way of regulating their finances.

"We are looking at strengthening the minimum financial criteria and other forms of self regulation that may impose greater standard on clubs that want to compete in European competitions and, beyond that, club football," Taylor explained.

"A situation where a club would not be allowed to compete in Europe would arise if a club didn't obtain a licence from their national football association.

606: DEBATE

"Club licenses are awarded every year and it's a requirement for clubs to have such licences before they compete in European competitions."

Improving the financial stability of Europe's leading clubs is one of Uefa's aims but Taylor admits it may take time for plans to achieve that to be initiated.

"It certainly won't happen next season but we've started with a working group to look at some of these issues," he said.

"Let there be no doubt that we're not sitting idly by, we're looking at increasing these requirements at some stage in the future."

Lord Triesman says the FA might consider enforcing a salary cap on Premier League clubs to help bring their debts under control.

"In the current climate it could be that we have to work out (wage) restraints and what they might be," Triesman added.

"A sensible form of (wage) restraint would make sense and it is not inconceivable. It's very hard to do anything unless all parties want to do it and everyone needs to want to do it. Preferably without being compelled."

But Taylor believes it would be almost impossible for Uefa to implement a similar system across Europe.

"A wage cap would be a very difficult challenge in Europe given all the different tax regimes and everything else that goes around that," he told BBC Sport.

Technically most clubs could be perceived to be on the borders of being insolvent

Crystal Palace's Simon Jordan

"It's one of a whole number of ideas that needs to be more seriously looked at than ever before but I think that would be one of the most challenging things to do."

Chelsea chairman Bruce Buck told the BBC that he thought the level of debt in football requires "a proper debate".

"I don't think you can, just by definition, say 'debt is bad'," Buck told BBC Radio 5 Live.

"Personally I don't think it's bad. Companies big and small borrow money and it is an appropriate business tool and I think football clubs are also entitled to use that tool.

"Debt per se is not bad but it's certainly has to be appropriate and reasonable in the circumstances."

Crystal Palace owner Simon Jordan believes working out a club's indebtedness is not a straightforward matter.

"How you judge the solvency of a club's balance sheet is very, very difficult because technically, most clubs could be perceived to be on the borders of being insolvent," he said.

"Their assets are players. Sometimes the value of those players on the balance sheet is zero but the next day they could be worth 50m."

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see also
FA chief fears '3bn' club debts
07 Oct 08 |  Football
Government to unveil bank rescue
07 Oct 08 |  Business
Liverpool stadium plans on hold
05 Oct 08 |  Liverpool
West Ham defiant despite bank hit
07 Oct 08 |  West Ham
Newcastle extend bidder deadline
07 Oct 08 |  Newcastle
Timeline: Global credit crunch
06 Oct 08 |  Business


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