More than 100 delegates from Europe's national football associations heard about the latest significant steps taken in UEFA's club licensing system – including new and highly challenging projects to ensure the game's integrity – at a UEFA Club Licensing Workshop on Financial Fair Play.
The event, staged in Geneva on Monday and Tuesday, highlighted two crucial extensions to the club licensing scheme, which has been undertaken by UEFA since 2003 and fully operational from the 2004/05 campaign.
Club Financial Control Panel
One milestone was reached in March when the UEFA Executive Committee created a Club Financial Control Panel comprising financial and legal experts independent of national associations, leagues or clubs. Former Belgian Prime Minister Jean-Luc Dehaene was appointed in September to head the panel, which will verify that licences were correctly awarded by the national licensor and that clubs fulfilled the criteria defined in the UEFA Club Licensing Regulations.
Financial Fair Play Concept
The second development was the Executive Committee's approval, last month, of a Financial Fair Play concept for the game's well-being. The major objective of Financial Fair Play is to improve financial fairness in European competitions, decrease inflationary pressure on salaries and transfer fees and encourage long-term investments in the youth sector and infrastructure.
To achieve this target, measures will be enforced, including an obligation for clubs whose turnover is over a certain threshold, over a period of time, to balance the books. Under the concept, clubs cannot repeatedly spend more than their generated revenues. Guidance will be given on salaries and transfer spending, indicators provided on sustainability of debt, and clubs obliged to honour commitments on a timely basis.
Costs and losses
Despite massive income increases over the last decade, clubs are still not making more money: although income rose by five per cent last year, costs grew by nine per cent, and half of clubs in Europe reported losses.
Promotion and protection
The Financial Fair Play concept intends to promote and protect the long-term viability and sustainability of European club football. It will complement the club licensing system which received full support from the EU Commission at a recent conference held in Brussels. European Commissioner Ján Figel hailed the success of UEFA's licensing project, saying "transparency and good governance had been reinforced at European and national levels".
Helping the national associations
UEFA is committed to continue assisting the national associations in their role as licensor. Raising standards – in sporting infrastructure, personnel, administration, legal and financial aspects – certainly extends far beyond those clubs that attain licences permitting them to compete in the UEFA Champions League or UEFA Europa League. The system, applied to all 53 UEFA member associations for entry to the UEFA club competitions from 2004/05, has been extended for domestic top-flight participation in most of the 53 member associations.
For season 2009/10, a total of 608 of the 730 top-division clubs in Europe underwent the licensing procedure – representing 83 per cent of the continent's top-flight clubs; from that number, 498 clubs, or 82 per cent of applicants, were licensed. However, six clubs that qualified for European competition through their on-field achievements were refused licences. Clubs have to pass muster in areas such as: audited financial statements; employee and tax overdues; stadium infrastructure; transfer payables overdue; and head coach qualifications.
Improving football's financial health
With the future development and implementation of the financial fair play concept, the drive to improve football's financial health and to help clubs become self-sustaining is constant. In this respect, the work of the new Club Financial Control Panel – in trying to stimulate long-term investment in youth development and upgrading of sporting facilities, ahead of short-term speculative spending – represents a valuable enhancement of the current club licensing criteria.
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