Football Debt, Spiraling Wages and the future of European Football

Taking a break from the Euros, Ronaldo, babes and bad refereeing decisions, we come back to one of our favourite topics, football and money.

Long story short – UEFA president Michel Platini wants to establish a financial criteria which would qualify clubs and allow them to participate in the Champions League and UEFA Cup. The flip side is that those clubs that do not meet the criteria would be banned from taking part in any European club competition.

There’s no cause for alarm yet, primarily because it will be impossible to impose any strict criteria that would ban the top clubs in Europe. At best, UEFA can introduce certain measures that will force clubs to tighten their belts and be more financially prudent than before.

Although UEFA are making a lot of noise about ‘debt’, I strongly doubt that they can ban clubs on that basis. A more reasonable scenario would be to insist on operational profitability – another option is to limit clubs based on their spending on wages. This won’t necessarily cap high transfer fees but it could have a knock-on effect on controlling wages offered to players (currently one of the best ways to get a player to agitate for a move, as we witness every summer).

However, this is just one of the things Platini is focusing on. His main agenda is to convince the EU to recognise ‘the specificity of sport’ – that sport holds a special cultural and social significance and cannot be run along the same economic lines as other forms of business / employment. Platini is actively campaigning (after securing similar memorandums from other teams sports in Europe) with the EU to get it to issue a legally-binding directive recognising sport’s special status.

Theoretically speaking, if the European government officially recognises that football cannot be allowed to stand as any other form of employment / business, legislation could be passed to restrict the number of foreign players in each club or to regulate ticket prices that each club can charge. Given that bureaucracy is notoriously slow-moving, we can be sure that football will not change too drastically in the next 10 years.

However with UEFA he doesn’t need the EU to play ball – by setting financial criteria that encourages financial solvency and discourages debt and running a club at a loss, he can ensure to an extent that football clubs cannot ‘buy’ titles by throwing obscene figures at players and then paying for it through loans – whether those loans are made by the bank or by an ambitious football-loving billionaire.

There’s more – UEFA is also looking to ‘even out’ the distribution of prize money from its cup competitions. Currently the top clubs in the Champions League take home a major chunk of the spoils (Everton made 400k from their last 16 exit from the UEFA Cup, Celtic made 10.3m from exiting at the same stage in the Champions League). There might be some balancing out but eventually it’s hard to justify that winnings in the UEFA Cup should be equal to winnings in the Champions League (you’re welcome to try in the comments section). Since the G-14 has disbanded and been replaced by a more representative agency, UEFA now has a chance to sell any ‘suggestions’ it has benefiting the ‘greater good’ of football and get them agreed to (within reason).

To do this UEFA will try to earn the support of the European Strategy Council, the consultative body representing clubs, leagues, players and associations, to implement changes to the revenue structure.

UEFA spokesman William Gaillard says:

“We are well aware there are some imbalances in the revenue distribution which have a negative effect in national leagues by widening the gap between the rich and not so rich.

We will talk to the clubs and see how they feel, and try to convince them that in the longer run it is not in their interest if, because of the way money is distributed, national leagues become too imbalanced.

This is something we have to bring to the strategy council and find a consensus, but we will have a very wide consultation policy.”

All of this is very good, but I wonder if the money is the biggest problem in sport and whether the structural problems – lack of quality referees, lack of support for decision-making for referees, appropriate punishment for obvious offences on the pitch that are missed by referees – will ever get the same support and backing from someone like Platini or Blatter. Because if they did, they would prove to be a LOT easier to tackle and solve than dealing with the G14, which Platini has already accomplished, or with dealing with the following question:

Should clubs spending too much on wages or debt repayment be allowed into Europe?

Further Reading:

G14 disbands – how Platini managed to strengthen UEFA and dispel the threat of a breakaway European super-league.
Platini and Blatter – how two men hold the keys to football’s future, and what they plan to do with it
Manchester United’s debt, analysed
Chelsea FC’s financial accounts and understanding Roman Abramovich

The Sun's Top 10 Flops of Euro 2008
Transfer Rumours (28 June 08): Arsenal and Liverpool tap up youngsters, Newcastle after Manchester United defender, Chelsea to lose Lampard but gain Arshavin and more


  1. Liverpool_Fan 28 June, 2008
  2. BlackburnPete 28 June, 2008
  3. foster 28 June, 2008
  4. Liverpool_Fan 28 June, 2008
  5. Ahmed Bilal 30 June, 2008
  6. John Holland 27 January, 2010