Manchester City have been warned by UEFA they will have to prove they are not ‘cheating’ the new financial fair play system by having huge sponsorship deals with companies closely associated with their owners.
City and Chelsea are believed to be among 46 clubs which could fall foul of UEFA‘s new financial rules based on 2009-2011 figures.
UEFA today published its annual benchmark report which warns that two English clubs – understood to be the European champions and the Premier League title holders – are in danger of breaking the new system which comes into effect next year.
Chelsea, however, made a profit last season and are confident they will comply when the system comes into effect next year, while City believe they will also be able to comply when the rules come into force for the 2014/15 season.
David Beckham’s new club, Paris Saint-Germain, are believed to be another who will have to prove they are not ‘cheating’ the new system.
City have a £400million deal with Etihad airline, closely linked to its Abu Dhabi-based owner, while Qatari-owned PSG have recently announced a £125million-a-year deal with the Qatar Tourist Authority.
UEFA are saying they will check to ensure they have not simply been agreed at inflated values in order to allow the clubs to comply with financial fair play (FFP).
UEFA general secretary Gianni Infantino said: ‘Everyone, including PSG, know they have to demonstrate [the deals] are without cheating and that will be submitted to panels.
‘We have a regulation which speaks about fair value of deals and the fact that a related party cannot just inject money into a club directly or indirectly.’
Clubs in European competition will be obliged to break even, within discretion of £4.3million over three years, though initially owners will be allowed to cover losses of up to £13million a year.
UEFA‘s report says club losses have ballooned from £515million in 2007 to a record £1.45billion in 2011, though revenues have seen an increase.
The UEFA Financial Fair Play Regulations are designed to prevent clubs spending more than they earn.
The regulations were agreed in principle in September 2009 and with sanctions being brought in for the first time last season.
The ultimate sanction of disqualification from European competition comes in from the 2014-15 season – other measures include fines, withholding prize money and transfer bans.
PSG would appear to have the most to do to convince UEFA, but at least the estimated £3million that David Beckham is due to receive for his five-month contract should be exempt from the FFP calculations because the French club is to pay that direct to charity.
Infantino said investments ‘in youth, in charity and social concerns,’ would be exempt from spending figures, adding: ‘It’s certainly a very good thing that he (Beckham) donates his salary or PSG do; if and how this will have an impact [on FFP] will have to be assessed.’
Infantino also insisted the financial measures were not targeted at England, and recommended that the Premier League adopt similar rules which are on the agenda for their meeting on Thursday.
He added: ‘It has been perceived by some as a sort of anti-English thing – absolutely not. It is just a good common sense rule that everyone of us is implementing at home; if you earn £1,000 you can’t spend £1,200.
‘We can only encourage the Premier League as we encourage each league and association. I think it’s very positive. ‘We are very happy that the Football League has already introduced financial fair play.’ [UK Mail]
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