(Reuters) - A new European soccer season kicks off this weekend with rules to encourage clubs not to overspend. Reuters has published a Special Report on the plans.
Europe’s governing body UEFA says the rules, called Financial Fair Play, are designed to stop reckless spending on wages and transfer fees, and curb large cash injections from rich club owners. Spending cannot exceed revenue from TV rights, gate receipts, competition prize money and sponsorship. Clubs who break this rule face expulsion from European competition.
The new rules will be phased in over the next two seasons. The first season when a club could be barred will be 2013-14.
UEFA has a Club Financial Control Panel, headed by Jean-Luc Dehaene, former Prime Minister of Belgium. The panel is responsible for scrutinizing clubs’ accounts and enforcing the club licensing system.
The new rules take full effect in the 2013-14 season, when UEFA will assess club accounts for the previous two seasons. That means what clubs spend now will have an impact.
Initially, clubs will be allowed to miss the “break-even” target by 45 million euros over a two-year period. This “acceptable deviation” then falls to 30 million up until 2018. Any deviation beyond that has yet to be decided but the aim is to do away with any wriggle-room altogether.
Money invested in stadiums and youth development will not count as expenditure, encouraging investment in infrastructure and in young soccer players.