UEFA financial regulations to be challenged in court

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UEFA’s financial fair regulations are going to be challenged in the courts of Europe due to a players agent being upset that the rules are restricting the total amount of money that a player can earn.

The Belgium agent, Daniel Striani, has placed a formal complaint with the EC stating that the rules are unfair since they require clubs in the EC from 2011 forward to financially more forward. Lawyer Jean Louis-Dupont will represent Striani. Louis-Dupont successfully challenged contract rules in 1995 for Jean-Marc Bosman and won allowing Belgium players from that point forward to move without any costs at the completion of their contracts.

This time around Dupont believes that he will once again beat the rules outlined by UEFA even if they are argued additionally by the European Commission. He stated that the regulations that are supposed to help prevent financial losses from occurring at clubs will have many adverse consequences that are not competitive.

The very first argument he plans to make is that by not allowing a club to run at a loss they will not be able to make any proper investments. The second argument is that it will give an unfair advantage of rich clubs and will secure their power in the league making it hard for any other team to rise up as Manchester City has done in the past.

In addition, he plans to argue that the FFP simply wants to reduce wages and transfer fees which is obviously anti-competitive and not fair to the players because it will end up reducing the amount of transfers that take place on a regular basis as well as the number of players that actually end up on a contract with different clubs. Over time this will also lead to salaries of players decreasing.

Chelsea back in the black for the first time in decade

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Chelsea had not been financially in the black since 2003 when Roman Abramovich bought the team, but when the season figures were released in November the club reported it had made £1.4m in the year to the end of June 2012. They claimed the profit was the result of a very successful season plus some better commercial deals and a substantial profit on transfers.

At the time Chelsea’s chief executive, Ron Gourlay, noted that the change from the previous season’s loss of £67.7m showed that the club was ‘on track’ to meet the financial fair play rules set out by Uefa. However, not all the figures were forthcoming at the time, and further accounting filed at Companies House revealed a slightly different prospect.

Part of that profit came from the cancellation of £15m in non-equity preference shares previously owned by BSkyB in a joint venture, and about £3.4m in dividends. Another £28.8m came from the sale of several players, including Yuri Zhirkov to the Russian club Anzhi, Nicolas Anelka to the Chinese club Shanghai Shenhua and Alex Anelka to Paris St-Germain.

Another figure that was added to the profit side of accounts was about £4.7m that had been earmarked for compensation of former managers; it was retained as profit when the intended recipients found other employment. If all these figures weren’t added in, the club’s £1.4m profit would have been changed to a loss of £19.9m.

Chelsea has made some great moves since Abramovich took over, winning the Premier League three times and for the first time taking the trophy for top club in Europe. However, the UEFA financial fair play rules are designed to force clubs to handle their financial affairs responsibly, and club secretary Alan Shaw said that still poses a challenge.

The fact that Chelsea didn’t make it into the final stages of the Champions League is likely to pose a major challenge anyway. It means that they will be playing in the much less lucrative Europa League in the spring, with an inevitable reduction in the amount of earnings.

UEFA brings in common sense finance rules

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UEFA brings in common sense finance rules Michel Platini the UEFA president said that the approval last week of new financial play fair rules is the start of a vital journey for football in Europe that will lead to the stabilization of economic common sense.

The approval of the rules means that clubs that want to compete in the Europa League or Champions League will need to break even during each season in order to be eligible.  Additionally, club owners will only be able to invest £38m for the first three seasons after the regulations start in the 2012 and 2013 football season.

The aim of the new legislation is to level the playing field, but the biggest clubs in England may feel the impact deeply with super rich owners of clubs such as the Manchester City and Chelsea unable to contribute millions of pounds in order to purchase star players and cancel out losses.

During this time, the Premier League, which has turned away from any suggestion that clubs should have to pass through tighter regulation, is also introducing a new set of financial rules.

Next week the Premier League will meet in order to stamp a new set of laws that will hopefully prevent another collapse like what happened in Portsmouth.

Included in the new financial laws are measures that will permit the Premier League to withhold TV rights payments and or to intervene if it is not happy with the club’s financial direction which includes stopping a takeover, access to details of all loan deals, and the ability to assess the suitability of any potential new owner of a club.