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Media & Entertainment Law

: Sports Biz

Premier League and UEFA Propose New Spending Requirements

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It seems to be soccer week here at SportsBiz and we're back in Europe today. Both the English Premier League and UEFA have proposed new financial rules in response to the flood of money that has been flowing into the game over the last few years. Let's look at the EPL first, as the reaction of the Premier League's clubs will impact the ability of UEFA head, Michael Platini's ability to get his proposals adopted.

The Premier League is first attempting to address those clubs who simply cannot keep pace with the big clubs and fall into receivership. Before that happens, under the new regulations, the Premier League may step in and agree to a budget for the club, but more significantly, the EPL would have the ability to ban transfers and the renegotiation upwards of player contracts. EPL chief executive, Richard Scudamore, expressing the view that is widely held among soccer fans, but perhaps less so among the owners, says:

"Our view is the current owners are just the current custodians and the clubs will be there before them and long after them. It's absolutely right that the clubs are sustainable and that they are able to meet their obligations to fans and the competition."

The heart of the proposed UEFA rule is that no club would be permitted to spend more on player salaries than the club's gross revenue for the year. While that on the surface might seem to be a proposal that would go a long way towards equalizing the playing field between the big and small clubs, in fact, it may well lead to the opposite result. Since clubs would be limited to spending no more than the revenue they take in, no club would have the ability to rely on its owners to fund a rise in the standings by spending to attract talent in the manner of, for example, Manchester City this year. The proposed rule would in effect consign the small clubs to the ranks of small clubs for the rest of their days, unless the managers turn into the most astute judges of talent on the continent.

It is for this stated reason that Scudamore believes no EPL club will support the proposed rules. How they will fare with other European clubs remains to be seen, but it is difficult to believe that any of the big clubs would be too agreeable to the concept.
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Full post as published by Sports Biz on September 15, 2009 (boomark / email).