February 4, 2013 6:07 pm

Europe’s top football clubs lose €1.7bn

Europe’s most spendthrift football clubs are coming under pressure from Uefa to show that they are abiding by the governing body’s financial controls, as losses across the game’s top sides grow.

Uefa’s annual benchmarking report on the health of 679 clubs in Europe’s top divisions said net losses in 2011 had reached a record €1.7bn, half of which came from 10 clubs.

Wages have risen 38 per cent since 2007, compared with a 24 per cent increase in turnover.

Clubs must abide by Uefa’s financial fair play rules in order to play in the governing body’s competitions. The rules are designed to ensure they live within their means, although they will be allowed to incur losses of up to €45m over three years.

Uefa said a simulation of the model over the past three years revealed that 20 clubs would have failed to comply with the regulations.

Andrea Traverso of Uefa said: “Financial fair play encourages a shift in the use of funding from short-term spending to medium and long-term investments in all member associations, to avoid football becoming a competition among a small circle of clubs.”

However, Uefa is anxious to avoid club owners abusing its rules by lining up inflated sponsorship deals with related parties.

Manchester City’s commercial relationship with Etihad, the airline, and Paris Saint Germain’s investment deal with the Qatar Tourist Authority have raised eyebrows in the game.

Gianni Infantino, Uefa’s general secretary, told the Press Association: “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.”

Manchester City, despite running up pre-tax losses last season of £97.9m, believes it will comply with the Uefa regulations. Owned by the Abu Dhabi royal family, it agreed a deal with Etihad that will see £350m injected into the English Premier League champions over 10 years.

The club insists the deal, which covers shirt sponsorship, stadium naming rights and the building of a campus, was done at a fair-market value.

PSG has had huge injections of funds from its owners, Qatar Sports Investment, since its 2011 takeover, and is promised an investment of around €200m a year until 2016 from QTA.

Uefa flexed its muscles on financial regulations for the first time in December by announcing that Malaga of Spain’s La Liga was being banned from European competition for late payments.

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