Encouraging financial fair play messages

Gianni Infantino says "encouraging messages" have emerged from the fifth UEFA club licensing benchmarking report and European teams are heeding the "wake-up call" on financial fair play.

Gianni Infantino said there have been positive signs
Gianni Infantino said there have been positive signs ©UEFA.com

UEFA General Secretary Gianni Infantino says "encouraging messages" have emerged from the fifth UEFA club licensing benchmarking report and that the continent's clubs had started to heed the governing body's firm advice with respect to financial fair play measures and their implication for European club football.

Summarising the key figures contained in the report, Mr Infantino highlighted that revenue continues to grow in the sport while losses have stabilised.

"We see already some trends which are changing," he said, "and I think there are a few encouraging messages coming out of this study. [They] are, from my point of view, that in spite of the general economic situation, revenues in top division club football have grown again. We are now at €13.2bn in revenues. On average in the last five years, they have grown 5.6% per year – can you tell me which other industry has grown 5.6% every year in the last four or five years when we had an economic crisis which is hitting all of us? This shows that the professional football business sector is healthy from a revenue point of view.

"The other encouraging figure is linked to the fact that losses are stabilising. For €13.2bn in revenues, we had €14.8bn costs. This makes around €1.6 to €1.7bn of losses in one year. This is worrying. But it is a little less worrying than last year, because the ratio of revenues and costs is going in the other direction for the first time in five years. Last year, it was 12.8%, this year it is 12.7%.

"It is encouraging, because the break-even rules, which will be the rules which have the major impact on this calculation, have not yet kicked in completely. The assessment will be done for the first time next year, so there is still a little bit of time. It shows that the clubs have taken it on board and that they are really taking it seriously and trying to spend a little bit less."

Clubs are taking notice of the first financial fair play measures which have been implemented for the first time this season with overdue transfer and employee payables reduced from €57.1m to €30m between the first assessment in June 2011 and the subsequent assessment 12 months later. Between June 2012 and September 2012, this figure was then reduced to €18.3m as clubs took note of impending action by the Club Financial Control Body (CFCB). In percentage terms, this equates to transfer and employee payables being reduced by 47% between June 2011 and June 2012, and by a further 40% in the subsequent three months.

"The figures are historical when it comes to maybe the speed of football in general," said Mr Infantino, "but they are very actual when it comes to financial figures relating to financial fair play. Last year, I remember when we published this benchmarking report, we were saying that this is a wake-up call for the clubs. I think now the clubs are really listening, and the financial fair play rules have shown that they have teeth, and that the rules are biting now."

UEFA analysis also demonstrates that little of the revenue boom of the last decade has been directed into longer-term investments, with fixed asset values (stadium, training ground, equipment, etc.) of the 237 clubs competing in this season's UEFA competitions totalling €4.8bn, of which a third, €1.6bn is taken up by the seven English clubs, showing that ownership of facilities in continental Europe still lags behind their English counterparts.

One of the objectives of financial fair play is to encourage more long-term investment and this is reflected in the formulation of the break-even assessment which allows costs from fixed asset investment to be excluded. In addition, the latest three-year financial fair play simulation (2009, 2010 and 2011) indicates that 46 clubs from 22 separate countries would have been required to improve their balance sheet through equity contributions had the regulations already been in place during that period.

Mr Infantino spoke of concrete figures which show that the financial fair play rules have begun to have an impact. "Everyone knows the rules and they know when they kick in," he said. "For the first time, some important sanctions have been taken as well. Clubs were excluded from our competitions, others were sanctioned," he said. "Payments were frozen to 23 clubs for a certain period until they put their accounts in order.

"We are not trying to harm clubs," he concluded. "We are trying to help them. We have to protect the whole football system together with the clubs."

Mr Infantino's comments come following the publication of the benchmarking report which covers more than 670 top-division clubs throughout Europe and from UEFA's member national associations. For the first time, the report has an entire section on UEFA club competitions and the participating clubs, and includes analysis on where clubs' finances are situated in comparison to financial fair play requirements.