The UEFA Champions League, the most popular club football competition, has been growing in global popularity over the past few years.
Despite the rise in global awareness of the competition, Europe’s top football club’s, who are regular participants in the Champions League, having been losing money faster than Usain Bolt can run 100 meters.
According to UEFA’s 2010 club licensing report, which has just been released, Europe’s top clubs lost about €1.6 billion in 2010.
“Net losses have increased in European football every year since 2006,” said UEFA general secretary Gianni Infantino.
“Income has grown but so have losses.
“In two years from 2008 to 2010 net losses have increased by €1bn. In 2006 losses were just €216m.
“If this is not enough to tell us that we need to act, and act quickly, then nothing will.”
They say football is a business, but obviously it’s not run very efficiently if the top club’s are losing a staggering €1.6 billion in one calendar year.
Financial Fair Play
I’ve go no answers, just “Financial Fair Play”.
When UEFA’s Executive Committee passed the Financial Fair Play concept in September 2009, they had six major objectives in mind.
Firstly, they wanted to introduce more discipline and rationality in club football finances.
Obviously, that has not worked.
Secondly, they sought out to decrease pressure on transfer fees and player wages in order to limit the inflationary effect.
Have you seen the weekly wages of Anzhi Makhachkala’s Samuel Eto’o?
Thirdly, Financial Fair Play was meant to encourage football clubs to compete within their revenues.
Surely the smaller clubs will benefit from Europe’s elite losing €1.6 billion, right?
Fourthly, FFP was designed to promote long-term investments in youth systems.
We can not assess the level of success of this objective at the moment. Let’s wait a few years before criticizing objective number four.
Fifthly, UEFA was seeking to protect the long-term viability of European club football, which is precisely what is in jeopardy due to the reported €1.6 billion loss in 2010.
Lastly, the committee believed that FFP would make sure that clubs settle their liabilities, or debt, in a timely manner.
Who’s to Blame?
At the moment, Financial Fair Play has not been anywhere near a success.
However, do not give up on it just yet.
I would place the blame on irresponsible ownership.
Owners have to realize that it is ridiculous to spend in excess of €100 million in the transfer market every year, especially when their club is losing money.