City set for UEFA finance rule change

28 May 2010 10:48
| Submit Comments| Comments (37)| Printable Version1/1Play SlideshowClose MapBIG SPENDERS: Emmanuel Adebayor and Robinho cost in excess of £50mManchester City have little to fear from new UEFA rules aimed at reining in the excesses of football?s reckless spenders. The Blues have been seen, in some quarters, as prime targets for the new rules, which were rubberstamped by the European governing body on Thursday and will be phased in gradually between 2012 and 2020. The rules will basically exclude from European competition any clubs who fail to live within their means, although they will be given time to bring their spending under control. They are the brainchild of UEFA president Michel Platini, who has declared war on wealthy club owners who he believes are ruining the game through overspending and running up debt. City made a £92.6m loss in 2008-09, the highest in the Premier League, even before they embarked on last summer?s £117.5m player spree. If they were to do that in two years? time they would, on the face of it, be threatened with exclusion from European competition. They would also fall foul of Premier League rules, which are expected to follow UEFA?s  example. But football finance expert Dr Rory Miller, of Liverpool University, says that City have far less to fear from the initiative than others in thePremier League. ?The two key things which UEFA are targeting are clubs who carry debt, and those that are not living within their means,? he said. ?As far as I can see, they are not against people coming in to buy clubs, as long as they are not loading it with debt.? Investment City owner Sheikh Mansour has already wiped out the £304.9m debt at City by converting his loans to the club into equity, or shares in the club. The Blues are also gearing up to ensure the club will be able to stand on its own two feet by the time the new rules are in full swing. The vast, ongoing investment into the club aims to make sure that they are able to compete with Europe?s best on the field, and to be a global entity and a club of real substance off it. The £1bn plans to re-develop the entire Eastlands site, possibly increasing stadium capacity to 60,000, aims to maximise revenue ? and the average five per cent ticket price rises this summer are part of the strategy of ensuring the club will eventually pay for itself. ?As the rules stand, if you buy a club and put in new equity and finance, that is fine,? said Dr Miller. ?If you buy a club and then take out debt to improve facilities or build a new stadium, Uefa don?t have a problem. ?But if you are a club which runs persistent losses, financed by borrowing, there is a problem. When you get the kind of plans City have for developing the area around Eastlands, I don?t think UEFA would want to be seen trying to stop such investment in a socially-deprived area. It?s not what they are about.

Source: Man_City