Sports

From July 1st

Spanish soccer clubs face new rules to curb overspending

Reuters

Madrid

01/31/2013

The rules include powers to set a limit on the total cost of a club's squad and to refuse to register players if they are deemed too expensive.

  • Spanish soccer clubs face new rules to curb overspending. Photo: EFE

    Spanish soccer clubs face new rules to curb overspending. Photo: EFE

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Spain's professional soccer league (LFP) has published details of rules to take effect from July 1 that aim to rein in the overspending on players that has helped push many clubs into administration in recent years.

The rules, drawn up by a joint commission created by the LFP and the government's sports council (CSD), include powers to set a limit on the total cost of a club's squad and to refuse to register players if they are deemed too expensive.

"This is a profound cultural shift in Spanish football," secretary of state for sport Miguel Cardenal told a news conference at the LFP headquarters in Madrid on Wednesday.

"The rules are a tool capable of serving as an instrument to get us back to reality in the face of some of the most significant problems confronting Spanish soccer," he added.

The new framework is the latest attempt to clean up the finances of Spain's 42 professional clubs after years of unchecked profligacy.

Many have overspent on players and wages in an attempt to compete with richer rivals and try to preserve their place in the top two divisions or win a berth in European competition.

The parlous state of their accounts has been exacerbated by the practice of negotiating contracts with television broadcasters individually, which means around half the pot of revenue goes to Real Madrid and Barcelona, the world's two richest clubs by income.

The LFP agreed rules in July 2011 which it said were in line with UEFA regulations on Financial Fair Play (FFP) currently being phased in across the continent.

It also agreed a "road map" with the government in April last year designed to help clubs pay off hundreds of millions of euros owed to the tax authorities.

The latest measures to be introduced include an obligation for clubs to provide details of projected budgets for the following season, including information on income and costs, profit and loss and investments or asset sales.

"It is a system that goes beyond UEFA's FFP rules," LFP president Jose Luis Astiazaran said. "It is about establishing a procedure to guarantee the sustainability of clubs in the short, medium and long term and reinforcing sporting equality so that football is ever more competitive."

A recent report by a University of Barcelona accounting professor showed the combined debt of the 20 clubs in Spain's top flight has been hovering around 3.5 billion euros ($4.75 billion) since the 2007-08 season.

During the 2010-11 campaign, they made a combined post-tax loss of 91 million euros, the study showed, although that was considerably less than the loss of 341 million euros racked up by the English Premier League.

A group of British politicians said on Tuesday new laws should be introduced to force English clubs to clean up their finances unless they brought themselves into line with UEFA's FFP rules.

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