UEFA warns Europe’s top clubs to break even or face being expelled from Champions League

UEFA threatens clubs in debt of Champs League ban

MONACO — UEFA warned European soccer clubs that they must break even in the future or face being barred from the Champions League.

UEFA president Michel Platini said Thursday he wants new financial rules in place by 2012 to stop clubs from spending more on buying players and wages than they generate in soccer-related income. That includes selling players, match tickets and merchandise, and money from television and sponsorship deals.

“The clubs simply can’t spend more than they generate by way of income,” Platini said. “We have three years to see how clubs can get back to break even.”

Platini spoke ahead of the draw for this season’s Champions League. UEFA’s proposals for controlling club spending will be discussed Friday by the Professional Football Strategy Council, a panel of experts from Europe’s clubs, leagues and players’ unions.

UEFA’s stand could threaten Manchester United and Liverpool — whose American owners borrowed heavily to buy the clubs — and Real Madrid, which used bank loans to fund a recent spending spree.

“If a club can get loans from a bank to buy players and then pay it back, that is not a problem,” Platini said. “If a club gets a lot of money in subsidies from a big backer and is still in deficit in two years, that is a problem and we don’t like that.”

Man United reported a pretax loss of $73 million in its most recent annual figures despite a profit in operations when it won the Premier League and Champions League in 2008.

Owner Malcolm Glazer, who also owns the Tampa Bay Buccaneers, borrowed money to buy the club in 2005 and repayments pushed the club’s overall debt to $1.052 billion.

Liverpool has debts of $405 million after Tom Hicks and George Gillett Jr. bought the club two years ago. It made a profit in the financial year ending July 2008 but debt repayments pushed up the parent company’s losses.

Gillett sold the Montreal Canadiens, and Hicks is looking to sell the Texas Rangers.

Madrid borrowed from Spanish banks before spending more than $356 million on players this offseason, including Cristiano Ronaldo from Man United and Kaka from AC Milan.

UEFA, the governing body of European soccer, is creating an independent financial control panel. It would warn and fine clubs before expelling them from the competition.

Platini said he is still looking for an “eminent personality” to chair the panel.

UEFA also wants to stop benefactors, such as the owners of Manchester City from Abu Dhabi’s ruling family, from driving up the cost of transfers and wages.

UEFA deputy general secretary Gianni Infantino said its key principle is that clubs must break even. However, clubs in debt could still play in the Champions League if the money had been spent on long-term projects.

“If the loss corresponds to the money which is invested in youth and infrastructure, this will certainly be tolerated,” Infantino said.

UEFA plans to stop benefactors from gifting large amounts of money under sham sponsorship deals worth well above the market rate.

“This would have to be analyzed by the club financial control panel … to see whether this was done to circumvent the rule or not,” Infantino said. “In which case there would be very strict rules.”

Platini, who will chair the meeting on Friday, has asked for a draft set of rules that can be approved by the UEFA executive committee when it meets next month, and phased in by 2012.