Chelsea At Threat From EU Plan - 25/09/2006

Chelsea are the club most likely to be hit by an EU plan, endorsed by sports minister Richard Caborn, to relate a club's expenditure to its turnover. Clubs would not be allowed to spend more than they earn on transfer fees and players' wages. However, they would be allowed to borrow for capital investments such as new stadia or training grounds. Chelsea could be hard hit as in the first two years of Roman Abramovich's ownership of the club they reported losses of £228m and spent £276m on transfers alone. As far as the EU is concerned, that represents a subsidy which is in principle illegal as it is a distortion of the internal market. However, up to now such rules have only been applied to state subsidised firms so there would be plenty for the lawyers to argue about. The plan is only at an early stage anyway and arises from the independent review of European football conducted for the European Commission by Jose Luis Arnaut, a former Portuguese minister.