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Platini's Champions League Ultimatum


Uefa president Michael Platini has given Premiership clubs a three year ultimatum to clear up their debts or be booted out of the Champions League. Of course, other clubs such as Real Madrid could be affected as well, but there is no doubt that Platini's real target is English dominance of the Champions League. Under Platini's scheme clubs will have to break even on their football budgets, only spending what they earn from ticket sales, television rights, sponsorship and prize money. Clubs will be able to go into debt to pay for stadium improvements and youth development, which Platini hopes will inspire investors to pump money into these areas rather than transfer fees and inflated wages. Under the plan a club £1m in debt would be treated more leniently than one £50m in arrears. A scale of fines could be imposed and other punishments could range up to suspensions from European competition. Platini's answer to high running costs is that club owners should not give the players so much money, but if you are operating in a free and competitive market the best players will always attract high transfer fees and wages. There are ways of fixing the market in the interests of 'sporting equilibrium', but there is evidence that imbalance actually makes the game more not less attractive.

Particular targets under Platini's plans would be Manchester United and Liverpool who carry hundreds of millions of pounds of debt. Manchester City, at present spending far in excess of their income, could also be expelled from the Champions League if they qualify, which seems more than possible. Chelsea are in more ambiguous position. Last season Roman Abramovich reduced an estimated £600m of debt by converting half of it into equity. He has also asked the club to start breaking even within a year, although that target may be difficult to achieve. Arsenal are Platini's blue eyed boys among the top four. Not only do they have a French manager, and some French supporters who make the trip under the Channel for home games, they more than balance their books and their considerable debts are largely because of the Emirates Stadium and therefore exempt under Platini's scheme. Uefa should be careful what they wish for: a Champions League competition without AC Milan (another of Platini's targets), Liverpool, Manchester United and Real Madrid might be much less attractive, even if it did produce a Barcelona v. Arsenal final.

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