By Nick Harris

16 January 2010

Arsenal are the only major English club that would meet Michel Platini’s own “Financial Fair Play” criteria for European club competitions if the Uefa president were able to introduce them now, according to senior sources within the organisation, although any such rules are at least three years away and far from fixed.

“Manchester United and Liverpool would be barred from the Champions League and the Europa Cup because they have debts piled directly on the club as a result of their current owners’ takeovers,” one executive revealed. “Chelsea and Manchester City would fail to meet the requirements because we want to prevent a situation where you can overspend a great deal, then inject cash to balance the budget at the end of the season. Only Arsenal would qualify. They make more than they spend, including debt repayments. So do Tottenham.

“But all this is only in [Platini’s] ideal vision. As things stand, Real Madrid would fail [to meet requirements], and Inter Milan. But for now it’s all theory, based around a principle that needs to be made into something workable.”

Debt in English football has been highlighted again because United’s latest financial figures, released this week, showed they made a annual profit (of £48.2m) only thanks to the £80m summer sale of Cristiano Ronaldo. United paid £41.9m in interest in the year on debts that are now above £700m.

Chelsea’s most recent figures showed a £44.4m loss, City’s showed they lost £92m, and both those clubs’ owners have wiped out debts in excess of £300m to clean up their balance sheets. Liverpool’s debts are £240m-plus. Arsenal have £297m of debt, but this was acquired manly for building the Emirates Stadium, now a cash cow that helps fuel profits. Those service repayments easily.

England’s “big four” plus City can take solace that Uefa’s plans are far from complete. Even Uefa officials are uncertain whether rules will be enacted retrospectively. “That might not be possible,” a source said. All clubs will have to meet some kind of requirements to balance income and spending, but grey areas (and loopholes) will remain for incumbent owners around debt.

Uefa’s only public statement on detail so far is the nebulous “obligation for clubs whose turnover is over a certain threshold, over a period of time, to balance their books or break even.”

The rules will be framed and tweaked over the next three years by an independent 11-man Club Financial Control Panel, set up last year and chaired by the former Belgian prime minister, Jean-Luc Dehaene. The aim is to introduce the rules in the 2013-14 season.

There is one Englishman on the CFCP, Brian Lomax, 61, who gained prominence in the 1990s as the “founding father” of the Trust movement, first as a leader of the fan-owner group at Northampton Town, then as the government-appointed inaugural chairman of Supporters’ Direct from 1999.

Lomax says he was “pleased but surprised” to be invited to work on the CFCP, because as a self-described “radical” he would like to see a German-style system of ownership across Europe, with at least 50 per cent plus one share of every club owned by “small-holders” or fans. “In fact I’d go further than that, and tie the shareholding to a properly organised trust that used the votes of fans to elect supporters to each board,” he said.

But Lomax is also a realist, and with his CFCP colleagues is committed to “a workable, enforceable solution”. Lomax highlights how starkly opinion might be divided, even within Uefa and the CFCP, by suggesting that Arsenal, Chelsea and City would all meet proposed rules if owners can “gift” their clubs money, not lend it. Platini wants to try to outlaw this, however.

Lomax’s personal view is that there should be a provision for a “truly altruistic benefactor”, but accepts this might not be a majority view. Most of the CFCP, and Platini, accept that debt is not to be outlawed per se, but want it to be manageable if it is on a club’s books. This is bound to create more grey areas.

Uefa also accepts that whatever rules it frames are susceptible to legal challenges. Lomax says there is an awareness that aggrieved parties “could fly off into the ether and form their own competition.” For now, there are three more years of work before proposals turn to rules. “Everything is molten, nothing is set in stone,” Lomax says.

The debts of Europe’s major clubs:

Manchester United: £727m.

*Real Madrid: £609m. (Real themselves claim £296m).

*Barcelona: £436m.

*Internazionale: £386m.

*AC Milan: £348m.

Arsenal: £297.7m.

Liverpool: c.£240m.

*Juventus: £147m.

*Roma: £136m.

*Bayern Munich: £96m.

Chelsea: £0, after £340m write-off, announced Dec 2009.

Man City: £0, after £305m debt-to-equity write-off, Jan 2010.

Sources: English data from club records or accounts. Clubs marked (*), figures according to Professor Jose Maria Day De Liebana, football finance specialist at the University of Barcelona.