Jonathan Clegg-12 January 2011

 For Europe's leading football clubs, heavy spending has long been an unofficial but required sport. This is a game in which money is arguably the most important player.

But after years of splashing astronomical fees and sky-high wages on superstar players, European football's ruling body is poised to tackle reckless spending by the region's biggest teams.

UEFA President Michel Platini used a news conference on Tuesday to warn top clubs that they will "face the music" if they fail to rein in their spending as a new report showed more than half of Europe's 655 top-flight clubs reported a loss in 2009.

While total revenue of the 655 top-division teams in Europe climbed to a record €11.7 billion ($15.1 billion), officials from European football's governing body said that net losses almost doubled to €1.2 billion, adding that there was "massive" spending on player wages.

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UEFA President Michel Platini, left, with European Club Association Chairman Karl-Heinz Rummenigge, said clubs will 'face the music' if they don't rein in spending.

Mr. Platini's comments in Nyon, Switzerland, came as a stark message to Europe's leading teams as he insisted that loss-making clubs would be excluded from the Champions League, the sport's most lucrative competition, if they do not abide by UEFA's complex new 'Financial Fair Play' rules.

"If a club doesn't fall in line and follow the same rules as everyone else, then it will be time to face the music," Mr. Platini said. "Certainly it is not something we want to see. Our objective is not to put clubs into financial difficulty."

The rules, which will apply to all clubs that qualify for UEFA competitions across Europe's 53 football nations, are designed to create a more level playing field by ensuring that a club does not repeatedly spend more than it generates.

For years, skyrocketing wages have been blamed for spiraling spending and saddling clubs with financial troubles.

In a study of English Premier League clubs between 2005 and 2009, London-based sports analyst Sporting Intelligence found that the amount the teams spent on salaries explained 85% of the total variation in league position. In other words, the more a club pays its players in wages, the better it does.

Those findings help to explain why top clubs spent an average of 64% of their income on wages in 2009, according to UEFA's review, while 73 teams across Europe spent more than 100% of their revenue on wages.

Mr. Platini said the Financial Fair Play initiative was the only way to force clubs to live within their means and stop some of this sport's most storied teams from sliding into financial disaster.

"None of us who love football have any interest in seeing clubs which are the heritage of European football disappear because of risky management," Mr. Platini told reporters. "That is why someone had to intervene."

Gianni Infantino, UEFA's general secretary, described the new rules as an "indirect salary cap" and said a panel of experts from European football's governing body will monitor club finances and recommend sanctions. Clubs that fail to comply with the regulations could be blocked from taking part in UEFA competitions, trading players and receiving prize money, he said.

Clubs can make a total loss of €5 million in the first three years of assessment, or up to €45 million if a wealthy owner makes a one-off donation to wipe out losses. UEFA will allow progressively smaller losses from 2015 before the break-even rule becomes mandatory.

The proposals will help clubs "exit an infernal spiral which prevents… them from having a viable medium-term or long-term model," Mr. Platini said.

Karl-Heinz Rummenigge, chairman of the European Club Association that represents 197 teams, said clubs would change their ways rather than risk being excluded from the sport's most lucrative tournaments.

"It would be disastrous for them to not be allowed to play... for financial reasons," said Mr. Rummenigge, also the chairman of Bayern Munich. "I am convinced that all clubs, including the top clubs in Europe, will do everything to fulfil the rules."

Under the Financial Fair Play rules, clubs will face possible bans from European competition from the 2014-15 season if they spend more than they earn in the three years before. If the new rules were currently in force, 11 clubs would "potentially" have been excluded from this season's UEFA Europa League and Champions League, according to Mr. Infantino. He did not specify which clubs would have been excluded.

Big spending top clubs in England, Italy and Spain are regarded as among the most debt laden, while Germany's top division clubs collectively balance their books. But Mr. Platini said there would be no "finger pointing" or blacklisting of clubs until clubs are required to break even starting in the 2011-12 season.

"There won't be any witchhunts today but on the other hand we won't hesitate to clamp down," he said.{jcomments on}

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