UEFA Plans $7 Billion Pandemic Relief Fund for Football Clubs


As European football clubs continue to count the costs of a global pandemic driving teams big and small European football’s governing body is set to set up a $7 billion relief fund to help struggling teams manage their growing debts while in financial trouble.

According to several officials briefed on the negotiations, the plan would be for UEFA, the governing body, to provide financial assistance to cash-strapped teams playing in major European club competitions. Refunds will be based on future payouts from teams’ participation in UEFA-run tournaments; For teams in the later stages of Europe’s premier club competition, the Champions League, these paydays can go up to €100m (about $120m) per year.

UEFA has been in talks with banks and private equity firms for months on fundraising. According to officials, first aid payments will be made to clubs that qualify for Europe’s three-year club competitions: Champions League, NS Europa League and new European Conference League.

Financial assistance is desperately needed for many European teams. Billions of dollars in revenue have been wiped off team balance sheets since the coronavirus first started affecting the football industry in early 2020. Clubs in dozens of countries had to play without an audience for months, and some had to pay discounts to broadcast partners. and sponsors. All but a handful of teams endured significant pain.

Barcelona, ​​for example, has been unable to retain the services of its most famous player, Lionel Messi, due to debts exceeding $1.5 billion, and the president said last week that the club was waiting. losses this year will approach $570 million, a record number for a football club. While most of Barcelona’s financial problems are self-inflicted, the result is years of bad management, red ink spilled on balance sheets across Europe. Football’s richest domestic rivalry, the Premier League, has suffered first drop in income Since it was first established in 1992.

UEFA has been in talks with Centricus, a London-based investment firm that is in talks with FIFA about funding the expanded Club World Cup, but more recently Citigroup and UniCredit have reportedly been in talks with people familiar with the talks. Their names were not disclosed as negotiations with the clubs continue and no agreement could be reached.

UEFA declined to comment on the talks or the relief fund. But it has discussed the proposal with the European Club Association, the umbrella body representing nearly 200 top league European teams.

UEFA has asked the ECA to conduct a survey to understand the financial needs of its members. The most pressing concern is the tens of millions of dollars in player trading debt. These obligations, which have accumulated over the years as teams buy and sell players to each other, are a vital source of income for small and medium-sized clubs. However, given how club debts have become interconnected, it risks having any default contagion effects on them.

The player trading market, valued at $7 billion before the pandemic, has now slowed significantly as more sellers from buyers and clubs struggle to hand over players they can no longer afford. The CEO of one of Italy’s biggest clubs said the market for mid-level players – trades that oiled the market in good times, ranging from $5 to $30 million – is now scarce. Instead, teams have become increasingly dependent on loans and free transfers to free up contracts and salaries they can no longer afford.

According to one person familiar with the talks, UEFA’s participation in the relief fund is critical as it will enable banks to secure their investments against the future revenues of their competitions rather than individual teams’ balance sheets. This arrangement provides lower-than-normal interest rates for clubs while reducing risk for lenders. To determine the amounts clubs are eligible to receive, UEFA will create a ratings profile for teams based on their probable revenue from the Champions League, Europa League and Conference League, a new third-tier competition launched this season.

UEFA’s initiative comes months after a failed effort by a group of 12 leading teams – citing the need for greater financial stability as well as a bigger share of football’s wealth. a separatist super league.

UEFA is the latest football organization to seek outside investment to mitigate the ongoing effects of the pandemic. Spain’s professional league announced earlier this month that it has reached an agreement to sell almost 11 percent of its broadcast and commercial revenues over 50 years to a private equity fund. For an investment of 3 billion dollars. The Italian league is negotiating a similar deal.

UEFA hopes the financing will allow teams to restructure their debt at lower interest rates. It also plans to revamp the financial regulations that govern teams in its competitions.

According to UEFA president Aleksander Ceferin, the current ten-year arrangement known as financial fair play has run its course and clubs are now preparing for a new set of cost control rules. One possible option is a combination of a luxury tax and a cap on income-related spending, similar to that imposed by Major League Baseball on teams that choose to spend much more than their competitors.

The move is an effort to bring more clarity to a process that has caused UEFA to fail to apply its rules to the continent’s top spending teams. UEFA leaders argue that under the new system, teams will know exactly how much they will have to pay if they overspend. But the system is unlikely to have a meaningful impact on the growing competitive imbalance between clubs that can spend freely on talent and those that can’t.



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