Written evidence submitted by UEFA |
This document contains the submission of UEFA to
the inquiry into English football governance currently being held
by the UK Parliament: Culture, Media and Sport Committee.
The document contains a brief outline of UEFA and
is then structured according to the six questions outlined in
the press release dated 7 December 2010. All comments are an objective,
dispassionate, external view on the relevant subjects and are
intended to be as constructive as possible. It is evident that
in a short submission of six pages/3,000 words, only a short summary
view can be given on each of these very important questions.
The six questions outlined by the committee are as
football clubs in the UK be treated differently from other commercial
football governance rules in England and Wales, and the governing
bodies which set and apply them, fit for purpose?
there too much debt in the professional game?
are the pros and cons of the Supporter Trust share-holding model?
Government intervention justified and, if so, what form should
there lessons to be learned from football governance models across
the UK and abroad, and from governance models in other sports?
UEFA's view on many of the questions being considered
by the Committee are covered, whether directly or indirectly,
within the submission of UEFA to the UK All Party Parliamentary
Football Group "Inquiry into English Football and its
Governance" (2008-09), and this document adapts many
of those responses.
According to the statutes agreed by its members,
UEFA is an association of 53 national football associations, is
the football governing body at European level, and organises competitions
for national teams and clubs. It was formed in 1954 and is based
in Nyon, Switzerland. It has a structure based on representative
democracy whose main organs are the Congress (legislature) together
with the Executive Committee and the President (executive). In
addition, there are autonomous disciplinary bodies to carry out
sports judicial functions. UEFA also has a series of consultative
committees and bodies which advise the Executive Committee.
The Football Association is a member of UEFA (and
FIFA, the football governing body at world level). As part of
its view-forming and decision-making processes, UEFA gathers opinions
not only from The FA (on behalf of English football as a whole)
but also from European representative bodies of the different
stakeholder groups who are organised on a European level, for
(via the European Club Association [ECA] which represents the
top clubs in European football);
(via the European Professional Football Leagues [EPFL] which represents
the top leagues in European football);
unions/associations (via FIFPro Europe which represents the players'
unions/associations in European football); and
(via Football Supporters Europe [FSE], Supporters Direct Europe,
CAFE [Centre for Access to Football in Europe] and other supporter
There are also other very important stakeholder groups
who are consulted (coaches, technical staff, referees, etc) via
the relevant organisations, forums and bodies. In addition to
The FA, UEFA also has some direct contact with other main national
English professional football stakeholder organisations such as
the Premier League, Football League, PFA, LMA, FSF, etc.
1. Should football clubs in the UK be treated
differently from other commercial organisations?
The answer to this question is that professional
football clubs already are treated differently from other commercial
organisations, in many different ways. For example, the framework
governing the employment conditions of the key employees of professional
football clubs (the players) is very specific and contains many
features (whether of international, European or national origin)
which differ from those which would apply to employees of "normal"
commercial organisations. The question is more in what way they
should be treated differentlyand that is the task of the
football authorities and the state authorities in their respective
areas of competence (and sometimes working together).
The various ways in which the treatment of professional
football clubs, and sport in general, is different to "normal"
commercial organisations can be classified as part of the "specific
nature of sport" (also known as "specificity").
For example, where EU law comes into play and impacts on the activities
of sports bodies, Article 165 of the EU Lisbon Treaty now requires
that the specific nature of sport must be recognised. UEFA believes
that sport is not "above the law", whilst this new provision
in the EU Treaty, together with numerous decisions of EU and national
bodies over the years, recognise that sport cannot simply be treated
as any other "business", without reference to its specific
characteristics (ie the specific nature, or specificity, of sport).
The first post-Lisbon decision by the ECJ in a sports case (the
Olivier Bernard judgement) certainly vindicates the idea that
sport cannot be treated like any other industry, because of its
specific nature (in this case in the areas of football education
and training). Furthermore, the very fact that most states have
a sports ministry, and a parliamentary committee responsible for
sport, would indicate that sport, as with a small number of other
sectors, deserves special treatment.
In conclusion, we believe that sport (and its professional
clubs) is and should be treated differently from other commercial
organisations in line with its specific nature.
2. Are football governance rules in England
and Wales, and the governing bodies which set and apply them,
fit for purpose?
Whilst every country is of course different, there
is still the need for a common basic framework. In every country
the national association, as governing body, needs to set a framework
to ensure coherence across the different levels of the sport and
to avoid the unnecessary duplication and layers of regulation,
bureaucracy, and red-tape which inevitably results from too many
parties trying to control the sport. For example, as regards disciplinary
sanctions each league should have the competence to deal with
disciplinary issues up to a certain degree of gravity. Nevertheless,
to ensure coherence across the sport and the country, uniform
sanctions should be fixed by the national association for certain
types of offences.
Another key example is youth developmentwhilst
it is clear that professional clubs are involved in, and critical
to, élite player youth development, the overall framework
and control of overall youth development policy and technical
matters should be with the national association for all levels
of football in order to ensure a coherent national approach to
It is the experience across European football and
sport that, almost without exception, where there is more than
one governing body, whether these are formal or de facto
governing bodies (who inevitably end up competing with each other),
it does not help the overall development of the sport as a whole.
The inevitable result is disparity in the standards of governance
because this means (by definition) a degree of incoherence and
fragmentation, and this is generally not good for the development
of the sport.
To conclude, ensuring that there is one single genuinely
empowered governing body per sport per country should help to
ensure that governance rules are fit for purpose.
3. Is there too much debt in the professional
Debt in itself is not necessarily "bad",
and indeed, on the contrary, is often very necessary for sports
and their professional clubs to develop. The question that needs
to be addressed regards the type of debt, but also how this fits
into the overall financial situation of a club (and therefore,
in aggregate, into the financial situation of the game as a whole).
As the Committee will be aware, UEFA has taken steps to introduce
further and more effective financial regulation for clubs competing
in UEFA competitions, under the general banner of the "Financial
Fair Play" (FFP) initiative.
Back in 2008 when the FFP discussions started, UEFA
had to decide on a basic systemic approach and found a lot of
concern and confusion around the role of debt in football (eg
destabilising football competitions, threatening the financial
sustainability of individual clubs, etc). During the extensive
consultation process there was considerable opinion frequently
voiced that UEFA should centre FFP on limiting "debt",
which UEFA more or less resisted. Although debt levels will be
taken into consideration, the ability of a club to break-even
over a period of time and the ability of a club to service all
its debts and future obligations will be of primary concern for
FFP rather than simply the level of debt.
To add a European perspective to the discussions,
UEFA's annual report "The European Club Footballing Landscape"
(which we enclose with this submission) sets out a fairly dysfunctional
situation across Europe, not just in England. Amongst the main
points are net losses reported by European top division clubs
of 1.2 billion (11 spent for every 10 of revenue)
and one in eight auditors of 600 clubs expressing doubt as to
whether their club would continue to trade in 12 months time.
The report also discusses debt, setting out the relatively large
debt burden that English clubs have, underlining the considerable
confusion around the term "debt" and also highlighting
the fact that a typical set of financial statements includes many
more detailed notes explaining the financial position (balance
sheet) than the financial performance (profit and loss account).
In other words, to understand the debt profile of a club, or indeed
the aggregate debt profile of a country's clubs, is not easy and
needs context. With FFP in mind, the members of the relevant decision-making
bodies will need to consider, amongst other things, not just the
size of debt, but the type of liability, any assets secured, the
terms of the debt and the maturity of debt repayments against
the projected cashflows.
Regarding the relatively high level of debts of English
clubs, there would appear to be several different factors and
issues at play. Firstly, it is somewhat natural that English clubs
report a level of financial debt exceeding their counterparts
in other European leagues since the stadiums are generally owned
and can provide security to the lender, whilst elsewhere only
20% of European top division clubs own their stadium.
UEFA does not see a problem, and indeed will encourage
under FFP, serviceable debt funding for capital projects such
as a stadium or training facilities build. Some of the debt in
the professional game no doubt falls into this category, either
through new projects or a legacy of previous investments. However,
UEFA sees a distinct difference between (a) debt financing for
such long-term football development purposes and (b) more speculative
activities where debt is increased to fund transfer fees or increased
salaries (which often has a knock-on effect on most other clubs,
as well on the competitions). Economically speaking therefore,
"new money" coming into football can be divided into
(a) investment and (b) consumption, respectively.
The use of large levels of debt connected to leveraged
buy outs is thankfully less common and a separate issue but in
general appears to act as a burden, soaking up club's operating
profits, whilst offering little merit to the club and their supporters.
For football clubs a more common and long standing type of debt
arises through the benefactor model, with the build-up of owner
debts, sometimes in the form of interest free "soft loans".
Putting aside the wider impacts of this business model beyond
the individual club, the risks from these situations are certainly
less clear cut and are centred around a potential over-dependency
of a club on an income stream with the potential to dry up, leaving
difficulty meeting ongoing financial obligations.
In general we would categorise the high debt in the
professional game as both a symptom and a cause of overheated
spending, primarily on players, in the pursuit of success. The
various rules within Financial Fair Play will attempt to address
this overheating through a systemic approach, indirectly limiting
debt taken by clubs for speculative purposes, although UEFA's
reach only extends to rules for its own cross border competitions.
4. What are the pros and cons of the Supporter
Trust share-holding model?
All governing bodies, where they are able, have a
duty to try to ensure that football develops in a balanced way
across the territory that they cover. On UEFA's level, this means
to consider whether it is helpful to the balanced development
of European football that investment and development funds go
to the parts of Europe where they are least needed. While there
is no uniform European concept or tradition regarding ownership
of football clubs, the fan ownership model seen in certain parts
of Europe (eg in Germany or at clubs such as Barcelona and Real
Madrid) has many positive features, not least the stronger intrinsic
link that this structure creates with local and regional communities
and the relative degree of stability that may be achieved as a
result of this. Whilst such associative structures bring their
own set of challenges, it cannot be denied that such systems do
not permit clubs to be "bought and sold" or otherwise
"traded", as such clubs will always belong to their
fans. For these reasons, UEFA continues to support the Supporters
Direct initiative in the UK and also the roll-out of this best
practice from England/the UK across the rest of Europe.
5. Is Government intervention justified and,
if so, what form should it take?
Firstly, it should be pointed out that there is a
vast amount of government intervention (both direct and indirect)
in sport in the UK, including the following:
Olympic Games and Paralympic Games Act 2006.
Lottery Act 2006.
Betting and Olympic Lottery Act 2004.
(Disorder) (Amendment) Act 2002.
of Communications Act 2002.
Advertising and Promotion Act 2002.
(Disorder) Act 2000.
(Offences and Disorder) Act 1999.
Totalisator Board Act 1997.
Symbol etc (Protection) Act 1995.
Lottery etc Act 1993.
The above list does not include other key legislation
for UK, European and international sport such as acts relating
to listed events, copyright and patents, ticket touting, and so
There are many examples of the football world, working
together with government and politicians, achieving improvements
for football. For example, together with other football stakeholders
UEFA and the European professional leagues, with several government's
support, managed to find a balanced and legally sound solution
to the international transfer system when it was under threat
from the EU in 2000-01. A similar partnership saw big efforts
in convincing the EU to permit legitimate central marketing of
rights by UEFA and the English Premier League. A current example
is that a large coalition of sports bodies from many countries,
including UEFA and English football bodies, are asking for government
intervention to support the right for sports competition organisers
to receive a fair return from betting operators who often pay
nothing for using the "organiser's" rights of sports
bodies for their own commercial gain, without giving anything
back to sport.
Therefore, the question is not whether government
intervention is justified, because government intervention in
sport is extensive everywhereand is even often being requested
by sports bodies. The question is rather how this intervention
Therefore, in order to avoid government intervention
it might be asked whether The FA could be further strengthened
in its role as regulator and governing body in England. In this
respect, it may be noted that England (and the rest of the UK)
is unlike most of the main European footballing nations in that
there is currently no "enabling" sports legislation
(a) defines the limits of governmental intervention;
(b) ensures coherence in key areas (eg youth
education and development);
(c) eliminates the risk of unnecessary inefficiencies,
bureaucracy and excessive red tape which is created through having
different controlling bodies; and
(d) empowers the national governing body to run
its sport and fulfill its functions.
Such legislation is relatively simple to draft and
implement and can help to protect different sports from the unwanted
side-effects of the hap-hazard way that sport has developedby
helping to ensure that sporting objectives are prioritised for
example. In certain countries (including England), the absence
of a proper legislative framework means that the control and development
of top-level sport can simply end up being the outcome of pyrrhic
turf wars between sports bodies, with generally negative results
for the sport and country in question. It is clear that national
parliaments and governments should not run sportsport
should run itself. However, the experience of many other countries
is that the parliament and government canand perhaps shouldhelp
sport to run itself, in particular by the adoption of appropriate
"supporting" legislation and not simply sitting by as
sports develop as a function of the outcome of turf wars.
6. Are there lessons to be learned from football
governance models across the UK and abroad, and from governance
models in other sports?
One possible area where the football governance model
could learn from abroad, is as regards the make-up of decision-making
bodies. Actors in professional football are many and variedthe
national association, clubs, leagues, players, coaches, supporters,
referees and so on. This is reflected in the structures of the
decision-making bodies in many of the other main footballing nations
where the relevant board will often have representatives of players,
coaches and referees, as well as the technical component in some
casesall of whom are football people. One large European
national FA now has a supporter representative on its board as
well as its congress. Lastly, it may be noted that, in England,
organisations such as the Professional Footballers Association,
the League Managers Association and the Football Supporters Federation
are both representative and respected.
There are of course many other areas where lessons
can be learned, and UEFA has programmes such as the Top Executive
Programme (for President and General Secretaries) and KISS (Knowledge
& Information Sharing Scenario) programme (for middle management)
which try to help different European countries learn from the
experiences of others.
Relevant background paper:
"The European Club Footballing Landscape: Club
Licensing Benchmarking Report Financial Year 2009" http://www.uefa.com/uefa/documentlibrary/index.html
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