NYON, May 28 – European football's governing body UEFA on Thursday unanimously approved Michel Platini's 'financial fair-play plan' which will require clubs to break even by 2012.UEFA president Platini’s initiative will be implemented over the next three years with the cornerstone of the new legislation – the break even requirement – intended to inject fresh financial stability into the way European clubs are managed.
Half of Europe’s leading clubs currently lose money, and over a fifth face huge deficits.
Clubs that would fail to meet the new criteria include English Premier League big spenders Manchester City, Livewrpool and Chelsea who have all reported losses running into tens of millions of pounds.
Explaining the move UEFA president Platini said: "We have worked on the financial fair play concept hand-in-hand with the clubs, as our intention is not to punish them, but to protect them.
"We have an agreement with the clubs. The philosophy is that you cannot spend more money than you generate.
"This approval today (Thursday) is the start of an important journey for European football’s club finances as we begin to put stability and economic common sense back into football."
The three main pillars of UEFA’s new rules are:
– Break-even requirement (clubs must not spend more than they generate over a period of time)
– No overdues payable during the season towards other clubs, employees and/or social/tax authorities
– Provision of future financial information (to ensure clubs can meet their future obligations).
Karl-Heinz Rummenigge, chairman of the European Club Association (ECA), told UEFA’s website: "This really is a huge achievement.
"On behalf of the European Club Association, I would like to thank UEFA and especially Michel Platini for his initiative that goes, I believe, in the right direction.
"After only two years of existence, the European Club Association has managed, together with UEFA, to set measures that will shape the future of European club football into a more responsible business and ultimately a more sustainable one.
"As clubs, by fully supporting these Financial Fair Play Regulations, we have agreed to change the way we operate, and that is a substantial step forward."