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Posted Friday, May 28, 2010 by YAHOO Sport

UEFA passed rules designed to curb European clubs’ excessive spending and end an era of so-called “financial doping.”

UEFA’s ruling executive agreed on Thursday to set limits on wealthy club owners subsidizing losses incurred by paying high transfer fees and salaries.

Europe’s football authority wants clubs to break even by spending only what they earn from football-related income—or face being barred from playing in the Champions League.

UEFA president Michel Platini said the new financial fair play regime was “not to punish (clubs), but to protect them.”

“This approval today 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,” Platini said in a statement.

Platini has said clubs were “cheating” by spending recklessly to chase success, and feared others would go out of business with unsustainable debts.

Last offseason, Real Madrid borrowed from banks before spending ?250 million ($310 million) on a host of talent, including Cristiano Ronaldo, Kaka and Xabi Alonso.

In England, the 20 Premier League clubs have been carrying a collective debt of 3.5 billion pounds ($5.1 billion; ?4.1 billion).

The Premier League issued a joint statement with England’s Football Association backing UEFA in its “difficult task.”

The English bodies “are fully supportive of the principle of sustainability and of football clubs living within their means,” it said.

Under UEFA’s new rules, owners will be allowed to cover losses of up to a maximum of ?45 million ($55 million) over an initial three-year spell, starting in 2012. In the three years from 2015, just ?30 million ($37 million) in losses can be covered.

The bailouts will only be allowed with “committed funds” of capital and not by borrowing, UEFA head of club licensing Andrea Traverso said.

Clubs without a wealthy patron would be allowed ?5 million ($6.1 million) losses over three years.

Accounts will be examined by a UEFA panel of financial and legal experts, chaired by former Belgium Prime Minister Jean-Luc Dehaene.

Traverso said UEFA could first bar clubs from the Champions League in the 2014-15 season. UEFA currently distributes over ?700 million ($856 million) each season among the 32 clubs competing in the group stage of the world’s most lucrative club competition.

Traverso said clubs could adjust their business model before first being judged on their 2012 financial reports, but monitoring would start immediately.

“They will already be warned or advised if they are moving in the wrong direction,” he said, adding that clubs should aim to spend no more than 75 percent of revenue on player costs.

UEFA will publish detailed rules next month, with some taking effect immediately. Clubs will face sanctions if they fail to pay salaries on time or fall behind settling transfer payments to rival clubs.

To encourage clubs to develop their own players, UEFA has set no limits on investment in youth academies, training facilities and stadiums.

“Clubs could spend an unlimited amount of money in those categories; in other costs they have to balance their books,” Traverso said.

The rules follow a two-year consultation involving federations, clubs, leagues and players’ unions representing Europe’s 53 football nations.

UEFA analyzed the 2008 financial reports from 732 top-tier clubs across Europe and found almost half failed to break even. One in five clubs made a “huge” loss—defined as spending 20 percent above total income.

Their total losses amounted to ?578 million ($708 million) despite record income of ?11.5 billion ($14.1 billion) in a boom era for television deals.

Platini said last year his campaign was supported by billionaire owners such as Chelsea’s Roman Abramovich and AC Milan’s Silvio Berlusconi.

This season, Abramovich and the Abu Dhabi ruling family which runs Manchester City converted a combined 730 million pounds ($1.2 billion; ?839 million) of loans into share equity to wipe away losses.