Uefa threatens indebted clubs with European ban

In the deeply ironic location of Stamford Bridge Uefa last night stepped up its assault on the debt culture of English football. David Taylor, the European governing body's chief executive, warned of a future in which clubs would be barred entry to the Champions League if their finances were not acceptable. "There would be forms of communication, even warnings or reprimands, before one got to a situation of exclusion but it is absolutely possible," Taylor said. "There is concern, particularly in an era of financial crisis."

His hosts Chelsea, their balance sheet propped up by Roman Abramovich's loans, are obviously in Uefa's firing line. Earlier this year Michel Platini, Uefa's president, said in reference to the debt burden incurred by Chelsea and their Champions League co-finalists, Manchester United: "It's the clubs who cheat that are winning. European football must be clean and transparent and we do not want clubs buying success on credit." The 2005 Champions League winners Liverpool, with their debt issues, are another probable target as are some clubs in Spain and, in particular, Italy.

Taylor's threat followed Tuesday's warning by FA chairman Lord Triesman, also speaking at the Leaders in Football Conference, that the Premier League's cumulative £3bn debt-mountain represented a "tangible danger".

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There is clearly a desire among the game's regulators to rein in the Premier League clubs, who have begun to dominate the Champions League and are increasingly being taken over by foreign owners, some with independent wealth, some using the banks to finance their control. "Our conclusion in Uefa is we cannot leave things as they are," said Taylor. How it can be done, and whether it is either desirable or achievable, is another matter.

Uefa has been working on a licensing system since around the millennium, bringing in the first controls in 2004, updating them earlier this year. Under this legislation CSKA Sofia were denied entry to this year's Champions League, having been denied a licence because of unpaid debts owing to the Bulgarian National Social Security Institute and other creditors.

On Monday a new working party, created at Platini's behest, will meet at Uefa headquarters in Nyon to begin exploring ways the licence can be given further muscle. Alex Horne, the Football Association's chief operating officer, is expected to attend. Elements they are considering include an adherence to "key financial ratios" (such as wages to turnover), and an "equivalent treatment of debt" across Uefa clubs.

Taylor said Uefa was seeking "financial fair play". He added: "This does not mean a level playing field, that has never been the case, but clubs must operate within their resources. The problem is not debt itself, debt can be a useful financial instrument, it is about clubs incurring debt they cannot support. "

Uefa has been looking at the domestic regulations in Germany, Switzerland and France, which are all stricter than the UK, and to the United States.

"Debt in itself is not necessarily a bad thing," added Taylor. "Just because I have a mortgage it doesn't mean I'm bankrupt. But the debt does have a requirement to be properly serviced. Clubs must not expose themselves to such an extent that the whole future of the club is jeopardised unless some white knight comes over the horizon with millions and millions of pounds. That is a very dangerous and risky financial strategy for any organisation and as far as football is concerned we have to consider whether we should take further measures to regulate against that. Governments might bail out banks but they are not going to bail out a football club."

Bruce Buck, Chelsea's chairman, argued that Platini, and Uefa, appeared to "misunderstand" the situation at Chelsea. Buck added: "I have no problem with there being a debate on the issue. Our debt is not external, we don't owe it to a bank or insurance company, we owe it to the owner of the club who is a committed investor in the club. The fact that it is characterised as debt, or as equity is irrelevant. Someone called it 'soft debt'; it is even softer, it is equivalent to equity for all practical purposes."

Taylor, though, had addressed this argument: "Many new owners or investors are not giving gifts to clubs. In most cases they are loans. It means the club is indebted to a benefactor. If the number is large enough, you need another large investor to take over or else you are up the Swanee.

"We are still at the stage of investigating solutions, but we are concerned about the longer term. There are no solutions yet but we are all convinced something needs to be done."

Platini last night expanded his criticisms of the game in England to include the trend for foreign ownership of clubs, suggesting that this could compromise their "national identity".

Speaking ahead of his induction into the English National Football Museum's European Hall of Fame, the Frenchman said: "What is football? Football is a game and this game has become popular because of the identity. You have to have identity, that is where its popularity lies, if you bring some people from Qatar and there is no one from Liverpool or Manchester on the pitch or in the company, where is Liverpool or Manchester?

"I think it is not good. I think the Qataris should invest in Qatar... they should develop the football in each country. Not go to take money and take a chance and then go back."