UEFA 'close to £6billion rescue package' to help clubs financially
UEFA ‘put finishing touches to a £6BILLION rescue package to help struggling clubs hit hard by devastating impact of Covid pandemic’
- UEFA are close to finalising a £6billion rescue package to help struggling clubs
- They are proposing funding facility of £1.7billion to £5.1billion to tackle the issue
- In addition clubs will now be able to borrow funds at a lower rate than previously
- UEFA are planning a salary cap to stop some clubs having an unfair advantage
UEFA are close to finalising a £6billion rescue package to help European football recover from the financial impact of the coronavirus pandemic.
As reported by Bloomberg, UEFA have devised a three-pronged strategy to help clubs who had to deal with a lack of supporters in stadiums in addition to falling broadcast revenue.
To combat the issue UEFA are proposing a funding facility of £1.7billion to £5.1billion.
UEFA are close to finalising a rescue a £6billion rescue package to help European football recover from the financial impact of the coronavirus pandemic.
In addition, there will be an emergency pot of money reserved to deal with future crises, while there will also be new rules on financial fair play.
Clubs will be able to access funds at lower borrowing rates, while they will also be able to restructure existing debt over longer periods of five to seven years.
UEFA are planning a salary cap to stop the likes of Chelsea and Manchester City having an unfair advantage
UEFA are also planning a salary cap as they look to prevent the likes of Manchester City and Chelsea from having an unfair advantage over other clubs.
The current Financial Fair Play system, which was introduced 11 years ago, states that clubs have to break even over a three-year period.
However, under the planned new system, clubs participating in European competitions would be limited to spending a fixed percentage of their revenue – around 70 per cent – on salaries.
Clubs that breach the cap would have to pay a luxury tax, with the equivalent or more of any overspend to then to be redistributed to other clubs in the competition.
Although fans have now returned to stadium at many grounds, clubs are still feeling the financial impact of the pandemic.
Barcelona, who lost Lionel Messi, are among the clubs that are currently struggling financially
In July Deloitte reported that revenue in European football fell by 13 per cent to £21.4million.
Barcelona, who were unable to keep Lionel Messi as he joined Paris Saint-Germain, are among the clubs that are struggling financially.
LaLiga clubs agreed to a proposal from private equity firm CVC Partners, which is set to provide the division with a financial boost of £1.78billion.
Barcelona and Real Madrid were strongly opposed to to plan owing to concerns regarding what it will mean for future broadcast revenue.
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