As European football clubs continue to calculate the costs of a global pandemic that has plagued teams large and small in financial trouble, European football’s governing body UEFA is set to offer $7 billion to help teams struggling to manage preparing to set up an assistance fund.
The plan, according to several officials briefed on the talks, would be for UEFA’s governing body to provide financial rebates for moneyless teams playing in major European club competitions. The refund will be linked to future payments of teams from their participation in those UEFA-led tournaments. For teams involved in the final stages of the Champions League, the first club competition in Europe, these paydays can amount to up to 100 million euros (about $120 million) per year.
UEFA has been in talks with banks and private equity firms for months about the creation of the fund. According to officials, the first discount payment will be made available to clubs that qualify for the three annual club competitions in Europe: the Champions League, the Europa League and the new Europa Conference League.
For many European teams, financial relaxation is essential. Billions of dollars in revenue have been wiped from teams’ balance sheets since the coronavirus impacted the football industry in early 2020. Clubs in dozens of countries have been forced to play spectator-free games for months, and some have had to pay discounts to broadcast partners and sponsors. Except for a handful of teams, everyone faced severe pain.
Barcelona has failed to retain the services of its most famous player, Lionel Messi, amid debts of more than $1.5 billion, and its president said last week that the club is expected to lose $570 million from this year. While many of Barcelona’s financial problems arise themselves as a result of years of poor management, red ink has spread across Europe’s balance sheets. The Premier League, the richest domestic football competition, has suffered the first drop in revenue since its inception in 1992.
UEFA is in talks with Centricus, a London-based investment firm that is also involved in talks with FIFA about expanded World Cup funding to clubs but recently reached an agreement with a group of creditors. UEFA hopes the funding will allow teams to restructure their debt at lower interest rates. Also, it intends to review the financial rules governing teams in their competitions.