EPFL promotes Good Financial Governance in Football

EPFL promotes Good Financial Governance in Amsterdam

The EPFL organised, on the 14th of May 2013, its second seminar on Good Financial Governance. Hosted by the Dutch Eredivisie in Amsterdam, the event was structured in four sessions, during which international experts discussed and brainstormed on the sustainability challenge professional football is facing nowadays, the implementation of centrally control measures to ensure and guarantee clubs’ sustainability at league level, the financial gap between leading clubs and the rest across Europe and, last but not least, the fight against corruption and money laundering in football.
 
The initial part of the seminar counted with the participation of Frank Rutten (Chairman of the EPFL Committee on Professional Football Finance and CEO of the Erdivisie), Emanuel Macedo de Medeiros ( EPFL CEO) Claudius Schäfer (CEO of the Swiss Football League), Andrea Traverso (UEFA Head of Club Licensing) and Emanuele Grasso (Financial Partner of PwC Italia). During the session, the three key-note speakers provided a general overview about the current financial situation in professional football across Europe and their thoughts on the different challenges and concerns European football is facing in financial terms, such as the current model of redistribution of resources within and between leagues, the situation of clubs’ overspending and indebtedness and the possible existing lack of competitive balance, among other critical subjects. On the verge of the full implementation of the UEFA Financial Fair Play concept, the panellists had also the opportunity to discuss possible threats and loopholes as well as the foreseen benefits and expected outcomes during the first year of the rules’ application. 
 
 Good Financial Governance in Amsterdam

The second session, with the active participation of Sébastien Cazali (Director of Administration and Finance of the Ligue Professionnel de Football – LFP) and Valerio Casagrande (CFO of Lega Nazionale Professionisti Serie B), was focused on the numerous initiatives related to specific cost control models implemented by the EPFL Leagues, at national level. In light of the implementation of the UEFA Financial Fair Play (FFP) rules, the Leagues are currently studying the best options to regulate effectively clubs’ spending and ensure their long term sustainability by taking into consideration the practical and political ramifications of these proposals and the relevant consequences for clubs and leagues. Potential legal challenges as well as sanctions which may be imposed for breaching these regulations were other issues which have been addressed and discussed with the audience.
 
The third session, moderated by the EPFL Head of Cabinet Jair Bertoni, focus on the existing Financial gap between clubs and leagues in Europe. The two experts of the panel, Claus Thomsen (CEO of Divisionsforeningen) and Wouter van Zetten (Director of AZ Alkmaar), exchanged views about the current financial solidarity methods, adopted at national and European level by football governing bodies, and possible improvement in order to compel more efficiently with good financial governance principles as well as guarantee a proper redistribution of revenues to promote a healthy level of competition and a healthy pyramid structure. During the discussion, the leagues’ experts stressed the need to effectively distribute and spend the important amount of money generated by football in Europe. For too long, owners, executives, agents and players have been focused on short-term strategies. Football generates large profits. As a result, future emphasis should be orientated towards better redistribution of revenues across its components and on those practices which could assist football executives to avoid certain clubs’ cash flows which are dangerous for the long term sustainability of Leagues across Europe.
 
Finally, Chris Eaton (Sports Integrity Director for the International Centre for Sport Security – ICSS) devoted its session to draw attention to some of the risks football faces when it comes to corruption, match fixing and money laundering. On the occasion, the leagues had the chance to analyse and identify those vulnerable areas which might be particularly affected by criminal actions, such as the ownership of football clubs or players, the transfer market, betting activities, image rights, sponsoring and advertising arrangements.

 Good Financial Governance in Amsterdam 
 
Frank Rutten stated: “The promotion of good governance practices is key to overcome the difficult financial situation most of the clubs are facing today across Europe. It is our responsibility to adopt and assist our clubs in the implementation of control  measures to prevent overspending and ensure long term sustainability for the whole system. I welcome and personally promote initiatives of this kind which are aimed to share best practices among finance experts and leagues/clubs executives under the umbrella of the EPFL”.

At the end of the meeting, The EPFL CEO Emanuel Macedo de Medeiros stated “Professional Football has grown exponentially, in terms of global appeal, attractiveness and income, driven by the unconditional passion of millions of fans and the influx of money from TV broadcasters, sponsors and other investors.  Despite the income rising every year, expenses have also escalated, especially on players’ wages, transfers fees and payments to agents, leaving many clubs under considerable financial distress.  It is within this context that the EPFL has taken the responsibility of launching these series of proactive initiatives aimed at promoting the implementation of the highest financial standards and supervision mechanisms to ensure clubs’ indispensable financial sustainability and further boost football’s business and economic potential”.

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