US Edition
Fears transfer system could collapse if Saudi clubs default on fee payments
European market is underpinned by a 'no overdue payments rule' which protects clubs and there are now calls for regulation of Saudi buyers
European clubs who have profited from a huge €878 million (£753 million) in transfer fees from the Saudi Pro League this year want Fifa to establish regulations that guarantee they will get their money - amid fears that late payments could collapse the transfer system.
Premier League clubs, including the ‘Big Six’, took part in behind-closed-doors talks on Wednesday over the future of the European game, with concerns raised that Saudi Arabia has now become such a major trading partner that it will have to submit to some regulation.
Leading clubs were told at the European Club Association (ECA) general assembly that Saudi investment in their players has soared to such an extent this year that transfers agreed by the Gulf Kingdom’s clubs now account for 11 per cent of all fees paid to sides in Europe’s top divisions. Previously it has never been higher than two per cent, and even last year was a comparatively modest €51million.
In Europe, the transfer system is underpinned by Uefa’s “no overdue payments rule” that means clubs must meet their obligations to fellow football club creditors and tax authorities by agreed deadlines. It is designed so that one club in financial straits cannot bring down others to whom it is indebted. Should a club fail to meet its transfer fee obligations it will not be licensed to play in Uefa or domestic competition.
However, no such leverage is available over Saudi sides, whose spending spree in Europe over the last two windows has been such that clubs have become concerned that they have left themselves exposed. Among those who have generated significant fees in the Premier League are Liverpool, Chelsea, Manchester City, Fulham, Newcastle United and Wolves.
The matter was discussed privately by clubs at the conference in Berlin, where they gathered to agree on the distribution of revenue from Uefa competitions for the next three seasons, starting in 2024/25. The new Champions League format begins next season with eight group stage games, up from six.
Fifa operates its transfer matching system (TMS) which oversees the smooth running of the transfer window but the clubs want tougher guarantees now Saudi Arabia has emerged as a major spender. Four of the clubs in the Saudi Pro League are owned by the sovereign wealth Public Investment Fund that controls the consortium that owns Newcastle.
Nasser Al-Khelaifi, the ECA president - and Paris St-Germain chairman - announced a deal with his Uefa counterpart Aleksander Ceferin to share the future wealth of the Uefa competitions. They are projected to earn €4.4 billion (£3.7 billion) a year in broadcast and commercial deals from next season.
As part of the deal, 10 per cent of the net profits, around €380 million (£325 million) annually, will be shared among the 616 European top-flight clubs who do not make it to the group stages of one of the three Uefa competitions. Those solidarity payments are up significantly from the current €175 million (£150 million) annually. There are 724 top flight clubs in Europe and 108 qualify for the group stages of the Champions League, Europa League and Europa Conference League.
With the competitions expanding next year, and broadcast revenues projected to increase, there was pressure on Uefa and the wealthiest members of ECA to share the greater profits with those outside its competitions. The deal was welcomed by organisations such as European Leagues which represents domestic leagues in Europe, including those clubs who do not participate in Uefa competitions.
In the new deal, Champions League clubs will take 56 per cent of the gross earnings; 13 per cent will go to the Europa League clubs and seven per cent to the Conference League. Uefa earns six per cent while costs are around nine per cent.
The calculation of those payments to individual clubs will also change with a greater emphasis on the performance of a club in any one season. Currently, a club’s Uefa coefficient – its historic performance – and the revenue earned from broadcasters in its own country account for about 45 per cent of the calculation of a club’s Uefa competition earnings. That will fall to 35 per cent with the two categories combined. Performance in the competition will rise to 37.5 per cent with the remaining element shared equally.