New finance rules for European football

European football's governing body, UEFA, has approved new regulations which will restrict the amount of money clubs can spend. The Financial Fair Play Test is designed to prevent clubs going into debt.

UEFA's ruling committee gave the new financial regulations its unanimous approval. After a phasing in period they'll come into force at the beginning of the 2012 season.

UEFA is determined to limit the lavish spending which has become such a feature of the game. A recent report found that half of Europe's leading clubs were losing money, and 20 per cent faced huge deficits.

Under the new rules they will have to break even. Clubs will not be allowed to spend more money than they generate. Rich benefactors will no longer be allowed to subsidise expensive transfers and salaries. Those clubs which consistently operate outside the parameters will be barred from European competitions.

Individual national associations will be mainly responsible for making sure clubs follow the new policy.

 

· unanimous approval

· all the members of a group (here, UEFA) agree to a course of action

· a phasing in period

· a period of time when clubs can get ready to follow the rules (though in this time they can choose to follow the rules or not)

· lavish spending

· paying a lot of money

· faced huge deficits

· lost a huge amount of money

· break even

· for a business to have neither a profit or a loss at the end of a business period

· benefactors

· people who give money to help an organization, society or person

· to subsidise

· to pay part of the cost of something

· transfers

· buying and selling of football players

· consistently operate outside the parameters

· repeatedly do not obey the rules

· will be barred from

 

 

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More financial trouble for BA

British Airways has revealed that it made a record pre-tax loss in the last financial year of 531 million pounds. The results reflect the impact on BA of the recession and industrial action by airline staff.

These are easily the worst results in the history of British Airways since it was privatised in 1987. The airline has suffered from the downturn in the global economy with passengers abandoning business class travel. The figures don't include the fall out from the volcanic ash crisis which has cost British Airways around 40 million pounds because the results only run up to March. But they do include losses incurred from the first round of strikes that month.

With a further 15 days of strikes due to start on Monday, British Airways stands to lose another 100 million pounds. The airline's chief executive, Willie Walsh, revealed that he had met the leaders of the Unite union in the last week to try to resolve the dispute. He also defended his strategy of going to the High Court to try to prevent the strike from happening.

Willie Walsh:
"I will look at every option, examine every avenue that is available to us to try and protect our customers and protect our business against the actions of a dysfunctional union who clearly are out of touch with reality and reality is best demonstrated by the financial results that we've released today."

If there are any crumbs of comfort for BA and its investors, it's the fact that the results were actually better than most analysts had anticipated and the airline also says that market conditions are showing an improvement.

· privatised

· changed from being state or government owned and controlled to being owned by private individuals or companies

· the downturn in the global economy

· abandoning business class travel

· the economic slowdown that is affecting a lot of countries around the world

· not wanting to buy expensive tickets to fly in business class (but choosing the cheaper option of travelling economy class)

· fall out from the volcanic ash crisis

· negative financial effects of the recent ash cloud from a volcano which disrupted air travel to and from the UK

· losses incurred

· money lost in a business venture

· strikes

· when workers don't go to work as a protest about their working conditions

· to resolve the dispute

· to find a solution to the problem (here, between management and the workers)

· a dysfunctional union

· a group that doesn't work well effectively or well. Here, 'union' is a legally recognised organization that represents the people who work in a particular industry, protecting their rights, and discussing their pay and working conditions with employers

· small positive signs

· market conditions

· crumbs of comfort

 

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