Euroleague Commercial Assets Board approves Financial Fair play for Euroleague
March 7, 2012
|A Commission formed by Mr. Salvador Alemany, president of the Financial Commission of Euroleague Basketball, and Jean-Bayle Lespitau, former president of French league and Honorary President of ULEB, Mr. Massimo Coccia legal council to Euroleague Basketball and Mr. Jan Pommer, comissioner of the Beko Basketball Bundesliga (BBL) of Germany, presented a framework to establish principles of greater financial stability and fair play in its competition by unifying the criteria used by and applied to participating clubs.
Led by these experts, Euroleague Basketball is seeking to strengthen principles that ensure good financial practices to protect the integrity and smooth running of the competition, as well as to increase the long-term financial health of its participating clubs. Euroleague Basketball and its clubs understand that the global objective of this project is to increase the stability of the competition, through the optimization of management methods and budgetary control.
The main criterion that falls under these principles is the break-even rule, which calls for clubs to commit to not spending more than what they generate in economic activity.
The overall project includes increasing financial uniformity and aligning accounting practices among clubs participating in the top European competition to ensure the transparency and effective processing of information in the documentation presented to the organization as well as to their national leagues. The project also seeks to stipulate regulations in accordance with the political, legal and regulatory frameworks already established on a European Union level and already incorporated into the financial frameworks of other sporting institutions such as UEFA.
The follow up and monitoring of documentation will be overseen by the Financial Control Commission, presided over by Mr. Salvador Alemany.
The Financial Fair play rules work on concepts, based on budgeted economic performance indicators that have been extracted from the information submitted by clubs, include a minimum budget for those clubs that participate in the Turkish Airlines Euroleague competition; a maximum loss allowed over a three-year period; a limit to player expenses and shareholder´s contributions related to the overall budget; and a common approach in the treatment of some investment write-offs and in the market value of some sponsorship and advertising revenues.
Mr. Alemany indicated the importance of this project for the future of the clubs and for the future of the sport.
"Euroleague Basketball is fully aware that some points on the agenda will be difficult to transition to, and it is important to understand that it is not about the shareholder´s who have invested, and are still willing to invest in the sport, this is about an economic structure and that, the limitations and concepts presented are more than reasonable," Mr. Alemany said. "With regards to the fair play issues, it is absolutely indisputable. The sporting industry has transitioned from a certain amateurism in the management of club budgets. To be able to move forward, clubs who want to belong to serious institutions need to have higher levels of control. This has to be self-control and a control that comes from the greater whole. This is why this project and the system that it puts in play are so important. Clubs that participate in the top European competition need to have solid and good reputations. This good reputation has to be seen as a whole. The development of this reputation means that clubs need to be owners of their future and be willing to make the necessary efforts to find that financial stability, which clearly will involve a level of sacrifice."