Football clubs need to better balance income and costs 

Though the football industry has not been immediately hit by the economic downturn, with long-term sponsorship contracts helping clubs "to limit the damage of the crisis," they "will be touched by it", said Ernesto Paolillo, director of Italian football club Inter Milan and chair of an ECA working group on finance issues.

When there is a crisis, "the most important thing is to immediately cut costs," Paolillo said, adding that football clubs' greatest expenditure is on players. Salaries are a problem that "will affect all clubs," he predicted. 

However, regarding the salary caps proposed by FIFA President Sepp Blatter, the Inter Milan director thinks they "cannot be easily introduced" as "you cannot oblige all the clubs to have the same level of salary for players". 

He believes instead that "the time is right" to analyse clubs' balance sheets and introduce criteria and limits for a safe ratio between income and costs. But "this cannot be a solution for just one country or a club, but must be the solution for all the football industry in Europe in order to maintain the same competitivity level," he added. 

Paolillo thinks that to make the football industry more competitive, harmonisation of fiscal treatment regarding players' salaries in all EU countries is needed. Due to lower taxation, "for the same salary, a player earns more in Spain than in the UK, Italy or France," he said, arguing that different taxation rates are putting European clubs in different situations competitively.

The European Clubs Association, which represents 137 clubs, was launched in January 2008, merging the former G14 group of 18 top European clubs with the European Club Forum, which represented a number of small and medium-sized clubs.

Asked whether the clubs had managed to establish a genuine dialogue, Paolillo described the first year of the ECA's existence as "a great success," insisting that the association had brought big and small clubs closer to one another.

While smaller clubs may be under the impression that "the most important clubs are working in their own interest," in the ECA they are working in the interest of football in general and the interest of all other clubs at the same time, he argued. Paolillo's club, Italian side Inter Milan, is a former G14 member.

To read the interview in full, please click here.