Jan Pommer (left - photo imago) and Salvador Alemany (right - photo Albertis) are fighting with Euroleague for financial fair play in the competition

A Euroleague commission looking to protect the integrity and operations of Europe’s top basketball club competition recommended measures designed to create more economic fair play, a break-even rule, minimum budgets and what in essence is a percentage salary cap.

The intention of the Euroleague Commercial Assets Board is to increase the stability of the competition and long-term financial health of the clubs involved though optimizing management methods and budgetary controls.

And the body – made up of Euroleague Basketball Financial Commission president Salvador Alemany, former French league and ULEB honorary president Jean-Bayle Lespitau, Euroleague Basketball’s legal counsel Massimo Coccia and German Beko BBL CEO Jan Pommer – was not afraid of becoming enemies to the teams in the competition as it approved some far-reaching ideas.

The fundamental criteria in the recommendations is the break-even rule through which the clubs commit to not spending more than what they generate economically.

This is something that Pommer has been calling for quite some time.

“The Euroleague has clearly recognized that it’s relevant and that it’s an important success control lever for the future,” Pommer told heinnews and selected German media at the 2012 Beko BBL All Star Game in Ludwigsburg in January.

“You have to operate economically. And clubs have to be able to plan accordingly.  I know this plan will not be popular with bigger teams like Panathinaikos, CSKA Moscow and other big clubs with big bosses at the top. But if we want the league to be played in a professional, lasting and solid manner then we have to move in that direction. And the bigger clubs also have to give in.”

The board is calling for financial fair play, similar to what the European football ruling body UEFA is in the process of implementing.

There would be a minimum budget for Euroleague participants and a maximum loss allotment over a three-year period. A percentage-scale salary cap is also recommended in the form of a “limit to player expenses and shareholder’s contributions related to the overall budget”. And the board is also calling for common treatment of some investment write-offs and market value of some sponsorship and advertising revenues.

“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,” Alemany said on the Euroleague website.

“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.”

Alemany called addressing the fair play issues “absolutely indisputable” as the sports industry is no longer amateur in regards to the management of club budgets.

If the plan were approved by the clubs, there would be increasing financial uniformity and aligning accounting practices among the clubs to ensure transparency and effective processing of information. Regulations would be based on political, legal and regulatory frameworks already established at the European Union level. And the follow-up and documentation would be overseen by the Financial Control Commission, headed by Alemany.

“All told, you have to say it’s kind of a rewarding issue because now we can finally decide: Do we all really want to economize properly, yes or no? And you really have to have a certain vigor to say, nah, not really,” said Pommer in January.

“This is a very ungrateful job and we have to make sure we don’t approach it as wise guys. We are not trying to win a popularity contest. But I think it’s a very important step for the development of European club basketball if we can agree on uniform regulations and then put them into being.”

One Euroleague observer believes the clubs will never vote on this issue, for it means clubs will have to open up their books – and that Euroleague would have to oversee it.

“A total nightmare for both sides. It’s a recipe for disaster – teams accusing others of cheating, etc,” the observer told heinnews.

“Different countries have different tax codes etc … you just wind up in a never-ending hole.”

There was very little media reaction around Europe on the board’s recommendations.

One response came from the blog “Liberals” , which said: “The general concept is not bad. But the break-even rule in the near future means … poverty for European basketball.”

The commentator went on to say it’s no secret that billionaire owner of big clubs just go out and spend money with no intention of ever seeing it come back in.

“It is bad business, with a doubt. But it is also the only way for the league to grow and to prevent top European talent from going to the NBA,” the blog continued.

The fact that the Olympiacos bosses were willing to dish out big money to NBA player Josh Childress could never occur under financial fair play, and Euroleague would never get the publicity it did from Childress playing in Europe, according to Liberals.

But Pommer said the new regulations are “inevitable”.

“In my opinion it’s not a matter of if it will be instituted but rather when and how,” he said.

“It’s not about being overly correct. An entertainment industry like the Euroleague or the Beko BBL has to be certain that those teams competing will definitely be around until the very end. … That is a fundamental concern of our league and it has to be a fundamental concern of the Euroleague. We are not doing this so that we can be the smart ass but rather because it’s urgently necessary for economic stability.”

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