Beko BBL CEO Jan Pommer

With the Euroleague Commercial Assets Board agreeing to institute Financial Fair Play into its league in the near future, heinnews’s David Hein sought out German Beko BBL league CEO Jan Pommer, who sits on the Euroleague board. The two discussed what has been agreed upon thus far; a percentage scale salary cap; big Euroleague clubs gritting their teeth; the end of billionaire owners with deep pockets; and the goal of the 2015-16 to start the new uniform financial rules.

heinnews: The Euroleague Commercial Assets Board has agreed in principle to institute Financial Fair Play into the league’s structures. What exactly has been approved thus far?
Pommer: A few months ago we started a process to evaluate if and when yes in what way regulations for a uniform licensing procedure and rules for Financial Fair Play can also be carried out in the Euroleague. That has not existed at all. We came up with a working group which I headed and we analyzed that, looking at the past data. We met extensively with the UEFA officials in charge of their Financial Fair Play. And we discussed all that very intensively internally.
We recommended introducing a uniform licensing procedure for the Euroleague competition with the foundation concept being Financial Fair Play. Those would be regulations that long term make sure that no club spends more than what they bring in – so a break-even rule. And it would secure that no club would drop out during the competition out of financial reasons. In the end, we are talking about viability and sustainability to make sure that everyone can play and compete.
Also included in these regulations is a percentage cap for players salaries and a cap on shareholders – subsidies, loans and et cetera. Those are the two big problems. Too much is being invested in players and not enough in structures. And too much of the money spent was not earned on the market or in business but instead comes the deep pockets of patrons. And in our opinion that is not a long-term sustainable business model.

heinnews: And those ideas were presented to the board?
Pommer: We presented some of those details to the Euroleague board and they approved them. The leagues and major clubs were represented at the meeting and now we have two months to analyze everything with the financial experts and advisors of the leagues and clubs, to see if these regulations are appropriate.
We’re talking about some very specific regulations and percentages and you can argue that some figures should not be 70 percent but 72 percent. In the UEFA Financial Fair Play, you look back and come up with a complete rating for the past two or three seasons. So we can argue it should be more long term and be the last three seasons or more in the short term and consider only the past two seasons. Those are all things that the financial experts of the leagues and the clubs are going through and assessing for themselves. And then ideally in the next couple months we will agree how the regulations look altogether. I think that’s such a big success because until now my impression was always that Financial Fair Play and a uniform licensing procedure were more unattractive to the southern and eastern European clubs and that they didn’t necessarily see the urgency to introduce something like that. And even though there is some loud criticism on some of the points, the overall mood has changed and everyone who spoke about it said it was important to establish this kind of a system. And it’s been agreed that we want to do this. It’s a very important step.

heinnews: Just for clarification, who exactly are the members of the Euroleague Commercial Assets Board?
Pommer: There are the Adriatic League, German league, French league and Italian league as well as the clubs Asseco Prokom, Caja Laboral, CSKA Moscow, Efes Pilsen, Maccabi Tel Aviv, Olympiacos Piraeus, Barcelona and Montepaschi Siena.

heinnews: So, there was probably some gritting of the teeth in that meeting, no?
Pommer: Yeeaahh. That means for many clubs that they will have to significantly change their way of economizing over the long term.

heinnews: And also make public their books.
Pommer: Yes, and also make public. Not necessarily disclose to the general public, but show their books to the board that will assess them. And that is not always pleasant. But everyone understood that the principle of sustainability is totally important and everyone understood that it cannot be in the statutes anything against breaking even. Maybe there are exceptions, who knows? But it helps that we are in an economic time in Europe in which it’s such a large issue regardless. Things like playing by the rules and serious economics and those types of things are not just a big issue in Germany but elsewhere in Europe as well.

heinnews: So one could say that the clubs have agreed to these principles and ideas?
Pommer: Yes, those clubs on the board. In the end, the executive board approves an item and then presents it to the General Assembly in July and it is voted upon. I don’t want to rule it out, but I have never experienced that something approved by the executive board and Euroleague itself was turned down by the General Assembly.

heinnews: That means that there is loads to do until July?
Pommer: Absolutely. We have pretty set ideas about how the rules could work. Now we are waiting for feedback from the individual clubs and leagues and then it will be modified and expanded and then in July we will present our new Financial Fair Play and licensing rules and they will be voted upon.

heinnews: In the next three months, what would you say are the most difficult points that need clarification?
Pommer: Those are the same three points that UEFA also dealt with in their discussions. How much can shareholders or affiliated persons contribute to the budgets? How much percentage of the entire budget can be allotted to players? You can also talk about that. And the third point is timing. When will it be instituted? And what time frame will be looked at? Those are the three major questions that are most interesting. I think it’s set in stone already that the principles of the league will state you cannot spend more than you earn. But the three questions, when? how much for the players? and how much can third parties who are not sponsors contribute? Those are the questions we will have to critically discuss.

heinnews: And what is the time frame at the moment?
Pommer: You mentioned the gritting of the teeth. Many clubs will need to drastically, drastically change their ways. And for that we need a bit of time. We need to allow for plans to be changed. So if we were able start it for 2015-16, then I think it would be very good. Also if we assess the three previous seasons – so 2012-13, 2013-14 and 2014-15 – that would be good. And that would still be quicker than UEFA did it. Next season will be the first in which Financial Fair Play takes effect in UEFA. And I think they started five years ago. So we would be quicker than UEFA – if it works out like that.

heinnews: So your expectations are for 2015-16?
Pommer: That is the time point we recommended. But there will be an entire package involved. And just like here in the BBL, the clubs also have to play their part. They also have to want it because they are the ones who have to go through with it. And they are the ones who would be penalized if they violate the rules. So we have to wait and see what the clubs and the participating leagues say. If there are serious issues unresolved then we have to discuss them. But 2015-16 is our wish date.

heinnews: So, the next two months will see the clubs talking to their accountants?
Pommer: Exactly. They will ask their people is this possible? How can we deal with this? It will be interesting with FC Barcelona or Olympiacos. How are we going to do this? What do we have to do so we don’t run into problems and are still able to compete? A lot of clubs are really going to have to think about things very intensively.

heinnews: Is this basically the end of the billionaire who just wants to have a club and pump his money into it?
Pommer: If you say that I would not refute it. But I would not like to put it that way.
I believe yes. You have to put it all together that these kinds of projects are carried by the market. Then the families at Olympiacos and Panathinaikos can say we are sponsoring it. But just digging into their pockets and transferring the money and telling the club you can do whatever you want we will always have your back, that will not work over the long term. Of course you are not naïve and I am not naïve. The patrons of these clubs will look for ways to get around these rules. But for me from a German point of view, it’s important that we are beginning with this at all. There will always be loopholes where people try to get around things and creative people trying to find them. That’s okay, that’s part of reality. We just have to close those loopholes. And we will keep finding holes for years. We just have to analyze it. But that doesn’t mean we shouldn’t start it.

heinnews: And there is no legal issue with instituting these kinds of rules since its Euroleague’s competition and they can set the standards by which the participants must comply.
Pommer: Exactly. It’s the same thing with the BBL. We are a monopoly provider, just like the Euroleague. It’s a matter of anti-trust laws as well. But as long as our rules are legally acceptable and not contrary to certain discretion then we can have those rules. That is what we have to look at with all of our licensing requirements – both Europe-wide and nationally. We as the league require 3,000 seat arenas otherwise you cannot play in the Beko BBL. And dozens of other rules. We can make any rule as long as it’s not unlawful. As long as it’s comprehensible and conclusive – such as a minimum budget etc – then it’s no problem.

heinnews: It would seem clear where there is more opposition to the plans. But where do you think the most support for these rules is coming from? Any certain league or clubs?
Pommer: I really have the impression that the Euroleague as an organization really wants this because it knows it is the guardian of the competition and it is responsible for making sure that the competition is economically sustainable long term. So the biggest supporters are in the Euroleague itself.

heinnews: It must be a nice feeling to have them having your back.
Pommer: That’s true even though I wished more of the big clubs would really support this with all their heart. But it will come bit-by-bit.

heinnews: How will fans recognize these changes and their impact?
Pommer: Even though the fan will not recognize it at every game, the main thing is that he or she can assume is that things are being done fairly. That there is truly fair play there and the clubs have a level playing field. All clubs should be properly financed and then play with those means. That is not the case at the moment. You cannot have a club like Ljubljana signing a player even though they don’t even have the money to pay him and the club just takes part in the Euroleague. That cannot happen. That is a violation of fair play in sports in general. And these kinds of things must be stopped in the future. And that’s what we are working on. And the fans will see that. It may be sad for the clubs affected negatively by the rules, but for all others it’s a good thing.

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