(BBC) – Uefa president Michel Platini has vowed to introduce measures that will make clubs “live within their means”.
The cornerstone of the Frenchman’s vision is for all clubs to spend only what they earn in football revenues.
Platini says the measures, which are being formulated and would come into force in 2012, are backed by owners including Chelsea’s Roman Abramovich.
“We have everyone on board with this, the owners, the players, the leagues, the national associations,” he said.
Many of Europe’s top clubs have huge debts, with Real Madrid estimated to be in the red by £500m at the end of the 2007/8 season.
Financial experts have estimated this could increase to about £800m this season following their summer spending spree.
Included in that spree were the signings of Portuguese force Cristiano Ronaldo from Manchester United and Brazilian whiz Kaka from AC Milan.
To sign both players reportedly cost Real Madrid some £136m.
Premier League club Chelsea reported losses of £65.7m up to June last year, while Red Football, Manchester United’s parent company which is owned by the Glazer family, recorded a £21m loss last year to increase their total debt to £575m.
Platini added: “If a club can get loans from a bank to buy players and is able to pay back bank loans then it is not a problem.
“But if a club gets a lot of money or subsidies from a big backer and is still in deficit in two years then it is a problem and we don’t want that.”
It would mean owners such as Manchester City’s Sheikh Mansour bin Zayed al Nahyan would not be able to make huge gifts of cash to their clubs.
The Sheikh’s latest big signing was former Everton defender Joleon Lescott. The West Midlands defender pocketed a £22m signing deal.
Platini added that an independent panel would be set up to judge whether clubs had broken the rules.
‘The panel will refer any matter to the disciplinary committee and sanctions will be taken from a reminder to a fine to expulsion from the Champions League,’ he said.
Platini added: ‘It’s mainly the owners that asked us to do something – Roman Abramovich, (AC Milan’s) Silvio Berlusconi, (Inter Milan’s) Massimo Moratti. They do not want to fork out from their pockets any more.
‘I have told Mr Abramovich about this and he said nothing against it.’
Uefa would also look at losses incurred by clubs’ parent companies who have to service loans, said Platini.
Sanctions – if implemented – would depend on the size of a club’s losses, said Uefa deputy general secretary Gianni Infantino, who is in charge of the detailed planning process.
He said around 20 clubs had been sanctioned in the past few seasons and not given a Uefa licence because their finances were not in order.
But Infantino insists the new rules would not stop clubs like Manchester City breaking up the domination of the ‘big four’ of United, Chelsea, Arsenal and Liverpool in the Premier League – as long as they were run on the right lines.
‘We think that the opposite will happen because if you have a rich sugar daddy coming in and throwing money around this is unhealthy in the medium and long-term,’ he said.
‘For the club to be healthy it has to live on its own means and generate income and this is not impossible.
‘Clubs have generated revenues by investing in stadiums otherwise it is an artificial bubble which inflates the system and is unhealthy and unsustainable.’
The measures have gained the support of both Manchester United and Chelsea.
United chief executive David Gill said: ‘It is basically something that should be looked at and brought in.’
His Chelsea counterpart, Peter Kenyon, said: ‘We as a club are very supportive of all the principles of what Michel has outlined.
‘He has got the support of the clubs in terms of the financial fair play model. It is an initiative that will develop and impact football for the positive.’