Brussels, 07/07/2004 (Agence Europe) - The European Commission is again tackling the Italian "Salva Calcio" decree that protects the large Italian football clubs such as Milan AC, Inter of Milan, AS Roma and Lazio Roma from bankruptcy. It has sent a reasoned opinion to Italy because it considers the decree, which allows payment for players to be spread out over several years, runs counter to European accounting directives.
In March, Competition Commissioner Mario Monti had agreed to abandon the State aid chapter of the affair after the Italian authorities had pledged to amend the decree. This time it is from the internal market angle that Commissioner Frits Bolkestein takes the matter up again. It is not a question of determination but of preventing the decree from creating a precedent, Jonathan Todd, spokesman, commented. The Commission fears that other Division A football clubs will follow this example to improve their accounts, and UEFA is now calling on all clubs to have balanced accounts before being allowed to enter European competitions. UEFA Director General Lars Christer Olsson had announced in March that UEFA would not give its opinion on clubs' accounting methods. He said it was not up to them to intervene in national laws as the European Union is there for that.
According to the Commission's reasoned opinion, the clubs do not give their shareholders a "true and fair view" of their financial situation, by placing in a special balance sheet item under assets the capital losses arising from the decreased value of the rights to exploit the performances of professional players. The decree allows users of this method to amortise the balance sheet item in ten yearly charges of equal amount, even if rights established by contracts with the players concerned last for only two or three years. According to the accounting directive, the players should be treated as intangible goods, "to be written off over their useful economic life", the Commission explains in a press release.