Michel Platini’s plan to make clubs live within their means has been approved by UEFA.
The new rules, called “financial fair play” are due to be introduced in 2012, and will in principle prevent clubs from spending more than they earn.
The new rules will be in place from the 2012/13 season and clubs could be thrown out of European competition if they do not abide by the regulations.
“We don’t want to kill or hurt the clubs, on the contrary we want to help them in the market,” said Platini.
“That (living within your means) is the basis of accounting but it hasn’t been the basis of football for years now.”
Platini said club owners themselves had asked for the reforms while UEFA’s deputy general secretary Gianni Infantino said more than 50 percent of clubs were currently losing money.
Former Belgium prime minister Jean-Luc Dehaene was named chairman of the Club Financial Control Panel, which will oversee the introduction of the new rules.
“The teams who play in our tournaments have unanimously agreed to our principles. We don’t want to prevent clubs from participating in our tournaments,” said Platini.
“Our goal is not for clubs to disappear. On the contrary, we’re only here to help them.
Platini, who says the measures are backed by owners including Chelsea’s Roman Abramovich, added that an independent panel would be set up to judge whether clubs had broken the rules.
“The owners are asking for rules because they can’t implement them themselves, many of them have had it with shovelling money into clubs and the more money you put into clubs, the harder it is to sell at a profit.
“I think a lot of owners would like to sell at the moment but can’t because of the line of business they are in.”
Platini said the new rules would be implemented from the 2012-13 season and clubs who failed to abide by them could ultimately be thrown out of European competition.
Platini said clubs would be given incentives to invest in youth development and facilities, including stadiums.
“The only people who want fewer rules are the ones who line their pockets,” said Platini, admitting it would be a huge task to introduce rules that worked across UEFA’s 53 member associations.
“It is not easy because we have different financial systems in England, France, Germany and Georgia.
“In England you can have debts, in France you’re not allowed to have debts and in Germany you get relegated to the second division (if you have debts).
“Fifty per cent of clubs are losing money and this is an increasing trend,” he said. “We needed to stop this downward spiral. They have spent more than they have earned in the past and haven’t paid their debts.”
He said debts would be permitted if clubs could cover them but that the days of “sugar daddies” would be numbered.
The new measures 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.
“If you buy a house, you have a debt but that doesn’t mean someone is going to stop you from working,” added Platini.
“If you depend only on a rich benefactor however, then the financial model is too volatile.”
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