UEFA in talks to limit transfers and wages

The European Club Association (ECA), which represents the continent's leading clubs such as Manchester United, Real Madrid and AC Milan, has proposed clubs should only be allowed to spend around 51 percent of their revenue on transfers or salaries.

An upsurge in the cost of buying players -- highlighted by Manchester City's reported 110 million euros ($145 million) failed bid for AC Milan's Kaka -- combined with huge salaries prompted the move as the global financial crisis bites.

"Talks are at a preliminary stage, but there is a view that clubs can not sustain this situation in the long term," one ECA source told Reuters on Thursday.

"The issue is due to be discussed at a meeting of the ECA's general assembly next month."

A senior UEFA official confirmed the governing body "was looking seriously at the proposal".

World soccer body FIFA, UEFA and the European Union have also expressed concern over the influx of money from billionaire owners from outside Europe who have recently taken large stakes in clubs, particularly in England.

In November, EU sports ministers mulled the possibility of a pan-European financial regulator for sport but decided instead to press FIFA and UEFA to introduce stricter financial rules for clubs and leagues. "If we fail to act, then the EU will," the UEFA official said.

Under the ECA proposal, revenue would be determined as money received only from ticket sales, sponsorship, merchandise and television income. It would not include any financial investment by owners or major shareholders.

"Any money from shareholders, or billionaire owners would be invested into the infrastructure of the club, such as building or renovating the stadium or investing in youth development such as an academy," the UEFA official said.

However, there are concerns that smaller clubs who cannot accumulate large revenues from ticket and television sales may suffer from the ECA proposal.

"One option would be to give such clubs a derogation for a couple of years to give them the chance to attract investors and sponsors," another ECA source said.

"This is all part and parcel of the negotiations."

Any deal with UEFA would only affect clubs involved in European competitions, such as the Champions League and UEFA Cup, and further discussions would also be needed to have any agreement enforced on a domestic level.

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