The need to reform financial governance in Iranian football: Where is the economy of clubs?

According to the sports economics platform (sportseconomics.ir), citing Tejarat News, the crisis faced by the Foolad football team over a recent hotel debt is more indicative of weak financial governance in Iranian football clubs than a mere accommodation issue. The fact that players of an Iranian Premier League team risk eviction from their accommodation due to club debt may seem like a routine operational problem, but it actually reflects a serious issue in the economic management of clubs in Iran.

The news about Foolad Abadan's camp crisis, involving debt to a hotel and coinciding with the club's management uncertainty, raises a critical question: how can a club that secures permission to compete at the highest level of national football face such a crisis over a routine expense like team accommodation? This highlights that the problem in Iranian football is not just about a hotel; it’s about the lack of a professional financial management system in many clubs.

In professional football worldwide, club economic management is not a decorative role where a CEO appoints someone as "Deputy for Economics" or "Financial Director" whenever needed. A professional club must have a financial structure, an approved budget, cash flow management, control of obligations, financial reporting, and a designated person accountable for these responsibilities.

UEFA regulations demonstrate how seriously club economics is taken. UEFA’s financial sustainability system is based on three pillars: ability to pay debts, financial stability, and cost control. Under current regulations, clubs must prevent non-payment of matured debts, and even debt to other clubs, players, employees, and tax and social institutions is subject to control.

From the 2025/26 season, the ratio of costs related to team composition—including player and coach salaries, transfer fees, and agent commissions—is capped at a maximum of 70 percent of club revenue.

This crucial rule ensures that a club cannot build an expensive team without considering its revenue-generating capacity, simply by injecting money or creating debt.
Even in the balance sheet section, there are standards. According to UEFA regulations, a club must have a positive equity position or show an improvement of at least 10 percent compared to the previous period.

In England, the new Premier League financial system, effective from the 2026/27 season, not only controls team composition costs but also includes tests for club financial sustainability and resilience. Clubs must provide future financial information, and their capital and debt positions are evaluated. In professional football, the question is no longer "how much money does the club have?" but rather "where does the money come from, how is it spent, what obligations have been created, and can the club afford to pay them?" This underscores the importance of the financial director and deputy for economics roles in Iranian football.

Unfortunately, in many Iranian clubs, positions such as financial director, deputy for economics, or revenue generation manager are often more of a relational and appointed managerial role than a specialized and independent one. The person responsible for warning about unreasonable expenses, unsupported contracts, future obligations, and cash shortages should not merely execute the CEO’s or board’s decisions.

A professional financial manager should be able to say, "This contract is not compatible with the club’s financial capacity," "This expense is not in the budget," "The cash flow for the next three months will not cover this obligation," or "The club will enter a debt crisis with this decision." If the financial manager’s role is limited to recording expense documents, then one of the most important pillars of club governance has effectively been removed.

The experience of the Asian Football Confederation (AFC) also emphasizes this point. The AFC club licensing system is not limited to technical issues; it considers sports, infrastructure, legal, administrative, and financial criteria simultaneously, with the goal of improving club organizational structure, financial management, and reporting.
Under AFC regulations, the submission of audited financial statements and future financial information is crucial, and clubs must determine their income and expense budget before the season. Additionally, having no matured debt to players, employees, and tax and social organizations is an important criterion for issuing a license.
Therefore, Iranian football must move beyond the concept of a "license to participate in the league" and embrace the idea of an economic license to participate in the league.

Accordingly, it is recommended that the League Organization and the Football Federation establish clear economic minimums for participation in the Premier League, such as audited financial statements, an annual budget, a cash flow plan, a list of matured debts, a debt payment plan, the ratio of salary and transfer costs to income, minimum working capital, a financially qualified financial manager, and periodic financial performance reports.

One could even define an economic score for clubs and evaluate them based on indicators such as current debt, team cost-to-income ratio, commercial revenues, share of sustainable revenues, cash position, and quality of financial reporting. This indicator should not be designed to punish weaker clubs; its purpose should be to establish a minimum standard for professionalism.

Within such a framework, incidents like the Foolad hotel crisis should no longer be discovered when players are ready to play and the hotel threatens to evict the team. The financial manager should have warned weeks or months earlier that such an obligation had been created and that the necessary resources to pay for it did not exist. Ultimately, it must be emphasized that if Iranian football truly intends to become professional, it must accept a simple reality: a professional club is not just a professional football team; it is a professional economic organization.

Therefore, until an economic manager is selected based on professional criteria, there is no real budget, cash flow is not managed, debts are not transparent, and league licensing is not tied to club financial health, small and large economic crises will continue—one day it’s a hotel, another day it’s a player, another day it’s taxes, a coach’s debt, or a player’s transfer debt!

Mehdi Hajivand, Sports Economics Expert

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