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The New Financial Fair Play Rules

The New Financial Fair Play Rules

The 20 Premier club chairman today agreed to two significant controls yesterday - to limit players' wage bills from next season, and longer-term measures that will restrict the amount of losses clubs can make to £105million over three years. The effect of the financial controls should prevent hugely wealthy owners achieving the almost-overnight success of Chelsea and Manchester City.

A breakaway group of elite clubs are attempting to curb the spending power of Manchester City and Chelsea further. A letter, signed by Manchester United, Liverpool, Tottenham Hotspur and Arsenal and published on Arsenal-headed notepaper, was circulated at a Premier League meeting before Christmas. It asked for tighter controls on Chelsea and Manchester City. The letter was followed up by a 10-minute speech from Manchester United chief executive David Gill, who advocated handing over control of the new regulations directly to UEFA.

Unfortunately, that move would be as good as making UEFA president Michel Platini the head of English club football! The letter, addressed to Richard Scudamore, the Premier League chief executive, called for UEFA's financial fair play controls to be implemented strictly - a step on from the regulations currently under consideration.

Clubs whose total wage bill is more than £52million will only be allowed to increase their wages by £4million per season for the next three years, though that cap does not cover extra money coming in from increases in commercial or matchday income. Scudamore said there would be an 'absolute prohibition' on clubs reporting losses of more than £105million over the next three years with the first sanctions possible in 2016.

Of the 20 clubs in the top flight, only Manchester City, Chelsea and Liverpool have reported losses of more than £105million over the last three years, according to the most up-to-date published accounts. Scudamore said that the measures would mean it will take longer for benefactor owners to achieve success -but that it would still be possible.

He said: 'The balance we have tried to strike is that a new owner can still invest a decent amount of money to improve their club but they are not going to be throwing hundreds and hundreds of millions in a very short period of time. 'While it has worked for a couple of clubs in the last 10 years, and I am not critical of that, if that's going to be done in the future it's going to have to be over a slightly longer term without the huge losses being made.

Deloitte published the Premier League wage bills from the previous season (2010/11). The top five 'employers' were Chelsea (£191m), Manchester City (£174m), Manchester United (£153m), Liverpool (£135m) and Arsenal (£124m). Spurs (£91m) How we have managed to compete on such an uneven playing field deserves credit. We have been a bottom heavy club for some seasons with a whole range of bench warmers who are now being moved on but Levy's prudence won Spurs the Financial Fair Pay Championship Crown of 2010/11.

The FFP rules sound tough and are obviously aimed at Abromovich and City's billionaire owner Sheikh Mansour to curb their spending. However, Sheikh Mansour is planning to emulate Barcelona's endless supply of home-grown players such as Lionel Messi, Xavi and Andres Iniesta through their famed youth academy, by preparing one such academy of their own. City announced their construction partners for the 200 million pound state-of-the-art youth development academy and first-team training headquarters on an 80-acre site adjacent to the Etihad stadium.

The FFP constraints however will be more than balanced off by more television rights money coming in next season to an all time high record of £5bn. Unless Levy and Enic depart from their prudent fiscal policy FFP will not be a factor for us but we all know that rules are there to be broken and whether FFP will actually level the playing field again remains to be seen.

Written by OyVeh Maria



Click here to join in the debate on the club forum.

Writer:OyVeh Maria
Date:Friday February 8 2013
Time: 8:40AM

Comments

0
This is a massive positive for the Premier League!
SamParadise
08/02/2013 09:15:00
0
Got to be seen as a positve surely? Hope this gets some of our "lets just shut our eyes and spend" crowd to slow down and take a breath at least. Thanks for the article OVM.
Underspur
08/02/2013 09:21:00
0
The thing I don't get is that no-one has ever said what the sanctions would be for sides that break the rules. Expulsion from the FA? European ban? Relegation? Points deduction? Transfer ban? Pittance of a Fine? All sounds good in theory but we need a bit more detail!
ParkLane67
08/02/2013 09:31:00
0
Park Lane it points deduction, according to Richard Scudamore anyway!
OyVeh Maria
08/02/2013 09:43:00
0
The key questions is, are there any loopholes? If I understand correctly, you can have a wage bill of £200m but this will mean you can only increase this by £4m per year. I see this as positive in the sense that the clubs with the money will be the talent for the first team rather than just buy someone to stop someone else having them.
yiddyboy
08/02/2013 09:56:00
0
Bit like bolting the door after the horse has bolted. Still if it manages to curb these excessive spending clubs it might help level the playing field, but I doubt it. They will have their lawyers looking for loopholes before the ink has dried.
longtimespur
08/02/2013 09:58:00
0
yiddyboy..... snap on the loopholes thought, I was writing at the same time as you obviously.
longtimespur
08/02/2013 10:00:00
0
OM anything u want to get off your chest RE ENIC and Levy...
Mix26
08/02/2013 10:06:00
0
longtimespur - I just cannot see the likes of Barca, Real Madrid, Citeh, Chelsea, United etc... being punished by UEFA.

It's like the 600+ games that are being investigated for match-fixing. Like FIFA are going to do something about it, if the truths known they're probably behind it!
yiddyboy
08/02/2013 10:08:00
0
Simpler to just Ban anyone involved with oil wells having any say in football, other than just being allowed to watch.
82spursdebut
08/02/2013 10:21:00
0
Oil to football...is a bit like water to electrics !!
82spursdebut
08/02/2013 10:22:00
0
I don't like the wage restrictions one bit. Who cares what the wages are so long as revenues balance out with expenditures on a year by year basis? It is a huge impediment to clubs holding on to their players. We want to sign Messi, as a ridiculous example, do we then have to sell three players to be able to fit his wages under the "cap". I mean the problem is not the transfer fees or wages paid, but rather that they exceed what the club brings in. I look at this as being a huge impediment for teams that want to hold on to their talent. It may not be that City or Chelsea want them, but what's to stop Bayern or Olympique or Roma taking the spoils. I can guarantee that our wages went up more than 4M each of the past 3 or more years, yet we live within our revenues. I see this as hugely protective of the bigger clubs who have been spending ridiculous amounts for years. Even Liverpool and Arsenal are now further advantaged over Spurs if I am reading this correctly. Not that they won't be hurt. Liverpool can't give Suarez way more any more than we can give Bale way more without sacrificing elsewhere in the squad. Not good IMO. Teams that balance budgets should be able to do what they want. COYS
peterballb
08/02/2013 13:20:00
0
Considering the grossly over inflated wages paid across the premiership perhaps the FA should look at their fine structure as well! Hitting Fergy with a 10 grand fine for constantly abusing the match officals is a joke! Would a 10p speeding fine really deter people from breaking the speed limit? Prehaps a points system should be introduced to the league. A yellow card would result in the club picking up a single point, red card three points, manger sanctioned for bringing the game into disrepute five points, Joey barton doing anything 10 points etc. If a team earns 15 or 20 penalty points then its a one league point deduction. Then three at thirty and so on. About time the fair play league actually reward the teams playing within the rules!
Slurms McKenzie
08/02/2013 15:37:00
0
It may have an effect on the future but will not undo that which has happened in the past, so Chelsea and Man City will retain their head start. The clubs will be allowed to spend any increase in match day revenues etc, so lets watch the price of corporate facilities and membership costs etc. and how many players start getting share issues on top of salaries, and getting paid "tax paid". Incidently what is a "reasonable amount of investment" by an owner and how often and for how many consequetive seasons can he make it.
Frank
08/02/2013 17:48:00
0
I look forward to a future where the likes of Platinii and most of the PL chairmen (the vote wasn't unanimous), will succeed in diminishing the standards in the PL by reducing the presence of the top quality players, we will level to the lowest common denominator, we may even see Stoke City win the PL. I hope when the PL standard is reduced to the level of the championship, the grounds will still be full to watch has beens, never quite were, and young up and coming never will bes, which will be the inevitable result of artificial wage constraints.
Frank
08/02/2013 17:57:00
0
Frank the players will go where the TV money goes. It's no different in any sport. There are some decent basketball and hockey leagues out there but there is only the NHL and NBA that have the worldwide audience. The corruption in Italy will probably always allow the EPL to stay at the top so long as there is no hooligan uprising which puts England out in the wilderness for a decade. Italy really is the only league that could command the TV money. What you describe in your apocalyptic scenatrio is already playing out in North America. It is called the MLS. Was no different in the late 60's early 70's with Pele, Beckenbauer etc plying their trades in North America. I can't see football (soccer) taking hold in North America because Americans neither get it nor do they care to get it. They are much more concerned with sports that come from their "education" system. The obsession with High School and University football, baseball and basketball is unbelievable, but it feeds directly in to their professional sports obsessions. Even hockey is big in the US where there are college programs that are successful. In those states, hockey is followed, even if as a 4th sport. Soccer is nowhere on the radar. No one cares and this is the big market. Football fans watch the EPL or Serie A. That is pretty much the tune in all non-traditional football markets. That's about it. The balance is all on lines of heritage and that poses no immediate threat to the EPL. Only a European Super League would bulldozer the status quo. COYS
peterballb
08/02/2013 18:29:00
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