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