Quite an interesting piece today by Matt Scott, a former Guardian Sports Journalist, discussing QPR's accounts and looming contest with the Football League if we get relegated.
Here's a relevant extract - note the penultimate paragraph and the new, more liberal FFP rules that come into play from the 2016/17 season that might give QPR decent grounds for discussion with the FL, and possibly assistance should the dispute go to court or arbitration:-
QUOTE The way the club massaged the groaning cash deficit [in the accounts] into a manageable loss was with the unusual insertion of a non-cash balance-sheet item into the profit-and-loss account. What the club referred to as being "in addition" to the reduced loss, namely the "writing off [of] £60 million of shareholder loans", was in fact absolutely central to the magical turnaround. What QPR did was to declare this write-off as an "exceptional item" in the P&L, thus reducing the true P&L loss by the same amount – from £69.8 million to £9.8 million.
The purpose of this accounting dexterity was presumably to counter scrutiny from the Football League regulator, whose Financial Fair Play rules are strict on clubs' expenditure. In the 2013-14 season clubs were not permitted to exceed a "permitted deviation" in losses over revenues of £8 million. Those who exceed this mark and fail to gain promotion suffer transfer embargoes - those, like QPR, who do are fined for a lack of compliance upon their return to the Football League.
With eight defeats in their past nine Premier League games, QPR currently lie 19th in the division, four points from safety and with an upwardly mobile club, Burnley - who beat the champions, Manchester City, on Saturday - immediately ahead of them. On the face of it at least, survival this season looks highly unlikely.
That would return QPR to the Football League's jurisdiction and it has clearly not been inveigled by the club's creative P&L. "The treatment of certain items in those accounts, and how the League's FFP rules should be applied to them, remains a matter of ongoing discussion between QPR and The Football League," said the regulator on the same day as QPR made its announcement.
The League has separately made clear its intention to pursue breaches of the prior rules: "The existing Championship FFP framework will remain in place for the 2014-15 and 2015-16 seasons. Any sanction for accounts relating to the 2013-14 season will continue to take effect as intended (and in accordance with the amounts specified at the time)."
That augurs ill for QPR, who under those prior rules face a fine measuring in the several tens of millions of pounds if they do succumb to relegation. The League's chief executive, Shaun Harvey, has previously intimated that a refusal to pay that could lead to the club being denied entry to its competitions, meaning a potential demotion to England's fifth tier.
However, where QPR may have some grounds for a challenge against Football League FFP is that a looser set of regulations were agreed last November, and will come into effect in the 2016-17 season. This will monitor clubs over a continuous three-year period in which they may lose up to £13 million per season, and additional amounts if they are promoted to the Premier League. QPR could argue that under those future rules they might have had no case to answer at all.
Indeed, going by the sanguine statement QPR released to the world to coincide with the submission of their accounts, it seems the club will fight whatever sanction the League imposes, blithely ignoring the threats. And despite the lack of self-restraint in QPR's past that he would no doubt disdain, Spurgeon might admire their optimism now, for as he said: "Anxiety does not empty tomorrow of its sorrow, but only empties today of its strength." UNQUOTE
Here's a relevant extract - note the penultimate paragraph and the new, more liberal FFP rules that come into play from the 2016/17 season that might give QPR decent grounds for discussion with the FL, and possibly assistance should the dispute go to court or arbitration:-
QUOTE The way the club massaged the groaning cash deficit [in the accounts] into a manageable loss was with the unusual insertion of a non-cash balance-sheet item into the profit-and-loss account. What the club referred to as being "in addition" to the reduced loss, namely the "writing off [of] £60 million of shareholder loans", was in fact absolutely central to the magical turnaround. What QPR did was to declare this write-off as an "exceptional item" in the P&L, thus reducing the true P&L loss by the same amount – from £69.8 million to £9.8 million.
The purpose of this accounting dexterity was presumably to counter scrutiny from the Football League regulator, whose Financial Fair Play rules are strict on clubs' expenditure. In the 2013-14 season clubs were not permitted to exceed a "permitted deviation" in losses over revenues of £8 million. Those who exceed this mark and fail to gain promotion suffer transfer embargoes - those, like QPR, who do are fined for a lack of compliance upon their return to the Football League.
With eight defeats in their past nine Premier League games, QPR currently lie 19th in the division, four points from safety and with an upwardly mobile club, Burnley - who beat the champions, Manchester City, on Saturday - immediately ahead of them. On the face of it at least, survival this season looks highly unlikely.
That would return QPR to the Football League's jurisdiction and it has clearly not been inveigled by the club's creative P&L. "The treatment of certain items in those accounts, and how the League's FFP rules should be applied to them, remains a matter of ongoing discussion between QPR and The Football League," said the regulator on the same day as QPR made its announcement.
The League has separately made clear its intention to pursue breaches of the prior rules: "The existing Championship FFP framework will remain in place for the 2014-15 and 2015-16 seasons. Any sanction for accounts relating to the 2013-14 season will continue to take effect as intended (and in accordance with the amounts specified at the time)."
That augurs ill for QPR, who under those prior rules face a fine measuring in the several tens of millions of pounds if they do succumb to relegation. The League's chief executive, Shaun Harvey, has previously intimated that a refusal to pay that could lead to the club being denied entry to its competitions, meaning a potential demotion to England's fifth tier.
However, where QPR may have some grounds for a challenge against Football League FFP is that a looser set of regulations were agreed last November, and will come into effect in the 2016-17 season. This will monitor clubs over a continuous three-year period in which they may lose up to £13 million per season, and additional amounts if they are promoted to the Premier League. QPR could argue that under those future rules they might have had no case to answer at all.
Indeed, going by the sanguine statement QPR released to the world to coincide with the submission of their accounts, it seems the club will fight whatever sanction the League imposes, blithely ignoring the threats. And despite the lack of self-restraint in QPR's past that he would no doubt disdain, Spurgeon might admire their optimism now, for as he said: "Anxiety does not empty tomorrow of its sorrow, but only empties today of its strength." UNQUOTE
