The premier league has announced that it will be bringing in rules that clubs who post a loss will be deducted points This is not before time and it's good to see that the Premier League as well as UEFA are taking action on financial doping. I hope that the rules are stringent and do not allow teams like City to circumvent the rules with their massively inflated 'Etihad' stadium naming deal. For it to work, their needs to be proper transparency and a robust disciplinary commission who will enforce the rules . http://www.bbc.co.uk/sport/0/football/21374699
Clubs have agreed to focus on a 'break even' model similar to the Financial Fair Play regulations introduced by Uefa, which affect teams in European competitions. Under Uefa's rules, which will start to apply from next season, clubs must eventually break even or risk exclusion from European competition. Owners will be permitted to cover annual losses of up to £12m via equity, but that will then be phased out. Arsenal, Manchester United, Tottenham and Liverpool are understood to be ready to argue that wealthy owners should not be allowed to underwrite any losses under Premier League rules either. But PA reports they will have to settle for a compromise where up to £105m over three years can be covered.
If the exemptions for expenditure are anything like FFP then £105mill is a huge amount for 3 years. Even when Chelsea turned in a £60mill loss they were on target for FFP as the exemptions meant that the loss was significantly lessened. A wage cap would be the best way of leveling things out, anything that relies on club's maximising their revenue always involves screwing over the fans with higher prices.
I think the Premier League need to ensure that there aren't the same expenditure loopholes that FFP seems to have. My feeling is that seeing as they have allowed owners to cover £12m shortfalls in revenue, that it means that they'll be taking the raw figures of profit and loss as the main marker. I'm hoping the combination of sanctions for massive loss postings coupled with wage caps will have a significant impact in reducing teams' overall spend, which in theory should protect fans from massive ticket hikes.
I guess they just don't want any new sugar-daddy club to emerge, as these new rules wouldn't affect any already established team like Man City. After the heavy initial investment City seem to be a fairly well run club.
Spend it all on Cadbury's creme eggs. I don't think this affects our transfer kitty, we can still afford a few eggs.
The problem with a wage cap in one league is that most of the best players would then prefer to play in leagues of a similar calibre but with no such cap, thus lessening the quality and marketability of any league that implements it. There are parallels in the tax system.
I would like to have seen that figure brought down more to FFP level. 105m seems like a licence for negligence to be honest.
Very true. I think everything's developed too far in football to put any meaningful regulation in, it's the same with ownership.
A wage cap is a bad idea, but limiting salary as a % of turnover would work. City's wages were 107% of their turnover a year or so ago. Limiting it to a much more manageable 60% would help prevent clubs going into administration & means how clubs spend that 60% is entirely up to them.
What happens after 3 seasons? Is it only in the first 3 years that you can make losses of up to 105 million? What happens after the 3 years are up, what becomes the limit afterwards?
I'm not sure of the details either. Is the £105m a cumulative figure or per season ? and as you say what is the limit after this time ?
