By Tony Attwood
And so it came to pass, just as suggested on Untold and elsewhere. Premier League clubs will lose points and face other “touch sanctions” (in the words of Richard Scudamore) if they don’t comply with the League’s on Financial Fair Play rules. The new approach has come in just in time to stop the whole £5.5bn television rights arrangement being spent on salaries.
It is by no means perfect, and it by no means everything we wanted, but at least it is a start. It should have an impact on wage inflation and on long term losses. With a spot of luck it will make clubs more stable. And most of all, it is the first rule about finances in the Premier League. Which means it is open to amendment and development. Getting the first rule in place is always the hardest measure.
From next season the total loss a club can make across three seasons will be £105m. A big loss, but not so big that it won’t stop another buyer from the UAE taking over a club and throwing money at it. Academy development and stadium building are not included in the calculations.
To give a perspective, last season the total losses were £361m – which suggests that the losses over the next three years without this regulation would be over £1bn. If every club made the maximum allowable loss across the next three seasons then the total loss would be over£2bn, which suggests the rules will have no impact.
But that is not how the Premier League plays out. A few clubs make a profit, a lot of clubs make losses well below the permitted level, so in fact only the big losers will be caught.
Thus the plan is not to cut spending but to stop it rising so fast, and to stop any more buy outs of the Man City and Chelsea type, and finally the reign in those two clubs.
Those clubs that have a wages bill over £52m a year can only add to that in a restricted way over the next three years – unless genuine increases in match day and commercial income occur. 13 of the Premier League clubs have wages bills over £52m a year.
Chelsea, Manchester City, Aston Villa and Liverpool would have had points deducted if the rules had been in place from 2008 on and they had behaved in the same way as they actually did. And to give a comparison, it is believed that Roman Abramovich has put £1bn into Chelsea in the past 10 years.
It is far from everything that Untold has argued for. But it is something. As always, the journey of 10,000 miles starts with a single step.
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