By Tony Attwood
During the course of last season, we had a number of debates about the range of FFP outside of the European regulations, and speculated that from the Championship perspective QPR and Leicester might have problems if they returned to the Championship, and Bournemouth might have some difficulties as well.
Reports suggest that Bournemouth are not in difficulties with Championship FFP, although of course we won’t know unless and until they are relegated from the Premier League. Leicester are freed from any worry by having survived in the PL (whether they exceeded the old regulations or not doesn’t matter as long as the club is in the PL) which just leaves QPR.
The problem is that the news sources dried up in the second week of May. A whole raft of headlines turned up at that time such as
And so we wait, and wait. At the very heart of the problem is that the rules that applied when QPR committed what some feel was their misdemeanor, have been changed. Others argue that QPR have nothing to fear. The arguments continue.
At best for QPR they get a tiny fine – which means the Championship is left looking like a toothless tiger, and will never have any credibility again in terms of financial control. It will make noises but everyone will know that a club willing to fight them, has a strong chance of winning.
The worst for QPR is that they get thrown out of the Football League and have to apply for a place in the Conference – which is tough since the fixtures have already been published. But if they did that the League would have its FFP programme in tact.
At the heart of the matter is that in March QPR filed accounts which showed a loss of £9.8m in the year in which they got promoted to the Premier League. But (and not for the first time I’m saying “there is always a but”) that £9.8m is seen as an absolute farce by some because it involved writing off loans of £60m in such a way that they would not be counted in the calculations.
If that move were legal then all the regs are null and void since any wealthy owner can make loans to the club and then say, “oh actually guys, I don’t need the money, you have it.” In short any owner can invest in a club at any level in order to help the club buy more and more players – exactly what FFP is designed to stop.
If QPR has breached the rules as they stood at the time they will get a fine of around £58m which the owner has vowed not to pay. (This comes from the rule whereby if clubs lost more than £10m than what they were permitted to, they would be fined £6.681m for the first £10m they lost and 100% of the amount they recorded as losses on top of this figure.)
The League could then kick them out, which these days is not quite so unthinkable as it might once have been. After all the SPL threw Rangers out into the third division – not quite the Lowland League, but fairly small beer. Scottish League Two contains East Stirlingshire which has a ground capacity of 3,746, and it is not the only club of that size.
As with European FFP, Championship FFP has some flexibility and some leeway, with the expected exceptions like investing in the ground, the youth infrastructure and the like.
What QPR are doing therefore is not questioning the detailed application of the rules, as for example Man City did when they were caught short, but rather they are going a stage further and challenging the absolute legality of the Football League rules.
The last public statement on the matter that came from the Football League said: “Legal proceedings are ongoing between Queens Park Rangers and the Football League. QPR challenges the legality of the Football League’s Championship Financial Fair Play Rules and any charge against QPR for breach of FFP Rules shall not be commenced pending the outcome of that challenge.
“The proceedings are confidential in nature and neither party is entitled to comment upon the proceedings until the independent arbitral panel has delivered its decision.”
Which is why all the media shut up at that point, accepted the new season’s programme of matches, and pretended nothing happened.
The sanctions against clubs in the Football League that break FFP rules can only be applied while they are in the Football League, which is why QPR had nothing to fear as long as they were in the Premier League. But they must know that the one and only punishment available is the fine. It is only if they refuse to pay, that they will go.
On the other hand, QPR are the first team caught in this way. They are threatening heaven and earth against the League, but the League has another problem, for the clubs that have obeyed the rules (and there are many) have already suffered by having QPR take one of the places for promotion to the Premier League. If the Football League back down, then why should any other club bother? They could be an uprising if the League lose this one.
The oligarchs will know that they can move in and snap up a Championship team, pump in the money without anyone really knowing too much about where it came from, and if it might be legit money or not, and then effectively get a promotion. That would bring in a huge wealth and open the gates to money laundering on a significant scale. Indeed if you are a long term reader you will know that we dealt with the money laundering issue in a series of articles – it being a subject that not too many newspaper articles have wanted to dwell on.
Shaun Harvey, Championship and Football League chief executive will not rule out QPR still being ejected from the league if they don’t pay up. And what lurks at the foot of all this is that the loss was over £60m in one season in the Championship. The oligarchs are watching in the wings.
In once sense though QPR’s position probably contains a lot of posturing. If they do get fined £60m and pay they will still be in the Championship. If they refuse to pay they will be out of the Championship, not getting any money from TV in the Championship, not fighting with a chance of rising back up, and playing in front of tiny crowds. The loss if they are thrown out, will be much, much greater, and could lead to the end of the club. Ticket sales will be down, sponsorship (which always has clauses in it about which league the club are in) will vanish…. the loss would be £150+ in the first year, and then even if they got promotion back to League 2, £100m in the second year compared with what they would have got had they become a mid-table Championship club.
Because of the news blackout on the case what we don’t know is whether QPR has yet been successful in challenging FFP in front of an independent tribunal although we presume not. If it fails QPR could then challenge the League in the UK’s courts. This takes us to the area of the recent claim by a Belgium lawyer Daniel Striani, in the Belgium court against Uefa’s FFP.
But as we reported recently, although that case was won by Striani, Uefa immediately appealed and has continued to impose FFP regulations. What’s more the European Commission, under whose remit sport-related regulations are considered, has already said it is happy with FFP.
Striani’s challenge is the Uefa’s FFP is inherently anti-competitive because it restricts clubs’ freedom to manage their own resources, which could distort competition between clubs. But the EC has repeated ruled that sport is a special case when it comes to competition, because it is not an open market. If QPR are raising these arguments again, they will presumably once again end up challenging the EC. As people sometimes say these days, “Good luck with that”.
Just to make it more complex, in a year’s time yet another set up rules comes in, within the League. Clubs can lose up to £39m maximum over a three season period provided they meet certain other regulations relating to the owner providing acceptable evidence of secure funding for the next two years.
But even here QPR seem to have a problem because the Championship also has a rule that says clubs will only be able to run up maximum losses of £13m next season.
If QPR win, then it will look like anyone can do anything. If they lose…. who knows.
From the anniversary files…
- 12 July 1995: George Graham found guilty of receiving £425,000 payment from agent Rune Hauge following the purchase of John Jensen and Pål Lydersen. He was dismissed by Arsenal and banned for one year by the FA.