Financial Fair Play - we no likey

[aFFCn_Fan]

So the Premier League has decided to impose new financial regulations. Based on a meeting of clubs yesterday, Fulham are one of those six clubs who voted against. The others were West Brom, Man City, Villa, Swansea and Southampton, and Reading abstained from the vote. I can understand why City would be against it, with their wealthy backers, but why the other clubs? What do the rest of us have against it? Is this a good thing for the Premier league?

Here's a quote from the BBC story I thought was quite interesting:
Each team will not be allowed to make a total loss of more than £105m over the next three seasons and must limit their player wage bills from next season.
"If people break the £105m we will look for the top-end ultimate sanction range - a points deduction," said Premier League boss Richard Scudamore.
The rules are designed to improve the financial sustainability of clubs.
Investment in areas such as stadia and academies will be exempt.
The aim is a 'break even' model similar to the Financial Fair Play regulations introduced by Uefa for sides in European competitions. The FFP allows only a £38m (45m euros) loss - significantly less than the Premier League's new limit of £105m between 2013 and 2016......

Of the 20 top-flight sides, only Manchester City, Chelsea and Liverpool have reported losses of more than £105m over the last three years, according to the most up-to-date published accounts.
It emerged that the vote for the financial regulations could hardly have been closer with only 13 of the 20 clubs voted in favour, with six against and Reading abstaining.
The 'yes' vote only narrowly achieved the necessary two-thirds majority of the 19 votes cast.
It is understood that Fulham, West Bromwich Albion, Manchester City, Aston Villa, Swansea City and Southampton all voted against. Chelsea, who had initially been viewed as opponents of financial fair play regulations, voted in favour.
"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 [of pounds] in a very short period of time," said Scudamore.

[westcliff white]

if only 13 clubs said yes the how is it going thru? all the reports in the press said 14 votes were needed to ratify the changes. seems very strange

[Holders]

I'd like to know the reasoning behind our voting against.

Perhaps the abstention modified the number required to vote in favour - although the report saying that the vote could "hardly" have been closer suggests that the 13 was not the absolute minimum required for it to be passed.

[FC Silver Fox]

It doesn't go nearly far enough, I think. From what I'm hearing, its full of loopholes.

I'd be interested to hear what these rules would imply for the Premiership clubs, based on expenditure and receipts over the past 3 years.

[Snibbo]

Some seemingly knowledgeable comments from the TIFF suggest that the changes will just entrench the current Utd/City/Chelski dominance, because they will be able to generate huge revenues from marketing, merchandise, and to a lesser extent attendances, and continue to pay huge wages, whereas the likes of us won't.

Here are a few of the comments:

I think there's a feeling that these rules will entrench the established order. Look at the list of teams that voted against: Fulham, West Bromwich Albion, Manchester City, Aston Villa, Swansea City and Southampton. Man City aside, these are hardly big spenders. Most are teams that are happy not to be relegated every year. And that might be the point. If you run a big loss over three years, you get a points deduction. That will likely send those teams down. Then bankruptcy is certain. And what about if these teams decided to raise money by floating on the stockmarket? That extra money wouldn't factor into the profit/loss calculation. So spending it could lead you to run fowl (sic) of this new rule, even though you haven't harmed your indebtedness one iota. (NT) -- rjbiii,

Also, what the hell does this mean: "Any club making a loss of above £5m a year will have to guarantee those losses against the owner's assets." That makes sense where the owner is a single person. But what about a PLC with a diverse shareholding? And doesn't the concept generally violate the whole idea of the corporate form (i.e. limited liabilities for shareholders)? I can see this really limiting the options of clubs wanted to go down the Spurs route to sustainable growth. (NT) -- rjbiii,

Yep you could say the laws an ass in the case as favours the big teams even more . If they really wanted financial fair play they should impose a flat wage cap Thats the same for all clubs 20 k a week perhaps . Unlikely to happen though . (NT) -- The tactician,

Exactly this. The rule they adopted seems, again, to be designed to fix in the status quo. Your wages can't go over 54m except if your additional commercial and matchday revenue permit it. That's a load of rubbish. No, we don't want another Portsmouth. But at the same time, how is anyone ever going to catch up unless they're permitted to spend money now based on future revenue growth that success brings? (NT) -- rjbiii,

The Club have always been against these proposals as Al Fayed believe it will restrict the ability of an owner to show ambition to move their club up a level. It's noticeable that the Clubs who voted against it are ones who have shown responsible ambition. I guess the rules don't cover the large loan West Ham want Newham Council to take out on their behalf to fund the lease for the Olympic stadium. And Chelsea are voting for restrictions they would have repeatedly broken under Abramovich to get where they are, presumably to stop other clubs doing similar. Am I to assume QPR voted in favour! (NT) -- Matt

[Holders]

I think that explains it, thanks.

[MasterHaynes]

So the Premier League has decided to impose new financial regulations. Based on a meeting of clubs yesterday, Fulham are one of those six clubs who voted against. The others were West Brom, Man City, Villa, Swansea and Southampton, and Reading abstained from the vote. I can understand why City would be against it, with their wealthy backers, but why the other clubs? What do the rest of us have against it? Is this a good thing for the Premier league?

Here's a quote from the BBC story I thought was quite interesting:
Each team will not be allowed to make a total loss of more than £105m over the next three seasons and must limit their player wage bills from next season.
"If people break the £105m we will look for the top-end ultimate sanction range - a points deduction," said Premier League boss Richard Scudamore.
The rules are designed to improve the financial sustainability of clubs.
Investment in areas such as stadia and academies will be exempt.
The aim is a 'break even' model similar to the Financial Fair Play regulations introduced by Uefa for sides in European competitions. The FFP allows only a £38m (45m euros) loss - significantly less than the Premier League's new limit of £105m between 2013 and 2016......

Of the 20 top-flight sides, only Manchester City, Chelsea and Liverpool have reported losses of more than £105m over the last three years, according to the most up-to-date published accounts.
It emerged that the vote for the financial regulations could hardly have been closer with only 13 of the 20 clubs voted in favour, with six against and Reading abstaining.
The 'yes' vote only narrowly achieved the necessary two-thirds majority of the 19 votes cast.
It is understood that Fulham, West Bromwich Albion, Manchester City, Aston Villa, Swansea City and Southampton all voted against. Chelsea, who had initially been viewed as opponents of financial fair play regulations, voted in favour.
"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 [of pounds] in a very short period of time," said Scudamore.

My problem with it is the 54m wage cap. It is not related to total income, if we reduced our wage bill to 54m then we would be making a sizable £30m plus profit each season if we did not invest in new players. Big teams get players because they offer higher wages but all this does is reduce the amount the big clubs need to pay to attract players from lower paying clubs like Fulham. Big winners here are Aresenal, Liverpool, Utd, Chelsea City and Spurs. Puzzled as to why the lieks of Stoke and Everton voted for it

[sipwell]

As I understood the UEFA rules, clubs were allowed to have debt as long as the club had enough assets that could be frozen. Up until now, owner just had to theoretically guarantee the money was there. In other words, if Real Madrid were to purchase a player for 100 million, the club not only had to have a loan (which, given the value of the club it could fairly easily get) but also a guarantee of the owner he would cough up the money. It is hence a commitment of an owner to actually invest the money in the club (rather than guarantee the money without actually spending it). This would be beneficial for smaller clubs, who can not always get a bank loan because of their limited club value and it would impact both the ridiculous prices for players as the ridiculous wages for players.

[DiegoFulham]

doesn't it pretty much benefit United due to the size of their club? i understand imposing these rules due to people not wanting the Portsmouth situation to happen again but in the long run this doesn't benefit any of the smaller teams, if i remember it is imposed so the money you generate

So the Premier League has decided to impose new financial regulations. Based on a meeting of clubs yesterday, Fulham are one of those six clubs who voted against. The others were West Brom, Man City, Villa, Swansea and Southampton, and Reading abstained from the vote. I can understand why City would be against it, with their wealthy backers, but why the other clubs? What do the rest of us have against it? Is this a good thing for the Premier league?

Here's a quote from the BBC story I thought was quite interesting:
Each team will not be allowed to make a total loss of more than £105m over the next three seasons and must limit their player wage bills from next season.
"If people break the £105m we will look for the top-end ultimate sanction range - a points deduction," said Premier League boss Richard Scudamore.
The rules are designed to improve the financial sustainability of clubs.
Investment in areas such as stadia and academies will be exempt.
The aim is a 'break even' model similar to the Financial Fair Play regulations introduced by Uefa for sides in European competitions. The FFP allows only a £38m (45m euros) loss - significantly less than the Premier League's new limit of £105m between 2013 and 2016......

Of the 20 top-flight sides, only Manchester City, Chelsea and Liverpool have reported losses of more than £105m over the last three years, according to the most up-to-date published accounts.
It emerged that the vote for the financial regulations could hardly have been closer with only 13 of the 20 clubs voted in favour, with six against and Reading abstaining.
The 'yes' vote only narrowly achieved the necessary two-thirds majority of the 19 votes cast.
It is understood that Fulham, West Bromwich Albion, Manchester City, Aston Villa, Swansea City and Southampton all voted against. Chelsea, who had initially been viewed as opponents of financial fair play regulations, voted in favour.
"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 [of pounds] in a very short period of time," said Scudamore.

My problem with it is the 54m wage cap. It is not related to total income, if we reduced our wage bill to 54m then we would be making a sizable £30m plus profit each season if we did not invest in new players. Big teams get players because they offer higher wages but all this does is reduce the amount the big clubs need to pay to attract players from lower paying clubs like Fulham. Big winners here are Aresenal, Liverpool, Utd, Chelsea City and Spurs. Puzzled as to why the lieks of Stoke and Everton voted for it

Everton are a big club? Wigan surprise me the most their ambitions mustn't he that high at all... in the long run this might benefit Leeds, Wednesday and Forest also?     

[Walsh]

I think it will ruin Football in England and will make transfer windows a lot more technical.

[Burt]

In all honesty I am not close enough to the detail to really understand whether this is a good thing or not.

If it encourages clubs to be a sustainable business, and controls the stupidity that we are seeing with regard to transfer fees, players wages and the cost of attending matches, then I am all for it.