Football League Confirms Financial Fair Play Rules Wednesday, 25th Apr 2012 14:00
The Football League has confirmed that it will adopt Financial Fair Play regulations in all three of its divisions next season. The League has outlined the sanctions that clubs not keeping to the rules will face, although these won't be enforced until 2013/14.
Championship clubs, who will have to provide the Football League with their accounts by December 1st each year, will be obliged to make sure their annual losses drop from an “acceptable deviation” of £4 million in 2011/12 to £2 million by 2015/16, certain areas of spending being excluded, including academy and community programmes.
The allowed level of shareholder equity investment will be reduced from £8 million in the 2011/12 campaign to £3 million by 2015/16.
Clubs which fail to comply with the rules will face sanctions but not until 2013/14, after "a sensible period of transition".
Sides that have been promoted to the Premier League will have to pay a Fair Play Tax on their spending excess, which ranges from 1% on the first £100,000 to 100% on anything over £10 million with that cash going equally to the clubs who have kept to the regulations.
Teams not playing by the rules and remaining in the Championship will face a transfer embargo.
Clubs relegated from the Premier League won’t face sanctions during their first season in the Championship if they have kept to Premier League regulations.
Championship clubs formally accepted the proposals at a vote in London this morning, although three voted against, with Football League chairman, Greg Clarke, welcoming the move which is aimed at creating a greater financial stability: "On the pitch we have three exciting, competitive divisions with crowds at their highest levels for 50 years.
"But that success isn't necessarily being reflected on our clubs' balance sheets and we have to remedy that situation or face an uncertain future.
"I'd like to commend the Championship clubs for the courageous decision they have taken today. It means that for the first time, all 72 Football League clubs have agreed to take concerted action towards controlling their financial destiny.
"Whilst we cannot promise that these rules will deliver results overnight, they will begin to lay the foundations for a league of financially self-sustaining football clubs."
Speaking to TWTD about the Financial Fair Play rules in some depth last month, Town chief executive Simon Clegg was similarly supportive: “When you step back and you look at the big picture, this can only be a good for football.
“It’s very sad to see Portsmouth, Port Vale and Rangers in the situations that they are in and no one would like to see Portsmouth go under completely. It is a massive wake-up call for the other 71 clubs.”
Owner Marcus Evans has injected around £5 million to £6 million a season since taking over at Town in December 2007 with the Blues' debts standing at £66.17 million in the accounts to June 2011.
Full details of the Financial Fair Play framework for the Championship, League One and League Two can be found on the Football League’s website.
I see the logic of these rules, but it does mean that we are going to a stratified system where everyone is expected to stay at "their natural level," so to speak. But perhaps it will make clubs realise that the only way of breaking out of that level is to do well with their own youngsters. That would be positive.
Whilst I can see the logic of doing it and helping to stop the financial problems that some clubs have had I'm not sure I agree fully with it. To me it seems that everything will level out and the bigger teams will be more competitive by the nature of their higher turnover. It'll be like Formula One a few years back in Schumachers last couple of title winning years, where nobody could over take because of aerodynamics and the cars followed each other around in a procession in the order of their over all competitiveness. Surely the same will follow here?
I totally agree with and support the principles of the Fair Play Rules, as it is about time clubs were properly managed and players' wages brought down to sensible levels.
From Ipswich's point of view, arguably it will mean that we cannot benefit from Marcus Evans' investment as we have in the past (I meant in terms of him having put the money in, not that it translated into results on the pitch!).
Mark...Maybe looking at what you've said in your post about Evans money it might benefit us, we've never really done much when we've had money. Burley pi$$ed a load of it up the wall when we were last in the Premier League and Magilton and Keane (not so much PJ) had a good go at it as well.
Have to agree to this, although I'd rather the entire football pyramid had to comply instead of the lower leagues.
I'd still feel optimistic about our transfers though for this year, not a lot of the wickham money was spent, this surely means it can be accounted for in our finances which could be invested in our wage budget or transfer budget.
Yes, I take the point about Evans' money not improving things although if it had have been well spent when we could be in the Premier League by now. Instead, just think of the big signings who have left for FREE recently: £2M Norris, £1.1M McAuley, £1M Civelli, £900K Fulop, £750K Lisbie, £500K R.Wright, £300K Quinn, £200K D.Wright, with £2.6M Leadbitter to come...plus some I have forgotten and many who have left for small fees.
According to www.bbc.co.uk/sport/0/football/17841566, "Owners will be allowed to invest £6m next season, £5m the year after, then £3m in the 2014-15 season".
I wonder whether Marcus Evans will use the opportunity to invest while he can? As we need to get wages down to meet the new rules, there is an opportunity to invest in transfer fees of decent young players for the next couple of seasons.
I may be wrong but I think the additional investment from owners is to cover existing committed costs such as the cost of Jimmy Bullard's contract which we would struggle to meet under the FFP rules. I don't think it allows ME to chuck good money away in a desperate last ditch attempt to 'chase the dream'.
I guess its good that football has finally realised it needs to cut its cloth accordingly. Makes it even more vitally important that ITFC get fans thru the turnstiles every match. I don't think the sanctions are enough to stop teams gambling though especially given the riches that premier league football guarantees a club. I would have thought points deductions might be a bigger deterent
Marcus Evans picks up the tab for the club's financial losses every year.
We have a lot of expensive journeymen and have been losing £5 million plus every year for a number of years now. The Wickman and Walters cash went to plug the financial hole for last year. Our player wage bill is the third or fourth highest currently in the Championship which is not sustainable.
Young hungry players at the club have to be the way forward both from a football and financial perspective.
BuryBlue77 - I dont think you can ever compare these rules to F1. F1 have machines which to some extent are consistent known entities, the drivers & team tactics make the difference. Football has humans, prone to good and bad days, illness etc. Even if you had the same money, rules etc, you'd still have a far larger element of risk in who you buy, value for money, unknown youngsters etc. I for one agree about a more level financial playing field - means we need to be more creative and hopefully brings silly wages down which ultimately means cheaper tickets etc. I'm sure bright sparks will find 'creative' ways to bypass some of the rules though.
"I think that what we'll see during the period before fines are introduced is clubs getting top players in on lower wages but with large signing on fees. When the fines are introduced (in a couple of years time), the players will still be on lower wages and therefore within budget. "