Town chief executive Simon Clegg has revealed that clubs contravening the new Financial Fair Play rules will not face any sanction for the first two seasons while existing player contracts are allowed to run down. Championship clubs have agreed to move to the break-even model from next season.
Clegg said: "Whilst Financial Fair Play will kick in from the start of next season, the current proposals are that there will be no sanctions for the first two years.
"What they want to do is get people into the process of filling in a Fair Play model and submitting results against that model to allow current players’ contracts to run out.”
He admits that the process could potentially be open to clubs ignoring the rules during that period: "There is nothing to stop people doing that but the whole reason that the sanctions don’t effectively kick in for two years to allow people to run out their three-year contracts with players who only have two years to run at the end of this season.
"So, if people make commitments for new players going forward and throw lots of money at it and don’t achieve it, they are going to face a huge challenge when the sanctions do kick in. It’s a high-risk strategy.
"The feeling was that we had to look at this strategically and, while there are faults with the sanctions not kicking in until two years’ time, it was to allow contracts to run out for those clubs who were committed to long-term player contracts before this was implemented.”
Last week, a report by a committee of the Council of Europe labelled deals such as Manchester City’s £400 million sponsorship by Etihad, which has links to their owners, "improper transactions”.
There has been speculation that Town — and other Championship clubs - might take a similar approach to the new rules but Clegg says efforts are being made to close those possible workarounds: "There is certainly a massive attempt to stop people from creatively finding loopholes, otherwise it’s a meaningless process.
"This is being driven from the very best of intentions - to stop clubs going into administration by spending beyond their means. And therefore a lot of work has gone in to ensure that there aren’t loopholes.”
However, Clegg admits that he, like other chief executives, will be trying to find ways of benefiting his side: "I’ll be looking at everything which will allow us to gain a competitive advantage over the other 23 clubs. That’s what I’m paid to do.”
He says clubs will have the freedom to make decisions as long as they spend within their means: "There’s not a wage cap, it’s an attempt to move us to break-even and then you’ve then got complete flexibility in terms of what priority you want to give to different cost centres within the club.”
The precise nature of the rules are yet to be confirmed - "We still don’t have definitive clarity, the final documentation will not be delivered until June” — but clubs’ wage bills and Championship player salaries will undoubtedly drop as a result.
Clegg says some sides will be affected more than others: "If everyone is being forced to bring wage bills down, then it’s going to hit everyone, maybe not equally, but it is hitting everyone. The challenge for us will be to operate more efficiently as a business and drive more revenue.”
Inevitably clubs who have recently been in the Premier League will be better off than most, Clegg says: "Relegated clubs will have a greater advantage because of the parachute payments.”
It might take a while for the Championship wages market to settle at a new level but Clegg won't hold back on offering new contracts to current players while this happens: "We will do what’s right for this football club. We will offer what we believe is right at the right time to those players that we want to keep.
"I take your point that it would be nice to see where the other 23 clubs settle but you never really know anyway, so what you’ve got to do is to make the right offer to the right player at the right time for your club.
"The challenge is whether the players psychologically have understood that the market has changed, and their agents.
"And whether they are getting equal feedback in the discussions that they may or may not be having with other clubs, and whether they want to stay here at Town.”
He says it’s possible that the nature of players’ contracts could develop because of the new rules, perhaps to reflect a club’s changing financial situation: "We’re not at the point yet where you are looking at the potential for players to become more performance pay related, and when I talk about performance, I’m not just talking about what on the pitch but what happens in the business.
"I think that there is the potential, although I’ve not heard of it yet, for contracts to be structured in a slightly different way.”
Ultimately, Clegg sees the new rules as a move in the right direction: "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.”
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