Financial Fair Play and the Premier League- Iain Taker

The situation going forward

While the Premier League does currently have protection mechanisms in place, described in more detail below, the noticeable difference with the UEFA system is the absence of a break even test. An equivalent system (to UEFA’s) has already been approved for the Championship and Leagues 1 and 2 have adopted a different version which ultimately has the same intention. As it currently stands any Premier League club who wishes to enter an UEFA competition must apply for a licence (last season 19 out of 20 clubs applied for a licence), part of the test is a requirement to pass the FFP criteria (http://www.financialfairplay.co.uk/financial-fair-play-explained.php). While it is usual for the vast majority, if not all, of the Premier League clubs to apply for a licence only around seven will actually require one in any season. This in turn means the need to comply with the UEFA rules is unlikely for over half of the clubs. Therefore it has been seen by some influential commentators that the current system does not offer a suitable and adequate system for the whole league and that change is necessary.

Recent press reports and comments by Richard Scudamore to the Common Select Committee (see 51 minutes into video http://www.parliamentlive.tv/Main/Player.aspx?meetingId=11205) have raised a realistic likelihood that the Premier League will consider bringing in FFP regulations by the start of the 2013/14 season.  The clubs are currently having discussions concerning the possibility of agreeing some further FFP regulations for the Premier League.  David Gill the Manchester United Chief Executive and an advocate of introducing FFP said:

While there is support from Richard Scudamore for the new regulations there continues to be a clear divide between the clubs as to whether there should be additional FFP rules brought into the domestic game. Supporters of the introduction of new regulations include Arsenal, Liverpool, Manchester United, West Ham and Wigan. Opponents of additional rules include the current Premier League champions (Manchester City), Champions League winners (Chelsea) and Fulham. As consent of at least fourteen member clubs is required it awaits to be seen as to what position some Premier League clubs will adopt and to what extent compromises will have to be made. The proposed regulations are due to be discussed at informal discussions in late 2012 and formally put to the clubs to vote on around March 2013. The intention would be to implement them prior to the start of the 2013/14 season although like the UEFA FFP regulations there would likely be a period of integration during which time teams would need to be adjust in order to comply with the regulations.

At the moment there has been no official word on the guise that any additional regulations will take. It is however informally understood that the clubs prefer an alignment with the existing UEFA FFP regulations e.g. break-even approach as therefore applying for a UEFA licence would be more aligned.  The alternative options would be to seek to limit the allowable debt to revenue ratio or seek to implement a spending cap (which in itself could cause significant legal issues). Clubs will undoubtedly will influenced by their existing structures and those with wealthy individual owners who are willing to bankroll their teams will have a different approach to the negotiations than those who are financed via debt.