February 2, 2013
OFFICIALS AND SUPPORTERS OF FOOTBALL LEAGUE CLUBS ARE BEGINNING TO GET TO GRIPS WITH THE FINANCIAL CONSTRAINTS OF THE FAIR PLAY RULES FOLLOWING THE INTRODUCTION AND IMPLEMENTATION THIS SEASON.
Clubs are having to apply the rules and are mindful of the Swindon Town situation of a few weeks ago when the Wiltshire club went over the top in relation to expenditure budgets against income.
As I understand it Fair Play is a UEFA initiative with individual Leagues agreeing with member clubs over implementation and the establishment of League Rules. A search under ‘Financial Fair Play Football’ gave me a number of sources for information and explanation including our own Football League. I started with UEFA to get an overall understanding before going further; as follows from the official UEFA web site:
UEFA’s Executive Committee unanimously approved a financial fair play concept for the game’s well being in September 2009. The concept has also been supported by the entire football family, with its principal objectives being:
to introduce more discipline and rationality in club football finances;
to decrease pressure on salaries and transfer fees and limit inflationary effect;
to encourage clubs to compete with(in) their revenues;
to encourage long term investments in the youth sector and infrastructure;
to protect the long term viability of European club football;
to ensure clubs settle their liabilities on a timely basis.
These approved objectives reflect the view that UEFA has a duty to consider the systemic environment of European football in which individual clubs compete, and in particular the wider inflationary impact clubs’ spending on salaries and transfer fees.
For someone taking a Iong term view and wanting to leave a football legacy for the generations to come it is difficult to disagree with any of this. I am particularly attracted to the fourth point on the list. I do not see enough young players being developed through into first teams especially at Premier League level. I understand the current revision of Youth Academy status is an attempt to rectify that although the new scheme does seem to have a hieratical flavour to it which suggests to me the same old.
Anyway, after several years of solid hard work and investment we are beginning to see the fruits of our youth policy at Bristol Rovers. The introduction of Ellis Harrison at Fleetwood and Rotherham has been felt by all of us who take inas many U-18 games as we can. Well done Ellis for a super individual goal at the New York stadium. Having watched Ellis do this so many times at Youth level and followed his progress closely, it was magic to see him do it in a first team shirt.
The Football League website has a page dedicated to the new rules. League One and League Two clubs have chosen to implement the Salary Cost Management Protocol (SCMP).
The SCMP broadly limits spending on total player wages to a proportion of each individual clubs turnover, with clubs providing budgetary information to the League at the beginning of the season and this information is updated as the season progresses. Any club that is deemed to have breached the permitted spending threshold will be subject to a transfer embargo, as was the situation at the County Ground at the end of last year. Wherever possible the League will seek to tackle the issue at source by refusing player registration that would take clubs beyond the threshold.
At the beginning of this season League Two clubs reduced the permitted spending threshold to 55% from 60% and this figure will continue to be operated next season.
Financial Fair Play in the Championship will see the introduction of ‘Breakeven Model’ . It will require clubs to stay within pre defined limits on losses and shareholder’s equity investment that will reduce significantly over the next five seasons. The new system will require clubs to provide annual accounts to The Football League by December 1st every year covering the previous financial year, excluding investment in specific areas of club infrastructure or losses in certain extraordinary circumstances.
The Football League will establish a Financial Fair Play Panel, led by its Chairman, to consider any challenges by clubs to the determination of the Fair Play Panel.
The Football League will phase in its Financial Fair Play framework for Championship Clubs over the period up to season 2015/16. Total permitted allowances will reduce from £12 million to £5 million over the period. It seems then that the days of losses of £12 million or more over the season are well and truly over. If any club does show losses in a financial year above the figure set in the framework then sanctions will be applied to the respective club. As I understand it, Premier League clubs are still debating the issue and have yet to reach any conclusions or agreements
I hope this is helpful to all of those who have asked me questions on the issue and to others who were as perplexed likewise.