On Financial Fair Play & Legal Threats
It was always likely to only be a matter of time before somebody issued a legal challenge to somebody’s Financial Fair Play rules somewhere in this country. After all, the acquisition of debt has become one of the defining characteristics of football in this country from the very top of the professional game down in recent years. Indeed, in some respects it might be even considered a tradition – English football clubs have been using their financial muscle to crowd out their rivals since before the Football Association’s rules even allowed players to be paid to play.
The challenge to Financial Fair Play is being made to the Football League and it’s coming primarily from the Championship, although reports have been conflicting on how many it might be, with the Guardian not giving the exact number of clubs behind it all (although they did name Leicester City, Queens Park Rangers, Blackburn Rovers and Wolverhampton Wanderers as being amongst the main movers behind it), whilst the Daily Mail went a step further and made the claim that ten clubs from the Championship and one from League One were involved in it all, although they only added the name of Bolton Wanderers to that given by their rival publication.
The Guardian’s list of clubs came from “Championship sources,” and there is little reason to question it. The notion of Financial Fair Play was always likely to be a divisive on between clubs themselves, especially if the perception was ever allowed to take hold that some clubs might be gaming the system or being allowed a free ride by the authorities whilst others were embracing the ruling by doing whatever was required to comply with the rules. And in the Football League’s defence, we should remember that the decision to introduce the rules that have come in came about only after a decisive vote by the twenty-four clubs of the Championship of twenty-one to three in favour of introducing this initiative in April 2012.
So let’s talk about “financial fair play” – not the capitalised version, a mine-field of clauses, sub-clauses and qualifiers which is all but guaranteed to make the eyes of most supporters glaze over within five minutes of starting to think about it. Let’s talk about the nature of what “financial fair play” might mean in a more nebulous sense. As we have noted before on this site, football supporters have, over the years, always been remarkably sanguine about the inequality that exists within the game in this country. We accept that some clubs are bigger than others, we accept that expectations might change from club to club. But the one thing that supporters would surely want more than anything else would be a slightly more level playing field. We want it to be a sport, rather than a series of exhibition matches which those with the deepest pockets invariably win.
In the Football League Championship at the moment there is not a level playing field at present, but it is not Financial Fair Play that massively distorts the financial prospects of clubs in this division – it’s Premier League parachute payments, the semi-hidden sweetener to life amongst the flotsam and jetsam of the top division, that should make the real financial difference in this division, and it’s a benefit that Queens Park Rangers, Blackburn Rovers, Bolton Wanderers and Wolverhampton Wanderers have all drawn in recent years. To take the most extreme example, Queens Park Rangers will have taken £23m this season in parachute money as a result of their relegation at the end of last season. The comparative payment for a club that doesn’t benefit from this – the Premier League’s arguably disingenuously entitled “solidarity payments” – is one-tenth of this, £2.3m.
That clubs relegated from the Premier League have in recent years made such a dog’s breakfast of getting back into the top flight following relegation may have a variety of different explanations behind it, but some sort of financial disadvantage over the other clubs in the Championship could hardly be considered to be one of them. So why is it that some clubs in the Championship are so unhappy about it all? Well, we could look to last year’s promotion winners for a clue or two – Cardiff City won the Championship last season thanks to a £31m loss underwritten by Vincent Tan, whilst Hull City managed to scramble up off the back of a £26m loss over the same period. Perhaps it is just the case that the sort of autocrat that would decide to fuel his self-importance by funding an attempt to buy a place in the Premier League is simply materially incapable of anybody “trying to tell him how to run his business” (in other words, “regulation”).
We all know the recent travails of Blackburn Rovers (who lost £37m in the 2012/13 financial year), Queens Park Rangers ( who lost £23m over the course of the 2011/12 financial year, but whose figures are expected to be considerably worse for the year following that), Bolton Wanderers (who lost £50.7m in the twelve months to June 2013 and whose total debt is almost £164m) , Wolverhampton Wanderers (who turned a £2m profit on their last year in the Premier League two years ago but are now fighting to get out of League One after two successive relegations), whilst Leicester City lost £30m during the 2011/12 financial year but, many supporters believe, are expected to pass FPP checks at the end of this season.
It would certainly seem that the legal letter, issued by the Manchester law firm Brabners LLP, doesn’t give too much consideration to outside perceptions of the clubs involved from a PR Perspective. The letter, which the Guardian states that it has had sight of, reportedly states that, “It is likely that, unless the FFP rules are modified, the Football League should expect a challenge from any number of clubs and/or players or agents suffering sanctions or the consequences of sanctions.” We shall have to wait and see whether there is an outpouring of sympathy for players or agents as being the victims of the Football League and their nefarious Financial Fair Play schemes, but it seems unlikely that this will come to pass.
So, if the clubs behind this legal challenge are serious about perceived injustice, let’s get serious about Financial Fair Play. Let’s end Premier League parachute payments. Just because the clubs that receive them don’t seem to have a very good record of making the most of them doesn’t mean that they don’t have a competitive edge in the transfer market over their rivals. Let’s take the financial revenues from the Champions League, the Premier League and the Football League and distribute it evenly across all ninety-two clubs. And let’s put an end to the trick of “investing” in a club through the medium of putting loans into it. If a vainglorious football club owner wants to chuck tens of millions of pounds into a football club, let him shoulder the risk rather than a club that the risk-taker himself could walk away from at any time. And if the owners of some clubs don’t like a football culture that is regulated in order to try to keep a lid on spiralling wage bills or gambling the family silver on a shot at promotion, let our message be perfectly clear: other businesses are available, should this one not suit them. They know where the exit is, should they wish to utilise it.
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