By Mark Baber
February 8 – The Premier League has voted in its own set of financial controls on its member clubs, though some clubs feel the rules do not go far enough.
The new rules were formulated as an initiative within the Premier League and are aimed at creating greater financial stability thoughout the league; helping clubs operate within tighter budgets without the pressure of outside forces, particularly player wages, driving the club cost base up to commercially unsustainable levels.
The rules also have a political agenda, in that may help deflect some of the recent concerns and threats from the UK government regarding the sport’s governance.
A recent parliamentary select committee warned both the FA and the Premier League that the government would consider national regulation if they did not show stronger governance and more responsibilty across a range of issues considered important for the national game in England and the UK.
13 out of 20 Premier League chairmen are reported to have voted for the measures with Reading abstaining. The regulations are designed to further improve the sustainability of clubs.
The new rules drawn up by the Premier League Executive Committee include:
Long-Term Sustainability Regulation:
– From the 2013/14 season Premier League clubs cannot make a loss in excess of £105million aggregated across seasons 2013/14, 2014/15 and 2015/16.
Any club that makes a loss up to that limit will be subject to a tighter regulatory regime that includes:
– Secure owner funding for three years ahead
– Increased future financial information over the next three seasons.
Short-Term Cost Control Measure
Premier League clubs are restricted in terms of the amount of increased PL Central Funds that can be used to increase current player wage costs to the tune of:
2013/14: £4m
2014/14: £8m
2015/16: £12m
The Short Term Cost Control measure applies only to clubs with a player wage bill in excess of £52m in 2013/14, £56m in 2014/15 and £60m in 2015/16.
Premier League chief executive Richard Scudamore claimed the regulations will be backed up by tough sanctions, saying, “As all things in our rulebook you will subject to a disciplinary commission.
“The clubs understand that if people break the £105m we will look for the top-end ultimate sanction range – a points deduction.
“Normally we stay silent on sanctions as the commission has a free range but clearly if there is a material breach of that rule we will be asking the commission to consider top-end sanctions.”
Areas such as stadia and academies will not be included in the calculations of club’s losses.
The Premier League regulations fall short of UEFA’s financial fair play rules for clubs in European competition.
Manchester United, Arsenal, Tottenham and Liverpool recently submitted a written demand for UEFA’s full financial fair play rules to be brought in to the Premier League.
Their proposal was aimed at preventing Manchester City and Chelsea from using the financial clout of their wealthy owners to dominate the league.
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