QPR’s relegation forces them into an even higher stakes FFP game

QPR

By Paul Nicholson
May 12 – QPR have reacted fast to potential Financial Fair Play penalties of as much as £58 million following their impending relegation from the Premier League to the Championship.

In a club statement they said: “Legal proceedings are ongoing between Queens Park Rangers Football Club and the Football League.

“QPR challenges the legality of the Football League’s Championship Financial Fair Play Rules and any charge against QPR (if any) for breach of FFP Rules shall not be commenced pending the outcome of that challenge.”

QPR announced losses of £9.8 million in March which relate to the 2013/14 season they had spent in the Championship after relegation in 2012/13 and before their return to the Premier League for the current 2014/15 season. That loss would have been greater had there had not been the agreement to the “writing off [of] £60 million of shareholder loans” (see Matt Scott column ‘QPR’s past failure to cut costs would make life after relegation a real battle’ http://bit.ly/1H0AY6g).

Football League Financial Fair Play rules allow clubs in the Championship to have losses of £8 million per season with £5 million of that funded by shareholders. Clubs that break the rules face a sliding scale of fines depending on how much they overspent.

The fine for the first £10 million of losses over the permitted £8 million is calculated on a sliding scale and is £6.681 million up to that full amount. Thereafter the fine is on a pound to pound basis.

If the Football League rules that QPR’s £60 million shareholder write-off is not admissible under their FFP rules then QPR face a fine of £6.681 million on the first £18 million of what would be deemed to be £69.8 million losses. A further £51.8 million fine would be levied on the remaining £51.8 million of losses – hence the massive £58 million fine.

At that level, QPR would become the Football League’s largest revenue generation activity, clearly not the intention of the FFP regulation in the first instance.

QPR’s challenge to the legality of the Football League’s rules is an almost inevitable pre-emptive strike against the potential of the fines escalating.

QPR has committed to the development of a new training ground as part of a community development project in Ealing, West London, and is working towards re-housing in a new stadium as part of the ambitious Old Oak regeneration discussions.

Contact the writer of this story at moc.l1734937738labto1734937738ofdlr1734937738owedi1734937738sni@n1734937738osloh1734937738cin.l1734937738uap1734937738