Point penalty under new spending rules

Premier League clubs face points penalty under new spending rules



…From 2013-14 onwards, clubs will be limited to losses of £105m over three seasons based on their audited accounts. As with Uefa’s stricter financial fair play rules, money invested in youth development and infrastructure can be discounted from the calculations.

Under the complex new rules, which have been intensely debated around the Premier League boardroom table since the summer, when it became clear that they were on course to share a £5.5bn TV income bonanza, clubs with a wage bill in excess of £52m will be able to increase it by only £4m, then £8m and finally £12m per year from 2013-14.

However, further increases to the wage bill are permissible in line with any uplift in a club’s commercial or match-day income – the curbs apply only to the central TV money distributed by the league. On the latest available figures, only seven clubs would be under the £52m cap.

“A new owner or even an existing owner with a change in attitude or a change in fortunes can invest proportionally a decent amount of money to improve their club,” he said. “But what they aren’t going to be doing is throwing hundreds of millions at it in a very short period of time. I’m not criticising that; I’ve been supportive of them, supportive of what they have done to make it a more competitive league.”

But Scudamore said that if new owners with deep pockets wanted to come into the league in the future “it’s going to have to be done in a slightly longer-term way without the huge losses being made”.

Four clubs – Chelsea, Manchester City, Aston Villa and Liverpool – would have fallen foul of the rules if they had been in place between 2008 and 2011. Abramovich has poured £1bn into the London club since he bought it a decade ago and won his first Premier League title in his second season as owner.

The development of the new controls has been contentious. The so-called “gang of four” – Arsenal, Tottenham Hotspur, Manchester United and Liverpool – had strongly argued that the Premier League should adopt the same spending limits as Uefa.

The top clubs in the Premier League have to comply with the Uefa rules from this season, which limit losses to €45m over a three-year period and will be assessed for the first time next spring.

But others argued that the limits should be set higher to allow sustainable spending by smaller clubs with ambitions to challenge for Europe.

Six clubs – Manchester City, Fulham, West Bromwich Albion, Southampton, Swansea and Villa – are believed to have voted against any restrictions for a range of reasons and Reading to have abstained, so the vote narrowly got the necessary two-thirds constitutional majority.

Read the entire report by the Guardian

Read more about our coverage on Financial Fair Play.

Part 1 – where we take a look at the pros and cons of Financial Fair Play (FPP)

Part 2 – a few answers about FPP and how most clubs have benefited in the past with investments

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