Last week, the Championship clubs voted on a number of potential changes to the existing FFP rules. However, as none of the tabled amendments could muster the required 75% of the vote, the rules will remain as they are. Huddersfield issued an excellent summary of the proposed changes and outlined their disappointment that ‘real-time’ monitoring of finances was not approved.
Under the current rules a ‘Fair Play Tax’ is levied on all clubs that gain promotion to the Premier League but make excessive losses in the process. When the rules were originally voted in, the 'Tax' was intended to be divided up between the Championship clubs that had complied with the rules. Crucially, the collection of the Fair Play Tax was subject to approval by the Premier League. This was because any club subject to the Tax would be in Premier League when their accounts were scrutinised and the overspending confirmed. Consequently the Football needed to rely on the Premier League to approve the concept. Some time after the rules were introduced, the Premier League advised that they did not support the intended redistribution of funds under the Fair Play Tax proposal; the Premier League decided that the Tax would go to charity rather than the clubs.
The Premier League have never formally announced why they decided to overrule the Football League. However at an FFP Forum last week, the Premier League Finance Director Javed Khan was asked why the Premier League had made the change. His answer was less than convincing and he explained that there is a system of carefully constructed ‘Solidarity’ payments in place with the Championship which would be disturbed and undermined if the Fair Play Tax were to be re-allocated to the member clubs. Like much of the audience, the Championship representative at the Forum didn’t appear to be entirely won over by Khan’s rather vague response.
The Premier League head Richard Scudamore has publicly stated that he believes the Championship FFP rules are ‘unsustainable’. Scudamore’s comments were made in March when the proposed rule-changes were first being discussed; they appear to have been designed at appeal to the clubs near the relegation-zone rather than attempt to influence the voting. However, one can’t help but feel that the rules are more likely to be truly ‘unsustainable’ if the powerful PL Head describes them as such.
If the situation wasn’t bad enough, the BBC recently reported that the Premier League will now not even help the Football League collect the Fair Play Tax. Rather than deduct the funds from the TV payments, it seems the Football League will be required to send QPR and Leicester a bill and simply hope that they pay-up. Although QPR will probably end up with a bill for around £30m-£35m, owner Tony Fernandes told the Guardian; “Will we fight the fine? What do you think? After all we’ve been through, it’s my middle name: ‘Fight it’ Fernandes”. It seems that the Football League will now have to embark on a costly legal battle to collect the ‘Tax’ – and all so that they can pay it over to charity (at the insistence of the Premier League). It remains to be seen whether the Football League feel it is worth the effort.
This affair illustrates the difficult relationship that clubs and many football organisations outside the Premier League have with their wealthy benefactor. In what is often a rather feudal relationship, the Premier League controls the way cash ‘trickles-down’. Essentially, if the Premier League want something, then we can be fairly sure that it is going to happen. This was well illustrated by the introduction of the Elite Player Performance Plan – a system which the Guardian maintained was only introduced via ‘blackmail’ of the Football League.
The Premier League is hugely powerful and controls the purse-strings of English Football to such an extent that few individuals or organisations feel secure enough to challenge them. The silence from clubs and the Football League and its member clubs over the Premier League’s handling of the Fair Play Tax has been particularly telling.
The PL introduced their own spending constraints model only following governmental pressure. The 2012/13 Commons Select Committee on Football Governance threatened to impose club licensing and reported ”Most fundamentally, the financial proposals were hugely disappointing, with the only real positive development being the eventual introduction of Financial Fair Play rules despite the football authorities’ reluctance’. It will be interesting to see whether the government takes a position on the Premier League’s lack of support for the Football League’s attempts to control overspending.
Posted by Ed Thompson.