Premier League Chief Executive Richard Scudamore has announced the that Premier League is looking into the prospect of introducing its own Financial Fair Play rules. Appearing before the Commons Select Committee on Tuesday 10 July, Scudamore advised that they are setting up a Working Group and aiming to have proposals before clubs during February/March 2013.
With the Football League having introduced their own FFP rules, the Premier League has been criticised for growing levels of debt and for the lack of Premier League-specific FFP controls. UEFA's FFP rules apply to all clubs that choose to apply to take part in UEFA competitions. Consequently, a club that does not wish to apply for a UEFA Licence may choose not to comply with the rules. Scudamore disclosed on Tuesday that only 19 of the 20 PL clubs had applied for a UEFA license. The non-applicant club is not in the public domain (although I suspect the non-applicant may have been Blackburn, owing to sign-off issues with their accounts).
Owners of clubs well adrift of the lucrative Champions League slots have several reasons for potentially choosing not to comply with the UEFA FFP rules (even at the expense of a UEFA competition ban). The revenue received for taking part in the Europa Cup is generally around £5m-£7m, compared to the new TV deal which will pay around £60m+ to clubs near the bottom of the
division. Ambitious clubs with wealthy owners currently outside the top 6-8 clubs (such as QPR) may therefore feel the restrictions imposed by the UEFA rules outweigh the potential benefits, and could choose not to comply. UEFA's FFP rules also require the owner to inject equity into the club to cover losses over E5m, up to the maximum Break-even deficit (E45m for the current Monitoring Period), - owners without the available funds may also decide not to apply for a UEFA licence.
Scudamore's appearance before the Committee is available in full in the link below. The more interesting disclosures start at around 33mins in, with the FFP announcement at 51mins (or 11.20). Note: the video doesn't appear to work on mobile devices.
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