Friday, February 08, 2013

ENGLISH PREMIER LEAGUE CLUBS TO GET POINT DEDUCTION IF NEW FINANCIAL REGULATION LAW IS BREACHED


English Premier League clubs are in danger of losing points if they break new wage restraints voted in yesterday by the narrowest of margins.

Each team will not be allowed to make a total loss of more than £105m over the next three seasons and must limit their player wage bills from next season. 
The 20 chairmen agreed two significant controls which is limiting the total amount of TV money they can spend on players’ wages to £60million by 2016, and longer-term  measures that will restrict losses to £105m over a rolling three-year cycle.

The deterrent of deducting points will be used by the Premier League for the most serious breaches of the rules.

The limits will also prevent prospective billionaire investors from emulating  Chelsea and Manchester City by quickly spending huge sums to buy the title.

Manchester City
The aim is a 'break even' model similar to the Financial Fair Play regulations introduced by Uefa for sides in European competitions. 

The FFP allows only a £38m (45m euros) loss - significantly less than the Premier League's new limit of £105m between 2013 and 2016.  

The wage restraints — £52m next season, £56m the following year and £60m in 2015-16 — mean a club could still offer  Neymar £250,000 a week, for instance,  provided they make savings elsewhere.

And the rules involve only the clubs’ shares of the £5.5billion TV rights deals, so the cap could be sidestepped if a team could show the extra money came from increased commercial or matchday revenue. 

The ballot at the Premier League chairmen’s meeting at  London’s Bloomsbury Hotel yesterday could not have been tighter. Six clubs — Southampton, Swansea, Manchester City, Fulham, West Brom and Aston Villa — voted against but  Reading abstained, meaning the two-thirds majority was enough to carry the proposal.

Chelsea, whose owner Roman Abramovich has subsidised the Stamford Bridge silverware to the tune of £1bn, had been one of the refuseniks but switched sides on the eve of the meeting.

Premier League chief executive Richard Scudamore said: ‘The clubs understand that if people break the £105m cap we will be looking for the top-end ultimate sanction range, a points deduction.

‘The changes will show everybody that we are serious about financial fair play. A new owner can still invest a decent amount of money to improve their club, but they will not be  spending hundreds and hundreds of millions in a very short period of time.’

Three clubs,  Chelsea, Liverpool and  Manchester City,, have reported losses of more than £105m over the last three years, while 13 clubs currently exceed the £60m salary cap

Agreeing to cost controls marks a major change for Premier League clubs - they made cumulative losses of £361m in the 2010-11 season - and Scudamore is adamant the system will be enforced.

"As with all things in our rulebook, you will be subject to a disciplinary commission," the Premier League chief executive warned clubs.

"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."

Scudamore confirmed there would be an "absolute prohibition" on teams reporting losses of more than £105m over the next three years, with the first sanctions possible in 2016. 

Agreeing to cost controls marks a major change for Premier League clubs - they made cumulative losses of £361m in the 2010-11 season - and Scudamore is adamant the system will be enforced.

"As with all things in our rulebook, you will be subject to a disciplinary commission," the Premier League chief executive warned clubs.

"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."

Scudamore confirmed there would be an "absolute prohibition" on teams reporting losses of more than £105m over the next three years, with the first sanctions possible in 2016. 

England Minister for Sport Hugh Robertson commented: "I am pleased that Premier League clubs have agreed further financial regulations that will help ensure they are run on a more sustainable basis.

"The Government has been clear that we want clubs to be on a secure financial footing for the long-term health of the game. This is a welcome and positive move."




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