Prem Financial Proposal - Its coming...

[1ke]

Manchester United and Manchester City split by proposals on Premier League financial controls

Manchester United and Manchester City are on opposite sides of a new divide in the Premier League: whether the competition should introduce its own Uefa-style financial fair play regulations.

At the League’s annual meeting the idea of tighter financial controls being imposed on clubs was advanced by Liverpool. It gained the support of a number of their rivals, including United’s chief executive, David Gill, who had previously helped shape Uefa’s ground-breaking Financial Fair Play rules.

The delegation from Arsenal is believed to have spoken up in favour. The club’s owner, Stan Kroenke is, like Liverpool’s John W Henry and United’s Glazer family, familiar with restrictive financial regulations through the US sports franchises they own. West Ham United’s joint chairman David Gold also gave his approval.

Gold told The Daily Telegraph: “I was involved in bringing in the FFP rules in the Championship and at the time I thought should I get to the Premier League, I’ll lobby for it. I made it abundantly clear we shouldn’t be doing nothing. David Gill was marvellous. He made lots of sense. Even the big clubs now are saying we have to get to grips with costs.”

But the subject was not unanimously supported. Manchester City, whose owner, Sheikh Mansour bin Zayed al-Nahyan , subsidised spending with £43.3million in cash between June 1, 2009, and the end of May 2011, are believed to have cautioned that they would prefer to manage their business as they see fit.

Fulham, whose rise through the leagues was financed by ‘soft’ loans from the chairman, Mohamed Fayed, have also historically expressed the view that they would not endorse a system that “kills the dreams” of others. However, this time they did not push back against Liverpool’s proposal.
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It all meant the Premier League executive staff have been tasked with drawing up a report on what proposals could be introduced. One option would be to adopt wholesale the Uefa FFP regulations.

Both Chelsea and United were instrumental in developing these, which require clubs to break even within a margin of “acceptable deviation” of €45 million (£35.5 million) over the first two years of their formal implementation – next season and the following.

Chelsea and United are confident of meeting Uefa’s rules despite their inclusion not just of cash expenditure but accounting charges relating to historical spending under “amortisation”. However, City will find that particularly challenging.

Their Premier League champions’ operating loss in the 2010-11 season alone – the most recent for which accounts are available – was £194.9 million. Even though some areas of this spending will be discounted as allowable, the discounts are unlikely to bring operating losses under FFP to within the £35.5 million cushion over two years.

David Gill, Manchester United’s chief executive, has told Parliament: “We were involved through the European Club Association, as were other clubs, such as Chelsea, who were on the working group to develop those proposals with Uefa.

“It made sense and was for the benefit of football clubs could operate within their own resources and it would bring about a limiting effect on player cost, in terms of transfers and wages.

“We are comfortable with it. The critical issue will be around implementation and the sanctions around that, and making sure that it is appropriately applied. But I do not think anyone can criticise the objective of ensuring that clubs operate within their own resources.”

How to guarantee compliance would be one of the biggest challenges of a new Premier League regulatory regime and this month Henry expressed his concerns about Uefa’s will to impose its own FFP regulations. But that view contrasts with recent Uefa actions.

The Court of Arbitration for Sport has upheld Uefa’s expulsion under financial fair play rules of Besiktas. The Turkish club will be banned from the next two European competitions for which it qualifies over the next five years.

The English top flight is the only league in the country not to have its own cost-restraint framework. Leagues One and Two have both implemented salary capping while the Championship has introduced a financial fair play system for this season based on the Uefa model. Championship clubs flouting Football League rules will be hit with a transfer embargo.

http://www.telegraph.co.uk/sport/fo...als-on-Premier-League-financial-controls.html

 

[seaplus]

Imagine how awesome the EPL would be with a salary cap. Would be so competitive and a joy to watch every single game. But a lot of players would go to different leagues if they can't get the amount of money they think they deserve. Would all of Europe have to go to a set salary cap and would they have a problem with exchange rates?

I think this 'break even' rule would hurt the smaller clubs a lot. The larger teams are getting more sponsorship revenue and other additional funds that would allow them to spend more than the smaller clubs. For example, isn't City receiving something like 400 million pounds over 10 years to rename the stadium? No small club is going to be able to get close to that figure and now City can go spend 40 million pounds more each year on transfers or on the state-of-the-art academy they are developing. I think teams like Liverpool and Arsenal would benefit most from the break even rules since they are behind in talent but still have a good brand. I can see why united and Chelsea support this ... because of their sponsorship deals. I can also see why City oppose it ... fewer people telling you how you can run your club.

Unless I am misunderstanding the term 'breaking even'. then please someone educate me

 

[Chrispy]

Not sure how I feel about this, but I believe no team should be even close to $500 million in debt(Man U)