Premier League clubs face raw deal from Euro financial rules
ENGLISH football clubs face being placed at an unfair disadvantage to their European rivals because of a loophole regarding charitable donations in new Financial Fair Play rules, City PM can reveal.
Top-flight sides last year donated a total of £167.2m – or £8.4m per club – to good causes and lower tier clubs via the Premier League, but that generosity stands to count against them in hard-hitting FFP calculations.
Because the money is top-sliced from their central payments by the league it is never credited as earnings, making them more likely to fail FFP tests and incur bans.
But Premier League chiefs are lobbying European governing body Uefa to make allowances for the unique nature of the top-flight’s donations mechanism. A spokesperson told City PM: “We have informed Uefa that we feel such central payments should be taken into account as ignoring them seems at odds with the principles of FFP and could put our clubs at a disadvantage because of our recognised and long-held league-wide commitments in these important areas.”
FFP states that clubs can make only small losses over a rolling two-year period, the first of which concludes at the end of next season. Teams who miss targets face punishments such as transfer embargoes or even suspensions from continental competitions such as the Champions League.
The £167.2m figure includes £45m to charity and community projects, plus a range of central payments supporting the health of the game in England at all levels, according to the league’s Creating Chances report, out yesterday. Those include vital investments in youth development and solidarity payments, both made to Football League and Conference sides, and parachute payments to help clubs cope with relegation.
Uefa considers charitable donations an allowable expense under FFP rules, along with spending on youth teams and stadia, meaning they should not affect calculations of a club’s profit or loss.
But FFP does not currently take into account top-sliced central payments, raising fears that Premier League clubs could vote to scrap the donations or face an £8m deficit that could tip them into the red.
League officials have raised the issue with Uefa but are concerned their pleas have fallen on deaf ears, with no indication yet that European chiefs are ready to factor the central donations system into FFP.
FAST FACTS | FINANCIAL FAIR PLAY
European regulation designed to make clubs live within their means
Clubs who fail test risk exclusion from Euro competitions such as Champions League, plus fines and transfer bans
Teams assessed on rolling two-year cycle starting this season
Certain expenses, such as donations to good causes, are supposed to be omitted