As we approach the January transfer window the term I am sure we will be hearing very soon is the restrictions enforced through the Premier League financial restrictions.
In a West ham statement on WHUFC.com dated 26th August 2013 stated that new rules state that “whatever a Club spent on wages last season, they are allowed to do so again, with an allowance for an extra £4m on top. If they did not spend £48m on wages last year, as was the case with West Ham United, they are allowed to go up to a new £52m limit.”
Despite claiming we were already at or very close to our £52m wages limit we went on to sign Mladen Petric and Carlton Cole who were free agents. It is understood we were budgeted to go “marginally over” the FFP limit.
David Gold was asked about financial fair play at the recent Season Ticket Holders’ fans forum
Mike, a West Ham season ticket holder asked “We seem to be ready to buy a striker now, therefore financial fair play must of changed in the last four months because before the start of the season we couldn’t sign a striker without breaking the restrictions of financial fair play, so what’s changed?”
David Gold answered
“Budgets move, you know in a business, you budget prudently then as you advance into your financial year so to speak, it changes and it doesn’t have change dramatically to be able to afford, for example a loan player in the second half, first of all he is half the price, well half the cost because you going to to bring in a loan, there might be a loan fee but that loan fee might be half of what you would of been in the first half of the season and to your credit there is another aspect of financial fair play you can use and that is generate wealth or income I should say, income for example via sales through the club shop or sales through a corporate deal, that can be added to the funds, I think people have done quite well because one or two of them are here I don’t want them asking for a salary increase, they have done very well and we have generated some extra money plus our budgets have been slightly better than forecasted. Don’t forget we are not talking about a £10 million player, we are talking about bringing someone on loan for six months maybe with a view what emerges, one possibility is you can encourage a quality player to come and join us with a view that in the event we stay up we sign him on a 2,3,4,5 year contract so that’s how it has changed over the period of time, does that help?”
Championship Financial Fair Play
However of possible bigger concern because our precarious position second from bottom at the moment is the Financial Fair Play rules already in place in the Championship. The rules for the championship is there is no wage cap but losses must be under £3m per season increased to £8m if the owners inject equity. Considering our losses were £25.4m for our season in the Championship we would find it difficult to buy our way out of the Championship as we did last time.
QPR appear to have ignored FFP rules and are set for a possible £60m fine if they get promoted at the end of this season as their losses are expected to be in the region of £80m. Championship clubs have been told they will have to pay a £1 fine for every £1 they lose over £18m in the 2013-14 financial year. If they do not achieve promotion to the Premier league they will be served with a lengthy transfer ban until they bring their losses under control.
Legal Challenge to Financial Fair Play
A Belgian sports agent representing a number of European footballers has launched a challenge against the legitimacy of UEFA’s Financial Fair Play Rules. The allegation is that the rules breach fundamental EU rules on competition and free movement. It is also argued that the rules may reduce the number of big-money player transfers in the EU and that as a result it is more difficult for agents to make money by offering their services in relation to such transactions. If this legal action is successful you bet similar legal challenges against the football league and Premier League for an early end to financial restrictions.
My original article on Financial Fair Play from September can be found HERE