This Is How Financial Fair Play Rules Will Affect Clubs

The Football League has issued guidance on its Financial Fair Play regulations covering the last two seasons as well as Season 2015/16 onwards.

Championship clubs will be permitted to lose a maximum of £13m under The Football League’s Financial Fair Play (FFP) rules during 2015/16, the final season under the current FFP regulations.

Next season will see the introduction of a new set of ‘Profitability and Sustainability’ regulations that will deliver a consistent approach to Financial Fair Play for those clubs that move between the two divisions through promotion and relegation.

Championship clubs voted to change their FPP rules in November 2014 as part of the wide-ranging negotiations with the top-flight about future solidarity arrangements that has contractually linked the finances of The Football League and Premier League for the first time since the formation of the latter in 1992.

The £13m limit for 2015/16 is in line with the losses permitted under the new regulations which will permit a maximum loss of £39m over a rolling 3 season timeframe (compared to an equivalent figure of £105m in the Premier League). A club that moves between the Premier League and Championship will be assessed in accordance with the permitted loss in the relevant divisions played in during the 3 year period in question. For example, a club that had played two seasons in the Championship and one in the Premier League would have a maximum permitted loss of £61m, consisting of one season at £35m and two at £13m.

Any sanctions relating to the 2015/16 season, levied under the existing rules, will continue to take effect.

2014/15 FFP RETURNS

Clubs that played in the Championship last season will be required to submit their FFP returns for 2014/15 to The Football League by December 1. They will be permitted to record a maximum loss of £6m subject to the deduction of certain costs including any expenditure on infrastructure, promotion bonuses, youth development and any exceptional items (as agreed by the Fair Play panel).

Any club exceeding that level (that has remained in the Championship) will be subject to an FFP embargo from January 1 for the remainder of the campaign at least, while any of the three clubs promoted to the Premier League (AFC Bournemouth, Watford and Norwich City) would receive a fine equivalent to:

• 1% of the excess amount between £1 and £100,000
• 20% of the excess amount between £100,001 and £500,000
• 40% of the excess amount between £500,001 and £1,000,000
• 60% of the excess amount between £1,000,001 and £5,000,000
• 80% of the excess amount between £5,000,001 and £10,000,000
• 100% of any excess over £10,000,000

These sums are in line with the amounts agreed with clubs in April 2012 when the current FFP regime was introduced.

Clubs relegated from the Premier League do not face any sanctions in their first season back in The Football League relating to the previous season as long as they have complied with the Premier League’s financial reporting requirements during that campaign – irrespective of any outstanding matters relating to FFP returns from previous seasons in The Football League. The three relevant clubs – Burnley, Hull City and Queens Park Rangers – all complied with the Premier League’s requirements during 2014/15.

Any club that has been relegated to League 1 having exceeded the £6m limit will not be subject to a transfer embargo but will be required to comply with the Salary Cost Management Protocol (SCMP) regulations in place in that division. These rules require League 1 clubs to limit their spending on players’ wages to 60% of turnover plus 100% of Football Fortune income (e.g. financial donations, transfer income, revenue from cup matches), with a club relegated from the Championship being able to operate at 75% of turnover for a transitional period of one season.

In addition:
• Clubs under an FFP embargo will not be permitted to pay (or commit to pay) transfer fees or compensation fees for professional players.
• Clubs under an FFP embargo will be permitted to sign a goalkeeper on an emergency basis (in line with existing regulations).
• Clubs under an FFP embargo will not be permitted to pay a loan fee to another club, they may only pay the player’s wage (or a contribution towards it).
• For incoming players, clubs can only pay Agents’ Fees as a benefit in kind to the player in question (as long as they do not exceed the £600,000 employee costs limit).
• Clubs under an FFP embargo may register players under the age of 21 for non-first team matches.

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