Arsenal, Tottenham, Man U and Liverpool united against Chelsea, Man C, WBA and Fulham « Untold Arsenal: Arsenal News, supporting the club, the players and the manager

By Tony Attwood

For the AAA it is just an excuse, for some it is just plain boring, but for a few of us it continues to be just about the most important issue in football.

It is, of course, financial fair play.

I mention it yet again today because Arsenal, Tottenham, Manchester United and Liverpool have joined together to put in a demand that the type of legislation that is being phased in by Uefa to control spending, and which now exists throughout the Football League, is now introduced into the Premier League.

The demand is in the form of a co-signed letter to Richard Scudamore demanding that all clubs be required to break even.  As such the demand goes some way beyond the requirements of Uefa (which only apply to clubs that are “invited” to be in the Champions League or Europa League).

The latest thinking is that while Manchester City and Chelsea are against such controls, most of the other clubs will agree on a deal next month, which will restrict the amount of losses that can be covered by the club’s benefactor.

Chelsea, of course, have oft claimed to be one of the instigators of FFP in Europe, but their slip from the high life in terms of the League last season, has meant that they have been spending again, and that means that are back in the opposition camp.

The letter from Arsenal, Tottenham, Man U and Liverpool thanks Mr Scudamore for his work on reforming the Financial Regulations of the Premier League.  It then continues…

“However, we do not feel that the latest proposals go far enough to curb the inflationary spending which is putting so much pressure on clubs across the entire League.

“We continue to believe that to be successful and have the best chance of gaining at least the 14 votes necessary, any proposals for Financial Regulation must include meaningful measures to restrict the owner funding of operating losses.”

Aside from Man City and Chelsea the objections to the whole set-up also come from West Bromwich Albion and Fulham.   Fulham are clearly dependent on their owner, although the WBA situation is less clear, and it might be that WBA expect to be able to sell to a rich buyer in the near future.

This leaves 12 clubs who are willing to vote in favour of some sort of compromise.   Add in the four signatories to the January Letter and that’s enough to get that resolution through.

One club that has changed sides (or at least it seems so to me – several clubs are not revealing their position that clearly) is Wigan Athletic who reported a net profit of £4.3m for the financial year ending on 31 May 2012.

This is the first time in six years that they have made a profit – and although it does not wipe out the loss of £7.2m recorded in the previous year it is the step that the owner of the club has been looking for.

The profit at Wigan came from a higher turnover and a cut in salaries plus the sale of Charles N’Zogbia to Aston Villa which gave them a profit on player sales.

The Wigan debt is also down through ploughing the profit into reducing the debt and the conversion of £48m of the debt into equity.

The profit will be re-invested into improving training facilities during the next year.  FFP in Europe excludes such investment when profit and loss is calculated, and it is fairly certain that Wigan and some other clubs will require this to be written into FFP in the Premier League.

Quite what the league will do if Chelsea and Man City continue to spend without restriction is another matter.

In the Football League Financial Fair Play started in all three divisions from the beginning of the 2012/13 season.

In the Championship, clubs have agreed to introduce a break-even approach based on the UEFA Financial Fair Play Regulations while in League 1 and League 2, clubs will implement the Salary Cost Management Protocol (SCMP) that has been in use in the latter division since 2004/05. The SCMP broadly limits spending on total player wages to a proportion of each club’s turnover.

In the Championship clubs must stay within pre-defined limits on losses and shareholder equity investment that will reduce significantly over the next five seasons.   As in Europe investment in youth development, community activities, stadium development and promotion related bonus payments are excluded.

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