EFL Chief Defends Financial Fair Play, Makes The Correct Point But Fails To Realise That’s Not What FFP Achieves

Queens Park Rangers stand out when you discuss EFL Financial Fair Play regulations as they were major news lately – Bournemouth, Leicester City, Hull City, Fulham, Nottingham Forest, Bolton Wanderers and Blackburn Rovers have all fallen foul themselves for various reasons. We can now add Birmingham City and Sheffield Wednesday potentially to the mix.

Why is this relevant to Aston Villa, well as we know we’re under the cusp of an FFP hole coming into play at the end of this season following our earlier spending and in amongst all the misinformed ‘just pay the fine’ nonsense (cue responses on the forum saying pay the fine!) this is real, and the consequences of a breach can’t be ignored.

A fine is one option, a transfer embargo is another. A points deduction and a follow through denial of promotion (or presumably even relegation) is even on the cards now should the EFL wish to punish us that way given the strengthened FFP regulations now in force.

Our FFP hole hasn’t gone away even though we’ve been taken over by Nassef Sawiris and Wes Edens and they have a number of pretty pennies to rub together. Left-field options to get around that hole are available to them if they think of them. The alternative is and remains player sales.

Fans shouldn’t think this is no longer a problem, it might be scary for some to consider but Forest are the standout club to suffer an embargo under the old rules. Sheffield Wednesday have confirmed they are under a temporary embargo as I type. Birmingham City have some leeway this window but come January I believe they are embargoed fully as well – and their new owners could easily ‘pay a fine’ if that was the answer.

I’m sure there are more clubs, I don’t need to list every man and his dog to prove the point that ‘pay the fine’ is not the answer.

QPR stand out for obvious reasons, having been punished for their spending as they gained promotion into the Premier League, rather than settling, they argued and took it through the Courts. A few years later, judgements and appeals, they lost ultimately and settled before the final appeal came to fruition and the settlement sees them cough up £42million to the EFL and they accepted a transfer ban in the coming January window.

With QPR arguing to the hilt, the meantime saw other clubs charged have their own action stalled whilst a precedent of sorts was waited for. Whilst the Loftus Road outfit can’t be faulted for going the Court route – the FFP regulations attempt to close the stable door three years after the horse has bolted (and merely serve to protect those clubs who were capable of spending beyond their means previously), lawyers for the club will have taken note of the fact that a few settled in the meantime.

For example, Bournemouth agreed to pay in the region of £4.75million for their breach and Leicester settled at £3.1million despite previously arguing themselves. Others followed suit and left QPR as the lone knight fighting the good fight.

As previously alluded to, Aston Villa aren’t out of the mire owing to the takeover as there is an FFP hole to fill before the end of next season. Birmingham City have been given dispensation to make five signings only this summer – but the EFL weren’t happy..

The clear trend under the current rules though is a club, and by default, their fan base suffers for an owner pushing the boat but the team not quite making the grade.

The old cop out of course was gain promotion and two fingers were shown to the EFL, but now ably backed up by QPR’s settlement, the new rules in play remove that, as the determination of a breach takes place in March.

Ergo clubs can be docked points, they can be denied promotion and if that wasn’t enough the EFL have struck a deal with the Premier League where even if promotion is allowed upon a breach, the Premier League will actively chase alternative punishments dished out to ensure a club complies.

I’m sure that’s enough words to explain the background without getting too technical. But you know what – I agree with the theory of Financial Fair Play.

I just don’t agree with ‘dotard’ way it’s been implemented.

Football fans of all colours got bored watching Chelsea owner Roman Abramovic come in and buy the league with unregulated spending. He wasn’t the first as Jack Walker and Blackburn Rovers were accused of the same thing previously, it was just on a lower scale and not quite as long-lasting.

Since then we’ve had Manchester City and the oil billions, Manchester United’s owners leveraging the club for their own buy-in from memory (I could be wrong but Manchester FC didn’t come out of nowhere) and there are other stories of owners coming in and spending and making the top-flight no longer a fair playing place to be or attempting to do similar, to varying degrees of success, further down the pyramid. We tried it ourselves using Parachute Payments which are supposed to protect losses and staff and spent them on players.

That’s why Leicester City’s title win was such a story – it’s why Burnley getting into Europe last season was in the headlines. Why? It was refreshing, it created a change from the norm and what was expected.

But if FFP wants to be a step in the right direction, why in the hell was it proposed as it exists?

EFL Chief Executive Shaun Harvey was on a media tour in light of the QPR success and he told Sky Sports and others who were in attendance.

“I certainly think QPR have taken it seriously enough and I think Leicester and Bournemouth – whatever your view is on the settlements reached – it is money they would much rather have done something else with than pay it to the EFL. There is a seriousness. The big challenge we have got in the next six months is to communicate really clearly what can and cannot take place by clubs that breach these rules.”

Harvey justified the rules by stating that the EFL had ‘not lost’ a club to administration for five years – Coventry City was the last one – but he completely forgets the Aston Villa situation and the experiences of others and their situations and the role the EFL played in that.

We know our own summer and history – Dr Tony Xia was given a pass on the Fit and Proper Persons Test. He reportedly gave assurances and provided proof he had the cash to fund the club for a couple of seasons – despite changes in Chinese regulations.

When presented with a winding-up order from HMRC, he was factoring future transfer fees for quick cash to stay afloat. He was letting financial companies lay a charge on club-owned property for a cash boost.

The takeover saved us from the eventual administration – not FFP rules – even if it’s fair to say there were other considerations in that his cash flow dried up against his control.

FFP rules did not stop us potentially going to the wall and it hasn’t other clubs, a few years back Exeter City had a raft of games cancelled. Cash flow was an issue – FFP didn’t save them – better cash flow did, as it did us.

But the absolute, 100% thing Harvey gets right, is in his following comments.

“There is no doubt in the Championship in particular a lot of the clubs survive purely on the basis of owner funding. The vast majority are all making a loss. The level of the loss changes. What we have to be really careful about is making sure the owners of the clubs keep funding it.”

Fans of clubs in League One and League Two will make their mind up on how much he values them given those owners arguably contribute more in a real sense to keep a club afloat, even if the sums aren’t the same as Championship level clubs.

Harvey doesn’t seem to notice if you have £100 and give a tenner the effort and impact is more than having £1000 and giving £50 quid…but he spends his life on EFL expenses after all.

He makes the correct point but doesn’t seem to realise what he thinks he wants FFP to achieve, actively stops owners from doing it – funding the lot. Take a brief glance at the rules, an owner cannot 100% fund over revenue spending, an owner cannot 100% fund wages with the stipulations on wage growth in place. An owner cannot even left-field sponsor the stadium because they are constrained by FFP ‘fair market value’ judgments on such deals.

An owner categorically under the rules cannot say ‘there’s a £100million, it underwrites the lot, don’t spend a penny more’.

An owner funds spending to the level of their wealth and within the regulations, whether their motivation is success, genuine fan desire, kudos, media profile – whatever. Harvey knows this because he says the line:

“What we have to be really careful about is making sure the owners of the clubs keep funding it.”

So shouldn’t the regulations ensure that Mr Harvey if that’s your aim?

I mean, as opposed to, stopping an owner funding his own business – which after all is what the EFL see clubs as. A business that lines their own pockets and pays their wages but doesn’t want the bad PR when a linked business goes bust.

Why not force owners to put the exact same sum spent in a protected EFL Trust account, so if things go wrong the club has the money but the owner is then restricted from being a controlling party from that point – so if that reckless, the club/fans don’t lose out?

Why not, which the current rules don’t allow, let the owner to underwrite completely the sum spent above natural revenue – because under the regulations they are restricted in how they underwrite because the EFL is obsessed with ‘natural’ turnover and revenue and for FFP considerations an owner cannot fund spending.

A Clubs owner is allowed to invest but they can only lose £13million a season. Owners who don’t invest can only lose £5million I believe to stay within the regulations. How is that, ensuring ‘owners keep funding it’.

Yes, FFP should encourage clubs to grow their revenue but not restrict owners to that revenue as long as the club is protected by ensuring said owner ‘keeps funding it’ – and there are numerous ways of ensuring that which don’t hamstring an owners spending power.

Whether you agree with such spending or not is irrelevant, Harvey made the call on insisting owners keep funding their clubs’ spending – so let them.

I know those with a better grasp of FFP will probably be able to pull me on bits above, but I really can’t see how the current regulations do what Harvey wants them to say on the tin.