Luxury Tax

[vegas-voss]

EPL to scrap points deductions in favour of NBA style luxury Tax for teams that overspend.The more they overspend the bigger the tax but they can still just keep on spending.

 

Man City and Chelsea brown envelopes to the FA must have worked 😂

[vegas-voss]

The Americanisation of Football continues 

[PaddysBar]

I don’t pay that much attention but did read that Man City were charged before Everton (and possibly Notts forest) but their case still hasn’t been heard?

[John Findlay]

12 minutes ago, PaddysBar said:

I don’t pay that much attention but did read that Man City were charged before Everton (and possibly Notts forest) but their case still hasn’t been heard?

Money talks, and Man City, have far more of it than Everton and Nottingham Forest combined.

[FarmerTweedy]

38 minutes ago, PaddysBar said:

I don’t pay that much attention but did read that Man City were charged before Everton (and possibly Notts forest) but their case still hasn’t been heard?

City case is a bit more complex.  Everton and Forest overspent no question, their accounts show it.  Everton's appeal was against the severity of the points deduction, not arguing they were innocent.  Forest, I'm not sure the basis of their appeal.  Man City claim they've not breached FFP rules at all, and that their accounts show that. The case against them is, as I understand it, that their accounts are allegedly a fabrication, with huge amounts really gifted to them by the owners, but disguised in the form of things like shirt sponsorship and stadium naming deals with Etihad (also owned by the club's owners) at levels vastly in excess of what they'd realistically be worth commercially. This isn't allowed in the rules.

[soonbe110]

54 minutes ago, PaddysBar said:

I don’t pay that much attention but did read that Man City were charged before Everton (and possibly Notts forest) but their case still hasn’t been heard?

Think they are facing over 100 different charges over 10+ years. Can understand why it would take a bit longer.  And that’s before the appeals process kicks in. 

Edited April 4 by soonbe110

[Bazzas right boot]

It's like fining a millionaire £60 for illegally parking their £200k car on a yellow line

 

Financial penalties just limits the poorest,  doesn't bother the rich.

 

 

[PaddysBar]

15 minutes ago, FarmerTweedy said:

City case is a bit more complex.  Everton and Forest overspent no question, their accounts show it.  Everton's appeal was against the severity of the points deduction, not arguing they were innocent.  Forest, I'm not sure the basis of their appeal.  Man City claim they've not breached FFP rules at all, and that their accounts show that. The case against them is, as I understand it, that their accounts are allegedly a fabrication, with huge amounts really gifted to them by the owners, but disguised in the form of things like shirt sponsorship and stadium naming deals with Etihad (also owned by the club's owners) at levels vastly in excess of what they'd realistically be worth commercially. This isn't allowed in the rules.

 

10 minutes ago, soonbe110 said:

Think they are facing over 100 different charges over 10+ years. Can understand why it would take a bit longer.  And that’s before the appeals process kicks in. 

Cheers. Curiouser and curiouser😀

[The Treasurer]

If this happens then it will be in the EPL's interest to encourage clubs to over spend, as they would rake in more in fines/tax

[August Landmesser]

10 hours ago, Bazzas right boot said:

It's like fining a millionaire £60 for illegally parking their £200k car on a yellow line

 

Financial penalties just limits the poorest,  doesn't bother the rich.

 

 

Exactly. Fines make things legal for rich people.

[boag1874]

Apparently not happening

Premier League will not scrap points deductions despite criticism (thetimes.co.uk)

[RustyRightPeg]

14 hours ago, FarmerTweedy said:

City case is a bit more complex.  Everton and Forest overspent no question, their accounts show it.  Everton's appeal was against the severity of the points deduction, not arguing they were innocent.  Forest, I'm not sure the basis of their appeal.  Man City claim they've not breached FFP rules at all, and that their accounts show that. The case against them is, as I understand it, that their accounts are allegedly a fabrication, with huge amounts really gifted to them by the owners, but disguised in the form of things like shirt sponsorship and stadium naming deals with Etihad (also owned by the club's owners) at levels vastly in excess of what they'd realistically be worth commercially. This isn't allowed in the rules.

 

City's accounts show it...but the various shell companies in the middle east with little to no background information that invested into them throughout don't add up.

[Paolo]

22 hours ago, vegas-voss said:

EPL to scrap points deductions in favour of NBA style luxury Tax for teams that overspend.The more they overspend the bigger the tax but they can still just keep on spending.

 

Man City and Chelsea brown envelopes to the FA must have worked 😂

Absolutely.  The tax willl be meaningless to their billionaire owners.  If anything it is likely to be seen as an investment, if the financia reward for spending all that money is more than the tax.

[NaturalOrder74]

Boring tourist league

[Cade]

 

Much like the pish-weak regulatory fines in every other industry in the UK, the perpetrators will simply see this shite as just another operating expense.

 

LAUGHABLE

[Deodato]

21 hours ago, FarmerTweedy said:

City case is a bit more complex.  Everton and Forest overspent no question, their accounts show it.  Everton's appeal was against the severity of the points deduction, not arguing they were innocent.  Forest, I'm not sure the basis of their appeal.  Man City claim they've not breached FFP rules at all, and that their accounts show that. The case against them is, as I understand it, that their accounts are allegedly a fabrication, with huge amounts really gifted to them by the owners, but disguised in the form of things like shirt sponsorship and stadium naming deals with Etihad (also owned by the club's owners) at levels vastly in excess of what they'd realistically be worth commercially. This isn't allowed in the rules.

 

@FarmerTweedy a nice summary. A blunt description of Man City is that the owner would pay gazillions for just one advertising board along the side of the pitch to promote his other company (or companies). If its deemed arms length, that is allowed by the rules - and that's where the dilemma begins. If you can satisfy 'arms length' criteria to the letter then you are in compliance with the rules. In my view, City have a rock solid case as they followed the rules. Bent them, yes - but break them, no. And if the rules allow it, and you want to win - why wouldn't you. It's called competition. (Disclosure: I do have some optics on this one) 

 

[db211833]

22 hours ago, PaddysBar said:

I don’t pay that much attention but did read that Man City were charged before Everton (and possibly Notts forest) but their case still hasn’t been heard?

Entirely different charges. Profit and sustainability rules versus ffp. And not even the same organisations investigating

[DalryJambo]

22 hours ago, Bazzas right boot said:

It's like fining a millionaire £60 for illegally parking their £200k car on a yellow line

 

Financial penalties just limits the poorest,  doesn't bother the rich.

 

 

 

Its an odd one. Newcastle are loaded but can't seem to spend it as they try to adhere to ffp. Chelsea seem to be spending a fortune, but are walking a tightrope as they must sell about £100m per year to balance the books. 

 

One thing is for certain ffp seems to have made it more difficult for smaller teams to break away from the pack and challenge the big boys. Now, they'll not cripple themselves trying to break through, but rather than bring teams closer together it's actually made the gap bigger.

[Deodato]

Link

 

Britain | Own goals

English football’s financial fracas

Financial-sustainability rules have caused an almighty mess in the Premier League

The lawyers reduced the penalty!photograph: tom jenkins/guardian/eyevine

Feb 29th 2024

Dragging football fans’ eyes away from a game is difficult. But for Everton, a club in the English Premier League, the season’s most critical moments have been two rulings by panels of lawyers: the first in November, docking the club ten points for breaching the league’s financial rules; the second on February 26th, reducing the penalty on appeal to six points.

Everton is the first top-flight English club to be punished under the regulations, which are called Profit and Sustainability Rules (psr) by the Premier League and Financial Fair Play (ffp) or Financial Sustainability by uefa, the sport’s administrative body in Europe. More sanctions may come, against Manchester City, the champions, and Nottingham Forest; Everton itself could face more trouble.

Under psr, which was introduced in 2013, a club cannot lose more than £105m ($133m) over three years, excluding certain categories like stadium investments, women’s football and community projects. Similar rules were originally introduced in England’s lower divisions after a spate of bankruptcies in the 2000s. Their stated objective is admirable: preventing clubs from going bust by overspending to chase sporting glory. Insolvencies in English football have dropped since the 2000s. But there is a cost: the rules favour richer incumbents and constrain challengers.

image: the economist

Everton’s story follows a familiar pattern in English football. A deep-pocketed owner—Farhad Moshiri, a British-Iranian billionaire—bought the club in 2016, planning to spend big and reach the top of English football. He managed only the first: Everton’s wage bill doubled between 2016 and 2021. But Everton barely escaped relegation in the 2021-22 and 2022-23 seasons. The club’s business plan had relied on regular top-eight finishes for profitability.

Ballooning costs and weak revenues drove a £287m pre-tax loss in the latest psr evaluation period. The club submitted a heroically creative set of carve-outs to reach the allowable £105m, some highly unconventional (not suing a player charged with sex offences for damages, issues selling players because of the pandemic). Eventually, Everton conceded it had overspent while arguing that the war in Ukraine (sanctions caused stadium-naming rights to fall through) and the pandemic mitigated the breach. The initial penalty brought relegation closer, further destabilising the club.

uefa has made some changes to its rules, to focus on “squad cost ratio”, the bill for players and top coaches relative to revenues. The Premier League is expected to follow suit. This is an improvement: it is simpler and also implicitly inflation-indexed. The £105m allowable loss hadn’t risen either with economy-wide inflation or with exploding footballers’ wages.

image: the economist

But a core trade-off remains: stability versus competition. By capping spending relative to club revenues, the rules limit the ways in which challengers can outmuscle richer incumbents. As a result an expensive but once-viable path to success has been closed off. Manchester City lost money for eight consecutive seasons between 2007 and 2014, before posting eight seasons of pre-tax profit from 2015 during which it won the league five times. Academics at Sheffield Hallam University have found that competitive balance deteriorated across the five largest European leagues after the introduction of ffp (see chart). Across all top divisions in Europe the number of different top-four finishers declined by 10%. (This is circumstantial evidence; football has changed a lot in that time.)

image: the economist

Advocates for the rules emphasise the devastation for fans when clubs go bust. Bury fc, a stalwart of English football’s third and fourth tiers, collapsed in 2019 and now languishes in the ninth tier, even after a fan-funded rescue. But most insolvencies are more benign. Stefan Szymanski, a sports economist at the University of Michigan, has compiled data on every bankruptcy in the top four divisions since 1945 and found no club that had vanished entirely. England’s football clubs are remarkable examples of corporate longevity. “It’s hard to imagine any other industry where there were 100 businesses a century ago and they’re all still around,” he say

Fans tend to be highly supportive of regulation, however. So too is the government, which is legislating for an independent football regulator to address “systemic financial issues in football”. It must resist the temptation to meddle further. English football is watched worldwide because of its fierce competitiveness. The industry has a spectacular knack of emptying billionaires’ pockets and sprinkling a share of the riches across English towns. Cinderella stories, of the sort Mr Moshiri hoped for with Everton, may not always materialise. But they should be possible.  ■

For more expert analysis of the biggest stories in Britain, sign up to Blighty, our weekly subscriber-only newsletter.

[Hmfc1965]

3 minutes ago, DalryJambo said:

 

Its an odd one. Newcastle are loaded but can't seem to spend it as they try to adhere to ffp. Chelsea seem to be spending a fortune, but are walking a tightrope as they must sell about £100m per year to balance the books. 

 

One thing is for certain ffp seems to have made it more difficult for smaller teams to break away from the pack and challenge the big boys. Now, they'll not cripple themselves trying to break through, but rather than bring teams closer together it's actually made the gap bigger.

Which was the whole point.

[Section Q]

Can only see the gap between the teams widening. Man City and co will easily pays any additional financial penalty. Buying success is becoming the norm unfortunately.

[Thunder and Lightning]

2 hours ago, Deodato said:

 

@FarmerTweedy a nice summary. A blunt description of Man City is that the owner would pay gazillions for just one advertising board along the side of the pitch to promote his other company (or companies). If its deemed arms length, that is allowed by the rules - and that's where the dilemma begins. If you can satisfy 'arms length' criteria to the letter then you are in compliance with the rules. In my view, City have a rock solid case as they followed the rules. Bent them, yes - but break them, no. And if the rules allow it, and you want to win - why wouldn't you. It's called competition. (Disclosure: I do have some optics on this one) 

 

May I ask what you do for a living? I not seen any of the evidence and assumed while complex it was rather obvious they are at it. But reading your post that seems to not be the case. 

[Morgan]

2 hours ago, NaturalOrder74 said:

Boring tourist league

Aye, there has been some right ‘boring’ games in that league this season.  

[DalryJambo]

1 hour ago, Hmfc1965 said:

Which was the whole point.

 

What, meaning teams don't cripple themselves or making it impossible for the mid to small teams to break through? It's working on both counts.

 

In terms of the Premier league, however, it means the bottom 8 teams are now crap and there are more rubbish games than ever.

 

They should allow teams to spend whatever they want, but the clubs debt can't be more than 1 years turnover.

[Hmfc1965]

12 hours ago, DalryJambo said:

 

What, meaning teams don't cripple themselves or making it impossible for the mid to small teams to break through? It's working on both counts.

 

In terms of the Premier league, however, it means the bottom 8 teams are now crap and there are more rubbish games than ever.

 

They should allow teams to spend whatever they want, but the clubs debt can't be more than 1 years turnover.

I mean making it impossible for teams to break through.

I sort of get the sustainability argument in a way but when you link everything to turnover the big teams have an overwhelming advantage which is self perpetuating.