Football League To Implement Own Ffp

The Football League is set to introduce its own Financial Fair Play regulations across all three divisions, after Championship clubs voted in favour of a breakeven approach based on UEFA’s Financial Fair Play regulations. 

Championship clubs making losses of more than £6m will be fined millions of pounds or put under a transfer embargo from the 2014/15 season.

The changes will also prevent owners from funding their clubs through loans.

Clubs promoted to the Premier League will have to pay a ‘Fair Play Tax’ on the excess by which they failed to fulfil the Fair Play requirement ranging from 1% on the first £100,000 to 100% on anything over £10m. 

Non-promoted clubs will not be punished financially for failing to adhere to the new rules, but instead placed under a transfer embargo.

Clubs relegated to the Championship will not be subject to sanctions in their first season as long as they have met their financial obligations under Premier League regulations.

UEFA introduced Financial Fair Play regulations for clubs in the top divisions across Europe playing in their competitions in an attempt to bring club spending under control. 

A Club Financial Control Panel was set up to monitor and ensure that clubs adhere to the rules and a three year accounting period, which began this season, was implemented with the aim that clubs ‘break-even’ by 2013/14 or face sanctions.

From the beginning of next season, Championship, League 1 and League 2 clubs will apply rules exerting greater control over club expenditure with each division having the flexibility to determine their own specific approach.

The decision to adopt Financial Fair Play regulations follows a strategic review by The Football League Board that identified the state of club finances as the organisation’s greatest challenge.

Financial Fair Play in the Championship will require clubs to stay within defined limits on losses and shareholder equity investment that will reduce significantly across a five season period.

Championship clubs must reduce losses from an acceptable deviation of £4m for 2011/12 to £2m by 2015/16, with additional investment in certain areas of club infrastructure, such as youth development and community programmes, excluded. 

The permitted level of shareholder equity investment must also be reduced from £8m for the 2011/12 season to £3m by 2015/16.

Any proceeds will be distributed equally amongst those clubs that complied with the FFP regulations for the season in question.