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New Premier League rules derived from self-interest, not fair play

There has been no great consideration of wider issues affecting football, and the clubs have voted from their own self-interest or peculiarities of opinion
    • The Guardian,
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Manchester City fan with money
Manchester City, who voted against the proposal to limit losses, have received almost £1bn from Sheikh Mansour. Photograph: Tom Jenkins for the Guardian

Richard Scudamore, the chief executive of the Premier League, said the regulations his clubs have introduced should not be likened to Uefa's financial fair play, and indeed the most striking first impression was how much more slack the 20 clubs have cut for themselves. Uefa's financial fair play rules restrict clubs in European competitions to making total losses of €45m in 2012‑14, while the Premier League's limit, agreed after nine months of discussion, is £105m over three years. That is still a great deal of money to lose between 2013 and 2016, given the £5.5bn bonanza expected to arrive in TV income alone.

The rules, the £105m loss and the measures restricting players' wages increases, are clearly a compromise. A deal has been done to reach a middle ground between clubs such as Manchester United, Arsenal, Liverpool and Tottenham Hotspur who wanted a strict implementation of Uefa's €45m limit, and other clubs, including Manchester City, who wanted no restrictions at all.

Scudamore argued that these rules will protect the Premier League clubs financially in advance of this deluge of cash. The £105m is only allowed to be lost if an owner has guaranteed it and paid the money in. Losses not guaranteed by owners will be limited to the much more modest £15m over three years. That, the Premier League said, will prevent "another Portsmouth", the notoriously insolvent club that, in administration again, lurched into another tortured twist, with a new bid made to challenge that of the supporters trust, even as the current top 20 clubs were meeting.

The compromise is also broader, between a vision of football that has clubs living within their means, and one that wants owners buying them and pouring in cash to buy success. The compromise means the English game is still open to that model, but such an owner is limited to £105m over three years, plus investment in youth training and infrastructure. Scudamore specifically acknowledged that the rules will not allow turbo-fuelling like that of Manchester City, where Sheikh Mansour bin Zayed al-Nahyan has injected around £1bn since 2008 to elevate City from ninth in the Premier League to champions.

There will be sanctions for breaching the rule, and Scudamore said they will push for it to be severe, a points deduction if the £105m is seriously overspent. The aim is to allow owners to put serious money into clubs, but not quite so serious as Roman Abramovich and Sheikh Mansour have unleashed into their football ventures.

The wage limit is a little odd, and illustrates the greatest frustration with the conduct of these reforms. Most clubs' main aim is to ensure they do not blow the forthcoming vast fortune on ever-inflating players' wages. They have agreed to limit wage bill increases to £4m in 2013, then £8m, then £12m, out of the Premier League's TV income. Clubs, though, can increase wages from commercial revenue – or ticket income.

The Premier League says clubs will not be seeking ways to evade the rules because they themselves have introduced them. But this rule builds in an incentive to raise ticket prices – at a time when there is an almighty outcry about the high cost of supporting football.

There lies the missed opportunity. These rules do something to restrain overspending, although it is notable they are aimed at a Manchester City project, which at least sees money going in, rather than the Glazers' milking of Manchester United for £550m to pay the interest and costs of their own takeover. This has been pushed for by the American owners of United, Arsenal and Liverpool, who bought English clubs as investments, and have no intention of spending money on them.

They, and the other Premier League clubs, three of whom will be relegated at the end of the season, have been allowed to introduce these rules with no reference to the wider game and no involvement of the governing body, the Football Association. They are designed to guard against spending the prospective windfall on player wages, but not tied to any broader discussion, perhaps a commitment to reduce ticket prices, or increase investment in the grass roots. There has been no great consideration of wider issues affecting football, and the clubs have voted from their own self-interest or peculiarities of opinion, passing the rules by the narrowest required majority.

Scudamore said they have been on "a journey" from "a fairly low threshold of financial regulation" to a set of rules requiring solvent, non-criminal owners and a reasonably sustainable way to run clubs. Many believe that journey should go a lot further, not just dampen player wages, and the millions owners can spend on the clubs they have bought.

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