Profit & Sustainability Rules Change/'Luxury Tax'

[Stan]

Premier League clubs to vote on 'radical' changes.

https://www.dailymail.co.uk/sport/football/article-13271249/Premier-League-eyeing-ABOLISHING-points-deductions-introducing-NBA-style-luxury-tax-fears-stars-leave-rules-restrict-pay-Everton-Nottingham-Forest-lost-points.html?ico=authors_pagination_desktop

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Premier League clubs are considering abolishing points deductions and introducing a 'luxury tax', Mail Sport can reveal.

The hefty points-deduction punishments for Everton and Nottingham Forest - coupled with a quiet January transfer window as clubs did not dare overspend and risk sanction - have left many officials to deem the league's Profit and Sustainability Rules (PSR) not fit for purpose.

There are also grave fears are that, under its current guise, PSR will see the Premier League fall from its lucrative position as the world's best league because it will no longer be able to afford the best players on the best salaries.

Radical reform has been discussed among the clubs and an entirely new system could be voted in at the end of the season meeting in June. As many as 17 of the 20 clubs are thought to be leaning towards significant change. Fourteen clubs need to be in agreement to get a rule change through.

Some feel that the eventual six-point penalty dished out to Everton and the four handed to Forest were draconian and not reflective of why PSR was brought in

They believe that should clubs wish to 'have a go' and have the money to do so, they should not face a punishment that could plunge them into the Championship.

A 'luxury tax' has been considered, where those clubs who overspend will have a financial punishment which would increase the more they splash the cash. But clubs can choose to press on regardless if they wish.

The monies collected, which could run into the tens of millions, would then be redistributed to those Premier League who complied with the rules. It has been discussed that some of the fines could even go into an 'emergency fund' to assist EFL clubs in financial danger.

Currently, such a tax features in America's Major League Baseball and National Basketball Association, and relates to the amount spent on the salaries of the playing squad.

America's other two main sporting leagues, the NFL and National Hockey League, meanwhile, have 'hard' salary caps which clubs are not allowed to exceed.

While some clubs want the tax to remove the threat of points deductions entirely, Premier League insiders are adamant that any proposal would still include an element of 'sporting sanction' and that it would be aimed more at providing additional flexibility and a buffer zone. 

UEFA’s new rule - which limits spending on player and coach wages, transfers and agent fees to 70 per cent of club revenue is also viewed favourably by some. 

A system of 'anchoring' has also been discussed. It is a form of salary cap where the amount any club can spend is directly related to the wage bill spent by the bottom club. So if Sheffield United, for example, finish bottom with an annual wage bill of £50m, every club would have a set multiple of that figure to spend for the following season. Again, if a club breaks that cap, they pay the fine.

There are other financial points up for debate at the end of season meeting. A 'growing number' - according to a source - want to change financial rules so that only spend on players (buying and salaries) and coaching staff is taken into account over the three-year reporting period. 

Currently, only money spent on new stadia, infrastructure, youth development and community projects is exempt from being calculated as part of the £105m clubs are permitted to lose over three seasons. But those pushing for only players and staff to be included believe that it would free up clubs to invest in the likes of content, digital and marketing to grow their global fanbases.

And in another shock development, a vote to reverse the February ruling on related-party transactions - deals within multi-club networks or with sponsors who have the same owners as a club - could also be on the cards.

In February, an amendment to these rules was approved by the narrowest of margins. With seven votes needed to block a proposal, there were 12 in favour, two abstentions and six against. But some feel that the change, and the knock-on impact it has on ownership of other clubs overseas, is harmful with one, thought to be Manchester City, considering legal action.

The option to send a young prospect to gain experience overseas at a club in their network, which would then increase their market value, is thought to be attractive to many.

The situation is complex. Traditionally the 'Big Six' both Manchester clubs, Arsenal, Tottenham, Liverpool and Chelsea, have tended to vote together. However, it is understood that there has been a 'seismic shift' in relationships, with Saudi-owned Newcastle now included in a 'Big Seven'.

Some feel that a rules to encourage investment would result in a more competitive league which would increase interest levels and safeguard against the future.

 

 

[RandoEFC+]

As I said in the Everton thread. If they change the rules and City end up managing to pay a luxury tax after Forest and Everton (twice in one season) have been given actual punishments then nobody can argue that the league isn't corrupt anymore.

[Danny]

8 minutes ago, RandoEFC said:

As I said in the Everton thread. If they change the rules and City end up managing to pay a luxury tax after Forest and Everton (twice in one season) have been given actual punishments then nobody can argue that the league isn't corrupt anymore.

I imagine it will begin from a specific period of time rather than just heres a new punishment

[RandoEFC+]

6 minutes ago, Danny said:

I imagine it will begin from a specific period of time rather than just heres a new punishment

It certainly should which is why I say *if* but I don't have high hopes for City getting held accountable against the rules and sanctions that were in place when they were charged.

I don't think the points penalties really have a place in most circumstances. If they introduce this rule where it's basically spend as much as you want but you have to pay a 'luxury tax' if it's more than X amount then that's basically the end of this attempt at profit and sustainability because the likes of Man City and Newcastle whose owners have bottomless pockets will just spend whatever they want.

It would be nice at least if they could use any money that teams have to pay as a luxury tax to share between teams lower down the pyramid but I suspect it's more likely to find its way into the pockets of Premier League executives. You can call me cynical if you want .

[Stan]

5 minutes ago, RandoEFC said:

I don't think the points penalties really have a place in most circumstances. If they introduce this rule where it's basically spend as much as you want but you have to pay a 'luxury tax' if it's more than X amount then that's basically the end of this attempt at profit and sustainability because the likes of Man City and Newcastle whose owners have bottomless pockets will just spend whatever they want.

It would be nice at least if they could use any money that teams have to pay as a luxury tax to share between teams lower down the pyramid but I suspect it's more likely to find its way into the pockets of Premier League executives. You can call me cynical if you want .

It does state in the article that there could be an 'emergency fund' for teams down the football leagues, but whether that comes to fruition is another matter.

As you mention though, the biggest flaw is that the richest teams can continue to just spend because their owners have those deep, deep pockets. 

I can't foresee the 'anchoring' rule coming in whereby they can only spend by a certain factor of what the bottom club's wage bill is, either. Especially if they're so worried about wanting PL to remain 'best league in the world' and attract the best players (one of which left UK to play in Spain...). 

[Tommy]

When I saw the topic title at first glance, I thought it was a topic from one of those spammers. Almost banned Stan. 

[Stan]

38 minutes ago, Tommy said:

When I saw the topic title at first glance, I thought it was a topic from one of those spammers. Almost banned Stan. 

[Cicero]

"Concerns that top players might leave if their pay is restricted". 

This is 100% built just to protect the top clubs. They deducted points from Everton and Forest, realising there will now be a magnifying glass on how they handle City and potentially our situation, and to remove themselves from such contradictory, they are now going to implement this rule. Especially when they probably figure at some point all clubs will have some book cooking when investigated deep enough. 

[Mel81x+]

As if a "luxury" tax will ever put a dent or send a message to clubs that have been caught of financial irregularities. Just deduct points and hit them where it hurts if found guilty. All this taxing is a waste of everyone's time. 

[Happy Blue]

2 hours ago, RandoEFC said:

As I said in the Everton thread. If they change the rules and City end up managing to pay a luxury tax after Forest and Everton (twice in one season) have been given actual punishments then nobody can argue that the league isn't corrupt anymore.

What they are trying to charge us with is mass fraud involving over 100 executives and high ranking people from multiple company's. the Prem is in deep shit right now as we called there bluff, no way in hell can they prove what they are trying to charge us with and they have damaged our club. they will try weasel out before the hearing because like i said, they are in deep shit with false allegations

We will get a fine for basically telling them to do one and the grass being the wrong type, away dressing room being too small by a square foot and other bullshit but they are in a lot more trouble than us so no doubt they are going to water down the rules and try make a deal with us but the damage has been done now for me and we should take them to the cleaners

I believe in that case Everton and Forest should get the the points back and fines refunded, this whole FFP was to stop City but it's backfired on the rest of the league that voted for it, it needs a major rethink 

[Dr. Gonzo]

Joke to punish Everton and Forest with points deduction but while City have brought the integrity of league titles into question... "let's give them a luxury tax."

[RandoEFC+]

Frankly what the Premier League have done, hand in hand with Sky, to English football with their capitalism on steroids makes it absolutely hilarious for them to be going around using the phrase "too much money" in any context whatsoever.

This is a nation where the disparity between the top two leagues is so monstrous that anyone who gets relegated receives hundreds of millions in "parachute payments" just to stop them from going completely bust, a league where the only sustained "upward mobility" that any club has really achieved in the last 35 years has had to come from billionaire investment from overseas. The Premier League created the wild west and now wants the residents to live off rations.

I have no sympathy whatsoever. I hope the entire organisation collapses because it's almost comical how not fit for purpose it is. There's been a lot in the news lately about clubs being criticised for voting against a deal with the EFL which would allow more money to trickle down the pyramid. Those clubs should be criticised but why the fuck are they allowed to vote on this stuff in the first place? This independent regulator can't come soon enough but it really does need to take radical action from day one.

[Dave]

They have a chance to make things better and only seem content on making things worse.

The Premier League members cannot be the ones to make this decision. They've all got there own self interests. It's time for Richard Masters to grow a pair and show there's not a need for an independent regulator.

[Bluebird Hewitt]

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There are also grave fears are that, under its current guise, PSR will see the Premier League fall from its lucrative position as the world's best league because it will no longer be able to afford the best players on the best salaries.

Yeah, I basically stopped reading it seriously after that. Nothing to do with adjusting rules to be more 'financially punishing' and just protecting itself more. Again.

Just glad that the Premier League is being made to look more of a joke (as it has been for some time) as each year goes by.

Edited April 4 by Bluebird Hewitt

[Happy Blue]

2 hours ago, Dr. Gonzo said:

Joke to punish Everton and Forest with points deduction but while City have brought the integrity of league titles into question... "let's give them a luxury tax."

And this is why the premier league are in big trouble because even when its proven we haven't cheated people are just going to say we paid them off etc, the club has been damaged

[RandoEFC+]

1 hour ago, The Palace Fan said:

It's time for Richard Masters to grow a pair and show there's not a need for an independent regulator.

His trump card was to hit Everton with 10 points because his idea of showing the league can govern itself is just handing out harsh punishments to look big and strong. There's clearly much more to it running the league than that and even that one gambit failed because the response was universally negative. He's not a man to provide strong leadership of any sort. The fact that at least two of the "big" clubs lobbied for his appointment tells you all you need to know.

[Stan]

I can't remember if it was Richard Masters or another bigwig at PL, but they showed their true colours when they said 'we can't have too many Leicester City's' after 2016.

 

[Dr. Gonzo]

1 hour ago, Happy Blue said:

And this is why the premier league are in big trouble because even when its proven we haven't cheated people are just going to say we paid them off etc, the club has been damaged

It hasn't been proven you haven't cheated though? You got off your last charges due to them being time barred - which has no bearing on City's guilt or not. No time bar on these 115 charges though and since we've seen clubs like Everton and Forest punished for less - looks like they're now changing the rules to your benefit. Because otherwise they'd have to deal with the fallout of one of the biggest football scandals of all time, and certainly the biggest in the UK - they don't want to go the way of Italy's Serie A with foreign viewership dropping way down in the wake of Calciopoli.

So looks like you'll get a slap on the wrist so they can protect their bank balances. And I imagine as a result, they'll get a nice little extra from some random dodgy UAE companies as well.

[Happy Blue]

23 minutes ago, Dr. Gonzo said:

It hasn't been proven you haven't cheated though? You got off your last charges due to them being time barred - which has no bearing on City's guilt or not. No time bar on these 115 charges though and since we've seen clubs like Everton and Forest punished for less - looks like they're now changing the rules to your benefit. Because otherwise they'd have to deal with the fallout of one of the biggest football scandals of all time, and certainly the biggest in the UK - they don't want to go the way of Italy's Serie A with foreign viewership dropping way down in the wake of Calciopoli.

So looks like you'll get a slap on the wrist so they can protect their bank balances. And I imagine as a result, they'll get a nice little extra from some random dodgy UAE companies as well.

It will be and no we didn't, the stuff that was timed barred we was innocent of anyway, did you read the case files? sick of explaining this over and over again. why did we get a fine then if we was innocent?? because we didn't comply before the hearing

Basically the whole thing was about something that was brought up in the uafa investigation and it boils down to some guy paid the money on behalf of Etisalat in 2 payments of 15m one in 2012 and in 2013 and that person was connected to our club.

However he was acting as a broker on behalf of Etisalat who was having cash flow issues, and city shown evidence at the cas hearing showing Etisalat repaid the money a year later, so basically Etisalat used a broker and intermediary to pay their sponsorship to city and then Etisalat repaid it a year later, so in essence Etisalat  borrowed the sponsorship money, this was a time bared offence at the time.

Basically this just allowed Etisalat to start their sponsorship agreement earlier when they didn't have the money, but IGT allowed city to add it to their 2012 financial figure, but this is just a everyday business thing that lots of companies do called invoice factoring where companies get paid straight away but its paid back at a later date, it is just a general business thing that gets done all the time. Yes it was time barred but it would have been dismissed anyway similar to the same accusation made about Etihad, that was within the statute of limitation but was found to NOT be true by case and city was proved innocent

Edited April 4 by Happy Blue

[Dave]

58 minutes ago, Stan said:

I can't remember if it was Richard Masters or another bigwig at PL, but they showed their true colours when they said 'we can't have too many Leicester City's' after 2016.

 

Richard Scudamore.

Shortly after that, the greedy six threatened to break away unless they got a bigger share of the international TV revenue and the games never really been the same since.

[RandoEFC+]

1 hour ago, Stan said:

I can't remember if it was Richard Masters or another bigwig at PL, but they showed their true colours when they said 'we can't have too many Leicester City's' after 2016.

 

I've heard a few people mention this around the various episodes of the PSR discourse this season, the sort of "in the know" types who know people in football and can attest to the powers that be not liking the Leicester storyline. I didn't realise one of them had actually said something to that effect publicly. Incredible really.

[OrangeKhrush]

The Penalties were premature and/or premeditated.    FFP was going to be the death of football with a bunch of stalemate clubs watching the gap to the top getting further and further.  This allows teams to catch up but get slammed by luxury tax which will limit the payroll. 

[Dr. Gonzo]

5 minutes ago, RandoEFC said:

I've heard a few people mention this around the various episodes of the PSR discourse this season, the sort of "in the know" types who know people in football and can attest to the powers that be not liking the Leicester storyline. I didn't realise one of them had actually said something to that effect publicly. Incredible really.

Dunno why the league wouldn't have liked the Leicester storyline. The media absolutely loved the Cinderella story Leicester's title race and victory was - I can't see how that didn't generate more excitement and interest in the league than 4 or 5 seasons of just Man City winning everything there is to win.

Seems ridiculous the league would take steps to weaken one of the things that made the league more marketable than other big leagues. But I'm sure there are r€a££y good r€a$on$ for shooting the league's marketability in the foot.

[OrangeKhrush]

The massive benefit to luxury tax over hard limits is new owners are now again encouraged to buy clubs,  invest in them without the stupid paradigm of needing to increase revenue by doing well but doing well costs money and if you haven't got money you are not going to do well endless merry go round. 

[RandoEFC+]

31 minutes ago, The Palace Fan said:

Richard Scudamore.

Shortly after that, the greedy six threatened to break away unless they got a bigger share of the international TV revenue and the games never really been the same since.

Yeah and don't forget the caving in to the five subs rule, getting rid of various extra time, replays, two legged cup ties that all play into the hands of the clubs with the biggest squads and the biggest fixture lists and limit further the chances for clubs down the pyramid to earn the gate money lottery.

I'm still yet to hear a word from any of the Super League Six managers about having six group games in each of the European tournaments, and extending said tournaments by allowing teams that finish 3rd to drop down to the one below for the knockout rounds. All unnecessary bollocks to generate extra lucrative fixtures but when it comes to travelling down to Bristol Rovers for an FA Cup 4th round replay because your second string of £150k a week players couldn't put their £15k a week squad to bed at the first attempt, it's "inhumane what we're asking of these players with this fixture list".

You could go on all day really.