The Football League FFP Regulations came into force in 2012 with the ultimate aim of reducing the levels of losses being incurred at football clubs and preventing them from spending more than they are earning. There are some potential loopholes for clubs in that losses relating to stadia investment and youth infrastructural investment can be written off but the Football League are keen to take a strong approach in relation to clubs paying high wages and shelling out large transfer fees. Queens Park Rangers spent a staggering £41 million on new players the season before last.
The Football League Financial Fair Play Regulations state that Championship clubs promoted back to the Premier League who exceed the permitted losses will be subject to a fine. The Football League are also investigating the fact that QPR have written off hefty loans. QPR’s recent accounts illustrated a loss of circa. £10 million during their previous season in the Championship. This figure would however have been much higher had they not written off loans of around £60 million. QPR have intimated that they are challenging the Football League in respect of the alleged breaches of FFP Regulations. The London club announced the legal challenge just 24 hours after being relegated from the Premier League.
The full details of QPR’s legal case have not been published nor have the exact arguments upon which they seek to rely. QPR would not be the first to challenge the Rules after Belgian football agent Daniel Striani recently sought to challenge the Rules on the basis that they breached European Laws on the free movement of capital, workers and services.
There is a sliding scale in place as to the potential fine to be imposed. In terms of a possible sanction, QPR could receive a fine of around £58 million if found guilty. There are also further far-reaching punishments should QPR refuse to pay the fine which would lead to them being evicted from the Football League altogether and having to play in the Conference. Although they will receive parachute payments following relegation, the initial estimations are that QPR will stand to lose up to £150 million in their first year absence from the top flight of English football at a time when broadcasting income is more lucrative than ever.
Here at Farleys we have a specialised Sports Law Department and regularly advised both individuals and clubs on the technicalities and implications of the FFP Regulations. If you have been affected by any of the above issues then do not hesitate to contact us today, to speak with one of our expert Sports Law Solicitors call 0845 287 0939. Alternatively please complete an online enquiry form.