Go Extreme or Go Home

Football financial fair play - whilst being alliteratively fun - strikes me as something of an oxymoron, but there you go. In an effort to curb some of the more outlandish behaviour of premier league clubs Profit and Sustainability Rules (PRS) were introduced, in the 2015/16 season. These rules specify that English premier league clubs are allowed to lose £105m over a 3-year spell. Unfortunately for them, Everton recorded losses of £125m. In March 2023 they were referred to an independent commission, who in November imposed upon them a 10-point penalty which, despite a strong start to the season, dropped them into the relegation zone. At the time, almost to a man/woman, the football literati said that this was extreme, that Everton would appeal and the deduction would be reduced to 6 points. Everton duly appealed and, guess what? The appeal panel has reduced their penalty from 10 to 6 points. They concluded that the Independent Commission had made legal errors in two areas:

1. Everton had been punished for “being less than frank” (check out the signal in that phrase) about their new stadium debt; the appeal panel found that whilst the errors were material, Everton had made an innocent mistake.
2. They also said that a 6-point deduction was not out of kilter with other available benchmarks.

So, what is the fallout from this? I think it’s safe to assume that every club that falls foul of PRS will appeal, given the precedent has been set that if you do you get a 40% reduction in your points deduction. It also appears that the tactic of “Act dumb be smart” will be increasingly used: “Oh, I’m sorry - I didn’t realise….silly me”. Everton seem to have got away with claiming that they didn’t realise that the cost of building their new stadium couldn’t be deducted from their allowable losses. Remember, it was the premier league clubs of which Everton are one, who determined what the rules were in the first instance. As I write I’m imagining some of the brightest legal minds in the UK developing defences for their multi-billion pound football masters along the lines of “I’m really sorry we didn’t do it on purpose we are just a bit thick”.

So, what was the point of imposing a 10-point deduction if within 3 months it’s going to be reduced to 6 which is what everyone thought it should be in the first place… from a negotiator's perspective, why do people make extreme opening proposals?

Predominantly, it is to influence the limit position of the other party and/or to set up a haggle. On this occasion, I think they were sending a message to a constituent, the government, who in September had reaffirmed their intent to establish an independent regulator for men’s elite football. The message being, “We’ve got it under control, we can and will take firm action, we can keep our house in order - we don’t need government interference”. Time will tell as to how effective they have been. If Nottingham Forest & Everton have points deducted in their upcoming cases it’s likely they will fall into the relegation zone and will no doubt appeal. Based on the current procedure the outcome of the appeal will not be announced until after the end of the season which means we won’t know who is relegated with certainty when the season finishes. This could politely be described as chaos - and certainly not a good look if you’re trying to demonstrate you are in control.

Oh and hot off the press,

“Premier League clubs also re-confirmed their commitment to securing a sustainably funded financial agreement with the EFL, subject to the new financial system being formally approved by clubs”.

This statement came after a meeting of Premier League (PL) clubs who had committed to action in relation to funding agreements with EFL.  The Premier League are not happy because the EFL finally have some leverage (The threat of an independent regulator) so they are trying to kick this can down the road (Technically known as staying in the argue phase) and playing a game of chicken with the EFL & GVT, who today re-affirmed their commitment to an independent regulator.

In a further bid to show that they are completely in control they now plan to get rid of PRS in favour a new system allowing clubs to spend 85% of their turnover on wages etc…………what could go wrong.