Financial fair play threat to Premier League

Real Madrid has beaten off stiff competition from domestic rivals Barcelona to top the Deloitte Money League for the sixth successive year, reports Alex Miller.

But as the financial strength of Spain’s super clubs is reaffirmed, leading clubs in the English Premiership face some significant challenges in their attempts to keep up.

While Uefa’s Financial Fair Play Regulations (FPP) from 2013-14 onwards will not affect clubs’ revenue generation - the key principle underlying the regulations being that clubs do not spend more than they earn - the rules will favour those clubs with the largest revenues (excluding player transfer fees, VAT and other sales related taxes).

Currently the two leading Spanish clubs have a massive advantage over Premiership rivals as they are allowed to negotiate their own TV rights deals. In the Premiership, TV rights are spread more evenly around the 20 teams. This scenario means English clubs will struggle to retain the dominance they have enjoyed in European competitions in recent seasons.

In preparation for FFP, senior finance figures from top Premiership clubs have travelled to Uefa’s Swiss HQ to familiarise themselves with the accounting software system all clubs will use as part of FFP monitoring. The clubs are also currently sharing internal financial forecasts for the next two years with Uefa ‘examiners’ to see if they are on course to meet requirements. Manchester City and possibly Chelsea are most in danger: City lost £194m in 2010-11, but the club insists it is on course.

Another cloud hangs over one of Scotland's "Old firm" clubs, as HMRC pursues a long-running tax dispute with Glasgow Rangers. With interest and late-payment penalties going back more than 10 years, when Rangers paid £48m into an Employee Benefit Trust (EBT) for players between 2001-10, the liability  could total in the region of £54m if Rangers loses its appeal before a first tier tribunal. The decision is expected within a few weeks.

HMRC said Rangers' EBT was for all intents and purposes, a tax scam. On Monday 13 February, Rangers FC filed a notice of intention to appoint an administrator, giving it 10 days' legal protection from creditors. 

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