Sunday, 7 July 2013

Financial Fair Play in the Champonship

Quite a few AFCB supporters have been questioning what the Financial Fair Play Rules really are how they impact on a teams spending ability for new transfers. I am going to try and give a simple overview with some links for you to follow for more information.

The agreement to introduce Financial Fair Play became operational (monitored) last season and in the Championship you are restricted to the club's losses being less than an acceptable level of deviation (£4m) and Shareholders equity investment (£8m). The first reports were submitted in December 2012 for the 2011-12 season. As we know AFCB had a financial loss of £3.4m in 2012 and Mr Demin invested some £5 or £ 6m as a loan (to be paid back whenever!). I am not sure if other shareholders at AFCB also input further funds. That probably does not give the Cherries much room for manoeuvre before they start incurring sanctions.

That is really what I don't get. If you overspend and you are not sustainable in your finances the league will fine you, giving you a greater financial burden.

The money is equally shared between the teams that have complied with the rules. The fines could be from as little as £1 to as much as £10m.

As the seasons progress the fact that we have a rich owner will have less and less influence on our spending power for players as the amount they can put in each season is gradually reduced.

I hope this gives you some kind of insight but I am not a financial analyst and interpreting the rules is no doubt more detailed than what I have shown here.

You can read more at:
The The Football League website
BBC article on clubs vote in favour of Financial Fair Play

And for UEFA competitions the rules are a bit different:
Financial Fair Play Website showing UEFA fair paly rules

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