The Premier League has brought in new rules to fast-track financial disciplinary cases following anger among clubs that Everton’s charge was not dealt with last season.
The new regulations say the process for any club charged with a standard financial rule breach must be completed within 12 weeks, including an appeal, so that any points deductions apply to the season in which the rule breach takes place.
Only the “most exceptional cases” will not be covered by the new deadline – such as multiple alleged breaches over multiple years, as in Manchester City’s charges of 115 rule breaches in February.
The rules mean any club this season that breaks the top flight’s profit and sustainability rules (PSR), which restrict losses over three seasons to £105 million, will have the sanction imposed before the end of the campaign.
Last season, relegation-threatened clubs including Leeds United, Southampton, Leicester City and Nottingham Forest failed in a bid to have Everton’s case dealt with before the end of the 2022-23 season – it will go before the league’s independent commission at the end of next month.
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However it was agreed at the Premier League’s summer meeting in June that a 12-week deadline should be imposed for the future.
It is not known yet if any other clubs apart from Everton could be in breach of the financial rules for this season, but football finance experts believe Chelsea and Manchester United could be sailing close to the wind.
Everton avoided any punishment last season following their FFP charge
ALAMY
The new rules are contained in the Premier League’s 2023-24 handbook and state: “These standard directions have been agreed by clubs to ensure that any complaint regarding a breach of the Profitability and Sustainability Rules can be resolved, including any appeal, as expeditiously as possible and, absent exceptional circumstances, prior to June 1 following the submission of the relevant club’s annual accounts.
“The League and clubs recognise and agree that, given the possibility of the imposition of a sporting sanction in the form of a points deduction on any club found to be in breach of rules E.47 to E.52 and the desirability (so as to protect the interests of other clubs) of any such points deduction taking effect in the season in which the relevant club’s annual accounts are submitted, it is important that clarity is reached regarding any such sanction prior to the subsequent Annual General Meeting.
“This provides certainty for the league, its member clubs and other stakeholders as to the membership of the league in the subsequent season.”
The league has also agreed to bring forward the date for the submission of annual accounts from March to December 31.
The handbook states that exceptional cases that will not be subject to the 12-week deadline “may include where multiple PSR breaches over multiple years and other breaches of the rules are alleged”. Legal experts say the Manchester City case could take more than two years to complete.
Chelsea are also being investigated by the Premier League over payments of millions of pounds to secretive offshore companies during Roman Abramovich’s era. Chelsea’s new owners self-reported to the FA, Premier League and Uefa a number of financial transactions between 2012 and 2019 which they uncovered during the takeover process.
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As well as the payments to offshore companies, at least one payment to a player’s family is understood to be under scrutiny. Chelsea have already agreed a €10 million (£8.6 million) settlement with Uefa to cover Financial Fair Play (FFP) rule breaches.
The Premier League’s Profitability and Sustainability rules allow clubs to make losses of £35 million a year, which works out to £105 million over a rolling three-year monitoring period.
The football finance blog Swiss Ramble reported this week that Manchester United have found it “much more difficult” to meet financial fair play targets after a record £150 million pre-tax loss in 2021-22, and the club has made it clear this summer that its transfer activity has been limited by FFP considerations.
Chelsea lost £122 million in the 2021-22 season and have spent heavily in the past three transfer windows. Despite bringing in transfer income from selling players this summer, Chelsea are expected to make another heavy loss for 2022-23 and possibly make an even higher one this season as they will have no Champions League income.
What are the new Premier League rules on financial breaches?
Effectively, that a disciplinary case for a club charged with a standard financial rule breach must be dealt with inside 12 weeks, including any appeal.
Why has the Premier League brought in this new deadline?
There has been unhappiness among some Premier League clubs that a club could be charged with a standard breach of the financial rules, mainly having losses above the permitted maximum, but would avoid any sanction that season. That has happened with Everton, who were charged in March with breaching the Premier League’s profit and sustainability rules for the period ending season 2021-22.
A group of top flight clubs have failed in a bid to have Everton’s charge for breaching the financial rules fast-tracked so that it was dealt with before the end of the 2022-23 season. The teams — mainly those who were in relegation trouble, including Leeds United, Southampton, Leicester City and Nottingham Forest — wanted any points deductions to be imposed for the season in which the charge was brought.
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It was generally, however, recognised that such a rule would make sense and it was agreed at the Premier League’s summer meeting in June.
How do the new rules work?
Clubs now have to submit annual accounts by December 31 instead of March, with any charges then announced in the first two weeks of January. The disciplinary process and imposition of sanctions must take place within 12 weeks, including an appeal, to ensure that it is done before the Premier League’s summer meeting in early June.
What about the Manchester City charges and the Chelsea investigation?
Would similar cases be dealt with inside 12 weeks? No – in “exceptional circumstances”, such as alleged multiple breaches over multiple years, that deadline may not apply. City have been charged with 115 rule breaches over 14 years, while the investigation into Chelsea covers the period from 2012 to 2019.
