The "break-even rule"

Copy and paste job but thought some might be interested in this.

The Premier League has proposed a ‘break-even rule,’ which does exactly what it says on the tin, in order to sustain financial stability while also preventing wage inflation and promoting a more ‘even playing field.’

It’s a model that we have all longed for in an age where football clubs are either going out of business or slipping down the leagues due to the loss of important revenue and the inability to keep up with the more wealthy clubs who can pay the best players the best wages.

UEFA has introduced a similar ruling in their competitions that demands clubs can only spend what they earn commercially and that they must break even, although they have gifted clubs a three year period in which they are allowed to make a loss of £36.3 million.

It is this kind of ruling that the Premier League hopes to adopt, but they have been met with some club owners’ disapproval, which if we’re honest, was always expected.

Fulham, Aston Villa, West Bromwich Albion and Manchester City have all voted against the introduction of the break-even rule, which means there is still some creases to iron out before all Premier League clubs are happy to proceed.

The ruling does prevent owners pumping money into the club whenever they like, which has been met with uncertainty  among clubs Chelsea and Manchester City, whose billionaire owners have given them the opportunity to perform on Europe’s biggest stage and win Premier League trophies. Chelsea do support the break-even rule, however, but still want the luxury of Roman Ambramovich’s bottomless pockets whenever they need to dip their hands in.

Chelsea have a point, but that would contradict the whole Financial Fair Play model and leave clubs without multi-billionaire owners still struggling to compete. Chelsea might be able to break even and comply to the FFP rules, but if Abramovich pumps in £100 million in equity into the club so Roberto Di Matteo can sign Lionel Messi, for example, that completely defeats the object.

The whole point behind FFP is to create a more level playing field in the Premier League and, more importantly, to prevent situations that Portsmouth have found themselves in.

We all know that it won’t be long before another top-flight side is bought by a multi-billionaire who is prepared to pump unlimited funds in to the club in exchange for silverware, European dominance and domestic glory.

But under these new rules, that wouldn’t necessarily mean we will have another Chelsea and Manchester City on our hands where the side buys and wins everyone and everything. Thankfully, those days are numbered.

What we should expect from this ruling is the smaller clubs being able to make a profit and slowly grow into sustainable businesses and successful teams. Of course, clubs like Manchester United, Arsenal and Liverpool will always be able to pay more wages because they generate more income commercially than the likes of, say, Wigan or Southampton.

But the Uniteds and Arsenals of the division will no longer be able to break the bank to sign a player who wants £180,000-a-week and will have to think twice about putting them on their wage bill. As a result, the transfer market may develop into a more open source for players. Other clubs could have a shot at bringing in a marquee signing, which is something we rarely see in the current climate.

Read more with this link...

http://www.footballfancast.com/premiership/what-will-its-overall-effect-on-the-premier-league-be

Very interesting Gary,

BUT

The multi millionaires will get their own way ,

They always do,

Maybe thats why they are multi millionaires.

The Cheslski and Machester City owners will have a UK office in the ground, paying a rent of £5 billion a year. Job done! The club are breaking even. As grimsby pete says, they'll always find a way around it.

Shame they can't concentrate more of the gap between the Premier League and the Championship, the Championship and League 1 etc.

tbh why shouldn't owners be allowed to pump their money in anyway ?

Wouldn't be suprised if all they're really worried about was viewing figures and the competitiveness of the Premier League.
If it was then so much for greedy owners !

I personally don't care about the premier league. And agree with you Pete.

The premier league in my opinion is for the rich clubs. There are some clubs that are in that league that just don't really stand a chance of winning it. For example, Norwich. Norwich are never going to win that league without spending at least 50 mill or even more.

Think you have to spend at least 50 million (maybe more) to be able to realistically compete for the premier league tittle.

One paper it sounds brilliant,
But in reality it would never be able to happen. Id say 95% of teams in the football league alone dont even nearly break even during a year in year basis.
Sadly teams over spending to try and reach the promise land of higher division football is just part and parcel of the game in this day and age - like it or not. Somethings over spending works and the team gets financially rewarded at the end but also like any business risk it can all end up so horribly aswell.
Asking clubs to break even, for the vast majority of teams is one hell of an ask. In my opinion it would allow the teams right at the pinnacle of the footballing pyramid to float but the rest of english football would suffer so badly we could end up with the same sort of lay out as the scottish league with just one team realisticly being able to win the league and no-one wants that!
Something so drastic as the break even rule would kill off lower league football in my opinion but one day i hope someone at the top thinking of something that actually works for everyone...il hold my breath on someone at the top doing something productive

Quoted from 1600

Shame they can't concentrate more of the gap between the Premier League and the Championship, the Championship and League 1 etc.

tbh why shouldn't owners be allowed to pump their money in anyway ?

I agree with the top part.

As for, "why shouldn't owners be allowed to pump their money in anyway?"
I think there should be a cap though to stop it from getting too daft (like it is already).

Sounds to me that the FA want to be the ones in charge of football clubs IMO there going about in the wrong direction let the clubs spend what they as long as their income remains above their expenditure but I think they should do more for the clubs outside the premier league, as a fan if town got in the prem I know we wouldn't stand a chance but its more that we are playing against grade A teams on grade A tv and bring part of that would be amazing.

The prem teams get all the money so for once the FA should grow some balls and start to put this back the premier leagues clubs are fine as long as they don't break the bank.

Quoted from Gary Haddock

As for, "why shouldn't owners be allowed to pump their money in anyway?"
I think there should be a cap though to stop it from getting too daft (like it is already).

I just wonder whether top flight football around the world could make a concerted effort to just lower the prize money.
Clubs wouldn't spend as much for starters.
Or are they worried about their product if players start flocking to other leagues around the world ?

Quoted from Gary Haddock

I personally don't care about the premier league. And agree with you Pete.

The premier league in my opinion is for the rich clubs. There are some clubs that are in that league that just don't really stand a chance of winning it. For example, Norwich. Norwich are never going to win that league without spending at least 50 mill or even more.

Think you have to spend at least 50 million (maybe more) to be able to realistically compete for the premier league tittle.

Try 10x that!! You'd have to spend (at least) £50m just to stand a chance of staying up