Football Finance

[Bradley]

On the bright side, no asterisk beside teams if we win the league this season.

 

[Beamrider]

Looks like the football clubs have been buying expensive accountants to get around various loop holes. Do you think the rules will evolve to block any dubious activities (e.g. the share purchases designed to write off debt interest (is that describing it correctly))?

I don't have an issue with the share issues. I've said before that when an owner puts in money, they can do it either as shares or as loans. In the past, the main reason for using loans was that it would be easier to pull that money back out in the event that the club made a huge profit further down the line (although off the top of my head, only Brighton have ever been able to do this). Part of the reason why the Premier League didn't go after loans in the first place was that they knew this. The loans only became an issue because of City's associated party transactions case. So all of this conversion to shares is fine. They're just changing a loan, that was probably never going to be repaid, into shares, which will also probably never be "repaid".
But all of this round-robin selling of academy players at inflated prices and intra-group sales of assets, that needs to stop. The problem with the former is that you need to prove there was a scheme and that prices were inflated. Clubs will just say they got it wrong, sorry, shit happens.
And the problem with the sale of assets is that they asked clubs to consider outlawing it and they wouldn't vote for the change, as so many of them know they might need it to bail themselves out at some point in future. Turkeys not voting for Christmas.
That's why I think the PL should have taken a test case on it - if they can't change the rules then they need a commission to rule on it. If the commission goes "letter of the law" then the club gets away with it. If the commission decides it's not fair that some clubs can do it (because of their group structure) and others can't (because they keep it simple and honest) then maybe they rule in the PL's favour. On balance, I think the PL loses that case, but they should give it a go out of fairness to the clubs who can't exploit it. And if they win, they have a mandate to change the rules.
So we are where we are. The difference is that because the PL flexed their muscles over Everton and Forest, the teams are taking it seriously now, even if their solution is to take the piss with clever accounting and structuring, rather than reining in their spending.
And longer term, if they move to the football costs ratio, then it will be harder for clubs to do these tricks to get around the rules. Intra-group asset sales won't help and player sales will only add 1/3 of the profit to the calculation (as it takes the average player sales over 3 years). They are trialling this now in parallel with existing PSR, but it isn't binding, and I suspect it will be difficult to get it voted in as the future measure because it's less open to manipulation.