QPR still on a collision course with Football League
Although Championship clubs voted for new FFP rules on 6th November, QPR are still on a collision course with the Football League. The rule changes do not expressly alter any sanction applied as a result of the club's overspend during 2013/14.
Although QPR’s accounts have not yet been released, it is inconceivable that they would have been able to keep losses below the threshold for the 2013/14 season (£3m maximum loss, or £8m if the owners injected £5m equity). Looking the most recent accounts it appears that QPR are heading for a fine of around £27m to 35m (plus an additional £5m if [as appears] the owners did not injected the £5m equity by June).
It is interesting to look at what lies ahead for QPR.
Although they are now in the Premier League, QPR are still required to submit their FFP return to the Football League by 1 December. The Football League will then assess their financial results and advise the club of the amount Fair Play Tax to be levied. However, this could be a drawn-out affair - Tony Fernandes has nicknamed himself “Fight it Fernandes“ and advises that he intends to challenge the legality of the Fair Play Tax.
QPR may decide that they do not wish to play ball and may decide that they do not wish to provide their financial results to the Football League by 1 December. However, this would have its consequences. Any club that fails to provide their return will have their results (and any fine) assessed by the Football League against the club’s published accounts (due some time around March). However, if the club doesn’t make a voluntary return in December, the rules state that the club will not be able to make use of the ‘exclusions’ such as promotion bonuses paid to players and youth development & community expenditure. If QPR decide not to play ball, it could end up costing them several million pounds extra. The club will need to balance up their desire to fight the rules with their desire to reduce any potential fine.
Once the Football League have assessed their financial results for 2013/13, they can expect to be sent a request for payment – the rules state that they will be given just 14 days to pay.
Assuming QPR do not simply hand over the cash, the Football League has a few options. One option is to register a claim with the Premier League against QPR. The FFP rules explain that in this scenario, the club would:
.. be deemed to have explicitly authorised The League to notify the Premier Leauge of such non-payment and to register the same as a debt due to The League for the purposes of rule C.51.
Technically, the Premier League would be required to withhold any TV revenue due to QPR and pay it over to the Football League. However, this course of action seems unlikely owing to the sometimes complicated relationship between the Football League and the Premier League. The Premier League have intimidated that it is not willing to help collect the Fair Play Tax. The Premier League fear that depriving one of their member clubs of a substantial amount of cash would undermine the integrity of their competition. The Football League evidently don’t have any appetite for pressing this matter with the Premier League in the courts. Consequently, if QPR don’t pay-up, it seems likely that the Football League will ask QPR to pay-up at whatever time in the future the club get relegated from the Premier League. If the Football League carries out its threat, QPR’s entry into the Championship would only be possible if the club pay their fine – if QPR refuse, they would potentially be excluded from the Football League and sent to the Conference. This potential course of action was confirmedby Football League Chief Executive Sean Harvey at Soccerex. Interestingly, it is unclear whether QPR would be allowed into the Football League from the Conference if they had the same owners and the fine was still unpaid.
Of course, ‘Fight It’ Fernandes may be successful in challenging the Fair Play Tax in the courts. Ben Rumsby in the Telegraph writes that a legal concept termed lex mitior may come to QPR’s aid as a consequence of the fact that that the rules will be changed in 18 months. However it is also quite possible that QPR’s case may well be undermined by a clause in the current rules which states that in relation to the Fair Play Tax, the promoted club will ‘be deemed to have irrevocably waived the right to raise an objection’.
None of this changes the fact that QPR were not in the Championship when the rules were introduced and feel they have been harshly treated. However time is not on their side – they are currently amongst the favourites for relegation and the uncertainly caused by a protracted legal and relegation battle would make life very difficult at Loftus Road.
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