New financial regulations to hit Premier League next season
Losses of more than £105m could result in points penalties
It has been a huge talking point across English and European football lately, leading to a Financial Fair Play regulation being introduced by UEFA for teams in European competitions.
Now the Premier League could be set to follow suit and bring in their own financial regulations.
Although the new rules are rumoured to have a lot more breathing room than UEFAs European guidelines, they are designed to prevent the same issue of clubs facing heavy debt as well as the threat of administration.
We have seen some huge examples of this across England and Scotland recently, none bigger than the financial problems Glasgow Rangers found themselves in.
Unpaid tax bills and other problems lead to the once dominant force of Scottish football being thrown out the SPL, now lying in the lowest tier having reformed following administration.
This is just one example of the dangers caused by overspending, as cases such as Portsmouth Football Club, still ongoing today.
Once flying high in the Premier League, competing in Europe, and FA Cup winners, Portsmouth are now battling for survival and have been given an ultimatum by the FA; find a buyer before the summer or face being removed from the Football League.
Situations like this have mean greater responsibility for owners to look after the future of Football Clubs with tighter sanctions, leading to a "Fitness test" before they are allowed to buy or takeover a Premier League to ensure the Pompey situation is not repeated. A much needed step after the problems at Fratton Park.
However, this still does not solve the issue completely. Under the new regulations proposed by Premier League boss Richard Scudamore, clubs in England's top flight would not be able to total anymore than £105million in losses, vastly greater than the sum imposed by UEFA, which stands at £38million.
Implications like these will ensure that past failings of teams trying to 'buy their way to success' will hinge on clubs producing sufficient turnover after spending big.
Leeds United fans will remember all too well their glory days in the Premier League, after having reached the Champions League, they continued to spend. Failure in Europe, as well as a domestic slump, have seen the Yorkshire side become a permanent outfit in the Championship, with the new rules in place to help prevent these tales of woe happening more often.
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