PL gets tough on club finances
Clubs could be forced to sell players if they don't meet rules
Last updated: 12th May 2009
Scudamore: Tighter controls
The Premier League is set to get tough on its clubs under new rule changes aimed at providing greater financial clarity and safeguards within the game.
Clubs could be forced to sell their star players and other valuable assets if they fail more stringent financial tests expected to be ratified by the board this summer.
Premier League chief executive Richard Scudamore does not believe there will be a situation where a top-flight club suffers from insolvency but he made it clear that sanctions will be taken if any of the elite should teeter on the brink of financial failure in future.
"It's more about putting other sanctions upon them and that will be for the board to decide what the appropriate sanction is," said Scudamore.
"It might be no transfers, it might be forced sale of players, forced sale of assets, there must be other things you can do to keep the club alive, because the most important thing is to keep the club in existence."
The Premier League has proposed 10 rule changes aimed at tightening the governance of clubs at the highest level.
It wants to reduce the risk of another 'Leeds', who collapsed into insolvency after gross overspending in the early part of this decade and were relegated in 2004.
"What happened to Leeds is what should happen to Leeds if you run the club like that," Scudamore added.
"It's tough on Leeds fans. But what these rules envisage is the football authorities getting involved earlier in that process, a bit more interference in that process. Not to prevent it, but to reduce the chance of that happening.
Financial difficulties
"If a club has overstretched to get a competitive advantage, if you get yourself in financial difficulties, it should unravel."
The Premier League also wants to enhance the 'early warning system' by asking clubs to submit future financial information and to improve the transparency of ownership by amending the rules to require disclosure of any interest in a club above 10 per cent.
Other significant rule changes will include making anyone ineligible for directorship if they have been convicted of a one-year prison sentence.
Individuals who are banned from entering the UK or whose assets are frozen will also be barred from taking up a club directorship under the proposed changes.
The new rules would aim to prevent people like former Thailand Prime Minister Thaksin Shinawatra from getting involved with a top flight club.
Shinawatra bought Manchester City for £80 million in the summer of 2007, but his wife, Pojaman, was later handed a jail sentence for tax fraud.
Shinawatra sold City to the Abu Dhabi United Group for Development and Investment (ADUG) in September last year because he knew the Premier League would eventually kick him out.
"Shinawatra is an interesting one as at the time he became the owner of a club in this country, it would have been very difficult to apply any 'Fit and Proper Persons' test," admitted Scudamore.
"It would have not allowed him in. He had been ousted by a military junta from a democratic country.
"The reality was that he had been convicted of nothing. We got all the clearances we would have expected to have got from the British government.
"Even with what we are doing now to the rules, it is probably hard to say we would have caught Mr Shinawatra back then.
"But once his wife was convicted, our rules would define her as an associate of his and the moment he was convicted, that would have caught him. The fact that he is no longer allowed to enter the country means that we would catch him under the rules we are now proposing.
Tightened
"The rules are being tightened but the fact he sold the club so quickly was because of the application of our rule. He knew that his wife and him were not going to comply. So in effect, the 'Fit and Proper Persons' test worked."
The Premier League is now also proposing that any director convicted of a one-year jail sentence, for whatever misdemeanour, will prevent that person from being involved in running a club.
"It used to be a list of specific offences," said Scudamore. "Now it is anything where you have a sentence of more than a year."
Scudamore was responding to a letter in October from Andy Burnham, the Secretary of State for Culture, Media and Sport, concerning finances at, and ownership of, football clubs.
A spokesman for the Department for Culture, Media and Sport said: "We are encouraged by the Premier League's response, in particular the proposed changes that will lead to greater financial transparency surrounding the running of football clubs including a strengthened 'Fit and Proper Person's' Test.
"We will continue our dialogue with football on the detail of these proposals and look forward to forthcoming responses from the Football Association and Football League."
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