Points penalties to be replaced by “luxury tax”

DJ

DJ

Moderator
https://twitter.com/x/status/1775844357246988680

Radical reform has been discussed among the clubs and an entirely new system could be voted in at the end of the season meeting in June. As many as 17 of the 20 clubs are thought to be leaning towards significant change. Fourteen clubs need to be in agreement to get a rule change through…

…A 'luxury tax' has been considered, where those clubs who overspend will have a financial punishment which would increase the more they splash the cash. But clubs can choose to press on regardless if they wish.

The monies collected, which could run into the tens of millions, would then be redistributed to those Premier League who complied with the rules. It has been discussed that some of the fines could even go into an 'emergency fund' to assist EFL clubs in financial danger.
 
What a stupid idea. So the likes of Luton, Sheffield Utd, Palace, us (perhaps) to name but a few, won’t have the financial wherewithal to “press on regardless”, whereas Man City, Newcastle and others, by dint of their ownership, have the potential for unlimited funds so can continue to buy their way to success.
 
How kind of them to consider the EFL clubs as a last resort.

These clubs are run by money grabbers.
 
Don’t agree with this, think deducting points is a better system.

The ‘luxury’ tax will be more advantageous to the bigger clubs.


A 'luxury tax' has been considered, where those clubs who overspend will have a financial punishment which would increase the more they splash the cash. But clubs can choose to press on regardless if they wish.
 
Not sure it's any worse than the current system. The only funny thing will be all the whining fans certain clubs who thought their slow drip-drip of rule changes meant they were locking everyone else out of success only for... oh dear... suddenly they aren't the richest clubs anymore.

Will also be funny when a team spends £150m on an absolute dud, is stuck with them for years in the squad and, as well as having to pay their astronomical wages, them having to pay all the other teams a tax for the pleasure.
 
RobTrent said:
Has it worked elsewhere?
Click to expand...

No idea. It's been described as an effective deterrent in the NBA but I wouldn't have a clue if that's right. It could be beneficial to the lower leagues if money gets redistributed there. I suppose the worry is those with the deepest pockets are the sportswashing state owned clubs, which is a problem but then again this shouldn't be allowed anyway.
 
kirsikka said:
Not sure it's any worse than the current system. The only funny thing will be all the whining fans certain clubs who thought their slow drip-drip of rule changes meant they were locking everyone else out of success only for... oh dear... suddenly they aren't the richest clubs anymore.

Will also be funny when a team spends £150m on an absolute dud, is stuck with them for years in the squad and, as well as having to pay their astronomical wages, them having to pay all the other teams a tax for the pleasure.
Click to expand...
A bit like Leicester being penalised for being sh it and getting relegated.

Although, they did get a shiny new stadium after being bankrupt.
 
billythekid said:
Don’t agree with this, think deducting points is a better system.

The ‘luxury’ tax will be more advantageous to the bigger clubs.


A 'luxury tax' has been considered, where those clubs who overspend will have a financial punishment which would increase the more they splash the cash. But clubs can choose to press on regardless if they wish.
Click to expand...
All depends on what the end game is re a better system?

If they want to ensure continued investment and star names then it’s not in the interests of the prem league to restrict funding. January transfers collapsed and not a good look for the prem nor their primary tv backer in Sky.

Similarly, if they want to stop the big 6 defecting then need to let them splash the cash. Current rules are an issue for ambitious clubs like Chelsea and Newcastle.

Thus it’s a better way from one angle. You and I might disagree though it is a better way for football as a whole!

For afcb, it’s good news if Bill wants to keep funding the club.

Of course, may mean Everton and forest trade off a points deduction for a fine on appeal?
 
AFCBade said:
All depends on what the end game is re a better system?

If they want to ensure continued investment and star names then it’s not in the interests of the prem league to restrict funding. January transfers collapsed and not a good look for the prem nor their primary tv backer in Sky.

Similarly, if they want to stop the big 6 defecting then need to let them splash the cash. Current rules are an issue for ambitious clubs like Chelsea and Newcastle.

Thus it’s a better way from one angle. You and I might disagree though it is a better way for football as a whole!

For afcb, it’s good news if Bill wants to keep funding the club.

Of course, may mean Everton and forest trade off a points deduction for a fine on appeal?
Click to expand...
Is it really? Do we exist in a vacuum where such decisions are ok?
 
Luxury tax is applied to some NA sports. Others have a "hard cap" and teams hire "capologists" to manage the nuances. Tricky business either way. "Big teams" are always prepared to go over budget and pay the luxury tax where applicable. Mid-range teams will go over from time to time if they think that there is a window go make a run at a title.

Points deduction this year has been a farce. I'd suggest that most of us think that it will end in skull-duggery that "punishes" Everton and perhaps Forest, but would never send them down. So, if the system is subject to conspiracy theories, might as well change it.
 
Our US friends can enlighten far better than I, but I gather the ‘tax’ works as a deterrent there because it directly boosts your competition’s coffers. Not clear who this ‘tax’ would benefit?
 
It's better than what we have now where the players and fans are punished in reality...

If in the proposed new system the Elite clubs 'press on regardless' it does not automatically mean they win any more trophies...as we know they can mess up with buying duds ( Manu flops etcetera)....the financial punishment stigma might make them more cautious in the Markets...which might ultimately make them weaker on the field and go towards a levelling out of the PL competition...
It's all about might this, might that.....and one of the 'mights' might depend on....how big exactly would the Financial punishments be and what effect would that have on 'investors' and how much the clubs are prepared to spend on any legal representation required.
There is a lot to research and understand.
 
Last edited:
I
northstandmark said:
Our US friends can enlighten far better than I, but I gather the ‘tax’ works as a deterrent there because it directly boosts your competition’s coffers. Not clear who this ‘tax’ would benefit?
Click to expand...
It's more complicated than that Mark. I've attached a wikipedia link for baseball, you need to dig pretty deep to follow the money. Some of the tax reverts to the players through various schemes, other goes to the lesser spending teams but it's not a pure calculation.

The big thing that you'll notice, if you dare to read through it all, is that the players are strongly opposed to it as they see it as an artificial way to constrain salaries. MLB has a strong Players' Association which negotiates the overall structure of the relationship between "millionaires and billionaires" (players v. owners) which has led to labour strife every few years, and possible strikes and/or lockouts.

Major League Baseball luxury tax - Wikipedia

en.wikipedia.org en.wikipedia.org
 
Ultimately FFP/PSR was never about preventing big clubs from overspending, it was about protecting clubs from being run into the ground or taken advantage of by its owners.

We now have a system than enables clubs to overspend and doesn’t protect them from clocking up massive debts to owners.

That should be prevented. Owners shouldn’t be piling on £100m worth of loans to a club during a takeover.

Once that is dealt with, then maybe this tax could work, especially if it distributes money down the ladder.
 
RobTrent said:
Is it really? Do we exist in a vacuum where such decisions are ok?
Click to expand...
Yes. Premier league is a vacuum. Thus the argument over parachute payments is often viewed from the wrong lens -it ensures prem league is competitive rather than trying to worry about fairness in the EFL.

As I posted, I am not saying that it is right but this is the world we are in. Financial penalty is the right way to go for the prem, no doubt.
 
I'm happy with this so long as all money invested is in the form of shares (i.e. not loaned).

Not sure if it solves the issue of working around regulations but perhaps offering an above board method for unlimited investment would be more appealing than gambling on getting caught foul of the rules later.
 
DJ said:
Ultimately FFP/PSR was never about preventing big clubs from overspending, it was about protecting clubs from being run into the ground or taken advantage of by its owners.

We now have a system than enables clubs to overspend and doesn’t protect them from clocking up massive debts to owners.

That should be prevented. Owners shouldn’t be piling on £100m worth of loans to a club during a takeover.

Once that is dealt with, then maybe this tax could work, especially if it distributes money down the ladder.
Click to expand...

I don't know the ins and outs of it at all but are there rules on whether owners can treat investment as equity as opposed to debt?
 
You must log in or register to reply here.

;