QPR relegated.....but where to?

On Sunday, QPR’s relegation from the Premier League was confirmed when they travelled to Manchester City in a win-or-bust situation and, in a performance which pretty much summed up their season, meekly lost 6-0.

Unfortunately for QPR fans, this season wasn’t really any different from when they were relegated two seasons ago. Once again they had Harry Redknapp in charge; a man I don’t believe is suited to managing in the modern game anymore. Once again they ended up with a squad containing a lot of players who either aren’t good enough for the Premier League, or just didn’t give a crap about the team.

Normally when a team is relegated, they start preparing for the division below, which in England is the Championship. That’s what already-relegated Burnley will be doing and what one of Hull, Newcastle or Sunderland will have to do soon.

QPR will start rebuilding for next season too and will face a few challenges. There’s the challenge of rebuilding the squad, moving on unwanted players, and replacing some of the players who have played well this season but will leave the club anyway.

There’s also the managerial situation to sort out. After Redknapp left coach Chris Ramsey took charge on an interim basis. While results under him were pretty bad, he seems to be popular amongst the players and may get the manager’s job on a permanent basis.

All of these changes and decisions will take place with QPR not knowing what division they’ll be next season, because as it stands, they’re not going into the Championship.

This is because QPR are in dispute with the Football League, the governing body of the Championship, League One and League Two, and if it’s not resolved, then theoretically, the Football League may refuse to accept QPR, which would relegate them to the Football Conference, which is the fifth tier of English football.

The Championship has its own FFP rules, like UEFA and the Premier League, though they are far stricter. However, unlike UEFA and the Premier League, the Championship takes the radical stance of expecting clubs to adhere to those rules, and punishes those clubs who do not.

Those punishments can come by way of sanctions on transfers, which happened to some Championship clubs this season, or by way of a fine, and that’s what’s facing QPR.

Under the Championship’s FFP rules, clubs are allowed to lose £8m a season (the Premier League allows losses of £105m over three years). In 2013-14, QPR would’ve lost £69.7m, except for the fact that their owners wrote off £60m worth of loans.

The Football League claims that that loan write-off flies in the face of FFP, and believes QPR are in breach of their rules. As some of the losses were for development reasons, which are excluded from consideration under FFP rules, it is believed that QPR would face an FFP loss of £46m, which would mean a £43m fine.

This impending fine isn’t news to QPR, they’ve known about it all season. All season long QPR’s stance has been that they won’t pay, and the Football League’s stance has been that they will seek to collect on their fine.

QPR have opened legal proceedings against the Football League in a bid to overturn this fine. QPR’s argument in this case will likely centre around competition law in the UK; with QPR believing that the Football League has abused their position of authority with their FFP rules. An independent arbitration panel has been convened, and both QPR and the Football League have waived any rights to appeal the verdict meaning what the panel says, goes.

A statement from QPR said:

“QPR challenges the legality of the Football League’s Championship financial fair play rules and any charge against QPR (if any) for breach of FFP rules shall not be commenced pending the outcome of that challenge. The proceedings are confidential in nature and neither party is entitled to comment upon the proceedings until the independent arbitral panel has delivered its decision.”

What won’t please QPR is the knowledge that there is a loophole that they could have exploited the last time they were in the Premier League, which would have seen any potential fine they faced substantially reduced.

When a club buys a player for a fee, that fee is usually spread evenly across the length of the contract in the club accounts. So, if a club buys a player for £20m on a 4-year contract, they usually report it in their accounts as £5m every year for the next 4 years.

What some clubs do instead is to report the whole transfer fee on one year’s accounts. For example, last season, Fulham were relegated from the Premier League, but despite a big increase in TV money, their losses increased from £2.7m to £33.4m. Nearly £17m of those losses was accounted for this, which will mean that if Fulham fall foul of the Championship FFP when this season’s accounts are published, it won’t be by nearly as much as they would have had they reported transfer fees in accounts over the length of contracts.

Several clubs have taken advantage of this to avoid FFP sanctions upon relegation, and as there doesn’t seem to be any plan to tighten this loophole; clubs will continue to exploit this.

If QPR’s challenge is successful, not only would they have to be admitted into the Championship, but the Championship’s FFP rules would be seriously undermined and would have to be reviewed.

If the Football League wins, then QPR have to pay up, or face not being admitted to the Football League. As the Football League season starts on 8 August, QPR would have to pay up quickly, and would then face the additional challenge of that fine swallowing up a large percentage of the parachute payments relegated clubs get from the Premier League to lessen the financial blow of relegation.

I believe that some form of compromise will be reached that allows QPR to stay in the league, but still carries some form of financial punishment. Another party who will be very interested in what happens will be Cheltenham Town, who finished 2nd from bottom in League Two last season, and would probably benefit if QPR were barred from the Football League.