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Bill

QPR fine - update

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I''ve posted the full article from the Times as some are blocked from that site (paywall) - and added brief thoughts on two of the three main sanctions
  • Fine is over ten year (£1.7m p a) and will be a hefty burden each year if on Championship income, or lower
  • Transfer embargo Jan 2019
  • Loans to be converted into club shares. That means if the club goes tts up the the owners lose their money and cannot ''write it off''
Yes, it could have been more crippling but it does leave QPR as not such an attractive proposition for any hinvestor (money launderer)

"Queens Park Rangers have reached a

£41.965 million settlement with the EFL over breaching its spending

limits and accepted a transfer embargo for January next year in an

agreement that brings their four-year legal battle to a close.

The Times

understands that the Championship club will pay a £17 million fine to

the EFL over a ten-year period, contribute £3 million to cover the EFL’s

legal costs and convert £21.965 million of outstanding loans into

equity.

QPR were ordered to pay a fine of about £40 million last

year for failing to comply with the EFL’s Financial Fair Play rules

during the 2011-12 season, when they were promoted to the Premier

League, with an arbitration panel ruling that levying a world-record

fine for a rule breach by a sporting organisation was lawful and not disproportionate.

The

club immediately announced their intention to appeal and a date was set

for a hearing in front of a new panel in London this month, but after

intensive negotiations, QPR have withdrawn their appeal.

Under

the terms of the settlement, QPR’s payments to the EFL will not be taken

into account when calculating their future Profitability and

Sustainability results, the measure of a club’s financial health that

replaced FFP at the start of the 2016-17 season as an alternative way of

countering potentially unsustainable levels of spending.

QPR’s

owners will not be permitted to take the £21.965 million out of the club

and a ten-year payment schedule has been agreed for settling the fine.

QPR

can claim to have succeeded in reducing the level of the fine, but with

the mandatory conversion of loans into shares, the dispute will still

cost the owners almost £42 million.

In addition Steve McClaren,

the new manager, will be hindered by a transfer embargo during January’s

window, which is likely to lead to a flurry of activity during the rest

of the summer by the west London club.

QPR’s settlement was

discussed at an EFL board meeting in London yesterday with their

decision to withdraw their appeal ending several legal battles between

the EFL and clubs recently promoted to the Premier League.

Bournemouth

and Leicester City agreed to pay fines of £4.75 million and £3.1

million respectively this year for posting losses of £38.3 million and

£20.8 million during their promotion seasons.

QPR’s case was more

complex as the club’s owners wrote off £60 million in an attempt to

avoid a huge fine for breaching FFP regulations. The club believed that

they had got round the regulations after declaring an annual loss of

only £9.8 million after promotion from the Championship in 2013-14, but

the EFL took issue with the £60 million income injection that QPR

classed as an “exceptional item” in their accounts, and considered their

real loss to be £69.7 million.

The EFL has been determined to

uphold its sustainability rules throughout the process while also being

conscious of the need to avoid putting QPR under so much financial

pressure that the club’s future could be threatened."

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At least theyre finally being punished. Embargo for a January window seems a little off to me.

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[quote user="FenwayFrank"]So it’s a bit like some chavvy kid getting done for theft and arranging to pay £2 a week[/quote]
F
ines are always about what can be paid.
You seem to overlook that the real guilty party, the owners, have been hit with what will amount to them losing around £42m.
As far as I can see a very fair ruling. Hit the owners (those responsible) not the club.

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I have no idea of the circumstances but I assume it must have been far worse than any of the previous culprits because that fine, admittedly on terms, is quite hefty.

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Good to have some resolution for such an old offence and well done on the EFL.

I do like that it targets the owners rather than the fans, and £1.7m pa as a league 1 or 2 club would hurt making, avoiding relegation a must.

Doesn''t the movement of loans to shares only hurt the owners if the share value plummets or the shareholder is unable to find a buyer for the current value (which may be the case)

Just a jan window embargo feels a little light/toothless as for all clubs most business is still completed over the summer so a 2019 embargo (in line with Bolton,Forest etc) would have felt more balanced.

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Certainly a far higher fine than that given to Bournemouth (although I think the offence was not as bad?).

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It is the requirement to convert their ''loans'' into equity that is the most damaging - and rightly so.
That money is now nothing more than shares in QPR which I should imagine are pretty much worthless.
QPR as a club will ''suffer'' but the sanction above will deter most other owners (or prospective) from trying to get round the rules.
Rather like having a dodgy money lender having all his loans cancelled. Yes hit the doorstep collectors but ultimately it has to be the ''guiding hand'' (owners) who have been deservedly hit.

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But when our owners converted loans into equity it''s claimed they are paid back in full. Doesn''t add up to me.....

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Our owners had loaned the club money and the board agreed to pay them back in full? Was that not the case? They no longer have any loans (outside of any investment in the Nest) but have shares that were separate to the loans they gave the club.

The QPR owner is being told to convert his loans into shares presumably so that he can not pay himself back & put the future of the club in doubt?

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Am I right in saying QPR are now back to 0 when it comes to FFP? So they can make losses of up to £39m over the next three years.

Will be interesting to see how the fine affects the financial running of the club going forward.

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[quote user="keelansgrandad"]I have no idea of the circumstances but I assume it must have been far worse than any of the previous culprits because that fine, admittedly on terms, is quite hefty.[/quote]
It was quite blatant and - I think - by some way the largest ever breach of FFP in the Championship, though that may be wrong. It does back up the point I have made before, that FFP (not what it is called now but it is a useful set of initials) is being implemented with considerable effect in the Championship. And it is a useful shot across the bows for other clubs in this division with mega-rich risk-taking owners who might have been thinking of breaking FFP, given the well-intentioned but flawed (in the sense of the law of unintended consequences) change to 39m pounds over three years is an enticement to risk it.

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The conversion of loans to shares does increase the value of the club because the loans have been cleared from the balance sheet. But the club is still only worth the value of its net assets which is unlikely to be much so to all intents and purposes they have lost their money.

Add QPR to a long list of clubs that have employed Harry Redknapp and have suffered financial problems

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A net gain when compared to Premier money and parachute payments.

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[quote user="Mike "]Our owners had loaned the club money and the board agreed to pay them back in full? Was that not the case?
 They no longer have any loans (outside of any investment in the Nest) but have shares that were separate to the loans they gave the club.

The QPR owner is being told to convert his loans into shares presumably so that he can not pay himself back & put the future of the club in doubt?[/quote]
Not again so soon Mike. The rest of the board will get fed up with us and say "Not dumb and dumber again!"
Much of the money Smith & Jones previously lent our club was converted into shares. This was seen, by many of you lot who don''t want her as owner, as some sort of profiteering at our clubs expense. They say "them shares are wurth 20x what the the cook paid for them".
This is a criticism of their stewardship and it baffles me on so many levels. Could you perhaps help me understand it Mike?

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[quote user="Mike "]Our owners had loaned the club money and the board agreed to pay them back in full? Was that not the case? They no longer have any loans (outside of any investment in the Nest) but have shares that were separate to the loans they gave the club.

The QPR owner is being told to convert his loans into shares presumably so that he can not pay himself back & put the future of the club in doubt?[/quote]
The Nest is a CSF project. Why would that have anything to do with it?

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[quote user="PurpleCanary"]
[quote user="keelansgrandad"]I have no idea of the circumstances but I assume it must have been far worse than any of the previous culprits because that fine, admittedly on terms, is quite hefty.[/quote]
It was quite blatant and - I think - by some way the largest ever breach of FFP in the Championship, though that may be wrong. It does back up the point I have made before, that FFP (not what it is called now but it is a useful set of initials) is being implemented with considerable effect in the Championship. And it is a useful shot across the bows for other clubs in this division with mega-rich risk-taking owners who might have been thinking of breaking FFP, given the well-intentioned but flawed (in the sense of the law of unintended consequences) change to 39m pounds over three years is an enticement to risk it.
[/quote]
It has been an odd story all the way through. Back in Augsut 2015 The Guardian (and possibly other papers) said  QPR were only going to be fined £8m, although there was no official confirmation. That prompted an outcry from rival clubs, including Bowkett on our behalf. Whether the EFL had decided on such an absurdly small fine and quickly had a rethink is not clear. But eventually the fine was announced at  £40m, which QPR appealed against, leading eventually to this diluted semi-tough settlement. What is interesting about the EFL''s rationale for easing the fine is that it was worried it might bankrupt QPR:"In agreeing to the settlement above, the Board was conscious that the

financial burden placed on the club had to be manageable, so as not to

put its future in doubt when considering that after this season the club

will no longer benefit from the promotion that was the catalyst for the

dispute in the first place."
I don''t see why that should have been a consideration, even without taking into account the enormous wealth of QPR''s owners. But perhaps the EFL hopes that will be taken as a sign that it might not be so lenient next time.

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It seems as if the football league has as it''s major concern that being one of keeping the FL going rather than any suggested moral code.
Just as FFP was about stopping clubs over extending themselves and so going tts up, this about not rocking the boat.
However i still think QPR are fcked as far as the next few seasons are concerned.
Though it is refreshing to see that ''readies'' Redknapp did not cause any further financial trouble when at Brum

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