Premier League Profit and Sustainability Rules

[Pagan Hibernia]

Manchester United report net loss of £113.2m in 2023-24 - BBC Sport (https://www.bbc.co.uk/sport/football/articles/c07e42ryd0po)

Can anyone explain in simple layman's terms how United have not breached these rules and are therefore avoiding the penalties that befell Everton and Forest?

[CropleyWasGod]

In simple terms, a "loss" is not a loss.

When calculating the loss for PSR purposes, the following need to be added back to the loss in the accounts:-

The depreciation of tangible fixed assets or amortisation/impairment of intangible assets.
Women’s football expenditure.
Youth development expenditure.
Community development expenditure.

So, if United have spent enough on, say, Youth Development in a season to bring them under the threshold, there will be no need for any action.

The threshold is a maximum financial loss of £105 million over a three-year period .

That's the bare bones. Like all such rules, there's caveats and exemptions. I think HoboHarry has a decent grasp of those, so over to him :greengrin

[Onceinawhile]

Manchester United report net loss of £113.2m in 2023-24 - BBC Sport (https://www.bbc.co.uk/sport/football/articles/c07e42ryd0po)

Can anyone explain in simple layman's terms how United have not breached these rules and are therefore avoiding the penalties that befell Everton and Forest?


It's in the third paragraph:

Despite the results, United are not expected to breach the Premier League's profit and sustainability rules because not all spending goes against their calculations and clubs can claim allowances known as 'add backs'.

[HoboHarry]

In simple terms, a "loss" is not a loss.

When calculating the loss for PSR purposes, the following need to be added back to the loss in the accounts:-

The depreciation of tangible fixed assets or amortisation/impairment of intangible assets.
Women’s football expenditure.
Youth development expenditure.
Community development expenditure.

So, if United have spent enough on, say, Youth Development in a season to bring them under the threshold, there will be no need for any action.

The threshold is a maximum financial loss of £105 million over a three-year period .

That's the bare bones. Like all such rules, there's caveats and exemptions. I think HoboHarry has a decent grasp of those, so over to him :greengrin
Leave me out of yer bun fight thank you very much..... :greengrin

[Pagan Hibernia]

It's in the third paragraph:

Despite the results, United are not expected to breach the Premier League's profit and sustainability rules because not all spending goes against their calculations and clubs can claim allowances known as 'add backs'.




yes, I know mate. And that's the paragraph I don't understand :greengrin

But CWG has done a good job of explaining it.

[CropleyWasGod]

Leave me out of yer bun fight thank you very much..... :greengrin

It's less of a bun, more of a hot potato :greengrin

You'll probably know that the PL clubs are trialling another new system next season..... :rolleyes:

[Viva_Palmeiras]

Manchester United report net loss of £113.2m in 2023-24 - BBC Sport (https://www.bbc.co.uk/sport/football/articles/c07e42ryd0po)

Can anyone explain in simple layman's terms how United have not breached these rules and are therefore avoiding the penalties that befell Everton and Forest?

see those rules - the don’t seem to apply for some but do for others

[HoboHarry]

It's less of a bun, more of a hot potato :greengrin

You'll probably know that the PL clubs are trialling another new system next season..... :rolleyes:
Yes I'd seen that but that will only be en-vogue until the case against Man City really shows itself and then I expect some additional changes.

[superfurryhibby]

Could we ever introduce similar rules to Scottish football?

[Jock O]

In simple terms, a "loss" is not a loss.

When calculating the loss for PSR purposes, the following need to be added back to the loss in the accounts:-

The depreciation of tangible fixed assets or amortisation/impairment of intangible assets.
Women’s football expenditure.
Youth development expenditure.
Community development expenditure.

So, if United have spent enough on, say, Youth Development in a season to bring them under the threshold, there will be no need for any action.

The threshold is a maximum financial loss of £105 million over a three-year period .

That's the bare bones. Like all such rules, there's caveats and exemptions. I think HoboHarry has a decent grasp of those, so over to him :greengrin

Do players contracts come under intangible assets here? My understanding was one of the reasons for the crazy long contracts for these clubs is to assist in the PSR rules..

[CropleyWasGod]

Do players contracts come under intangible assets here? My understanding was one of the reasons for the crazy long contracts for these clubs is to assist in the PSR rules..

They don't. Quoting the rules:-

i) depreciation and/or impairment of tangible fixed assets, amortisation or impairment of goodwill and other intangible assets (but excluding amortisation of the costs of Players’ registrations);

The previous "loophole" of the long contracts has been closed. The maximum period over which a contract can be written off is now 5 years, irrespective of the length of the contract. Chelsea, IIRC, were trying to use that as a way to get round the rules, but can't anymore. AIUI, they are the club most likely to have problems with the new regime next season.

[Brianmcd]

One major allowance in these accounts is the £47.8m costs associated with Ineos purchase of shares. This is fully deductible as is infrastructure, academy, woman’s team etc. So very plausible that they could comply with PSR.

[Paul1642]

Could we ever introduce similar rules to Scottish football?

Would it change much?

Celtic run at a large profit anyway. Money breeds money.

Most other Scottish clubs couldn’t afford to run at a loss for long because they simply can’t afford to and when the do it comes at a future cost.

At a guess it would probably be Rangers, Hearts, Aberdeen and ourselves who would be most likely to fall foul of these rules right now as we are the ones being topped up from our owners. The rules are needed down south more so because every second club has loaded owners who want to buy success.

[Viva_Palmeiras]

TV sponsorship and mega investments down south have distorted things interesting to read the comments of Uli Honeß? Of Bayern in comparison between the German and English approaches (on affordable STs etc).

football authorities asleep at the wheel for 20 years.