Two days before the deadline for applications to play in UEFA competitions next season the Daily Record has decided to cover the licence issue that seems to have paralysed the SFA.
In order to have a semblance of Fair Play UEFA insists that clubs taking part in their competitions can’t have more than 5m euros of debt over a three year period.
Sevco were well over that threshold last season but were knocked out in the first round of the Europa League by Progres Niederkorn which halted any enquiry from UEFA.
Reporting on a Q and A will Hearts forum Jambos Kickback the Record states: “The FFP regulations were established by UEFA seven years ago and updated in 2015 in a bid to prevent clubs spending more than they earn in the pursuit of success. The rules are also designed to stop clubs careering into financial turmoil.
“Clubs failing to meet criteria can be refused a UEFA licence. Budge was asked if Hearts would seek assurances from the SFA that Rangers meet the FFP regulations ahead of next season having “publicly reported substantial losses in each of its five years existence” and given that they are requiring “further funding of £7.2m over the next two seasons as identified in their last accounts”.
From JAMBOS KICKBACK
Will Hearts seek assurances from the SFA that Rangers meet FFP criteria for a UEFA Licence for season 2018/19, given that the company has publicly reported substantial losses in each of its five years existence and requires further funding of £7.2m over the next two seasons as identified in their last accounts?
I would add that Hearts as a member club of the SFA, in conjunction with all other clubs, has a duty to uphold the rules and integrity of the game. In Rangers case, and as a result of their financial record over a number of years, I don’t think that it is enough to accept self-certification by the club. Â
Ann Budge: All I can say is that at Hearts, we have to jump through a lot of hoops to ensure we comply with FFP (Financial Fair Play) rules. We must assume that UEFA does the same with all other clubs and it’s UEFA who decide if a team can play in Europe or not. It’s not a question of whether a club is in debt. It’s a case of, is that club in a position to pay the debt back. We have to complete enormous amounts of paperwork to UEFA, the SFA, the SPFL. When we took over in 2014, we had to attend a lot of meetings to prove we could run a financially viable football club. There is no reason to think Rangers are being treated any differently from any other team in that respect.
The Financial Fair Play rule is also in place to protect domestic competitions to deter clubs from running up unsustainable debts which they hope to recoup from UEFA competitions. This is effectively the business model that Dave King is working to.
Last season Sevco published unaudited interim accounts for the period to 31 December 2016 that claimed existing debt would be converted into shares. No share issue has been made.
In November Sevco published their audited accounts to 30 June 2017 which revealed a £6.7m loss on turnover of £29.2m, the figures for the current season are expected to be much worse with an emergency loan from Close Brothers required in February.
The SFA have still to receive a report from their Compliance Officer into the 2011 UEFA licence issued to Sevco despite having an unpaid and overdue tax bill of £2.8m relating to undeclared payments made to Ronald de Boer and Tore Andre Flo.
Stewart Regan requested that the 2011 licence was reviewed in September 2017, seven months later there has been no further comment on the matter.
CLICK HERE for full Ann Budge Q and A.