We're getting almost into another thread, about the structure , governance and probity of the PL board.
As for FFP, I wonder if normal competition rules are inadequate for sports. What would stop a Musk spending billions on one team? Or several teams.
Stagecoach did predatory pricing to take over smaller bus companies. The law should have stopped it. Companies should not use a dominant position to exclude new entrants or smaller competitors. But what about when you need competitors to be viable in order to operate? In a competition, for instance?
That is indeed a whole new area, but I've asked the question before about the nature of financial regulation in football. What is it for? What's the objective?
Is it to ensure a genuinely level financial playing field? No one really wants a scenario like Germany or France, where the wealthiest club by far generally dominates the league. Obviously that probably applies to us at the moment but there are a number of clubs who stand apart from the rest financially, with united & Chelsea showing that spending does not necessarily equate to success.
If that's the objective then you have to look at revenue sharing and spending caps. The notion of 'anchoring' is not one that I'm comfortable with. Why allow the lowest earning clubs to restrict the spending of the successful ones? You're handicapping clubs like us and Liverpool by doing that.
Is it to ensure genuine financial sustainability? I've said many times that the current PSR/FFP regimes, with the focus on historic profits and losses, aren't fit for that purpose. The squad cost rules are better, but still don't answer the fundamental questions around debt, which has generally been the main factor in club failure. We could have easily gone into administration in summer 2008, not because of historic losses, but because of cashflow issues and our inability to meet the £15m liability for the previous summer's transfers. FFP/PSR, even with squad cost limits, still won't prevent that liability-based scenario.
To use your example, if Musk took over Ipswich, and proposed a £1bn sponsorship over 5 years, it should fail the PL's FMV test. I don't think any reasonable person would have a problem with that. If he lent them a billion, there would be no regulatory scrutiny though, although they could still only spend so much, based on their revenue, expenses and squad cost. You could argue there should be some leeway though. But if he did lend them a substantial sum, regardless of whether they could spend it, then changed his mind a couple of years later and demanded it back, they'd be screwed, possibly terminally. It happened with Brooks Mileson at Gretna (although he fell seriously ill). Why are there no rules to mitigate impacts like this?
I'll finish with the question I started with, which is what is financial regulation trying to achieve? We've never had a satisfactory answer to this question.
