QPR’s financial crisis underlines the perils of a Premier League return
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With a net debt of £177m revealed last week, Rangers are nowhere near ready for a return to English football’s top flight
Tony Fernandes finds himself in an almost impossible position. In light of QPR’s staggering level of debt, as revealed in last week’s financial figures, the chairman insisted that promotion to the Premier League is “not critical” to their long-term ambition. He may have to accept that a return to the top flight is the very last thing the club needs.
The scale of the financial problems facing QPR is bewildering. The figures returned by QPR Holdings Ltd for the 2012-13 season revealed a net debt of £177 million, with £65.4m lost as they were relegated to the Championship and a wage bill of £78m.
The permitted loss for clubs under the Football League’s financial fair play rule is just £8m.
Here, as if it were needed, was devastating evidence of the damage of QPR’s reckless spending since Fernandes became chairman in August 2011 – the true cost of extravagant signings on astronomical wages by a club which never seemed to seriously consider relegation as a possibility.
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Only Chelsea and Manchester City have ever recorded higher losses in a single season. The repercussions will be long-lasting.
Under FFP rules, sanctions will not apply to the 2012-13 season, but they will for the current campaign.
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QPR do not have to file those figures until December. When they do, it is highly unlikely that their losses will be in line with FFP regulations, given that the figures released last week were for the period before QPR signed Charlie Austin, Matt Phillips and Danny Simpson, as well as the likes of Yossi Benayoun and Niko Kranjcar on loan.
That leaves the club facing two eventualities, each unpalatable and potentially damaging.
Should QPR miss out on promotion – not impossible given their recent inconsistent league form – they are likely to face a transfer embargo from the January 2015 window. Such an embargo would remain in place until QPR could provide financial information proving they can meet FFP.
Alternatively, if they are promoted, they will receive a fine, the financial fair play tax, which is assessed on a sliding scale. That penalty is estimated to be in the region of £47m.
While a fine may seem infinitely preferable to a transfer embargo, and will be softened to an extent by broadcasting rights earnings, structurally QPR are not ready for the Premier League.
Their squad is composed largely of loan players or players whose contracts expire at the end of the season. Many are over 30 and approaching the final years of their career.
In order to reduce the debt the club will have to sell an almost unprecedented number of players this summer. That list is likely to include their highest earners – the likes of Shaun Wright-Phillips, Jermaine Jenas, Rob Green and Bobby Zamora. Others, including Junior Hoilett, Phillips and Austin, could also find themselves moving on if QPR are to reverse the trend.
The board will also have to negotiate permanent deals for Loic Remy, Adel Taarabt, Esteban Granero, Stephane Mbia and Julio Cesar. Yet another stressful summer awaits.
And then there is Harry Redknapp, whose future as manager remains far from certain. Despite QPR’s current poor league form, Fernandes and his chief executive Phil Beard have dismissed all notions that Redknapp’s position is under threat.
But with his ongoing knee problem potentially requiring a second operation in the summer, there have been suggestions that Redknapp could seek to leave the club on his own terms.
None of which blesses QPR with the stability which is so often talked about but which remains a forlorn hope at Loftus Road.
Ill-equipped for the Premier League, a further season in the Championship, albeit with a likely transfer embargo, would at least help the club to find its feet after staggering blindly for so long under Fernandes.
For now, Fernandes appears to be in a no-win situation.