Fair play rules give relegated Hull City a headache

Hull City, since losing the mantle of being Yorkshire’s sole representative in the Premier League, know all about that. It has been tough going for the East Riding club since May due, in the main, to how the Football League landscape has changed during their short time away.

When Hull went up in 2013, the Allam family’s financial muscle meant the club could afford to lose an eye-watering £27m.

Two years on, however, and the implementation of Financial Fair Play rules by the League has outlawed such an approach.

Instead, Hull and their Championship brethren can post losses of no more than £2m in 2015-16 with additional owner investment capped at £11m.

Any club that fails to stay within this £13m limit can be hit with swingeing punishments, ranging from a transfer embargo to fines similar to the near £60m punishment currently hanging over QPR following their transgressions of 2013-14.

An almighty headache, therefore, at a club that not only spent £43m on new players last term but also had the accompanying inflated wage bill.

Relegation clauses of between 30 and 50 per cent inserted in every player’s contract has helped in bringing down that outlay on salaries but, even so, the Tigers hierarchy have had something of a juggling act to perform in the past couple of months to try and keep the club within the boundaries of FFP while pressing forward with plans for next season.

“The big difference to when we won promotion in 2012-13 is FFP,” admitted vice-chairman Ehab Allam when speaking exclusively to The Yorkshire Post at the end of a week that brought two big-money departures and Steve Bruce being given the green light to kick-start his own recruitment plans.

“Last time, we were able to spend our way out of the League. We lost £27m that season but that just isn’t possible any more. FFP was being phased in when we went up, in that we had to report in line with the regulations. But the penalties only came in after we had won promotion.

“If you look at the spending chart from that year, there were only a couple of newly-relegated clubs along with ourselves who were in the highest band of spending.

“The problem for the relegated clubs was they didn’t get the same performance because of the baggage they were carrying from falling out of the Premier League.

“Now, with the FFP cap in place, there are a far greater number of clubs at a similar level of spending.

“Last year’s Championship is a good example of what FFP has done. There were seven or eight clubs at the very maximum, compared to just three in 2012-13.

“FFP means the way you operate in football is so different to before that you just can’t compare the two. This year, promotion will be about management and not how much you spend. That is probably why the likes of Bournemouth did so well – and Burnley the year before that.

“The days of spending your way to promotion are gone with FFP, now it is how well you are managed.”

The bookmakers seem to believe Hull can bounce straight back in a manner similar to Norwich City a year ago with only big-spending Middlesbrough and Derby County consistently priced at shorter odds to go up than Bruce’s men since the market opened at the start of the summer.

With Hull only starting their own recruitment four days ago – in the process becoming the 72nd and final Football League club to do so this summer – much of the bookies’ confidence must surely be based on the quality of the squad that competed in last season’s Premier League.

Several of those have since moved on. Just this week, Robbie Brady left for Norwich City in a £7m deal as James Chester opted to join West Brom ahead of Leicester City in a transfer that could earn Hull around £8m.

Following on from Tom Ince’s £4.75m departure after Derby matched a buy-out clause in the winger’s contract, the sales represent a healthy boost to a balance sheet that will be markedly smaller now the club is in the Championship.

Further departures are likely with high-earners such as Dame N’Doye, Nikica Jelavic and Abel Hernandez all having made it clear their intention to move on following relegation last May.

Still at the KC for now, all three have had to take a pay cut due to the presence of relegation clauses inserted in their contracts. The size of the cut depends on when signed, with Hull understood to have inserted a 30 per cent reduction in the contracts of arrivals during the 2013-14 season and 40 per cent last term. A couple of the later arrivals have had to forego half what they earned in the Premier League.

Such planning was pivotal at a club who learned the hard way in 2010 the potential ruinous effect of not having such clauses, Jimmy Bullard not only retaining his £45,000 per week wages in the Championship but also being guaranteed a pay rise every subsequent 10 games.

Six months after that relegation and with debt levels by now out of control, the Allams first became involved at Hull so it is no surprise that the same mistake was not made during the club’s recent stay among the elite. There has, though, been an unwanted consequence to such caution.

“It does give incentives to players to look elsewhere as no-one wants a pay cut,” admits Ehab Allam. “The downside is if you don’t have them then you are in even more financial trouble so it was right to have them.

“But it does make things easier for other clubs in terms of coming in and turning heads. They can offer what a player was on in the Premier League. That is a fact of life.

“We made contract offers, within FFP parameters, to certain players. But we had just been relegated and are still dealing with the legacy of big wages and big transfers. Spending £43m in transfers last year restricts what we can do. If we had stayed up, we would have had more flexibility.”