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May 20, 2009

Football League: Transfer embargo for tax debts

Football League clubs face a transfer embargo if they fail to pay tax on time, in one of the proposed changes which will also call for money from the Premier League to reflect wage increases.

The new measures, which also asks for all clubs to be involved in the next television deal, are included in a letter from Lord Mawhinney to Secretary of State Andy Burnham after Government calls for football to "reassess its relationship with money''.

Receiving more money from the Premier League may require lengthy negotiations, but the transfer embargo could be ratified much sooner.

"We will propose at our annual meeting next month an initiative which seeks to provide clubs with an incentive to keep up to date with payments to HMRC (Revenue & Customs), PAYE and NI (National Insurance) contributions,'' read the letter.

"If approved, clubs who fall behind (with either current debt or time to pay agreements on historic debt) will be embargoed from signing further players.''

Mawhinney accepts clubs will not agree to a cap on wages but he feels there could be mechanism to combat the "ripple effect'' of high wages at the top end of the sport, possibly with a certain percentage of money filtered down.

"This method would have the advantage of being self-adjusting according to the costs associated with the players in the top flight and also seek to counteract the ripple effect of these costs on the wider domestic football market,'' the letter continued.

Mawhinney's proposal for Football League clubs to be included in the next television deal came in response to the question of how "competitive balance might be improved''.

"Whilst combining properties might initially create some concerns, a subsequent 'bundling' of these rights into a number of packages for the marketplace (similar to the Premier League's current practice) ought to satisfy the competition regulators,'' Mawhinney's letter added.

Other proposals include reopening the transfer window on a domestic level and greater flexibility for clubs to loan younger players.

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