In Depth

Liverpool FFP probe: three ways the Reds could escape

Anfield under investigation over its finances but the club believe they can avoid punishment

Uefa has confirmed that Liverpool are one of seven clubs under investigation for possible violation of Financial Fair Play rules. The Uefa regulations stipulate that clubs competing in Europe must restrict losses to £35.4m over two seasons but, according to BBC Sport, the Reds have incurred "losses of £49.8m in 2012-13 and £41m in 2011-12". Consequently they are one of the clubs who risk being punished for their profligacy.

Monaco, Inter Milan, Roma, Besiktas, Sporting Lisbon and Krasnodar are the other clubs being investigated by Uefa.

The next step in the process is a submission by the seven clubs next month of "additional monitoring information", which will be assessed by Uefa before they decide in November whether to impose any punishment.

Uefa also said an undisclosed amount of prize money destined for five clubs playing in European competitions this season would be withheld due to "overdue payables" owed other clubs, employees or their national tax authorities. The clubs in question - Turkey's Bursaspor, Montenegrin side Podgorica, Lithuania's Ekranas and the Romanian teams Cluj and Astra Giurgi – will be investigated further in the coming weeks and a final judgment will be delivered at the end of the year.

Liverpool are not the first Premier League club to face FFP sanctions, Manchester City have already fallen foul of the rules, the Sky Blues received a £49m fine (along with Paris Saint-Germain) in May as well having the size of their Champions League squad reduced from 25 players to 21.

Asked about the news, Liverpool manager Brendan Rodgers said: "It's obviously something that will be dealt with by the directors. It's something we're comfortable with because we're great advocates of Financial Fair Play. It's ongoing with the club."

There are several reasons the Anfield club believe they will escape sanction.

Commercial income

The BBC says that Liverpool are "confident" they did not breach FFP rules because of a number of lucrative commercial deals signed in the past year-and-a-half. "Money raised commercially can be offset against the £90m losses, which can be reduced further if Liverpool show they have invested in youth development, infrastructure and community projects" explains the BBC.

Hicks legacy

Additionally, Sky Sports says that Liverpool will "argue that a £35m chunk of their 2011-12 deficit was attached to former co-owner Tom Hicks' aborted plans for a new stadium on Stanley Park".

FFP challenge

The news comes just 24 hours after it was announced that an independent Manchester City fans' group had joined a legal challenge to Uefa's FFP regulations. The  initial complaint was lodged with the European Commission last year on behalf of players' agent Daniel Striani and lawyer Jean-Louis Dupont, who won the landmark Bosman Ruling.

City fans believe there is a case to be heard. They claim that the rules do not create a level playing field but act as "a prohibition... that prevents ambitious owners" from developing their clubs. And they could have a point, says the BBC's Matt Slater. "There is no real debate about Uefa's Financial Fair Play rules breaking EU law: they do, emphatically," he says. "The debate is whether this exemption from the free market is proportionate to the risks associated with spendthrift clubs leaving trails of debt and destruction behind."

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