Paul Barber on today's FFP vote

[spanish flair]

Walton, Ince, Caskey, March, Dunk - to name a couple of our young talented players around the first team

All signed professional forms under Gus I believe?

 

[Rugrat]

Why shouldn't the Premier League look after it's best interests, and those of it's 'employees'.

The obvious question is:-
'Why does the Premier League exist?'.

Sadly though that decision can't be undone, so we are stuck in the ludicrous position of have 5 governing bodies (if you include UEFA & FIFA) having a say over English football, all with very separate agendas.

Of course they would, they were established to syphon as much money out of football (in its broadest sense) and channel it to a privileged few. The horse has bolted and yes, we're stuck with it, ad infinitum

 

[Stat Brother]

all signed professional forms under gus i believe?

give

it

up.

 

[TWOCHOICEStom]

What's the point of FFP if you can rack up 13 million in debts a year? How does this achieve the stated aims of FFP? And Bloom and Barber have both stated they support the aims of FFP and sustainability then go and vote for this increase. I feel a bit conned.

Totally agree.

Looks to me as if the clubs see it as next to impossible to get promoted by having debts of less than 6 million, they've realised this over the last year and have backtracked. 'Sod sustainability if it means we haven't got a chance of going up' in other words.

 

[mona]

I have an idea on how to make FFP a little fairer ( and maybe PB might take it up as he obviously reads these threads ). In the same way that some expenditure is excluded from the FFP accounts why not do the same with income - i.e. when it comes to the FFP accounts parachute payments don't count. If a club makes an 'unacceptable' loss before parachute payments are taken into account then they are punished. If a club is in receipt of parachute payments then the punishment is a fine rather than a transfer embargo.

Just an idea and I await to be shot down in flames because there is a major flaw in it.

I think that's an excellent idea.

 

[Peter Grummit]

I left out wage caps as I just don't see it as viable from the Championship upwards where the market for the better players extends far beyond the reaches of the Football League.

I don't think it can be dismissed out of hand.

It depends on what level the caps are set. Because the PL pay more than elsewhere (as a whole) there is some headroom for restraint without losing ALL the decent players. If a few mercenaries want to beggar off to Russia, Monaco, wherever, well you won't find me complaining. A wage cap would also
- give more chances to home-grown talent with longer term benefits for the national team
- remove the ridiculous position of overpaid players sat on the bench or in the DS

One thing in its favour is that the owners would benefit and therefore be inclined to vote for it.

It's worth debating, at least.

PG

 

[Mattywerewolf]

I have an idea on how to make FFP a little fairer ( and maybe PB might take it up as he obviously reads these threads ). In the same way that some expenditure is excluded from the FFP accounts why not do the same with income - i.e. when it comes to the FFP accounts parachute payments don't count. If a club makes an 'unacceptable' loss before parachute payments are taken into account then they are punished. If a club is in receipt of parachute payments then the punishment is a fine rather than a transfer embargo.

Just an idea and I await to be shot down in flames because there is a major flaw in it.

I think this could work as long as you match the parachute payments with the players wages they are supposed to cover and strip out any excess payment above this from the FFP calculation. Otherwise all relegated clubs would have the payment immediately stripped away again

 

[father_and_son]

For BHA not a chance of ever making a profit outside of the Prem. Unlikely within it perhaps but hope we give it a go and see what happens!

There's a reason that the PL clubs have a much higher threshold than the one agreed for the Championship yesterday (£105m vs £39m over 3yrs). Its because almost all of the PL clubs lose much bigger sums of money than they did before they were promoted.

There are a handful of PL clubs actually generating an operating profit. Those that do are almost exclusively the internationally recognised "brands" who have commercial revenues coming in from overseas that other clubs can only dream off. This is why both Hull and Cardiff have been thrown into turmoil by their respective owners, because both of them see that the only way to actually make any money from this sport (apart from asset stripping and selling the club down the river) is to work hard to join this elite group. (I disagree with the actions of both men, but I do see what they are trying to do)

The PL is not a way to make a profit in football... its a way to make a bigger loss!

There are other ways to make money... capital appreciation can offset operating costs... so an owner could, say, afford to pump £6-8 million a year into a club if he knew that just holding on to the club long enough and doing "ok" means he can sell it at a profit. This is no different to regularly maintaining your house. You spend money regularly that you aren't going to get back, on maintenance, but you hope that it means that when you do sell, you have made a profit overall.

 

[Rugrat]

There's a reason that the PL clubs have a much higher threshold than the one agreed for the Championship yesterday (£105m vs £39m over 3yrs). Its because almost all of the PL clubs lose much bigger sums of money than they did before they were promoted.

There are a handful of PL clubs actually generating an operating profit. Those that do are almost exclusively the internationally recognised "brands" who have commercial revenues coming in from overseas that other clubs can only dream off. This is why both Hull and Cardiff have been thrown into turmoil by their respective owners, because both of them see that the only way to actually make any money from this sport (apart from asset stripping and selling the club down the river) is to work hard to join this elite group. (I disagree with the actions of both men, but I do see what they are trying to do)

The PL is not a way to make a profit in football... its a way to make a bigger loss!

There are other ways to make money... capital appreciation can offset operating costs... so an owner could, say, afford to pump £6-8 million a year into a club if he knew that just holding on to the club long enough and doing "ok" means he can sell it at a profit. This is no different to regularly maintaining your house. You spend money regularly that you aren't going to get back, on maintenance, but you hope that it means that when you do sell, you have made a profit overall.

I understand all of that and agree with most.

I don't know that the handful of clubs generating a profit are the "branded" ones but certainly all those with a global brand appear to be doing OK.

As for others and without reference anywhere I thought a few were doing OK. I'll exclude the loony tune foreigners spending like mad but some of the others of the likes of WBA, Stoke, Everton were doing OK. Not making much maybe but not losing much.

Certainly for a club like ours I can't see us ever doing anything other than losing money outside the Prem but within it I think we can follow the approach of some of these more prudent clubs.

Also take your point re capital appreciation, but I'm not sure that pumping gazillions into purchasing and paying players always enhances the value of a club (QPR being a good example)

 

[father_and_son]

I don't think it can be dismissed out of hand.

It depends on what level the caps are set. Because the PL pay more than elsewhere (as a whole) there is some headroom for restraint without losing ALL the decent players. If a few mercenaries want to beggar off to Russia, Monaco, wherever, well you won't find me complaining. A wage cap would also
- give more chances to home-grown talent with longer term benefits for the national team
- remove the ridiculous position of overpaid players sat on the bench or in the DS

One thing in its favour is that the owners would benefit and therefore be inclined to vote for it.

It's worth debating, at least.

PG

Agree... worth debating but it isn't the solution. For clubs such as Chelsea, the "ridiculous position of overpaid players sat on the bench or in the DS" is a commercial decision. For every 18yo paid £20k a week to stay in their DS squad is a talented youngster than isn't playing AGAINST them in the league. A wage cap alone would not stop this ridiculous, but understandable situation. It fact, it would make it easier for these rich clubs to deny talent to other teams. If there were a £5k wage limit on 18yo's then the same money spent paying for one potential superstar to NOT play can be used to stop 4. If the club is rich enough and the youngsters mercenary enough (and at 18yo I'll bet even the most talented players have a price that they WON'T play football for!) and the rules allow them to do this, then its a good commercial decision which helps them retain their position in the elite club at the very top.

Add a wage cap and you then have to apply limits not just to the first team squad size, but to the club as a whole (otherwise the clubs can use the extra cash freed up to hoard young players!). If you restrict the size of everyone's academy/dev squad/youth team/etc, then you start to squeeze the young talent you were trying to bring through. If Chelsea have, say, 30 places in their whole academy set up, then they won't nuture home-grown talent, they'll use the 30 slots to block their rivals from gaining access to the best talent.

Tinkering at the edges doesn't work, this one one tiny part of a wholesale reform which is needed to manage a steady deflation of the football bubble as they try to avoid the inevitable burst which will come if nothing is done. Trouble is none of the "regulators" have the balls to take on the clubs!





The reason the PL/FL/FA can't act on wages is that they do see the consequences

 

[father_and_son]

Also take your point re capital appreciation, but I'm not sure that pumping gazillions into purchasing and paying players always enhances the value of a club (QPR being a good example)

I don't think our opinions are a million miles apart.


The last comment was actually a reference to what I think Tony is doing (or at least holding as a plan B) rather than the crazy "spend, spend, spend" of QPR.

TB has pumped undeniably large quantities of cash in BHA, but the majority of what he's spent have tangible "bricks and mortar" value that will appreciate over time. I think that the sum of the parts of this club would be valued more favourably in comparison to, say, the current favourite whipping boy of this forum, B'mouth. The current resale value of their club is tied heavily to "goodwill" and other transient factors, whereas we have a more solid long term asset base.


I personally know two business men who have been involved in plans to buy football clubs. One looked at Brighton and one looked at B'mouth and both wanted to do what TB has done for the respective clubs but, although both are worth tens of millions, neither has deep enough pockets to play Tony's game properly and so openly admit that their ambitions were largely theoretical.

 

[Gwylan]

Tinkering at the edges doesn't work, this one one tiny part of a wholesale reform which is needed to manage a steady deflation of the football bubble as they try to avoid the inevitable burst which will come if nothing is done.

Why is there going to be inevitable burst? I've been watching football for nearly 50 years and there have periodic warnings of a burst. In the time I've been watching just one league team (Maidstone) has gone bust - although a few more have since leaving the league - that scarcely strikes me as industry teetering on edge. I'd say a failure rate of 1 or 2 percent (at most) in 50 years compares well with most industries.

Why should there be a burst in the future? The PL is marketing way beyond its normal base to brand-new markets. All clubs seem to attract a buyer - even permanent basket-case Leeds was bought this year and already has new buyers sniffing around. Sky is now facing competition from BT so is pumping more money into the game. There are more sponsorship opportunities etc

I'm not saying that it's a great situation (I don't think it is) but I can't see anything to stop more money coming into the game and there's certainly no "inevitable" burst

 

[Peter Grummit]

Agree... worth debating but it isn't the solution. For clubs such as Chelsea, the "ridiculous position of overpaid players sat on the bench or in the DS" is a commercial decision. For every 18yo paid £20k a week to stay in their DS squad is a talented youngster than isn't playing AGAINST them in the league. A wage cap alone would not stop this ridiculous, but understandable situation. It fact, it would make it easier for these rich clubs to deny talent to other teams. If there were a £5k wage limit on 18yo's then the same money spent paying for one potential superstar to NOT play can be used to stop 4. If the club is rich enough and the youngsters mercenary enough (and at 18yo I'll bet even the most talented players have a price that they WON'T play football for!) and the rules allow them to do this, then its a good commercial decision which helps them retain their position in the elite club at the very top.

Add a wage cap and you then have to apply limits not just to the first team squad size, but to the club as a whole (otherwise the clubs can use the extra cash freed up to hoard young players!). If you restrict the size of everyone's academy/dev squad/youth team/etc, then you start to squeeze the young talent you were trying to bring through. If Chelsea have, say, 30 places in their whole academy set up, then they won't nuture home-grown talent, they'll use the 30 slots to block their rivals from gaining access to the best talent.

Tinkering at the edges doesn't work, this one one tiny part of a wholesale reform which is needed to manage a steady deflation of the football bubble as they try to avoid the inevitable burst which will come if nothing is done. Trouble is none of the "regulators" have the balls to take on the clubs!





The reason the PL/FL/FA can't act on wages is that they do see the consequences

The salary cap would be a total not per player. Teams could keep more players but every £ they payed them would be less they could pay their stars.

I don't think Chelsea acting in their own commercial interest is the issue. The case for a cap is because individual clubs acting in their own interests is not consistent with the collective good of football. Surely what all but the existing elite want is a more level playing field, to better reward good tactics, teamwork and spirit rather than being able to buy success?

PG

 

[father_and_son]

Why is there going to be inevitable burst? I've been watching football for nearly 50 years and there have periodic warnings of a burst. In the time I've been watching just one league team (Maidstone) has gone bust - although a few more have since leaving the league - that scarcely strikes me as industry teetering on edge. I'd say a failure rate of 1 or 2 percent (at most) in 50 years compares well with most industries.

Why should there be a burst in the future? The PL is marketing way beyond its normal base to brand-new markets. All clubs seem to attract a buyer - even permanent basket-case Leeds was bought this year and already has new buyers sniffing around. Sky is now facing competition from BT so is pumping more money into the game. There are more sponsorship opportunities etc

I'm not saying that it's a great situation (I don't think it is) but I can't see anything to stop more money coming into the game and there's certainly no "inevitable" burst

What if, for some reason completely unrelated to football, Sky stopped pumping obscene amounts of cash into the game for TV rights (could be legislation over perceived monopolies or perhaps someone has been fiddling their pension fund or whatever).

If the money were to stop overnight (and assuming BT and the terrestrial channels would offer a tiny fraction of what Sky has been paying) then I'm pretty sure that this would count as a "burst" for the current football bubble. Without this money, a huge proportion of PL clubs would be unsustainable because they are tied to player contracts that they can't meet without the TV cash.

The directors of those clubs would be legally obliged to declare they can't operate as a going concern and, to avoid the consequences of breaching the player contracts, would have to put themselves in administration. A handful would survive but a number wouldn't and the knock-on impact them would exasperate the loss of value in the others creating the football equivalent of a recession.

[It isn't as simple as I've made out above and I'm aware their are other companies buying rights to PL matches outside of the UK but the price they pay is heavily influenced by the "valuation" created by the amount Sky pay. The loss of the UK TV rights owner would dramatically cut the worldwide price for PL rights because suddenly the buyers have a much stronger negotiating position that the seller. Sponsors would back out as audience targets were not being met allowing them to invoke get-out clauses. The macro-economic picture would be heavily influenced by the micro-economics of the Sky deal and this is the very nature of bubbles, a small but significant set back accelerates quickly into a collapse because there is no solid foundations for the valuations being applied in a bubble market.]

 

[Gwylan]

What if, for some reason completely unrelated to football, Sky stopped pumping obscene amounts of cash into the game for TV rights ...

Yes, that could happen but I don't think it's "inevitable".

I don't think the scenario you paint is likely either. Sky needs football as much as football needs Sky - its business plan is based around football rights so the company would be very loath to pull out. It's possible that it could scale back but the PL also sells a lot of TV rights to Asia now so I don't think the loss would be massive. Besides, these contracts are negotiated a couple of years in advance so clubs would know that less income would be coming in and adjust accordingly.

I'm sure there are other factors that could affect the funding too and yes, football could rethink its finances, but there's nothing "inevitable" about this

 

[Del Fenner]

Nobody is expecting him to write off his investment, especially him but he has always said that option is available if it's needed. It also would not be a write off. Maybe he could look at the administration option for the club which seems to have worked for a number of clubs. Any tips for him on that?

I wouldn't know, as I have no experience of running a football club. Perhaps a chat with Mark Goldberg and Simon Jordan will assure him that such a course of action would be a sure-fire way to lose him tens of millions from his personal fortune. After all, SJ was by far the biggest creditor when Agilo pulled the plug.

In any case, it's not as if Brighton are unfamiliar with such situations. The crisis in 1997 predated the existence of administration, and creditors were paid a fraction of Brighton's debt. No doubt some relevant knowledge and expertise already exists in the BHAFC community.

 

[seagullsovergrimsby]

In any case, it's not as if Brighton are unfamiliar with such situations. The crisis in 1997 predated the existence of administration, and creditors were paid a fraction of Brighton's debt. No doubt some relevant knowledge and expertise already exists in the BHAFC community.

As pointed out in previous threads on here over the years the creditors were dealt with on a case by case basis , you imply they got back 1p or 2p in the £ whereas anecdotal evidence suggest businesses were told they could be paid back half or more of what was owed as opposed to nothing if the club went bust in the very short term. We're only talking about a dozen or so businesses owed hundreds of £ not a shedload of creditors owed £30M to £40M who only got back 1p in the £.

 

[Del Fenner]

As pointed out in previous threads on here over the years the creditors were dealt with on a case by case basis , you imply they got back 1p or 2p in the £ whereas anecdotal evidence suggest businesses were told they could be paid back half or more of what was owed as opposed to nothing if the club went bust in the very short term. We're only talking about a dozen or so businesses owed hundreds of £ not a shedload of creditors owed £30M to £40M who only got back 1p in the £.

Hello SC, I'm a long term admirer of your craft. Expertly done.

 

[spanish flair]

I wouldn't know, as I have no experience of running a football club. Perhaps a chat with Mark Goldberg and Simon Jordan will assure him that such a course of action would be a sure-fire way to lose him tens of millions from his personal fortune. After all, SJ was by far the biggest creditor when Agilo pulled the plug.

In any case, it's not as if Brighton are unfamiliar with such situations. The crisis in 1997 predated the existence of administration, and creditors were paid a fraction of Brighton's debt. No doubt some relevant knowledge and expertise already exists in the BHAFC community.

Are you sure about any of that?

Jordon was owed £7.8 million but Lloyds bank were owed £10.8 million on the creditors list which I can give you the link for if you require.

Can you give me any link to back up your claims that shows our creditors and how much was owed by the club to these people?

 

[Herr Tubthumper]

This definitely wouldn't happen in Germany.