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Article: Paul Barber on parachute payments and Albion finance
- Thread starter El Presidente
- Start date
Hotchilidog
Well-known member
- Jan 24, 2009
- 9,718
Yet another informative and excellent read. Thanks very much.
KZNSeagull
Well-known member
Very good article, again.
Just because relegated clubs are generally not seeing the benefit of parachute payments reflected in their league position, it is still 25m quid in their first season that they do not have to find from elsewhere. You also have to factor in that the relegated team are, in effect, a bunch of overpaid charlies used to losing and it takes a while to get out of that mentality. Give that 25m to a team on the up and they would do a hell of a lot more with it. It is a huge advantage.
Just because relegated clubs are generally not seeing the benefit of parachute payments reflected in their league position, it is still 25m quid in their first season that they do not have to find from elsewhere. You also have to factor in that the relegated team are, in effect, a bunch of overpaid charlies used to losing and it takes a while to get out of that mentality. Give that 25m to a team on the up and they would do a hell of a lot more with it. It is a huge advantage.
Would it be fair to summarise the reasons given for BHAFC voting for the 'new' FFP rules as threefold?
1) Parachute Payments will be made for three years rather than four.
2) Solidarity Payments will be formalised as a percentage of TV royalty payments received.
3) Alignment of the Premier League and Championship FFP rules.
On the face of it strong arguments for voting in the new system BUT isn't it rather premature to do so at the present?
1) No figures have yet been decided on the parachute payments - If it is the same total as the current 'four year' figure paid over three years then I would think that would exacerbate the current problems with these payments rather than relieve them.
2) Again, as I understand it, no specifics have been put forward nor agreed on regarding the solidarity payments.
3) Alignment of the two league's rules on the face of it appears to be a 'good thing' but yet again no specifics have been drawn up regarding the synchronising of penalties for breaching the rules - simply 'suggestions' of what might happen.
All in all voting for and the introduction of the 'new' rules without those specifics being decided appears to be somewhat hasty - why could the vote not have been delayed by a 'No Vote' until they were decided?
I understood that the main tenet for the introduction of FFP was to ensure the sound financial footing of football clubs in the League - essentially by forcing the cutting of costs, principally made up of payments to players. None of the recent changes strike me as improving the effectiveness of FFP in that regard - quite the opposite!
1) Parachute Payments will be made for three years rather than four.
2) Solidarity Payments will be formalised as a percentage of TV royalty payments received.
3) Alignment of the Premier League and Championship FFP rules.
On the face of it strong arguments for voting in the new system BUT isn't it rather premature to do so at the present?
1) No figures have yet been decided on the parachute payments - If it is the same total as the current 'four year' figure paid over three years then I would think that would exacerbate the current problems with these payments rather than relieve them.
2) Again, as I understand it, no specifics have been put forward nor agreed on regarding the solidarity payments.
3) Alignment of the two league's rules on the face of it appears to be a 'good thing' but yet again no specifics have been drawn up regarding the synchronising of penalties for breaching the rules - simply 'suggestions' of what might happen.
All in all voting for and the introduction of the 'new' rules without those specifics being decided appears to be somewhat hasty - why could the vote not have been delayed by a 'No Vote' until they were decided?
I understood that the main tenet for the introduction of FFP was to ensure the sound financial footing of football clubs in the League - essentially by forcing the cutting of costs, principally made up of payments to players. None of the recent changes strike me as improving the effectiveness of FFP in that regard - quite the opposite!
- Aug 8, 2005
- 27,828
Did you ask what effect having 16,000 through the turnstile rather than 23,000 if the 23,000 has all paid for a ticket?
It's a serious question as I wonder if the financial ramifcation is as great as it would seem. On the face of it we are losing 7,000 punters who are not paying for pies programmes and drinks etc, but where does that sit in the wider scheme of things.
Clearly if they were not buying the tickets that would be a greater problem, and I guess that is the main issue that would concern them. If things continue a fall in season ticket holders could be quite damaging.
It's a serious question as I wonder if the financial ramifcation is as great as it would seem. On the face of it we are losing 7,000 punters who are not paying for pies programmes and drinks etc, but where does that sit in the wider scheme of things.
Clearly if they were not buying the tickets that would be a greater problem, and I guess that is the main issue that would concern them. If things continue a fall in season ticket holders could be quite damaging.
- Thread starter
- #7
FFP is dead, long live sustainability.
The vote in favour of the changes is conditional on the detailed proposals from the PL, so nothing is confirmed as yet.
None of the reports have seen, ncludng the statement on the Football League's own site, make any suggestion that the vote taken was provisional.
From the Football League's site:-
"Following the Championship’s decision, The Board of The Football League has been given a mandate by its clubs to complete a new financial solidarity arrangement with the Premier League in accordance with that currently under discussion between the two leagues."
Where do you get your information that the recent vote is in any way 'conditional'?
- Thread starter
- #9
Because if you read the FL comment, it says the FL has been given a mandate to complete a financial solidarity arrangement. If negotiations fail, then everything will have to be renegotiated, including the proposed changes.
Thanks El P. Interesting stuff.
Very interested to read that PB has taken his coaching badges. Rather refutes the suggestions from some quarters that he is a purely numbers driven suit with no real interest in football.
Very interested to read that PB has taken his coaching badges. Rather refutes the suggestions from some quarters that he is a purely numbers driven suit with no real interest in football.
Fair enough - I don't read it like that though - in the same way that if a government is given a mandate to do something and they don't do it I wouldn.t expect there to be another vote - simply that the FL had been given instructions to agree terms for a solidarity payment deal, not even any suggestion that the clubs will have to approve any deal they do make!
. . . and what about the parachute payments. This is given as one of the major reasons by PB for voting for the new deal without apparently knowing if these are being reduced in total - not only that but those in receipt of the payments in the first two years of doing so will also be allowed to make greater losses than the rest of the League clubs - there seems to be a major lack of reasoning in that argument to vote for the changes!
For instance were Palace or Sunderland to be relegated at the end of this season then next season they would have to comply with the current regulations limiting overall losses to £5 million whilst receiving a parachute payment that year of £30 million. Were they to be relegated the following season though they would be permitted to make a total loss of £83 million over three years, more than twice the permitted loss of other League clubs on £39 million. Not only that but because parachute payments will be made over a three year period rather than four these could also well increase in the first year.
Personally EP I think you should stand by the last statement in your previous article:-
Whilst on the subject of your last article do you have any information regarding the proportion of losses suffered that have to be financed via equity purchase? It still looks to me that if a club makes a loss of £5 million in the 2016/2017 season, (in line with the old rules), then all of this can be funded via a loan, commercial or otherwise, whilst under the old system £3 million of the loss would have to be funded by way of new equity.
In conclusion I am by no means persuaded that voting for the 'New FFP' is for the 'greater good'.