FFP financial fair play

[Baaaald]

You can tell it's the international break.

 

[Rugrat]

Brilliant links to a sarcy OP, well done.

To the original poster, have a look in the first link of AZ's post. Check out Bristol City. Spending lots of money does not guarantee success, does it? I'm personally delighted that my club is not trying to spend beyond its means, if writing off this season due to injuries to key players means doing this then that's football. Better luck next year.

Brizzols absolute wages weren't that much higher than the average but, as a ratio of turnover, were because their revenue is crap. Fact is the three teams promoted had the highest wage bills along with Leicester.

I can't see any reason why that trend wouldn't continue, and the hope for clubs without parachutes would be to sneak a play off place and pray!

 

[mikeyjh]

Can somebody please explain how this works because I'm confused.

We had an average attendance of over 26000 last year but can't afford to buy anybody yet bournemouth averaged abouth 8000 & are spending money as if it is going out of fashion.

I'm not going to try and explain FFP but I think there are 2 obvious points.

1 - It doesn't matter how big crowds are if expenses are too high. Crap analogy but I could set up a company selling Rolex watches for 20% less than anyone else, I'd sell shed loads, the sales figures would look great, but I'd still be making big losses.

2 - The acceptable losses need to be made up from somewhere and where's the > £8m going to come from?

 

[Dave the OAP]

Interesting from that article Swiss ramble, that he thinks Peterborough had the most robust financial model, yet they were relegated the next season!

It actually just shows that how the parachute payments skew the figures so much they almost become meaningless.

 

[Icy Gull]

Interesting from that article Swiss ramble, that he thinks Peterborough had the most robust financial model, yet they were relegated the next season!

It actually just shows that how the parachute payments skew the figures so much they almost become meaningless.

Peterborough are a fantastic example of a team with small gates punching way above their weight year in year out. they yo yo between the Championship and League One and everytime getting a bit closer to staying up in the Championship. Lots of goals scored, attractive football, promotion or relegation every season and entertaining the fans. Never a dull moment as a Peterborough fan with ability to get players on the cheap and sell them for ridiculous prices. Setting League One alight this season too, they will probably be back in the Championship next season

 

[Creaky]

Personally I see nothing wrong with providing a club with funds via equity purchase - or indeed other schemes such as sponsorship deals.

These do not increase the liability of the club - where existing loans are converted into equity, for example with BHAFC, it actually reduces those liabilities and IMO this should be encouraged especially as one of the stated aims of FFP is to make clubs commercially viable.

Commercially non-viable loans, either from individuals or banks and other commercial organisations are the biggest 'threat' to the stability of clubs and have been the cause of many clubs failures - equity purchase and 'gifts' via schemes such as sponsorship deals do not threaten the financial well being of individual clubs.

Much has been made of FFP aiming to reduce player wage demands - this strikes me as fundamentally wrong - if I have an ability, (whether that be sporting or in any other field), what right does some organisation have to try and reduce or cap the income I can achieve from selling this. If bus companies got together and agreed the maximum they would pay their drivers and actually colluded to reduce the current wages then you could expect an outcry over this and quite likely legal action being taken against the companies.

I'm all in favour of a system that reduces the existing liabilities of clubs and more importantly preventing those liabilities from increasing but FFP does neither. In fact it encourages clubs to increase their liabilities by exempting loans to the club for infrastructure improvement from their financial calculations.

It is debt that threatens the future of a club not gifts.

 

[theonesmith]

Brizzols absolute wages weren't that much higher than the average but, as a ratio of turnover, were because their revenue is crap. Fact is the three teams promoted had the highest wage bills along with Leicester.

That's a very fair point, I hadn't considered that..

 

[KZNSeagull]

Personally I see nothing wrong with providing a club with funds via equity purchase - or indeed other schemes such as sponsorship deals.

These do not increase the liability of the club - where existing loans are converted into equity, for example with BHAFC, it actually reduces those liabilities and IMO this should be encouraged especially as one of the stated aims of FFP is to make clubs commercially viable.

Commercially non-viable loans, either from individuals or banks and other commercial organisations are the biggest 'threat' to the stability of clubs and have been the cause of many clubs failures - equity purchase and 'gifts' via schemes such as sponsorship deals do not threaten the financial well being of individual clubs.

Much has been made of FFP aiming to reduce player wage demands - this strikes me as fundamentally wrong - if I have an ability, (whether that be sporting or in any other field), what right does some organisation have to try and reduce or cap the income I can achieve from selling this. If bus companies got together and agreed the maximum they would pay their drivers and actually colluded to reduce the current wages then you could expect an outcry over this and quite likely legal action being taken against the companies.

I'm all in favour of a system that reduces the existing liabilities of clubs and more importantly preventing those liabilities from increasing but FFP does neither. In fact it encourages clubs to increase their liabilities by exempting loans to the club for infrastructure improvement from their financial calculations.

It is debt that threatens the future of a club not gifts.

And the biggest cause of debt is clubs paying extortionate wages in an attempt to get the riches of the Premier League. There is nothing wrong with debt, as long as you can service it. Having rich sugar daddies to service it is all well and good, but what happens when that sugar daddy gets fed up and walks away?

 

[Tricky Dicky]

Thirty seven pages, three flounces, two " you are a cxxt" twelve " we know better than you" and one cantankerous old git acting all superior.
!

So, a usual NSC thread on any subject, then.

 

[Creaky]

And the biggest cause of debt is clubs paying extortionate wages in an attempt to get the riches of the Premier League. There is nothing wrong with debt, as long as you can service it. Having rich sugar daddies to service it is all well and good, but what happens when that sugar daddy gets fed up and walks away?

I would agree with you but that is bad management plain and simple - blame the clubs owners/administrators for that - not other clubs nor the players. If an owner, or anyone else, wants to donate money to pay those high wages, then fine, just limit the clubs ability to borrow money to do so - if FFP were based on the difference between liabilities and assets rather than between income and expenditure then maybe its penalties would be more justifiable. Basing it on income and expenditure but then excluding certain types of both, (infrastructure and gifts), as well as "allowing" a fixed level of loss, appears to make little sense as the only impact I can see that it will have on the financial viability of a club is to decrease this by allowing an increase in debt.

Serviceable debt is fine but it is only truly serviceable if a club is making a profit and is projected to do so through the life of the debt.

 

[Husty]

If reading NSC semi regularly is 12 hours a day then no I don't.

I have obstacles preventing me from doing that

(a) a job
(b) a wife
(c) a child

But thank you for your well informed answer to my question

Ahh yes that classic excuse for posting something moronic on NSC, 'I have a life and don't spend 12 hours a day on here.'