New FFP rules

paddy20
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Re: New FFP rules

by paddy20 » 01 Sep 2020 08:24

Nameless
paddy20 Ok. Using the financials from the holding company we lost 21m in 17/18 and 11.7m in 18/19. So for last season and this basically we have to break even still. Its very likely we lost a lot of money last season so this season we have to make the equivalent of the loss last season. How do we get out of that?


Have you deducted all the allowances ? The FFP figure is not the same as the P&L


Where do we find these? Capital items such as the training ground costs I would have thought would not been in the P/L. What do these allowances consist of?

thanks

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Re: New FFP rules

by Nameless » 01 Sep 2020 08:32

paddy20
Nameless
paddy20 Ok. Using the financials from the holding company we lost 21m in 17/18 and 11.7m in 18/19. So for last season and this basically we have to break even still. Its very likely we lost a lot of money last season so this season we have to make the equivalent of the loss last season. How do we get out of that?


Have you deducted all the allowances ? The FFP figure is not the same as the P&L


Where do we find these? Capital items such as the training ground costs I would have thought would not been in the P/L. What do these allowances consist of?

thanks


There are a number of things- Academy costs, I think cost ofrunning a women’s side, ground improvements. There is a whole section of the EFL regulations which deals with FFP.

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Re: New FFP rules

by Stranded » 01 Sep 2020 08:42

Nameless
paddy20
Nameless
Have you deducted all the allowances ? The FFP figure is not the same as the P&L


Where do we find these? Capital items such as the training ground costs I would have thought would not been in the P/L. What do these allowances consist of?

thanks


There are a number of things- Academy costs, I think cost ofrunning a women’s side, ground improvements. There is a whole section of the EFL regulations which deals with FFP.


Yep, plus charitable costs, community work costs - you can also apply for various other points to be excluded on a case by case basis - I doubt the figures would be hugely lower than what paddy20 posted but they will be lower.

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Re: New FFP rules

by WestYorksRoyal » 01 Sep 2020 09:20

From what I understand of the FFP rule change, doesn’t it just effectively delay shit hitting the fan for us by a year? So if we spend big and go up, great. Spend big and fail and our points deduction would be after we release 20/21 accounts, which would be spring 2022.

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Re: New FFP rules

by Stranded » 01 Sep 2020 09:25

WestYorksRoyal From what I understand of the FFP rule change, doesn’t it just effectively delay shit hitting the fan for us by a year? So if we spend big and go up, great. Spend big and fail and our points deduction would be after we release 20/21 accounts, which would be spring 2022.


Essentially yes but that still kind of makes this year a "free hit", spend and go up all good - spend and not then maybe a fire sale to try and balance the books. I think FFP will likely can delayed again to be honest before disappearing. Without stadium income, or vastly reduced income across the board, hardly any Champ club will be able to hit current targets without selling (and there aren't tons of buyers at the mo).


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Re: New FFP rules

by Nameless » 01 Sep 2020 09:53

Stranded
WestYorksRoyal From what I understand of the FFP rule change, doesn’t it just effectively delay shit hitting the fan for us by a year? So if we spend big and go up, great. Spend big and fail and our points deduction would be after we release 20/21 accounts, which would be spring 2022.


Essentially yes but that still kind of makes this year a "free hit", spend and go up all good - spend and not then maybe a fire sale to try and balance the books. I think FFP will likely can delayed again to be honest before disappearing. Without stadium income, or vastly reduced income across the board, hardly any Champ club will be able to hit current targets without selling (and there aren't tons of buyers at the mo).


And given it’s the clubs that decide the rules essentially it will depend on exactly who is in the division and what state their finances are in....

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Re: New FFP rules

by Sanguine » 01 Sep 2020 11:44

tmesis
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tidus_mi2 No, you can't use owner investment to bypass FFP


Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.

Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.


This is the route to multiple clubs folding, isn't it? New owner decides to float the club £50m in an effort to get promoted. Fails. Leaves. Club is without an owner and the squad is full of overpaid players.

FFP might lend some benefits to bigger clubs but I fully support its aims to make lower league football sustainable.

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Re: New FFP rules

by WestYorksRoyal » 01 Sep 2020 11:56

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Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.

Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.


This is the route to multiple clubs folding, isn't it? New owner decides to float the club £50m in an effort to get promoted. Fails. Leaves. Club is without an owner and the squad is full of overpaid players.

FFP might lend some benefits to bigger clubs but I fully support its aims to make lower league football sustainable.

This. Ultimately it's impossible to have any sort of sustainability rules without giving some benefit to bigger clubs. Which is fine; smaller clubs can still beat them by being smarter.

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Re: New FFP rules

by tmesis » 01 Sep 2020 16:04

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Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.

Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.


This is the route to multiple clubs folding, isn't it? New owner decides to float the club £50m in an effort to get promoted. Fails. Leaves. Club is without an owner and the squad is full of overpaid players.

FFP might lend some benefits to bigger clubs but I fully support its aims to make lower league football sustainable.

The current way would see the owner loaning the club £50 million. I would think that owners knew that money they put in was gone, they might not be so hasty.


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Re: New FFP rules

by Nameless » 01 Sep 2020 16:06

tmesis
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tmesis Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.


This is the route to multiple clubs folding, isn't it? New owner decides to float the club £50m in an effort to get promoted. Fails. Leaves. Club is without an owner and the squad is full of overpaid players.

FFP might lend some benefits to bigger clubs but I fully support its aims to make lower league football sustainable.

The current way would see the owner loaning the club £50 million. I would think that owners knew that money they put in was gone, they might not be so hasty.


And sometimes charging exorbitant rates of interest on the loan....

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Re: New FFP rules

by Mr Angry » 01 Sep 2020 16:20

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Disagree with that part of FFP. There should be a way for owners to invest as much as they want so long as conditions are applied to the “investments” to stop owners, for example, funding through mortgages and loans and not taking responsibility if they “over-reach” themselves.

Yeah. They should be allowed to put money in, effectively as 'sponsorship', but I'd ban the practice of loaning money to clubs. If an owner wishes to bankroll a club, he should do it knowing that the club doesn't owe him that money, and he can't claim it back.


This is the route to multiple clubs folding, isn't it? New owner decides to float the club £50m in an effort to get promoted. Fails. Leaves. Club is without an owner and the squad is full of overpaid players.



I can think of at least 2 examples of something like this happening, and the club subsequently disappearing - Gretna FC and Rushden & Diamonds FC; be careful what you wish for........

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Re: New FFP rules

by Sanguine » 01 Sep 2020 16:32

tmesis The current way would see the owner loaning the club £50 million. I would think that owners knew that money they put in was gone, they might not be so hasty.


I'm not sure any owners put money into league football clubs expecting a return. Outside of the biggest clubs, what examples are there in the last few years? Bournemouth? I'm struggling after that.

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Re: New FFP rules

by SCIAG » 01 Sep 2020 17:17

Sanguine
tmesis The current way would see the owner loaning the club £50 million. I would think that owners knew that money they put in was gone, they might not be so hasty.


I'm not sure any owners put money into league football clubs expecting a return. Outside of the biggest clubs, what examples are there in the last few years? Bournemouth? I'm struggling after that.

A decent share of the PL turn a profit, those like Burnley and Brighton who spend relatively modest sums to finish 15-17th (or higher in Burnley’s case). West Ham sometimes make a bit of money thanks to that stupid ground deal. It’s also very easy to make a profit while getting relegated. Yo-yoing or consistently narrowly surviving might offer a decent ROI but there are much simpler ways to make money...


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Re: New FFP rules

by tmesis » 01 Sep 2020 18:04

Sanguine
tmesis The current way would see the owner loaning the club £50 million. I would think that owners knew that money they put in was gone, they might not be so hasty.


I'm not sure any owners put money into league football clubs expecting a return. Outside of the biggest clubs, what examples are there in the last few years? Bournemouth? I'm struggling after that.

If you are loaning a club money, then even if you sell up, the new buyer will have to take on that debt to you.

Yes, gifting clubs unsustainable amounts is never good. The sad thing with the Rushden example mentioned above is that they were a completely viable league club, with decent support. There was just no management of switching from being run by a benefactor to paying their own way.

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Re: New FFP rules

by PistolPete » 24 Mar 2021 08:41

Will this affect us?

https://twitter.com/tancredipalmeri/sta ... 5112560642

"UEFA to blow final whistle over financial fair-play:

it will be announced a new system of financial control that will leave much more freedom of spending to clubs"

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Re: New FFP rules

by paultheroyal » 24 Mar 2021 09:15

PistolPete Will this affect us?

https://twitter.com/tancredipalmeri/sta ... 5112560642

"UEFA to blow final whistle over financial fair-play:

it will be announced a new system of financial control that will leave much more freedom of spending to clubs"


in a positive way yes. Run the club efficiently but if you have an owner who can pump money in under many disguises then you are good to go.

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Re: New FFP rules

by Stranded » 24 Mar 2021 09:23

paultheroyal
PistolPete Will this affect us?

https://twitter.com/tancredipalmeri/sta ... 5112560642

"UEFA to blow final whistle over financial fair-play:

it will be announced a new system of financial control that will leave much more freedom of spending to clubs"


in a positive way yes. Run the club efficiently but if you have an owner who can pump money in under many disguises then you are good to go.


Surely this is just a maybe.

We are not governed by FFP but be the EFLs Profit and Sustainability rules - UEFA FFP rules just effect clubs who enter European competitions. So unless the EFL copy the same and in good time, then we may still have issues.

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Re: New FFP rules

by Forbury Lion » 24 Mar 2021 09:36

If our owners have a second profit making business and they create a holding company that this profit making business and Reading FC's current holding company roll up into, would the FFP rules be based on the new company at the top of the pyramid?

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Re: New FFP rules

by skipper » 24 Mar 2021 11:56

Really wish we had sold Loader to Wolves.

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Re: New FFP rules

by Westwood52 » 24 Mar 2021 13:54

Given Covid I really think 19/20 and 20/21 should be taken out of the equation for FFP.Especially as most of the country bar the supermarkets and Amazon are bust.I dread to think what Reading Town Centre is like now.Has everything gone ? Anybody been in recently ? Even John Lewis are closing stores.

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