2019/2020 accounts analsyis - from STAR

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Dirk Gently
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Re: 2019/2020 accounts analsyis - from STAR

by Dirk Gently » 24 Aug 2021 13:23

tidus_mi2 I was thinking about this the other day but couldn't the FFP rules be more flexible? Say a club wants to buy a player and the overall cost of the player, transfer + value of the contract is £10m, why shouldn't the owner be able to just inject £10m directly into the club? If for whatever reason the owner decides to walk away, he has already personally financed the cost of the player and the contract so it's surely at no risk to the club from that perspective.


Because they're not just designed to ensure sustainablity - they're also designed to prevent a club with a rich owner just pumping ludicrous amounts of money in to gain a competitive advantage over all the others

They fail, of course, but that's the theory...

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Re: 2019/2020 accounts analsyis - from STAR

by The Royal Forester » 24 Aug 2021 13:33

But they let a club coming down from the Premier League have millions each season for three(?) years and that club can spend it how they want. I think parachute payments should only be used to cover wages only and only for the players who stay after relegation and the rest of those payments should be shared around the other clubs.

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Re: 2019/2020 accounts analsyis - from STAR

by Sutekh » 24 Aug 2021 13:49

The Royal Forester But they let a club coming down from the Premier League have millions each season for three(?) years and that club can spend it how they want. I think parachute payments should only be used to cover wages only and only for the players who stay after relegation and the rest of those payments should be shared around the other clubs.


Agree. The whole system is utterly flawed. If a club is lucky enough to get themselves a rich owner or two then I don’t see it as unfair if those owners put loads of money into a club in an effort to get to the top of the tree so long as that money is not put in at risk to the club concerned.

Parachute payments are just an utter joke and should either be scrapped completely or limited as per the suggestion above.

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Re: 2019/2020 accounts analsyis - from STAR

by tidus_mi2 » 24 Aug 2021 13:52

This is the conclusion I come to with FFP.

1) It's a dumb name especially when they also use profitability and sustainability which are two different things and the latter name for me, is far more sensible for what football should be looking to achieve as a whole.

2) The goal of financial rules and restrictions should be to protect clubs from going under, not "levelling the playing field" as all it does right now is keep the big, big and the small, small.

3) So yeah, allow owners to bankroll a club as long as the direct costs are against the owner, as long as they keep the expenditure against the club at an acceptable level and can show the club isn't going to crash and burn if they walk away, any investment should be allowed.

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Re: 2019/2020 accounts analsyis - from STAR

by Dirk Gently » 24 Aug 2021 14:26

tidus_mi2 This is the conclusion I come to with FFP.

1) It's a dumb name especially when they also use profitability and sustainability which are two different things and the latter name for me, is far more sensible for what football should be looking to achieve as a whole.

2) The goal of financial rules and restrictions should be to protect clubs from going under, not "levelling the playing field" as all it does right now is keep the big, big and the small, small.

3) So yeah, allow owners to bankroll a club as long as the direct costs are against the owner, as long as they keep the expenditure against the club at an acceptable level and can show the club isn't going to crash and burn if they walk away, any investment should be allowed.


Just as long as item 3) means that they put the money into the club with no strings attached - i.e. they don't convert it into share or don't add it onto the club as debt, soft or hard. Otherwise all they're doing is storing up problems for later owners - and potentially making the club unsaleable. They'd also need to setup a bond or similar to guarantee the same level of payments for the duration of any contracts - otherwise you have a potential Gretna on your hands.


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Re: 2019/2020 accounts analsyis - from STAR

by Elm Park Kid » 24 Aug 2021 15:50

Dirk Gently
tidus_mi2 This is the conclusion I come to with FFP.

1) It's a dumb name especially when they also use profitability and sustainability which are two different things and the latter name for me, is far more sensible for what football should be looking to achieve as a whole.

2) The goal of financial rules and restrictions should be to protect clubs from going under, not "levelling the playing field" as all it does right now is keep the big, big and the small, small.

3) So yeah, allow owners to bankroll a club as long as the direct costs are against the owner, as long as they keep the expenditure against the club at an acceptable level and can show the club isn't going to crash and burn if they walk away, any investment should be allowed.


Just as long as item 3) means that they put the money into the club with no strings attached - i.e. they don't convert it into share or don't add it onto the club as debt, soft or hard. Otherwise all they're doing is storing up problems for later owners - and potentially making the club unsaleable. They'd also need to setup a bond or similar to guarantee the same level of payments for the duration of any contracts - otherwise you have a potential Gretna on your hands.


What's to stop them taking money back out of the club? They could do this in a million different ways: dividends, paying themselves/family large salaries, free sponsorship to their own companies, moving assets such as stadiums/training grounds out of the club etc. There's no way really that the EFL could monitor and stop them all.

It seems to me that a lot of people have this misconception that there is a clear/strong divide between the club and the owners. There isn't really - the Dai's own RFC the same way that someone might own an ice cream van. You can take the strongest, most financially stable club in the world and completely bankrupt it in a few days if you want to. The same way that you can take a profitable, brand new ice cream van and set it on fire.

FFP isn't about keeping the big clubs big. It's an agreement between owners that they won't engage in some kind of expensive arms race against each other where they need to each pile in more and more money to keep up.

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Re: 2019/2020 accounts analsyis - from STAR

by PATRIQT » 25 Aug 2021 16:14

Dirk Gently
tidus_mi2 I was thinking about this the other day but couldn't the FFP rules be more flexible? Say a club wants to buy a player and the overall cost of the player, transfer + value of the contract is £10m, why shouldn't the owner be able to just inject £10m directly into the club? If for whatever reason the owner decides to walk away, he has already personally financed the cost of the player and the contract so it's surely at no risk to the club from that perspective.


Because they're not just designed to ensure sustainablity - they're also designed to prevent a club with a rich owner just pumping ludicrous amounts of money in to gain a competitive advantage over all the others

They fail, of course, but that's the theory...


Like PSG then... Oh.

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Re: 2019/2020 accounts analsyis - from STAR

by 3points » 26 Aug 2021 14:13

tidus_mi2 This is the conclusion I come to with FFP.

1) It's a dumb name especially when they also use profitability and sustainability which are two different things and the latter name for me, is far more sensible for what football should be looking to achieve as a whole.

2) The goal of financial rules and restrictions should be to protect clubs from going under, not "levelling the playing field" as all it does right now is keep the big, big and the small, small.

3) So yeah, allow owners to bankroll a club as long as the direct costs are against the owner, as long as they keep the expenditure against the club at an acceptable level and can show the club isn't going to crash and burn if they walk away, any investment should be allowed.
I believe FFP isn't an EFL term / phrase. it's just that fans use it because that's what is applied by the Premier League / UEFA. The EFL uses the P&S term, presumably for the good reason you state

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Re: 2019/2020 accounts analsyis - from STAR

by tmesis » 29 Aug 2021 16:54

Elm Park Kid
Dirk Gently
tidus_mi2 This is the conclusion I come to with FFP.

3) So yeah, allow owners to bankroll a club as long as the direct costs are against the owner, as long as they keep the expenditure against the club at an acceptable level and can show the club isn't going to crash and burn if they walk away, any investment should be allowed.


Just as long as item 3) means that they put the money into the club with no strings attached - i.e. they don't convert it into share or don't add it onto the club as debt, soft or hard. Otherwise all they're doing is storing up problems for later owners - and potentially making the club unsaleable. They'd also need to setup a bond or similar to guarantee the same level of payments for the duration of any contracts - otherwise you have a potential Gretna on your hands.


What's to stop them taking money back out of the club? They could do this in a million different ways: dividends, paying themselves/family large salaries, free sponsorship to their own companies, moving assets such as stadiums/training grounds out of the club etc. There's no way really that the EFL could monitor and stop them all.

It seems to me that a lot of people have this misconception that there is a clear/strong divide between the club and the owners. There isn't really - the Dai's own RFC the same way that someone might own an ice cream van. You can take the strongest, most financially stable club in the world and completely bankrupt it in a few days if you want to. The same way that you can take a profitable, brand new ice cream van and set it on fire.

I believe there are some laws against that kind of thing, but in any case, it makes it more difficult. Anything that can be done to stop owners loading clubs with debt in a promotion gamble should be stopped.

The tricky part is how you deal with clubs getting in debt through relegation, specifically from the premier league. Maybe parachute payments should only be conditional on reducing the wage bill. If a club gambles on an instant return, they get nothing in the event of failure.

FFP isn't about keeping the big clubs big. It's an agreement between owners that they won't engage in some kind of expensive arms race against each other where they need to each pile in more and more money to keep up.

I'm sure internationally it was about stopping oil billionaires outspending the previous big spenders. Unfortunately, while they owners think overspending should be curbed, they all seem to think their overspending is fine, and you get almost useless FFP rules like in the championship.

The biggest problem is that the rules punish clubs when they are already massively in trouble, and do little to stop clubs getting into trouble in the first place.


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Re: 2019/2020 accounts analsyis - from STAR

by Elm Park Kid » 29 Aug 2021 17:46

tmesis
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Dirk Gently
Just as long as item 3) means that they put the money into the club with no strings attached - i.e. they don't convert it into share or don't add it onto the club as debt, soft or hard. Otherwise all they're doing is storing up problems for later owners - and potentially making the club unsaleable. They'd also need to setup a bond or similar to guarantee the same level of payments for the duration of any contracts - otherwise you have a potential Gretna on your hands.


What's to stop them taking money back out of the club? They could do this in a million different ways: dividends, paying themselves/family large salaries, free sponsorship to their own companies, moving assets such as stadiums/training grounds out of the club etc. There's no way really that the EFL could monitor and stop them all.

It seems to me that a lot of people have this misconception that there is a clear/strong divide between the club and the owners. There isn't really - the Dai's own RFC the same way that someone might own an ice cream van. You can take the strongest, most financially stable club in the world and completely bankrupt it in a few days if you want to. The same way that you can take a profitable, brand new ice cream van and set it on fire.

I believe there are some laws against that kind of thing, but in any case, it makes it more difficult. Anything that can be done to stop owners loading clubs with debt in a promotion gamble should be stopped.

The tricky part is how you deal with clubs getting in debt through relegation, specifically from the premier league. Maybe parachute payments should only be conditional on reducing the wage bill. If a club gambles on an instant return, they get nothing in the event of failure.

FFP isn't about keeping the big clubs big. It's an agreement between owners that they won't engage in some kind of expensive arms race against each other where they need to each pile in more and more money to keep up.

I'm sure internationally it was about stopping oil billionaires outspending the previous big spenders. Unfortunately, while they owners think overspending should be curbed, they all seem to think their overspending is fine, and you get almost useless FFP rules like in the championship.

The biggest problem is that the rules punish clubs when they are already massively in trouble, and do little to stop clubs getting into trouble in the first place.


I understand the points your making, but the way that corporate law currently works and the lack of regulation of football means that there really is nothing that the authorities can do to safeguard clubs financially. An owner can add hundreds of millions of pounds of debt overnight and it not be a big issue (as happened when Man U were bought or Spurs built their new stadium). Or an owner can come in and 'bankrupt' the club purely from inaction (as happened with Wigan and Bury). It's never as simple as it seems with finance - you can use every accounting trick in the book to make debt look sustainable, or incomes to be lower/higher than they actually are. And as clubs are usually just one PLC among a host owned by the owners (as with Newcastle), it's difficult to even work out what is going on half the time.

Whatever measure the EFL comes up with to try and protect clubs you can be certain that an owners will find a way around it. All they can really do is what they do now - monitor expenditure and income and punish clubs that fail to follow reasonable spending limits. Yes, that might end up 'kicking a club when it's down' - but the punishment has to be there. It's like saying: "Why are you sending me to jail for crashing into that bus stop when drink-driving, can't you see how badly i'm doing?".

The only solution is for laws to be changed so that football clubs are not treated the same as ice cream vans.

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Re: 2019/2020 accounts analsyis - from STAR

by Sutekh » 29 Aug 2021 18:36

Elm Park Kid
tmesis
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What's to stop them taking money back out of the club? They could do this in a million different ways: dividends, paying themselves/family large salaries, free sponsorship to their own companies, moving assets such as stadiums/training grounds out of the club etc. There's no way really that the EFL could monitor and stop them all.

It seems to me that a lot of people have this misconception that there is a clear/strong divide between the club and the owners. There isn't really - the Dai's own RFC the same way that someone might own an ice cream van. You can take the strongest, most financially stable club in the world and completely bankrupt it in a few days if you want to. The same way that you can take a profitable, brand new ice cream van and set it on fire.

I believe there are some laws against that kind of thing, but in any case, it makes it more difficult. Anything that can be done to stop owners loading clubs with debt in a promotion gamble should be stopped.

The tricky part is how you deal with clubs getting in debt through relegation, specifically from the premier league. Maybe parachute payments should only be conditional on reducing the wage bill. If a club gambles on an instant return, they get nothing in the event of failure.

FFP isn't about keeping the big clubs big. It's an agreement between owners that they won't engage in some kind of expensive arms race against each other where they need to each pile in more and more money to keep up.

I'm sure internationally it was about stopping oil billionaires outspending the previous big spenders. Unfortunately, while they owners think overspending should be curbed, they all seem to think their overspending is fine, and you get almost useless FFP rules like in the championship.

The biggest problem is that the rules punish clubs when they are already massively in trouble, and do little to stop clubs getting into trouble in the first place.


I understand the points your making, but the way that corporate law currently works and the lack of regulation of football means that there really is nothing that the authorities can do to safeguard clubs financially. An owner can add hundreds of millions of pounds of debt overnight and it not be a big issue (as happened when Man U were bought or Spurs built their new stadium). Or an owner can come in and 'bankrupt' the club purely from inaction (as happened with Wigan and Bury). It's never as simple as it seems with finance - you can use every accounting trick in the book to make debt look sustainable, or incomes to be lower/higher than they actually are. And as clubs are usually just one PLC among a host owned by the owners (as with Newcastle), it's difficult to even work out what is going on half the time.

Whatever measure the EFL comes up with to try and protect clubs you can be certain that an owners will find a way around it. All they can really do is what they do now - monitor expenditure and income and punish clubs that fail to follow reasonable spending limits. Yes, that might end up 'kicking a club when it's down' - but the punishment has to be there. It's like saying: "Why are you sending me to jail for crashing into that bus stop when drink-driving, can't you see how badly i'm doing?".

The only solution is for laws to be changed so that football clubs are not treated the same as ice cream vans.


And shouldn’t the laws be the same in the PL as they are for the FL or vice versa, seems strange that a club could quite evidently utterly ignore the FL rules and get themselves promoted and face no action unless they fell back into the FL.

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tmesis
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Re: 2019/2020 accounts analsyis - from STAR

by tmesis » 29 Aug 2021 18:37

Elm Park Kid
I understand the points your making, but the way that corporate law currently works and the lack of regulation of football means that there really is nothing that the authorities can do to safeguard clubs financially. An owner can add hundreds of millions of pounds of debt overnight and it not be a big issue (as happened when Man U were bought or Spurs built their new stadium). Or an owner can come in and 'bankrupt' the club purely from inaction (as happened with Wigan and Bury). It's never as simple as it seems with finance - you can use every accounting trick in the book to make debt look sustainable, or incomes to be lower/higher than they actually are. And as clubs are usually just one PLC among a host owned by the owners (as with Newcastle), it's difficult to even work out what is going on half the time.

Whatever measure the EFL comes up with to try and protect clubs you can be certain that an owners will find a way around it. All they can really do is what they do now - monitor expenditure and income and punish clubs that fail to follow reasonable spending limits. Yes, that might end up 'kicking a club when it's down' - but the punishment has to be there. It's like saying: "Why are you sending me to jail for crashing into that bus stop when drink-driving, can't you see how badly i'm doing?".

The only solution is for laws to be changed so that football clubs are not treated the same as ice cream vans.


There is a difference between a chairman who is running a club down deliberately, and one who is just making 'speculative investment' though. Or even one that is overspending because all the other clubs are overspending.

If every club is overspending by 20% it means that if your club doesn't also overspend, you'll be at a competitive disadvantage. It's that kind if thing that needs to be prevented as much as possible. Championship clubs are allowed to lose on average, 40% of their entire revenue each season. The £39 million over three years is far too high to be workable.

I don't think FFP rules shouldn't be there. My problem is that they come in too late, when the damage is already done. Basically, Reading FC are screwed and there's no way we'll ever trade our way out of this debt.

Legislation to control reckless ownership won't be easy, but that doesn't mean the league shouldn't do everything it can to try.

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Re: 2019/2020 accounts analsyis - from STAR

by Chairman Mao » 01 Sep 2021 09:45

Dirk Gently
tidus_mi2 I was thinking about this the other day but couldn't the FFP rules be more flexible? Say a club wants to buy a player and the overall cost of the player, transfer + value of the contract is £10m, why shouldn't the owner be able to just inject £10m directly into the club? If for whatever reason the owner decides to walk away, he has already personally financed the cost of the player and the contract so it's surely at no risk to the club from that perspective.


Because they're not just designed to ensure sustainablity - they're also designed to prevent a club with a rich owner just pumping ludicrous amounts of money in to gain a competitive advantage over all the others

They fail, of course, but that's the theory...


why?


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Re: 2019/2020 accounts analsyis - from STAR

by Snowflake Royal » 01 Sep 2021 12:21

Sutekh
The Royal Forester But they let a club coming down from the Premier League have millions each season for three(?) years and that club can spend it how they want. I think parachute payments should only be used to cover wages only and only for the players who stay after relegation and the rest of those payments should be shared around the other clubs.


Agree. The whole system is utterly flawed. If a club is lucky enough to get themselves a rich owner or two then I don’t see it as unfair if those owners put loads of money into a club in an effort to get to the top of the tree so long as that money is not put in at risk to the club concerned.

Parachute payments are just an utter joke and should either be scrapped completely or limited as per the suggestion above.

We got to a situation where FFP was needed because owners kept coming in, loading up clubs with debt then leaving them in the shit.

This whole idea that owners should be able to put in money fundamentally misses the point that the owners don't just put in free money. It's usually loans,which add debt. And in some cases it's very dodging financed.

For all the complaints about ffp, I feel the number of clubs getting winding up orders have dropped since it’s introduction.

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