FL's FFP rules 0 unfair to relegated clubs?

[stanistheman]

I all honesty, how does the FL expect relegated clubs to meet the £8M loss limit?

In QPR's case, they released, sold or loaned out 19 players and tried to get rid of a few more, but due to legally binding contracts were unable to do so.
Cesar refused to go as he wouldn't accept a pay cut, no one wanted to match the wages of SWP, Diakite or Barton. QPR tried to move Johnson on, but due the failure to sign Kane on loan pulled the plug on the deal as it would have left just Austin as a striker given that Zamora was injured.

QPR had to keep some of the others like Green, Traore, Hill & Hoilett, otherwise they would not have had a squad. Or is are the rules in place so that relegated clubs can filled a squad of inexperienced kids in order to fight another relegation battle.

I can only guess that the clubs who voted in favour of these rules were the clubs who had not recently been relegated from the Premiership and were in fact jealous of those that had.

I agree with Fernandes, that the rules should have a cooling off period to allow relegated clubs to either sell, loan, pay off (taking the losses incurred into account) or allow the existing contracts to run out.

http://www.dailymail.co.uk/sport/football/article-2638472/QPR-vow-fight-50m-fine-breaking-FFP-rules-securing-134m-Premier-League-place.html

[klonk]

it does seem so...

even after the parachute payments, there is at least a £20m gap in income between the premier league and the championship. that means that outgoings need to be cut by £400k per week just to replicate the previous season's financial results.

reducing the wage bill is not the easy answer everyone thinks it is. players' contracts are deemed to be assets on the club's balance sheet, so when players leave, these values are written off in the accounts. so where we sell someone for less than their book value, that's a net cost in the accounts rather than income.

so... if we bought samba for £12m on a 4-year deal and sold him for the same amount after the first year of that deal, the actual profit in the accounts for selling samba is only £3m (samba's book value at the time of sale is ¾ of his purchase price).
but... if we bought cisse for £4.5m on a 3-year deal and terminated his contract after 2 years, then we need to record a loss of £1.5m (the last year of his contract) in the accounts.

so the only way that it's easy to balance the books is if you can sell a lot of players at a profit... which is a difficult outcome when everyone knows that you need to sell.

[stanistheman]

it does seem so...

even after the parachute payments, there is at least a £20m gap in income between the premier league and the championship. that means that outgoings need to be cut by £400k per week just to replicate the previous season's financial results.

reducing the wage bill is not the easy answer everyone thinks it is. players' contracts are deemed to be assets on the club's balance sheet, so when players leave, these values are written off in the accounts. so where we sell someone for less than their book value, that's a net cost in the accounts rather than income.

so... if we bought samba for £12m on a 4-year deal and sold him for the same amount after the first year of that deal, the actual profit in the accounts for selling samba is only £3m (samba's book value at the time of sale is ¾ of his purchase price).
but... if we bought cisse for £4.5m on a 3-year deal and terminated his contract after 2 years, then we need to record a loss of £1.5m (the last year of his contract) in the accounts.

so the only way that it's easy to balance the books is if you can sell a lot of players at a profit... which is a difficult outcome when everyone knows that you need to sell.

This is just one of the major flaws in the rules, and one that an accountant like Fernandes will be more than ready to point out in any appeal. The FL's FFP rules are a complete nonsense in their current format and impossible for any relegated club to meet unless most players' contracts had 10-15k Championship wage clauses inserted into them. and even then, they could still come up short if they had to sell players at a loss.

[silvercue]

FFP is a contradiction in terms. Whether FL or UEFA it is purely going to aid big clubs. So how is that "fair play"?

[MYU]

They also need to put a wage cap in place, how are smaller clubs to compete with the bigger clubs unless they offer silly money?

[stanistheman]

FFP is a contradiction in terms. Whether FL or UEFA it is purely going to aid big clubs. So how is that "fair play"?

In UEFA terms it isn't about FFP but about keeping the big established clubs at the top to have their European League dream kept alive.

They just want the likes of Man U, Liverpool, Arsenal, Real Madrid, Barcelona, Bayern Munich, Benfica, Porto, Ajax, PSV to stay at the top table and not let anyone else in.

As for the FLs rules, perhaps they should explain just how a relegated Premiership can stay within the £8M loss limit within the 1st season. Or are they suggesting that any promoted club should just go up for the ride and not give out Premiership wages to players they want to sign to compete at that level a bit like Reading did last season when they went straight back down.

[stanistheman]

They also need to put a wage cap in place, how are smaller clubs to compete with the bigger clubs unless they offer silly money?

They wont be able top compete as the clubs with the biggest crowds will always have more money to spend and nearly always be able to attract the better players. and with freedom of contract for players it means they can demand transfers from the smaller clubs they are signed to and hold them to 'ransom'.

[QPRDave]

Football league are clueless and this hasn't been thought through

[W12_Ranger]

How are Fulham going to shape up this season, aren't they massively in debt?

[MYU]

Football league are clueless and this hasn't been thought through

I think someone should feature on SSN and make a big deal about it and ask questions, only then something will be done.

[bakes8]

How are Fulham going to shape up this season, aren't they massively in debt?

Again they mouth off at our ludicrous 78m wage bill last year, without noting their own bill is 67m.

We got massive earners in taarabt, remy, mbia, granero, Chris Samba off the wage bill this yr. Wonder what they're gonna do?

[klonk]

In UEFA terms it isn't about FFP but about keeping the big established clubs at the top to have their European League dream kept alive.

They just want the likes of Man U, Liverpool, Arsenal, Real Madrid, Barcelona, Bayern Munich, Benfica, Porto, Ajax, PSV to stay at the top table and not let anyone else in.

As for the FLs rules, perhaps they should explain just how a relegated Premiership can stay within the £8M loss limit within the 1st season. Or are they suggesting that any promoted club should just go up for the ride and not give out Premiership wages to players they want to sign to compete at that level a bit like Reading did last season when they went straight back down.

yeah, it seems that it's basically this. go up... increase your cost base to the level of the parachute payments and hope that you stay up.

financial fair play isn't about 'fair play'... it won't lead to, say, burnley having the same chance as, say, man utd of winning the league any time soon, it'll ensure that the team that man utd fields against burnley will be better paid and will have cost more to put together. it'll mean that man utd can poach burnley's best players whenever they want to - and annoyingly, it'll also mean that burnley will end up banking any profit they make because they have to recognise the profit in the year of sale and can't even offset it against the write-down of the contracts of any players that they buy using the profit.

[BUSHRANGER1982]

Financial Fair Play, arrant nonsense.