City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

Esteban de la Sexface said:
regulating debt blocks investment

they need to regulate salaries and transfers to make a fair and sustainable competition. Investment in facilities etc can be at the behest of the owner or the club but if clubs didn't have to spend 100's of millions a year on wages or 200m on transfer fees the debt would be regulated anyway. It's out of control. Regulating debt based on revenue is just FFP mark 2 and anti competition.
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Clubs don't "have" to spend 100's of millions on wages, they have a choice
They can say "no" and if enough of them draw the line, as City has, then what's the player going to do!
 
Kazzydeyna said:
But that is life. It’s unfair but in life the richest DO often prevail. Nobody minds Tesco prevailing over the local corner shop because it is richer.

It would encourage smart thinking and good club management. Build a youth team, nurture your talent, good coaching and you can compete with the big boys.
Smarten up your processes and make your club an attractive investment opportunity.
Live within your means, be financially prudent and survive and thrive.

I’ll say it again, no club has ever gone bust from too much investment. Every defunct club has gone bust from too much debt.

Why don’t we tell Tesco, or BT, or Warner Bros how much they can spend on staff wages? Why should football be more highly regulated in that regard? It’s an entertainment business and entertainment thrives on the best people producing the best entertainment. Football is no different from any other business in that regard.

Investment should be totally unimited. Debt should be manageable. That way the game will still be here in another 100 years and most of the clubs will still be playing it.

If Doncaster Rovers get a benefactor who wants to inject a trillion quid into them and ten years from now they’re playing us in a champs leg semi final I’d say that was brilliant.
If united were languishing in the bottom half because they couldn’t afford to sign top players because they’d over indebted themselves chasing artificial success with money that wasn’t the clubs to begin with I’d say that was sensible and prudent.

If you reduce debt in the game you ensure its sustainability.

Clubs should no longer be allowed to dope themselves up on money that isn’t their own. It’s immoral and disgusting and i am glad City have never done so long term.
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Again it's all very anti competition - you can only spend what you earn - in terms of debt. Here's your box and you stay in it.

At least with something like a Salary cap all 20 clubs in the premier league have say 100mil to spend on salaries for 1st team players and can distribute as they see fit. The salary cap is moving year on year based on the leagues revenue. All teams have the same salary budget.

The transfer system is more difficult as there is no real nursery system to feed the leagues and is a feeding ground for corrupt agents. That'll be difficult.

The rich do prevail - but at what cost. If two clubs can simply outbid everyone for everything, what becomes of football?
 
Esteban de la Sexface said:
Again it's all very anti competition - you can only spend what you earn - in terms of debt. Here's your box and you stay in it.

At least with something like a Salary cap all 20 clubs in the premier league have say 100mil to spend on salaries for 1st team players and can distribute as they see fit. The salary cap is moving year on year based on the leagues revenue. All teams have the same salary budget.

The transfer system is more difficult as there is no real nursery system to feed the leagues and is a feeding ground for corrupt agents. That'll be difficult.

The rich do prevail - but at what cost. If two clubs can simply outbid everyone for everything, what becomes of football?
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You’ve just described the situation every business and indeed every individual on earth faces every day. You can only spend what you earn plus a relatively small amount in borrowings.

Tesco aren’t told ‘you can only spend X amount per year on staff costs as it is unfair that you have more money than the Co-Op’ They have a huge financial advantage over every other UK food retailer but guess what? There are still loads of places to go buy your food and lots of companies are making a nice butty from it. As they should. Why should football be any different?

And with respect you’re incorrect in your assumption that only one or two clubs would thrive. They would still only have space for a certain amount of playing staff, realistically 25 each.

There are more than 50 top players going around.

What would happen is EVERY club would thrive as EVERY club would have a manageable level of debt. Clubs would be more attractive to potential purchasers as they wouldn’t be buying a tonne of debt on top of the cost of the club to begin with = more investment, but sustainable investment = a better product long term, a more sustainable product long term and a healthier and more attractive and competitive game.

It’d just mean those clubs that have financially doped their way to success and prominence would have to be dragged kicking and screaming into the 21st century in order to save them from themselves and what sensible person would argue against that?
 
GoatsDomeWax said:
First rule change should be to stop Leveraged Buyouts.
Thankfully too late for the Rags, but a potential blight on the future of smaller clubs in future.
If you need to borrow money to buy a club, then by definition you are an unfit owner.
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And stop buyouts of deeply indebted clubs for a nominal £1 Without proper due diligence and evidence of funds to clear debts.
 
Esteban de la Sexface said:
Hang on? What line have City drawn?
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www.goal.com

Alexis Sanchez transfer news: Manchester City pull plug as Manchester United close in | Goal.com UK

Manchester City have pulled the plug on their pursuit of Alexis Sanchez, leaving rivals Manchester United with a clear run at tying up a shock transfer
www.goal.com


Man City 'pull out of Maguire race'

Manchester City reportedly withdraw their interest in Leicester
www.sportsmole.co.uk www.sportsmole.co.uk


There's two examples, plus Eden Hazzard (went to Chelsea) Isco (Real Madrid)
If it doesn't work financially for City, the club will walk away
I have never heard of united, Real Madrid or Barcelona missing out on a player due to wage demands or a fee being too high
Barcelona made a fortune when Neymar moved to PSG and then they spunked the money away on shite
 
Esteban de la Sexface said:
You also accused me of defending financial fair play when I did no such thing.

If City weren't as rich as they were you'd be completely different in your views.

I'd love to see the cross section of people who were complaining about Chelsea who now think its fine to have owners with unlimited funds spending in an an unregulated market, during a downturn

The arse is going to fall out of this fairly soon pal
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You think ADUG would allow that to happen with the reputational damage it would cause?
City amounts to about 80% of the overall value of CFG and our revenues dwarf the rest of the group combined. If some of the other clubs within the group start to struggle I'm pretty sure we would be able to withstand it.

If FFP is abolished, and IF City's revenues fell significantly ("the arse falling out" as you put it) there would be nothing to stop the owners from riding in on their white horse with a cash injection. The amounts of money required to so would be fairly piffling to the owners given the scale of their wealth. I appreciate this may offend your clearly strong and dearly held morals but that is the reality.
 
Esteban de la Sexface said:
except for when the investment stops and the club has spent way beyond its means due to a benefactor that's no longer there. (for all the sensitive types, I'm not saying that's us).
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That is true. There also needs to be a failsafe for this happening. Maybe a compulsory, yearly "rainy day fund" that has to be given to the club and protected (to cover 1 year of operating costs).

Additionally, if they cut costs and sell some assets they should be able to stay out of too much debt, especially if the debt is regulated.
 
kun said:
That is true. There also needs to be a failsafe for this happening. Maybe a compulsory, yearly "rainy day fund" that has to be given to the club and protected (to cover 1 year of operating costs).

Additionally, if they cut costs and sell some assets they should be able to stay out of too much debt, especially if it is regulated.
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it is my opinion that regulation on revenue be it investment or debt is there to protect the status quo and is unsustainable, it needs to be competition based regulation where every team can spend X amount of money on salary and squad, rated against their leagues revenue. Personal investment can go in to facilities and stadiums etc. This model has proved sustainable in leagues where the money got out of hand before it did in football, namely NHL, NFL, and NBA.
 
Despite the prevalent belief on here that debt is damaging no area of economic activity actually bans debt. Debt is seen as a valid way of raising capital for investment and had UEFA forced indebted clubs to settle their debts they would have ruined half (at least) of the clubs in the PL. UEFA abandoned action on debt in the face of threats by "the cartel clubs" of legal action, action they would have won. Debt is essential, for example to enable clubs to finance new stadia etc. Incredibly UEFA replaced action on debt by action to restrict (severely) owner investment. If football needs one thing desperately now, more than ever, it is external investment. Effectively this only comes from sponsorship (which has dried up somewhat) and the TV. Much of this is swallowed up in wages but wages attract good players and this keeps TV revenue high. But wages take money out of the game and this seems to make wage caps attractive, but in fact they are decisive because they put restrictions on transfers as effectively at least as caps on transfer fees. And transfer fees are the only mechanism to distribute wealth from outside within the game. So most of the obvious means of establishing a level playing field or competitive balance are, in fact, non-starters. Do we set a salary cap which all clubs in the PL can reach? What about championship clubs? The Italian league? What about a transfer ceiling? Does it become the norm for all transfers? Which national leagues would have an immediate advantage? We can see why UEFA made a complete mess of their attempt at regulation! My own opinion is that no series of rules will achieve satisfactory regulation of a complex sport such as football on a European scale and we are better of restricting ourselves to trying to ensure honesty rather than regulation.
 
Esteban de la Sexface said:
it is my opinion that regulation on revenue be it investment or debt is there to protect the status quo and is unsustainable, it needs to be competition based regulation where every team can spend X amount of money on salary and squad, rated against their leagues revenue. Personal investment can go in to facilities and stadiums etc. This model has proved sustainable in leagues where the money got out of hand before it did in football, namely NHL, NFL, and NBA.
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You talk about a house of cards. Salary caps work there because there's no threat of relegation.
It's a tiny house of cards so it is sound. By the logic of those leagues then we would be looking at a Super League or a PL without promotion/relegation.

I think salary caps are needed lower down the ladder but look at other top flight FOOTBALL leagues that use a salary cap.

A-League
MLS

No promotion or relegation either. Also not the highest quality of leagues.

The Indian Premier League (cricket) uses a salary cap system and have had 5 teams fold in just 12 years.
 
Esteban de la Sexface said:
It's quite simple really - it's a pretty unique industry that needs competition to be sustainable. One team winning everything because they are financially superior isn't sustainable. There needs to be hope for smaller clubs.

I'm not talking about capping individual salaries pal. I'm talking like the NFL where the cap is a percentage of the leagues revenue and teams can spend it how they see fit within the cap.

I don't think regulating investment and debt is possible legally as we've seen with FFP 1.0. Any other form of it is similarly wrong in my view.

It needs to be internal to the finances of football. It works in other sports, that we're gone out of control salary wise. Why not football?
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You do that and no club outside of the PL can compete. In fact, PL clubs expenditures dwarf already their continental rivals.

You cannot replicate the NFL or other north american model in Europe. They have a single league and it is simple to apply those rules while we have several leagues in Europe following their own rules and their own state laws.

In the case of your proposition, let's take France as an example. They have a lower league revenue in TV rights. They also have higher taxes. So PSG, despite the owner wealth and their commercial development, wouldn't be able to spend much while most likely having to pay the incoming luxury tax because their gross wage bill would be higher than their other european rivals.
 
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