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

[Marvin]

Re: City & FFP (continued)

Blueparrot. Here's two relevant posts...........

Can somebody explain to me...With Kompany,Silva,Aguero signing new deals how does this work in relation to amortisation?

Kompany we are only talking about £400k a year saving, Silva was signed for £21m 4 years ago, so rather than £5.25m a year it would now be £2.33m a year, Aguero signed for £38m 3 years ago so rather than £9.5m a year would now be £4.75m a year.

So overall just over £8m a year.

Also from an Aguero topic I found this

Sergio Aguero's new deal reduces annual FFP hit from £16.1m to £11.2m. Great business by MCFC to not only lock Aguero up, but also save £'s. Calculation based on declining amortised xfer fee + reported weekly pay decreasing from £200k to £150k (took long-term security, it seems)


@JakeFCohen

lawyer, triple eagle, chelsea supporter. i write about legal, financial, and economic issues in football.

 

[FanchesterCity]

Re: City & FFP (continued)

I believe the salary decreases aren't in favour of long term security.... it's in exchange for bigger performance bonuses.

 

[Bodicoteblue]

Re: City & FFP (continued)

Article from Economia on FFP.

Financial Fair Play rules could have the unintended consequences of “locking in” wealth disparity between football clubs across the leagues this season

A BDO study on football finances and the impact of Financial Fair Play (FFP) has shown that 94% of club finance bosses believe the wealth disparity between larger and smaller clubs is growing. It revealed 64% of English Premier League (EPL) clubs and 76% of Football League Championship clubs report a widening gap within their leagues.

Polarisation of the industry has to be taken as a serious issue when considering sustainability and the long term health of the game as a whole
Trevor Birch
The major sponsors are focussing their efforts on only a “handful of clubs”, as a result, Football League clubs, and even Premier League clubs outside the Champions League positions are finding it increasingly difficult to attract sponsorship deals.

Trevor Birch, BDO partner and former Everton chairman, said that the success of the EPL has tended to concentrate its wealth in the hands of the few, at “the expense of the many”.

He said, “Polarisation of the industry has to be taken as a serious issue when considering sustainability and the long term health of the game as a whole.”

FFP rules, which were introduced to promote financial stability after a number of clubs overstretched their finances, will take time to take effect and “may lock in the existing differential”, the report claims.

Although 90% of clubs have complied with the rules, 44% said they need to be refined or changed while 61% think they do not yet meet the objective of promoting sustainability. Despite the rules, 57% of respondents were still not expecting to make a profit in their next accounting period, indicating that loss making is still rife.

Almost a quarter of clubs believe their finances need attention or are a cause for grave concern, and 21% of EPL respondents think their club’s owners could be considering a full or partial exit in the next 12-18 months, compare to none in the same survey last year.

Birch said, “The top six or seven clubs in the EPL will be able to consolidate their superiority with bigger and better global commercial deals. The rest of the league then struggles to grow revenues outside the central media deal and faces a perennial relegation battle, with the consequent uncertainty that brings for long term planning. FFP is unlikely to change this scenario.

“In the FL, clubs have historically made large losses as they compete to gain promotion and the introduction of FFP should go some way to assisting clubs reduce these losses and promoting sustainability.

However, the recent increase in parachute payments to FLC clubs relegated from the EPL, which are not included in FFP calculations, may start to have a greater distorting effect on competition in the future and effectively create a two-tier league.”

In his recent interview with economia, former FA chairman David Bernstein said he worried FFP will only serve to maintain the status quo among the very elite of the European game.



- See more at: <a class="postlink" href="http://economia.icaew.com/news/august-2014/uk-football-finances-increasingly-polarised?utm_source=economianews&utm_medium=articles&utm_content=headlines&utm_campaign=aug15#sthash.E9Yd4wa2.dpuf" onclick="window.open(this.href);return false;">http://economia.icaew.com/news/august-2 ... d4wa2.dpuf</a>

Is this not yet more evidence that there is a huge disparity between the "stated aims" of FFP , and the methods that Uefa are applying to achieve those ends?
As each day goes by and the effects of these blatantly unfair rules are felt by many clubs and they are more and more being seen for what they are .
Part of M.Duponts case , as I understand it , is to show that the current set of rules is neither the best nor most efficient way to achieve the stated aims of FFP and that there are better alternatives.
The weight of evidence must be swinging behind that view now.

 

[waspish]

City & FFP (continued)

The majority of chairman in the premier love these FFP rules! Good excuse not to buy players and they can pocket the rest

 

[Bodicoteblue]

Re: City & FFP (continued)

The majority of chairman in the premier love these FFP rules! Good excuse not to buy players and they can pocket the rest

You're absolutely right - the chairmen can sit on their hands an blame FFP, but how long are the fans going to wear it?
Every season you are asked to pay increasing amounts for your season ticket and match tickets and every season you see no change in ambition and virtually no chance of winning anything.
If I were a fan of a mid-table side now , I would be seriously disillusioned and I would be forced to make a decision as to whether or not I was going to bother spending my hard earned just to keep a chairman in clover, while my club aimed for mid - table mediocrity as its only target.
When the fans start to disappear in serious numbers , there will have to be a major re-think.
This ossification of the pecking order is ultimately self-defeating.

 

[BlueAnorak]

Re: City & FFP (continued)

I believe the salary decreases aren't in favour of long term security.... it's in exchange for bigger performance bonuses.

Aguero's basic salary will probably have remained the same while his bonus has gone up each renewal. As bonus payments don't show up on the FFP valuation, I suspect Aguero's FFP cost to MCFC looks something like:
2011 Contract Amortisation = £39.6m / 4y = £9.9m a year. Wages = 170k pw * 52 = £8.84m pa. FFP total = £18.74m pa.
2013 Contract Amortisation = £19.8m / 5y = £3.96m a year. Wages = 170k pw * 52 = £8.84m pa. FFP total = £12.8m pa
2014 Contract Amortisation = £15.84m / 5y = £3.168m a year. Wages = 170k pw *52 == £8.84m pa. FFP total = £12.008m pa

Im pretty sure Silva's basic will actually have gone up a bit this time as his value to the team is unquantifiable. As such I suspect Silva's FFP cost to MCFC has changes as follows:
2010 Contract Amortisation = £25,3m / 4y = £6.325m a year. Wages = 80k pw * 52 = £4.160m pa. FFP total = £10,485m pa.
2012 Contract Amortisation = £12.65m / 5y = £2.53m a year. Wages = 120k pw * 52 = £6.240m pa. FFP total = 8,77m pa
2014 Contract Amortisation = £7.59m / 5y = £1.518m a year. Wages = 140k pw *52 = £7.28m pa. FFP total = £8.798m pa

Kompany's remaining transfer fee (£7.28m in 2008) will be pretty much zip by now b ut the £31m for is contract has to be taken as a yearly sum for FFP:
2014 = (£31m over 5 years) = £120k pw = £6.2m pa

So overall the value on the books goes down by about £10m (Nasri and Kolarov amortisation drops with a bang) but the spine of the team are tied down to long contracts.

 

[I'm no cynic but...]

Re: City & FFP (continued)

The majority of chairman in the premier love these FFP rules! Good excuse not to buy players and they can pocket the rest

You're absolutely right - the chairmen can sit on their hands an blame FFP, but how long are the fans going to wear it?
Every season you are asked to pay increasing amounts for your season ticket and match tickets and every season you see no change in ambition and virtually no chance of winning anything.
If I were a fan of a mid-table side now , I would be seriously disillusioned and I would be forced to make a decision as to whether or not I was going to bother spending my hard earned just to keep a chairman in clover, while my club aimed for mid - table mediocrity as its only target.
When the fans start to disappear in serious numbers , there will have to be a major re-think.
This ossification of the pecking order is ultimately self-defeating.

Perhaps Tony Pulis is the first casualty of FFP?

 

[Centurions]

Re: City & FFP (continued)

I believe the salary decreases aren't in favour of long term security.... it's in exchange for bigger performance bonuses.

Aguero's basic salary will probably have remained the same while his bonus has gone up each renewal. As bonus payments don't show up on the FFP valuation, I suspect Aguero's FFP cost to MCFC looks something like:
2011 Contract Amortisation = £39.6m / 4y = £9.9m a year. Wages = 170k pw * 52 = £8.84m pa. FFP total = £18.74m pa.
2013 Contract Amortisation = £19.8m / 5y = £3.96m a year. Wages = 170k pw * 52 = £8.84m pa. FFP total = £12.8m pa
2014 Contract Amortisation = £15.84m / 5y = £3.168m a year. Wages = 170k pw *52 == £8.84m pa. FFP total = £12.008m pa

Im pretty sure Silva's basic will actually have gone up a bit this time as his value to the team is unquantifiable. As such I suspect Silva's FFP cost to MCFC has changes as follows:
2010 Contract Amortisation = £25,3m / 4y = £6.325m a year. Wages = 80k pw * 52 = £4.160m pa. FFP total = £10,485m pa.
2012 Contract Amortisation = £12.65m / 5y = £2.53m a year. Wages = 120k pw * 52 = £6.240m pa. FFP total = 8,77m pa
2014 Contract Amortisation = £7.59m / 5y = £1.518m a year. Wages = 140k pw *52 = £7.28m pa. FFP total = £8.798m pa

Kompany's remaining transfer fee (£7.28m in 2008) will be minimum on the amortisation will be:
2014 = (£31m over 10 years) = £120k pw = £6.2m pa

So overall the value on the books goes down by about £10m (Nasri and Kolarov amortisation drops with a bang) but the spine of the team are tied down to long contracts.

Perhaps I'm misreading it (or am just being thick) but where does "2014 = (£31m over 10 years)" for Kompany come from?

 

[SilverFox2]

Re: City & FFP (continued)

Whilst FFP does not now seem to be a problem for City, I was wondering about the effect of player insurance on FFP if an event causes its payment.

In particular, the injury to Negrada will presumably have been covered by a key man type insurance policy which effectively means the premium paid will trigger a proportion if not all of his cost to City.

Presumably, the payment to him will be deducted from the cost side of the FFP equation ?

 

[cibaman]

Re: City & FFP (continued)

Whilst FFP does not now seem to be a problem for City, I was wondering about the effect of player insurance on FFP if an event causes its payment.

In particular, the injury to Negrada will presumably have been covered by a key man type insurance policy which effectively means the premium paid will trigger a proportion if not all of his cost to City.

Presumably, the payment to him will be deducted from the cost side of the FFP equation ?

Do clubs insure players other than for career ending injuries? Given the number of injuries that routinely occur every year, wouldn't the premiums be prohibitive? Insurance is usually a waste of money if its for incidents that occur on a regular basis.