Club not paying up contracts

[SWP's back]

Fbloke just tweeted saying "The reason City won't pay up the contracts of Bellamy, Ade etc is that doing so WOULD count towards FFP". Where as letting them sit on their arse in the reserves has no affect on our FFP spending as they were signed before the deadline. Paying up the contract is classed as "re-neotiating the contract".

This is from a lawyer who works on behalf of Premiership clubs advising on FFP rules.

It also explains a lot if true.

 

[Rammy Blue]

IIRC we can sit people in the stands for 1 year without their wages counting for FFPR.

Still pretty confident we will get the deadwood out by Sept 1st, we'll just get bummed on a few of the deals.

 

[mancboy123]

Also why the hell should we pay them up, they get a big payoff from us and the chance to go and earn elsewhere, we owe them nothing they signed the contracts its on them.

 

[The Fat el Hombre]

Fbloke just tweeted saying "The reason City won't pay up the contracts of Bellamy, Ade etc is that doing so WOULD count towards FFP". Where as letting them sit on their arse in the reserves has no affect on our FFP spending as they were signed before the deadline. Paying up the contract is classed as "re-neotiating the contract".

This is from a lawyer who works on behalf of Premiership clubs advising on FFP rules.

It also explains a lot if true.

If true then that's a brilliant bargaining tool for us. Bellamy and co will know that we aren't bluffing and that paying up and shipping them on, considering our vast wealth and FFP, will be much more harmful than letting them rot.

This is going to boil down to greed and their desire to play. The next 2 weeks will tell you a lot about bellers and co. Probably end up in loan deals

 

[SWP's back]

IIRC we can sit people in the stands for 1 year without their wages counting for FFPR.

Still pretty confident we will get the deadwood out by Sept 1st, we'll just get bummed on a few of the deals.

I'm sure we will but Dave et al were saying that we should just pay them off.

Whilst that would cost the same, I can now understand why the club won't do that. If would be stupid to add to our FFP cost burden.

I suppose it just shows that the City know better than some people on here.....

 

[Damocles]

That would be good if it was true, which it isn't.

 

[bluefandk]

Fbloke just tweeted saying "The reason City won't pay up the contracts of Bellamy, Ade etc is that doing so WOULD count towards FFP". Where as letting them sit on their arse in the reserves has no affect on our FFP spending as they were signed before the deadline. Paying up the contract is classed as "re-neotiating the contract".

This is from a lawyer who works on behalf of Premiership clubs advising on FFP rules.

It also explains a lot if true.

Did not know that, I was thinking we should just pay up to get rid, but this of course changes everything.

Just let them rot if they dont want to take a paycut to play football then.

 

[Maintainin]

...so where do we stand in obligations ?

And why can't the want-aways simply buy themselves out ?

 

[The Fat el Hombre]

That would be good if it was true, which it isn't.

fbloke IS the truth

 

[mancboy123]

Once again they signed the contracts why should we pay them up and let them have their own choice of clubs and earn big wages elsewhere with a nice little payoff from us?

 

[SWP's back]

That would be good if it was true, which it isn't.

You saying that Fbloke is KFA on this and made it up?

It is true their current contracts don't count towards FFP so you are saying that paying them off would not be classed as "renegotiating" the original contract?

Anything to back it up? It's just it's now your word Vs Fblokes and he does tend to have an idea on things of this nature.

 

[Damocles]

That would be good if it was true, which it isn't.

fbloke IS the truth

He's sort of right but he's a little confused. The FFPR calculations will be done on the profit/loss of every club (obviously with various barometers such as income only from "football related activities").

Anyway, IF YOU FAIL the FFP regulations, AT THEIR DISCRETION, UEFA can choose to ignore all contracts signed before 1 June 2010 for the purpose of the calculations.

 

[Three_Hat-tricks]

That would be good if it was true, which it isn't.

fbloke IS the truth

He's sort of right but he's a little confused. The FFPR calculations will be done on the profit/loss of every club (obviously with various barometers such as income only from "football related activities").

Anyway, IF YOU FAIL the FFP regulations, AT THEIR DISCRETION, UEFA can choose to ignore all contracts signed before 1 June 2010 for the purpose of the calculations.

[youtube]http://www.youtube.com/watch?v=_pxeRT8pcTo[/youtube]

 

[SWP's back]

That would be good if it was true, which it isn't.

fbloke IS the truth

He's sort of right but he's a little confused. The FFPR calculations will be done on the profit/loss of every club (obviously with various barometers such as income only from "football related activities").

Anyway, IF YOU FAIL the FFP regulations, AT THEIR DISCRETION, UEFA can choose to ignore all contracts signed before 1 June 2010 for the purpose of the calculations.

So it's fair to say that the club wouldn't benefit from paying them up but may benefit from letting them rot until they get bored and accept a lower offer or their contract runs out.

 

[Skashion]

Anyway, IF YOU FAIL the FFP regulations, AT THEIR DISCRETION, UEFA can choose to ignore all contracts signed before 1 June 2010 for the purpose of the calculations.

I think they would be in legal trouble if they didn't accept that stipulation because in that case they'd effectively be applying rules which came into place on that date retroactively to contracts not signed under those conditions.

 

[Damocles]

That would be good if it was true, which it isn't.

You saying that Fbloke is KFA on this and made it up?

It is true their current contracts don't count towards FFP so you are saying that paying them off would not be classed as "renegotiating" the original contract?

Anything to back it up? It's just it's now your word Vs Fblokes and he does tend to have an idea on things of this nature.

Just the regulations themselves:

For the purpose of the first two monitoring periods, i.e. monitoring periodsassessed in the seasons 2013/14 and 2014/15, the following additionaltransitional factor is to be considered by the Club Financial Control Panel:

Players under contract before 1 June 2010

If a licensee reports an aggregate break-even deficit that exceeds theacceptable deviation and it fulfils both conditions described below then this would be taken into account in a favourable way.
i) It reports a positive trend in the annual break-even results (proving it has implemented a concrete strategy for future compliance); and
ii) It proves that the aggregate break-even deficit is only due to the annual break-even deficit of the reporting period ending in 2012 which in turn is due to contracts with players undertaken prior to 1 June 2010 (for the avoidance of doubt, all renegotiations on contracts undertaken after such date would not be taken into account).This means that a licensee that reports an aggregate break-even deficit that exceeds the acceptable deviation but that satisfies both conditions described under i) and ii) above should in principle not be sanctioned

<a class="postlink" href="http://www.scribd.com/doc/54698592/Uefa-FFP-regulations" onclick="window.open(this.href);return false;">http://www.scribd.com/doc/54698592/Uefa-FFP-regulations</a>

Page 85

They are saying that IF WE FAIL, and IF WE CAN PROVE WE ARE COMPLYING, and IF WE CAN SHOW THAT WE FAILED BECAUSE OF THESE CONTRACTS, UEFA can, AT THEIR DISCRETION discount the contracts signed before 1 June 2010.

That's not quite what Andy said.

 

[Balti]

if we let the contract run down then aren't they effectively still an asset on the books in the meantime which would offset their monthly cost in wages etc with that cost effectively being amortised anyway, whereas if we pay the contract off then there's just a big instant number in the minus column of the p&l plus the loss of any remaining asset value making it a double negative whammy even with their salary being taken out of the equation?

or am I just making that up?!

 

[Prestwich_Blue]

That would be good if it was true, which it isn't.

Well that depends.

There is a transitional arrangement that allows us to exclude wages for contracts signed prior to 1st June 2010 in this year's accounts only if this was the only expense stopping us meeting FFPR and the trend in our results is showing an improvement over the two monitoring periods these accounts will be used in. however it doesn't apply to contracts that are re-negotiated after than time. So that bit is certainly correct and is one of the key get-outs for us.

The question has to be over the definition of "re-negotiation". If we simply pay-off the outstanding contract value then I suspect that would simply count as wages, in the same way a pay-off to a manager would count. But if we, in the absence of any clause allowing it, were to agree a settlement figure with a player that was less than this then it certainly could be classed as a re-negotiation.

After 31st May 2012 then there would be no impact as the get-out only applies to the financial reporting period which ends on that date.

 

[fbloke]

The OP told me that he had started this thread so I thought I would check it out.

The point I made on my tweet was quite simple - City WILL NOT pay up contracts as it WILL bring those payments into FFPR calculations.

Dam' has made other points that are true and accurate but I was not arguing any of the FFPR rules, simply making the point that there wont be any contracts paid up.

Bellamy has continually talked about this as he wants freedom to move without his wages being a burden on, say Cardiff (funnily enough he would still take a wage from Cardiff as well which is nice).

The only reason for City to pay off a player would be if the pay-off was for less than the contract value, which if it is means that UEFA deem that to be a re-negotiated deal and as such will include that cost in FFPR calc's (if it was exempted previously due to the 2010 rule).

UEFA are also cautioning clubs about even the slightest amendments to contracts as it may bring some costs into FFPR, it is quite simply a minefield.

Incidentally there has also been some concern at clubs that in order to achieve FFPR compliance they would want to trim costs by moving players on, but the very fact that ALL clubs are worried about the FFPR impact of new deals there is a log jam.

We may well be seeing that log jam in players already with fewer fringe players moving than before and City are being asked to pay players whilst on loan elsewhere. The likelihood is that UEFA will also include the costs of subsidising a loan as part of FFPR.

Extrapolate what you want from that folks.