This is how french football is regulated since decades with the DNCG.As I have been saying all long. This version of FFP should be scraped at the end of the season. What I would have in its place is what I call COP., it means CAN OWNERS PAY. The way it would work is that the owner/s of a football club, must prove that they have the money to pay of all of the debts, should the bank come asking for their money back, or reduce the debt.
Surely this is a much better way to run all clubs. This would keep clubs afloat and stop clubs from folding i.e. Bury for an example. How many more clubs are there like Bury where the current owners are spending more money of the club then what it has .
Well its not fair for a start.So FFP is not FFP (Fit For Purpose)?
Thanks for that accountancy info PB great stuff.FFP should consist of an assessment of a series of KPI's or metrics covering all aspects of a club's financial health - things like operating profit, wage ratios, ownership of assets, net assets, debt levels and other liabilities and cashflows. It should be a traffic light system, with a set number of ambers or reds setting in chain a requirement for further explanations or, at worst, more in-depth examination of a club's books and overall financial management. As a last resort they should assess an owner's ability to finance the club over a future period, say 3 years.
MLB clubs, when they sign a player to a contract, have to deposit the full amount in an escrow account.
Come on did you read that and think it was compulsory to Spend 100m a year isn’t compulsory it’s a cap!
No, of course it isn't but have you not thought of the effect on asking prices?
If it had been set up for the right reasons it would look the way you describe. In fact I would take it a little further and suggest a balanced score card approach which also would measure supporter and employee satisfaction. But of course it wasn’t set up for the right reasons........FFP should consist of an assessment of a series of KPI's or metrics covering all aspects of a club's financial health - things like operating profit, wage ratios, ownership of assets, net assets, debt levels and other liabilities and cashflows. It should be a traffic light system, with a set number of ambers or reds setting in chain a requirement for further explanations or, at worst, more in-depth examination of a club's books and overall financial management. As a last resort they should assess an owner's ability to finance the club over a future period, say 3 years.
MLB clubs, when they sign a player to a contract, have to deposit the full amount in an escrow account.
Do you just allow a Billionaire to come into football and buy success?There are massive problems in trying to introduce any form of financial regulation of football clubs. One is certainly the enormous difference in the size and status of individual clubs and then of leagues. One system will never fit all, especially when the body which is going to regulate the game at European level has such a history of failing to balance its own books and does not enjoy an exactly spotless reputation for honesty with fans.
Many of the problems that the game faces did not develop overnight and are not going to be dealt with quickly. A basic concern appears to centre around the concept of competition and this is one which has tied the authorities in knots. Should all teams be able to compete with each other over a season? Clearly not or we would not have divisions in the professional game. Should the game be made more competitive? If so how do we do that - by a system of handicaps? This is where the authorities have been convinced that competition has a financial dimension but how it deals with such a complex aspect of the game has proved to be problematic in the extreme.
Football finance, like the finance of any economic activity, exists within a legal framework, and I believe that FFP regulations are extremely vulnerable to challenge in the courts. A second dimension is historical. It is a sad fact that most football clubs are in debt and have been for a long time. It is no good trotting out that this is not the case in Germany because of the Bundesliga's regulations because Germany sees more failed football clubs than good old free-for-all England, or France where the courts simply demote troubled clubs. Clearly clubs cannot be ordered to pay off their debts immediately and UEFA would never discipline certain big clubs for their debt? How could they do that anyway? And I think it is clearly impossible to penalise debt for the purposes of investment. So what attitude do UEFA take towards clubs which invest their owner's capital, rather than rely on a sponsor to provide the funds. Then there is the geographical/historical problem. The PL benefits from revenues from TV beyond the dreams of any other league because the PL is a national obsession at the moment and because of the historical connection between England and many areas of the world. In the 80s and 90s Italy was the financial centre of the football world, largely through very wealthy club owners. Uefa is unable to influence these forces and financial regulation seems only to make the resulting inequalities even more stark.
I don't know the solution but I think one of the problems that has escaped attention is that the regulations attempt to make certain clubs poorer by a variety of methods such as not being able to use their owners wealth whereas the obvious need is to bring more money into the game and ensure that even the smallest clubs benefit. The sad fact is that even the EFL is more concerned with clobbering the "rich": QPR already and Wolves, Leicester and Villa if and when they are ever relegated. Jealousy rules OK.