UEFA to propose FFP replacement plan

Prestwich_Blue

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53,687
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Wherever I lay my hat that's my home
The short answer is that limits on the P&L are unfair since clubs need different strategies depending on their circumstances. For example, Aberdeen would need to pay over the odds wages to attract anybody to the frozen north.
The second objection is that it would not protect clubs from debt, which is the real killer. Debt arises from two directions, not just over spending but also lack of enough income.
Quite right. Simple metrics like maximum transfer spend or wage ratios simply don't address the key issues that cause financial problems. Generally these are due to clubs not being able to meet liabilities, such as tax bills or paying other creditors.

What nearly sent us into administration in 2008 was that we didn't have the £15m in cash to pay the second instalment of Sven's transfers. What La Liga have got right is that they don't really bother with what happened 3 years ago but what's likely to happen in the future. So, look at what's coming in, what's likely to be going out in operational costs and upcoming current liabilities (for transfers, trade creditors, etc) and any other financial issues (e.g. loan repayments).

The problem with using absolute measures like a maximum transfer spend of £100m is that there are other financial factors involved in transfers. Money in, amortisation, instalments, wages and bonuses. Much better to look at total player costs, which should be calculated as:

(amortisation + wages) - profit/(loss) on player transfers = total player cost

To illustrate this, back in 2017/18 when we bought Walker, Mendy, Bernardo, Ederson, etc, we spent over £200m gross and about £120m net. Yet, using that equation I outlined above, our overall player costs went up just £3.5m. That's virtually zero net spend yet what if we had to find £100m in 12 months that we'd struggle to find? A sensible financial regulation system would ring-fence that £100m and either offset any sales against it and/or restrict any other spending until it was paid.
 

RandomJ

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Joined
12 Mar 2009
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24,706
All I know is whatever they have come up with will in some way be designed to cripple us. They won't soon have forgotten the very public bloody nose we gave them.
 

andyhinch

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31 Jan 2012
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42,144
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On the outside looking in.
Quite right. Simple metrics like maximum transfer spend or wage ratios simply don't address the key issues that cause financial problems. Generally these are due to clubs not being able to meet liabilities, such as tax bills or paying other creditors.

What nearly sent us into administration in 2008 was that we didn't have the £15m in cash to pay the second instalment of Sven's transfers. What La Liga have got right is that they don't really bother with what happened 3 years ago but what's likely to happen in the future. So, look at what's coming in, what's likely to be going out in operational costs and upcoming current liabilities (for transfers, trade creditors, etc) and any other financial issues (e.g. loan repayments).

The problem with using absolute measures like a maximum transfer spend of £100m is that there are other financial factors involved in transfers. Money in, amortisation, instalments, wages and bonuses. Much better to look at total player costs, which should be calculated as:

(amortisation + wages) - profit/(loss) on player transfers = total player cost

To illustrate this, back in 2017/18 when we bought Walker, Mendy, Bernardo, Ederson, etc, we spent over £200m gross and about £120m net. Yet, using that equation I outlined above, our overall player costs went up just £3.5m. That's virtually zero net spend yet what if we had to find £100m in 12 months that we'd struggle to find? A sensible financial regulation system would ring-fence that £100m and either offset any sales against it and/or restrict any other spending until it was paid.
I love it when you talk finance ;-)
 

BrianW

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People's Republic of Bury, Gorton exile
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There's Only One City
FFP did not save Bury FC. That club was destroyed by its debt and a questionable owner, whose motives we can only speculate upon.

If the objective is to stop clubs from going bust, there should be a limitation on how much debt can be put on them. Owners should, OTOH, be able to put in as much equity funding as they wish.

But the objective is not to stop clubs from going bust, it is to keep a rein on City and stop any other club from doing a City in the future. It is all about maintaining the established hierarchy, and it stinks.

If we had a law saying that Asda, Sainsburys, Tesco, Morrisons and Waitrose should be protected and not face competition from new supermarkets, we would think the world had gone mad.
 

Dicko69

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Joined
26 Jul 2009
Messages
2,010
All I know is whatever they have come up with will in some way be designed to cripple us. They won't soon have forgotten the very public bloody nose we gave them.
I think we'll be safe from any attempts on us for a couple of years now, they can't harm us without killing themselves at the moment
 

waspish

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Joined
25 Jan 2009
Messages
44,606
Location
Blue Moon
Quite right. Simple metrics like maximum transfer spend or wage ratios simply don't address the key issues that cause financial problems. Generally these are due to clubs not being able to meet liabilities, such as tax bills or paying other creditors.

What nearly sent us into administration in 2008 was that we didn't have the £15m in cash to pay the second instalment of Sven's transfers. What La Liga have got right is that they don't really bother with what happened 3 years ago but what's likely to happen in the future. So, look at what's coming in, what's likely to be going out in operational costs and upcoming current liabilities (for transfers, trade creditors, etc) and any other financial issues (e.g. loan repayments).

The problem with using absolute measures like a maximum transfer spend of £100m is that there are other financial factors involved in transfers. Money in, amortisation, instalments, wages and bonuses. Much better to look at total player costs, which should be calculated as:

(amortisation + wages) - profit/(loss) on player transfers = total player cost

To illustrate this, back in 2017/18 when we bought Walker, Mendy, Bernardo, Ederson, etc, we spent over £200m gross and about £120m net. Yet, using that equation I outlined above, our overall player costs went up just £3.5m. That's virtually zero net spend yet what if we had to find £100m in 12 months that we'd struggle to find? A sensible financial regulation system would ring-fence that £100m and either offset any sales against it and/or restrict any other spending until it was paid.

They probably know all this but they dance around what’s good for the history clubs not what’s good for all! That’s the problem and always has been..
 

KS55

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Joined
14 Oct 2016
Messages
11,555
I think we'll be safe from any attempts on us for a couple of years now, they can't harm us without killing themselves at the moment
Our financial position is sound. Provided we continue with our policy of being self sustaining, I doubt Uefa can touch us. Despite Covid, Khaldoon was bullish about the final outturn of the two years taken together.
 

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