UEFA to propose FFP replacement plan

[Pablo ZZZ Peroni]

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.

Agree totally.


Using Transfer Mrkt (seemingly the go-to site for net spend nowadays albeit there are numerous flaws) our net spend for 17/18 was actually a huge £204 million. Yet, using the all-in accounting formula the net increase for the year was as you say less than £4million. And, as you know, we were ridiculed for our big spend that year - £50million on Walker etc.

Total net spend for the 6 years 14/15-19/20 (Transfer Mrkt)
City 655 mil United 630 mil.

Meanwhile, using the all-in accounting formula for 14/15 to 19/20
United £2.224 billion
City £2.087 billion

So, United are comfortably the biggest spenders.

 

[PannickAtTheDisco]

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'd rather Ceferin went with a 10 year plan so we get long-term transformative change and he doesn't need to upset the 'istree clubs, with incremental steps along the way than just patching up with short-term measures which don't work.

 

[Newman Noggs]

That consequence doesn't exist any longer for Man City or PSG, it literally doesn't exist. PSG could tack another zero onto Messi's wages and it would have zero effect to them but for the pesky financial rules. They could stick 2 zeros on and not give a shit. While money has always dominated the sport its always had a limit up until this point. They have turned the treadmill up to 50 and asked the history clubs to keep up, Barcelona and Inter have already fallen off, from what I hear Man Utd have rolled the dice and need to get very lucky or they're next. If this doesn't change then you will be the rich kids with the only ball on the street but nobody wants to play with you.

This is an infantile argument that presupposes, as so many opposition fans do, that our owners don't want to make a profit.

Until we came along, United, Liverpool, Arsenal and Chelsea had ring-fenced the CL money to ensure they were the owners of the ball whilst the rest of us were there to provide plucky opposition. They inflated transfer fees (and continue to do so) so that no-one else could compete, something even City's myriad critics acknowledge we never have.

When we came along they "took their ball home" in the form of FFP, and, when that didn't work, tried to create a new playing field in the shape of the ESL.

So, blame us as much as you like, you reap what you sow.

 

[gordondaviesmoustache]

This is an infantile argument that presupposes, as so many opposition fans do, that our owners don't want to make a profit.

Until we came along, United, Liverpool, Arsenal and Chelsea had ring-fenced the CL money to ensure they were the owners of the ball whilst the rest of us were there to provide plucky opposition. They inflated transfer fees (and continue to do so) so that no-one else could compete, something even City's myriad critics acknowledge we never have.

When we came along they "took their ball home" in the form of FFP, and, when that didn't work, tried to create a new playing field in the shape of the ESL.

So, blame us as much as you like, you reap what you sow.

The refusal of fans of clubs like Spurs to acknowledge (or even appreciate) that it was their clubs that were at the vanguard of monetising the sport, and thereby creating the landscape we see today, is comical.

 

[bobbyowenquiff]

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.

As long as the EFL continues to allow criminals to take over clubs plenty of them will continue to go bust. This has been happening for the last 50 years and probably before and it isn't going to change anytime soon. To have FFP rules in the PL which take no account of debt is just ridiculous.

 

[BobbyBoy]

This is an infantile argument that presupposes, as so many opposition fans do, that our owners don't want to make a profit.

Until we came along, United, Liverpool, Arsenal and Chelsea had ring-fenced the CL money to ensure they were the owners of the ball whilst the rest of us were there to provide plucky opposition. They inflated transfer fees (and continue to do so) so that no-one else could compete, something even City's myriad critics acknowledge we never have.

When we came along they "took their ball home" in the form of FFP, and, when that didn't work, tried to create a new playing field in the shape of the ESL.

So, blame us as much as you like, you reap what you sow.

There was an article in the Athletic yesterday that did just that, as in spread the blame around. I don't disagree with anything you have said there but it doesn't change the point that the game is a bad state now. PSG would have paid anything for Messi and cooked the books as necessary, like it or not your club is associated with them in the eyes of everyone bar Man City and PSG fans. Spending £250m on 2 players won't change that perception.

 

[Clevers]

OMG this is awful news for anyone trying to get into the champions league and staying there. Pretty much closes the door to them. I'm all for it since most of the league hates us anyway so screw them

We could say you asked for it and you got it.

 

[Semper aggressus]

I still don’t get why if a club is £400 million in debt it can still spend with impunity yet a club with no debt and a very wealthy owner is punished simply because it doesn’t sell as many tea towels and duvet covers in the Far East.

 

[Clevers]

Around 57%

In that case I'm in.

 

[Clevers]

I find it all a load of bullshit. Let clubs run themselves as they see fit. If they’re run that badly they go to the wall, then so be it, just like any other business sector

I've always thought that. There seems to be a strange view that football clubs should always be saved. Clubs need to learn to live within their means.