Financial Fair Play in Championship

[Svlad Cjelli]

Championship clubs are set to introduce their own financial fair play system where teams can spend only what they earn. The Football League chairman, Greg Clarke, said the Championship clubs have voted in principle to mirror the Uefa system that will affect clubs in European competition from 2014.

The system will be proposed at the Football League's AGM in Cyprus on Thursday, where it will also be put forward that League One clubs move towards the introduction of the salary cap currently in force in League Two, limiting teams' outlay to 60% of their turnover on wages.

http://www.guardian.co.uk/football/2011/jun/08/championship-financial-fair-play

This will significantly change the balance towards clubs like Reading who manage their resources well and aren't dependant upon debt.

[brendywendy]

only if clubs arent allowed to circumvent the rules with their clever lawyers etc

[Row Z Royal]

Will it?


Or will it reduce the general wage levels in the Champ? The teams with the big reputations and big salaries now will still have the big rep and still get the best players at this level.

We won't and we won't.

[Svlad Cjelli]

Indeed - or rather their clever accountants. It all really depends if the FL have a properly funded compliance unit which can investigate potential breaches of the rules, and also the balls to impose sanctions on clubs that break them.

This won't stop "sugar-daddy" investors, of course - it just mean that they won't be able to loan money to club and have it counted as"income" - they'll have to give money so it doesn't sit on the books as debt.

[Snowball]

One way to (partially) circumvent the rules is for a business-owning
Sugar-Daddy to have sponsorship on the shirts and pay way over the odds
for the privilege.


But surely TRYING to have rules is better than not trying?


As for "only the big/famous clubs will get the good players"
doesn't that currently mean that for clubs like RFC to get
these players they would have to pay even higher wages?

Won't the transition years favour the financially-well-run clubs?

[Barry the bird boggler]

Bound to be 101 loopholes for clever people to exploit.

Firstly, I presume"what a club earns" is defined as simply gate money, tv revenue, merchandising, sponsorship, cup success revenue, player sales etc.

Secondly, how long before these changes would be implemented, if they get the green light on Thursday will they be enforced for 2011/12 or 2012/13 or later

Thirdly, who polices this and will the penalties be clearly identified and explained to all or will it be the usual "fudge job" where nothing happens until a club goes into administration and we get left with the same palava we get now?

[ZacNaloen]

Presumably they would need to look at all existing contracts, and set the time table for when this is fully enforceable for when the last contract runs out.

As many clubs will have to renegotiate/sell/release players in order to be able to afford this.

[Bandini]

If the hotel is included in the club's assets and its turnover within the club turnover, I guess that that would be a significant bonus to us.

[SCIAG]

One way to (partially) circumvent the rules is for a business-owning
Sugar-Daddy to have sponsorship on the shirts and pay way over the odds
for the privilege.

Common misconception, at least under UEFA's model. There was talk of Manchester City selling a certain seat for, say, £10m per season to their owner, or charging a ridiculous amount for a small item of memorabilia, but this isn't allowed.

[brendywendy]

If the hotel is included in the club's assets and its turnover within the club turnover, I guess that that would be a significant bonus to us.

it was making us money pre recession- and youd have to be an eedjit to complain about it being a short term drain, when clearly in the long term its a financial bonus for the club, and gives us non football related revenue that is worth alot to a club like ours

[Hoop Blah]

SCIAG, how do they plan to regulate that then? Surely if I want to give money to RFC for it's own use then that should be perfectly acceptable.

Selling me a seat for that 'donation' seems ok to me as long as that money is staying within the club.

I think it's a positive thing that football is at least trying to do something, or even just trying to look like it is.

As RZR said, I'm not sure this will really help address any imbalance but I disagree that we'd be behind a lot of clubs in this league. I think we're seen as a decent club these days, much more so than 10 years ago at least.

[SCIAG]

SCIAG, how do they plan to regulate that then? Surely if I want to give money to RFC for it's own use then that should be perfectly acceptable.

Selling me a seat for that 'donation' seems ok to me as long as that money is staying within the club.

I think it's a positive thing that football is at least trying to do something, or even just trying to look like it is.

As RZR said, I'm not sure this will really help address any imbalance but I disagree that we'd be behind a lot of clubs in this league. I think we're seen as a decent club these days, much more so than 10 years ago at least.

I think they'll check the accounts of clubs for extraordinary spending. I'll do some Googling to see if I can find the article I read about that in, it was very well researched.

[Bandini]

If the hotel is included in the club's assets and its turnover within the club turnover, I guess that that would be a significant bonus to us.

it was making us money pre recession- and youd have to be an eedjit to complain about it being a short term drain, when clearly in the long term its a financial bonus for the club, and gives us non football related revenue that is worth alot to a club like ours

My point was that, even leaving aside any profit from the hotel, if it adds to our turnover it means that we can pay more in wages (should we choose to do so).

[brendywendy]

sorry- wasnt really disagreeing, just used your post as a starting point

[SCIAG]

http://swissramble.blogspot.com/2010/10 ... -even.html

That was the article I was thinking of, though on re-reading it doesn't cover what I was talking about. Still, I am absolutely certain I read somewhere that clubs can't artificially turn "gifts" from the owner into revenue by massively overcharging for something, the owner or major shareholder needs to receive equity.

[Mr Angry]

http://swissramble.blogspot.com/2010/10/how-manchester-city-could-break-even.html

That was the article I was thinking of, though on re-reading it doesn't cover what I was talking about. Still, I am absolutely certain I read somewhere that clubs can't artificially turn "gifts" from the owner into revenue by massively overcharging for something, the owner or major shareholder needs to receive equity.

That would be the same way of preventing getting around a salary cap by having a player paid within the cap, but then he does 1 hour a week as gym caretaker for which he gets paid £50k or something equally stupid....

[RoyalBlue]

All sounds good in principle but it is very hard (probably impossible) to regulate capitalist driven behaviours.

And if it worked, presumably it would just widen the gulf between PL and the Championship. PL teams would find it even easier to attract any Championship players they wanted. Promoted clubs would suddenly find themselves having to pay even greater increases to their players who were good enough for PL whilst running around trying to find new players to replace a greater number who couldn't make the PL grade. Depending on where the wage levels settled, clubs might also find themselves less able to attract good overseas players. Maybe that would be good for the English game in the longer term but it will make it even harder to reach the PL in the immediate term.

[Svlad Cjelli]

http://swissramble.blogspot.com/2010/10/how-manchester-city-could-break-even.html

That was the article I was thinking of, though on re-reading it doesn't cover what I was talking about. Still, I am absolutely certain I read somewhere that clubs can't artificially turn "gifts" from the owner into revenue by massively overcharging for something, the owner or major shareholder needs to receive equity.

But they don't need to - "gifts" are allowed to be counted as income under FFP rules - just as long as they are given and not lent.

This isn't about restricting income, it's about making sure that what is "income" is legitimately that - and that no more than a certain proportion of that realistic income is spent.

[Tony Le Mesmer]

Would this not mean some relegated PL clubs having to ship their entire squad to meet the regulations?

[Svlad Cjelli]

All sounds good in principle but it is very hard (probably impossible) to regulate capitalist driven behaviours.

And if it worked, presumably it would just widen the gulf between PL and the Championship. PL teams would find it even easier to attract any Championship players they wanted. Promoted clubs would suddenly find themselves having to pay even greater increases to their players who were good enough for PL whilst running around trying to find new players to replace a greater number who couldn't make the PL grade. Depending on where the wage levels settled, clubs might also find themselves less able to attract good overseas players. Maybe that would be good for the English game in the longer term but it will make it even harder to reach the PL in the immediate term.

But isn't that more or less exactly what we have now? Average PL wages are 4.54 time bigger than avergae Championship wages.