Window Cleaner Posted 25 April, 2012 Share Posted 25 April, 2012 Cos we'll be in the crapper if we don't. http://www.bbc.co.uk/sport/0/football/17841566 No more financing through loans,limited losses. Our owner has invested about 50 million in 3 years!! Link to comment Share on other sites More sharing options...
Sour Mash Posted 25 April, 2012 Share Posted 25 April, 2012 Cos we'll be in the crapper if we don't. http://www.bbc.co.uk/sport/0/football/17841566 No more financing through loans,limited losses. Our owner has invested about 50 million in 3 years!! Stupid rule, load of b****ks. If someone wants to give money to a club, why shouldn't they be able to? Or will it just result in a restructuring of "loans" into outright "gifts" which incur tax? Link to comment Share on other sites More sharing options...
The9 Posted 25 April, 2012 Share Posted 25 April, 2012 I wonder who the 3 were...? Link to comment Share on other sites More sharing options...
doddisalegend Posted 25 April, 2012 Share Posted 25 April, 2012 So if a team gets more than 6 million in debt they will recive a fine that could run into millions .....how does that make sense? you have no money so we will fine you? I'm guessing the fine money goes to the football league? Link to comment Share on other sites More sharing options...
stevegrant Posted 25 April, 2012 Share Posted 25 April, 2012 So if a team gets more than 6 million in debt they will recive a fine that could run into millions .....how does that make sense? you have no money so we will fine you? I'm guessing the fine money goes to the football league? Not quite. Teams who remain in the Football League at the end of the season (i.e. not promoted to the Premier League) will be subject to a transfer embargo - the article I've read is a bit ambiguous here, but there's a chance that embargo would last for a whole year, similar to the one the SPL/SFA have handed Rangers this week (only allowed to sign players under the age of 18 ). It is only those who are promoted to the Premier League who would be subject to the "Fair Play Tax" at a sliding scale depending on the amount of the loss above the "acceptable deviation". Here's an example: Say an entirely fictional club, East Cheese City, were promoted to the Premier League in the 2015/16 season (when the target "acceptable deviation" will be a £2m loss), having made an annual loss of £10m. That's £8m over the "acceptable deviation". On the sliding scale (1% for £100k losses, 100% for £10m+), that would equate to an 80% "tax" by the Football League, so that club would have to contribute £6.4m out of its revenue from the next season (i.e. its Premier League money) into the Fair Play fund, which would then get distributed evenly among the clubs remaining in the Football League who were fully compliant with the regulations. Link to comment Share on other sites More sharing options...
darren Posted 25 April, 2012 Share Posted 25 April, 2012 That's the end of portsmouth then. I have a feeling that more clubs will go bust becuse of this, Who will want to buy a club when they can't spend the money to get the club out of the mess there in. Link to comment Share on other sites More sharing options...
This Charming Man Posted 25 April, 2012 Share Posted 25 April, 2012 Let's hope WHU don't get promoted. I'm looking forward to seeing how they're going to get round that one. Link to comment Share on other sites More sharing options...
stevegrant Posted 25 April, 2012 Share Posted 25 April, 2012 I have a feeling that more clubs will go bust becuse of this, Who will want to buy a club when they can't spend the money to get the club out of the mess there in. To be fair, there's another year and a bit until sanctions will start to be imposed - plenty of time for most clubs to be adjusting their budgets. Pompey are probably ****ed regardless of this latest development. Link to comment Share on other sites More sharing options...
stevegrant Posted 25 April, 2012 Share Posted 25 April, 2012 Let's hope WHU don't get promoted. I'm looking forward to seeing how they're going to get round that one. Nailed-on that they were one of the three clubs who voted against it - when it was last mentioned they claimed they'd take it to a judicial review Link to comment Share on other sites More sharing options...
VectisSaint Posted 25 April, 2012 Share Posted 25 April, 2012 Let's hope WHU don't get promoted. I'm looking forward to seeing how they're going to get round that one. Maybe by getting out of the Championship in the next 2 seasons. Doesn't come in until 2014-5, so really not that relevant to us, as we should have yo-yoed down and back up before then. Link to comment Share on other sites More sharing options...
Window Cleaner Posted 25 April, 2012 Author Share Posted 25 April, 2012 (edited) Maybe by getting out of the Championship in the next 2 seasons. Doesn't come in until 2014-5, so really not that relevant to us, as we should have yo-yoed down and back up before then. these rules start next season, 2014/15 is when they apply to maximum effect I believe.Owners can only pump in 6 million next season,then 5,then 3. Our losses will exceed 6 million this season without a doubt so next season we'd have to increase revenue or cut costs and that would mean player salaries, where we are no doubt in the red again big time.If we don't go up this season next season will see us diminished. "Owners will be allowed to invest £6m next season, £5m the year after, then £3m in the 2014-15 season." Edited 25 April, 2012 by Window Cleaner Link to comment Share on other sites More sharing options...
stevegrant Posted 25 April, 2012 Share Posted 25 April, 2012 Our losses will exceed 6 million this season without a doubt I don't think they will. Don't forget we have a rather nice £12m windfall from the sale of Chamberlain to Arsenal, an extra £4-5m in broadcasting rights, an increase in ticket revenue (30% rise in ST prices, plus an extra 3k on the attendances), etc. Any costs incurred relating to the Academy and infrastructure development don't count towards FFP, so even with the new signings and new contracts awarded to existing players, I can't see us making a loss this season. Link to comment Share on other sites More sharing options...
Window Cleaner Posted 25 April, 2012 Author Share Posted 25 April, 2012 I don't think they will. Don't forget we have a rather nice £12m windfall from the sale of Chamberlain to Arsenal, an extra £4-5m in broadcasting rights, an increase in ticket revenue (30% rise in ST prices, plus an extra 3k on the attendances), etc. Any costs incurred relating to the Academy and infrastructure development don't count towards FFP, so even with the new signings and new contracts awarded to existing players, I can't see us making a loss this season. The players got a salary spike for getting promoted,virtually all of them.Our losses will be pretty monumental this season I expect. All the extra TV cash (and it won't be 4/5 mill cos the basic award is just 2.4 million) will be gobbled up on extra player salaries (don't forget we have some expensive additions) and the AOC money is mostly gone.Our loss for this season will probably be somewhere around the 12 million mark. Link to comment Share on other sites More sharing options...
anothersaintinsouthsea Posted 25 April, 2012 Share Posted 25 April, 2012 These rules make it even more important to have a successful academy. Not only because it will be cheaper to utilise homegrown talent rather than buy-in but also because selling a Chamberlain or Walcott for big bucks will give a massive competitive advantage over other clubs that can't make up the different through debt/investor loans. Link to comment Share on other sites More sharing options...
Saint_John Posted 25 April, 2012 Share Posted 25 April, 2012 The Football League site has 2 articles that go into more detail. http://www.football-league.co.uk/footballleaguenews/20120425/league-clubs-choose-financial-fair-play_2293334_2748233 http://www.football-league.co.uk/page/FLExplainedDetail/0%2c%2c10794~2748246%2c00.html For example the 2nd explains what is included and what is not. Link to comment Share on other sites More sharing options...
Matthew Le God Posted 25 April, 2012 Share Posted 25 April, 2012 (edited) Cos we'll be in the crapper if we don't. http://www.bbc.co.uk/sport/0/football/17841566 - Southampton sold Chamberlain for £12m rising to £15m in the first reporting period. - Equity investment is still allowed next season (albeit dropping over time to 2015/16). - The £15m spent on Staplewood training ground is exempt from these rules. - Can you tell me how much Saints made/lost in 2011/12 (the first reporting period for these rules)? No, because those accounts are not out yet. Income for the first 6 months of this season compared to last season was up by 70% though. In any case Nicola Cortese was fully aware that these rules would come in and he welcomed them. He wouldn't have expected Southampton to go up this season so will have budgeted for still being in the Championship next season. Edited 25 April, 2012 by Matthew Le God Link to comment Share on other sites More sharing options...
Window Cleaner Posted 25 April, 2012 Author Share Posted 25 April, 2012 - Southampton sold Chamberlain for £12m rising to £15m in the first reporting period. - Equity investment is still allowed next season (albeit dropping over time to 2015/16). - The £15m spent on Staplewood training ground is exempt from these rules. - Can you tell me how much Saints made/lost in 2011/12 (the first reporting period for these rules)? No, because those accounts are not out yet. Income for the first 6 months of this season compared to last season was up by 70% though. In any case Nicola Cortese was fully aware that these rules would come in and he welcomed them. He wouldn't have expected Southampton to go up this season so will have budgeted for still being in the Championship next season. We may have sold Chamberlain for a fair amount of money (not £12 million though,not after VAT has been paid on the sale) but we have invested fairly heavily in new players for somewhere around half of that.The saving factor in our accounts for this last season is that youth development is exempted from all of the "fair play" rules for the foreseeable future.Everything that can be imputed to the academy and development squad can be sidelined from the total operating budget, in our case this will be a fair old amount. For this season the rules were:Acceptable deviation from financial equilibrium= £4 million,permitted owner equity injection up to £8 million.So with a £12 million,partially offset by owner equity increase of £8 million, operating loss we would still be within the football league targets for this season,with the possibility of writing off youth development factors to boot. Next season would be something completely different if we were to be marooned in the NPC again, we'd have to cut costs. Link to comment Share on other sites More sharing options...
Frank's cousin Posted 25 April, 2012 Share Posted 25 April, 2012 Steve, do you have a handle on how the whole issue of infrastruvcture investment is handled - eg say a gate + commercial rev + TV money is 50mil or operating costs and overheads are 49.99 mil, but the owner invests 25mil in a new stand as a gift in exchnage for more equity, can this still be done under the new rules? Link to comment Share on other sites More sharing options...
Channon's Windmill Posted 25 April, 2012 Share Posted 25 April, 2012 I think these new rules are excellent and have been a long time coming. Lets get football back to being a competitive sport rather than a billionaires plaything. Success will be based on how well a club is run and by how good they can produce youngsters rather than owners wealth which is no bad thing. Link to comment Share on other sites More sharing options...
derry Posted 25 April, 2012 Share Posted 25 April, 2012 Steve' date=' do you have a handle on how the whole issue of infrastruvcture investment is handled - eg say a gate + commercial rev + TV money is 50mil or operating costs and overheads are 49.99 mil, but the owner invests 25mil in a new stand as a gift in exchnage for more equity, can this still be done under the new rules?[/quote'] The separate company that owns a stadium could spend what they liked. Link to comment Share on other sites More sharing options...
stevegrant Posted 25 April, 2012 Share Posted 25 April, 2012 Steve' date=' do you have a handle on how the whole issue of infrastruvcture investment is handled - eg say a gate + commercial rev + TV money is 50mil or operating costs and overheads are 49.99 mil, but the owner invests 25mil in a new stand as a gift in exchnage for more equity, can this still be done under the new rules?[/quote'] Wouldn't even need to be done as a gift or in exchange for more equity. All investment in infrastructure is disregarded when it comes to the FFP calculations, which includes building work to expand the stadium (and any debt incurred as a result), building work to renovate/expand training facilities and the vast majority of the operating costs of the Academy. Link to comment Share on other sites More sharing options...
Frank's cousin Posted 25 April, 2012 Share Posted 25 April, 2012 Wouldn't even need to be done as a gift or in exchange for more equity. All investment in infrastructure is disregarded when it comes to the FFP calculations, which includes building work to expand the stadium (and any debt incurred as a result), building work to renovate/expand training facilities and the vast majority of the operating costs of the Academy. Thanks - although this does leave a few loop holes for imaginative accounting.... Link to comment Share on other sites More sharing options...
Frank's cousin Posted 25 April, 2012 Share Posted 25 April, 2012 We may have sold Chamberlain for a fair amount of money (not £12 million though,not after VAT has been paid on the sale) but we have invested fairly heavily in new players for somewhere around half of that.The saving factor in our accounts for this last season is that youth development is exempted from all of the "fair play" rules for the foreseeable future.Everything that can be imputed to the academy and development squad can be sidelined from the total operating budget, in our case this will be a fair old amount. For this season the rules were:Acceptable deviation from financial equilibrium= £4 million,permitted owner equity injection up to £8 million.So with a £12 million,partially offset by owner equity increase of £8 million, operating loss we would still be within the football league targets for this season,with the possibility of writing off youth development factors to boot. Next season would be something completely different if we were to be marooned in the NPC again, we'd have to cut costs. I doubt we will have an operating loss of 12mil this season - so far in reported account the cash injection for equity has only been 18 il over 3 years + the original 12-14 mil 'purchase price' (pay off aviva and Barclays) - the 15 mil investment te acedmy- cost will be spread over a number of years for accounting purposes which will be allowed I guess - and not sure if the 'provsion' for teh club as alluded to by NC on Markus' death has been used up or if there is till some cash for the likes of staplewood that could be injected and coverted to equity - I guess we'll know more when this season accounts are published next year, but wont have cost us 12 mil loss. Link to comment Share on other sites More sharing options...
Horley CTFC Saint Posted 25 April, 2012 Share Posted 25 April, 2012 Reading Southampton & Leicester!? http://www.ft.com/cms/s/0/43fe56e2-8ed6-11e1-aa12-00144feab49a.html#axzz1t5IlSzdY Link to comment Share on other sites More sharing options...
trousers Posted 25 April, 2012 Share Posted 25 April, 2012 Wouldn't even need to be done as a gift or in exchange for more equity. All investment in infrastructure is disregarded when it comes to the FFP calculations, which includes building work to expand the stadium (and any debt incurred as a result), building work to renovate/expand training facilities and the vast majority of the operating costs of the Academy. So, using these new Football League rules as a retrospective benchmark, Southampton's reason for going into administration in 2009 was based upon a legitimate endeavour not quite going to plan (new stadium) whereas Pompey's 2 recent administrations were based upon reckless spending on players? Link to comment Share on other sites More sharing options...
trousers Posted 25 April, 2012 Share Posted 25 April, 2012 @solentsport: #Saintsfc revealed as one of the 3 Championship clubs who voted against the new Financial Fair Play rules. Leicester & Reading the others Link to comment Share on other sites More sharing options...
S-Clarke Posted 25 April, 2012 Share Posted 25 April, 2012 Reading Southampton & Leicester!? http://www.ft.com/cms/s/0/43fe56e2-8ed6-11e1-aa12-00144feab49a.html#axzz1t5IlSzdY You have to register to read that - any chance you could paste it? Link to comment Share on other sites More sharing options...
Horley CTFC Saint Posted 25 April, 2012 Share Posted 25 April, 2012 English clubs aspiring to membership of the Premier League, the world’s most lucrative domestic football competition, have agreed to curbs on how much they can spend to achieve success. The 24 clubs in the Championship, English football’s tier below the Premier League, have voted to operate under new financial restrictions designed to end the spiralling losses racked up by players’ wages that have put the survival of several clubs at risk. The Football League – which runs the three tiers of the sport outside the Premiership – has persuaded Championship clubs to agree to limits on losses they incur and on equity investment from shareholders. The restrictions mirror rules introduced by European football governing body Uefa for clubs that qualify for the Champions League and Europa League. Not every club was so ready to give up the free market. Three of the 24 Championship clubs voted against the new rules, which impose sanctions in the form of a transfer embargo or a fine for failing to keep within spending limits, and restrictions on owners’ investment. They are understood to be Reading, which won promotion to the Premier League last week, Southampton, favourites to be promoted this weekend, and Leicester City. Greg Clarke, Football League chairman, said: “The free market is not the best solution to all of our problems.” His vision of football finance is in marked contrast to the Premier League’s, which has been more than happy to see ambitious Championship clubs speculating in a bid to win promotion to its exclusive membership. The rules are unlikely to be well received at the Premier League because they may limit the number of Championship clubs with the financial clout to compete for promotion. How the rules will work The Championship’s “financial fair play” rules borrow from the Uefa rules of the same name, with some tweaks, writes Roger Blitz. Coming into effect from next season, the rules say a Championship club can incur losses for the 2012/13 season of no more than £10m. Within this loss is a level of shareholder equity investment that cannot exceed £6m. This permitted loss is reduced in each of the next three seasons, so that in 2015/16 the acceptable loss is £5m, of which shareholder equity investment cannot be more than £3m. To allow for the new rules to bed in, clubs that break the rules in the first two seasons will not be sanctioned. But from the 2014/15 season, clubs in breach face the imposition of a transfer embargo. Any clubs in breach of the rules that are promoted to the Premier League will have to pay a “fair play tax,” based on a percentage of the sum by which they have exceeded the losses threshold. Clubs relegated from the Premier League to the Championship will not be subject to sanctions in their first season in the new division, provided they have met Premier league financial regulations. Money raised from the fair play tax will be distributed to Championship clubs. Clubs in breach that are relegated from the Championship will miss out on this distribution. The Premier League, which has reservations about Uefa’s financial fair play rules, declined to comment. Mr Clarke said it would be consulted about the new rules. Mr Clarke has painted an increasingly ominous outlook for English football since the former chief executive of Cable & Wireless Communications and Lend Lease joined the Football League two years ago. Debt, “a proxy for risk”, said Mr Clarke, has reached £1bn across the three divisions, and he warned it is projected to double in five years unless urgent action is taken. Richard Scudamore, Premier League chief executvie, tends to be more sanguine about debt in football. Two Football League clubs, Portsmouth and Port Vale, are in administration, but there was a real danger, said Mr Clarke, of liquidation for 3 or 4 clubs. Income from broadcasting rights deals has fallen by a quarter, but the biggest problem for club owners was the dearth of buyers. The best outlook for the Football League for the next five years, its chairman argued, was for clubs to control costs in order to avoid the need to raise any new net capital. “This is a step on the road which will allow over a period of time our clubs to be financially sustainable,” Mr Clarke said. The Football League initiative follows last month’s joint agreement with the Premier League and the Football Association to set up a new regulatory authority to monitor the professional game’s finances. Mr Clarke has already persuaded the 48 clubs in League 1 and League 2 of the Football League to adopt salary caps, but he said it was “impossible” to make that work in the Championship. Tom Glick, chief executive of Derby County, said: “The key is we have options. We are not being told how big our squad needs to be. Some will choose to run a tight squad, some will invest more in youth development.” According to John Beech, sport and tourism professor at Coventry University, clubs are facing “an increasingly turbulent financial scenario”. The new rules were a step towards their survival. “It was becoming less and less defensible to continue to allow unrestrained financial doping,” said Mr Beech. But will it drive down wages, football’s biggest and most uncontrollable cost? Mr Clarke says there is anecdotal evidence of a more realistic approach from players, with some, worried by the budget squeezes in their clubs, prepared to negotiate longer-term deals in return for less money. But one consequence is a widening gulf between wages in the Premier League and in the rest of English football. “I have no idea and no interest in how the Premier League [is] going to regulate itself,” said Mr Clarke. “But if you’ve got a player in a Championship club, he can double his wages in the Premier League if he’s good enough.” Link to comment Share on other sites More sharing options...
Saint_clark Posted 25 April, 2012 Share Posted 25 April, 2012 That's the end of portsmouth then. I have a feeling that more clubs will go bust becuse of this, Who will want to buy a club when they can't spend the money to get the club out of the mess there in. ...but we will also see a lot of overpaid players f*cking off elsewhere and home grown talent coming to the fore once again. I can't wait. And regarding that article above...it is "understood" to be us, Reading and Leicester. Nothing concrete. Probably rumour based on us and Reading receiving massive loans from our owners and Leicester spending an absurd amount. Link to comment Share on other sites More sharing options...
Horley CTFC Saint Posted 25 April, 2012 Share Posted 25 April, 2012 ...but we will also see a lot of overpaid players f*cking off elsewhere and home grown talent coming to the fore once again. I can't wait. And regarding that article above...it is "understood" to be us, Reading and Leicester. Nothing concrete. Probably rumour based on us and Reading receiving massive loans from our owners and Leicester spending an absurd amount. Our loan was converted to equity for obvious reasons Link to comment Share on other sites More sharing options...
SaintBobby Posted 25 April, 2012 Share Posted 25 April, 2012 I don't understand the new rules. If some benefactor wants to give a club of his choosing a few million, let him. I can see why they'd want to tighten up on debt/leveraging but not on straight philanthropy. Link to comment Share on other sites More sharing options...
benjii Posted 25 April, 2012 Share Posted 25 April, 2012 I don't understand the new rules. If some benefactor wants to give a club of his choosing a few million, let him. I can see why they'd want to tighten up on debt/leveraging but not on straight philanthropy. Indeed. All this will do is make the Premiership even more of a closed shop and distort even more the value of parachute payments. Link to comment Share on other sites More sharing options...
stevegrant Posted 26 April, 2012 Share Posted 26 April, 2012 So, using these new Football League rules as a retrospective benchmark, Southampton's reason for going into administration in 2009 was based upon a legitimate endeavour not quite going to plan (new stadium) whereas Pompey's 2 recent administrations were based upon reckless spending on players? Newsflash Link to comment Share on other sites More sharing options...
mikee Posted 26 April, 2012 Share Posted 26 April, 2012 Am I reading that correctly? It is equity investment that is being limited NOT loans. This seems crazy as it is all the people that are buying clubs with loans that are the real problem. They expect their money back when they pull the plug and leave the club in question in ruins. If owners want to gift clubs money in the form of equity investment - how is that a problem? Am I mis-understanding this or is this another case of the FL not knowing their arse from their elbow. Link to comment Share on other sites More sharing options...
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