Financial Fair Play and all these new contracts

[Lallana's Left Peg]

Can anybody informed on the new passed Financial Fair Play rules tell me if Saints gain any advantage from getting all these new contracts sorted before the end of this season?

 

I'm not suggesting that if there is an advantage then that is the reason we've renewed so many contracts it but I'd be interested to understand what impact (if any) the new contracts being sorted now has, assuming it increases our wage bill ahead of next season when the rules come in.

 

It might be that there is no impact whatsoever but just curious to understand and whether or not it is something that gives us more opportunity to increase the wage bill in the summer.

[stevegrant]

Won't make a great deal of difference.

 

The only impact it has is on the amortisation figure for players we've paid a fee for.

 

For example, we signed Lambert for £1m on a 5-year contract, which means the accounts show a £200k charge each year in amortisation/depreciation. However, having "paid" £800k of that over 4 years, we've since given him a new 3-year contract so the remaining £200k will be split over those three years, reducing his annual contribution to the amortisation bill by £133k a year.

 

Our wage bill is too low to be affected by the "maximum £4m increase" rules that come into play next season. The threshold is £52m, I expect ours will be around the £35m mark.

[The9]

I'm sure we're signing players to lots of new contracts in order to benefit from this when the rules come into effect. Problem being, I don't understand how it might work yet !

[SaintBobby]

Might it not be better to get (potentially large) signing-on fees out of the way this season? E.g. are we giving relatively generous signing on fees and relatively lower wages? For example, rather than paying Lambert £60K per week for 4 years, we pay him £4m up front and £40K per week?

[Glasgow_Saint]

Won't make a great deal of difference.

 

The only impact it has is on the amortisation figure for players we've paid a fee for.

 

For example, we signed Lambert for £1m on a 5-year contract, which means the accounts show a £200k charge each year in amortisation/depreciation. However, having "paid" £800k of that over 4 years, we've since given him a new 3-year contract so the remaining £200k will be split over those three years, reducing his annual contribution to the amortisation bill by £133k a year.

 

Our wage bill is too low to be affected by the "maximum £4m increase" rules that come into play next season. The threshold is £52m, I expect ours will be around the £35m mark.

 

 

good post

[Lallana's Left Peg]

Won't make a great deal of difference.

 

The only impact it has is on the amortisation figure for players we've paid a fee for.

 

For example, we signed Lambert for £1m on a 5-year contract, which means the accounts show a £200k charge each year in amortisation/depreciation. However, having "paid" £800k of that over 4 years, we've since given him a new 3-year contract so the remaining £200k will be split over those three years, reducing his annual contribution to the amortisation bill by £133k a year.

 

Our wage bill is too low to be affected by the "maximum £4m increase" rules that come into play next season. The threshold is £52m, I expect ours will be around the £35m mark.

 

Thanks, so it has a bit of an impact on the balance sheet (but doesn't realistically mean much) and our wage bill would have to swell massively before we are even impacted by the new rules on growth?

 

With quite a few fringe players leaving when their contracts expire, and potentially others shown out of the door, it sounds like there is still plenty of scope for bringing in new players (not withstanding how much of the 'new' money needs to be used for the BVI loan).

[mikee]

Won't make a great deal of difference.

 

The only impact it has is on the amortisation figure for players we've paid a fee for.

 

For example, we signed Lambert for £1m on a 5-year contract, which means the accounts show a £200k charge each year in amortisation/depreciation. However, having "paid" £800k of that over 4 years, we've since given him a new 3-year contract so the remaining £200k will be split over those three years, reducing his annual contribution to the amortisation bill by £133k a year.

 

Our wage bill is too low to be affected by the "maximum £4m increase" rules that come into play next season. The threshold is £52m, I expect ours will be around the £35m mark.

 

So this suggests we will benefit from the new rules as we have lots of headroom to increase the wage bill whereas most of our (top half) competitors may only be able to increase theirs by £4m.

 

Is that right?

[Sour Mash]

So this suggests we will benefit from the new rules as we have lots of headroom to increase the wage bill whereas most of our (top half) competitors may only be able to increase theirs by £4m.

 

Is that right?

Depends who you consider our competitors to be I guess.

[stevegrant]

So this suggests we will benefit from the new rules as we have lots of headroom to increase the wage bill whereas most of our (top half) competitors may only be able to increase theirs by £4m.

 

Is that right?

Yes and no.

 

The rules come with a very significant caveat. The £4m increase limit has been brought in to ensure that the extra cash from the new TV deal doesn't all end up in the pockets of the players, but the rules also add that the wage bill can increase by more than £4m if the increase is sourced from an increase in commercial revenue.

 

Hence why Man United have been signing up dozens of new sponsorship/partnership agreements. Getting £15m a year from Aon just to sponsor their training ground means that's £15m a year they can add to their wage bill if they feel the need to make any marquee signings.