On The Assumption That This Is Correct

[shurlock]

We need an up to date figure for players' wages for the last season. I seem to remember seeing £53m?

 

What is clear is that the known figure used by the blog post is for club wages, not players wages. His assumptions are made against this arguably faulty baseline.

 

It is very easy to conflate players wages and club wages, overlooking the whole staff force that works behind the scenes (not to mention lavishly paid (ex)directors). Gareth Rogers has had to remind journos of this distinction in the past.

 

Players -rather than club wages- could be in the ballpark of £53m this year; but that would require as much as a 85% increase in the player wage bill in the space of a year. Doubt it.

[buctootim]

I freely admit I know next to nothing about FFP. If the wages are restricted by going up by no more than 5% what happens to the huge increase in tv money?

[ant]

Another article in a similar vein here: http://www.footyplace.com/features/ffp-to-blame-for-southampton-exodus-0730298110

 

Key assertions:

• Our wage cap is essentially set for us due to FFP - we cannot match £60k+/w without bringing the whole house of cards down
  
• Raising Shaw's wage to United's level would use half of our allotted 4% annual wage increase in one fell swoop
  
• Satellite/franchised academies are an intriguing option to sell our youth reputation and increase financial clout (I believe this has already been alluded to elsewhere)
  

[hasper57saint]

Initials:- RK

 

Beat me to it!

[OldNick]

Beat me to it!

Krueger does not seem to be the type to use a false name on a forum. Iam 100% sure it is not him

[Wurzel]

What is clear is that the known figure used by the blog post is for club wages, not players wages. His assumptions are made against this arguably faulty baseline.

 

It is very easy to conflate players wages and club wages, overlooking the whole staff force that works behind the scenes (not to mention lavishly paid (ex)directors). Gareth Rogers has had to remind journos of this distinction in the past.

 

Players -rather than club wages- could be in the ballpark of £53m this year; but that would require as much as a 85% increase in the player wage bill in the space of a year. Doubt it.

 

The UEFA FFP rules include that a club must have the following (amongst other things) in place

Personnel and Administrative criteria

A club secretary, general manager, Finance officer, medical officer, medical doctor, physiotherapist, security officer, stewards, supporter liaison officer, qualified head coach, assistant coach, head of youth development, qualified youth coach for each youth team,

 

I would assume that if a club has to have all those then their wages would be included in the overall total.

 

http://www.financialfairplay.co.uk/

[shurlock]

The UEFA FFP rules include that a club must have the following (amongst other things) in place

 

I would assume that if a club has to have all those then their wages would be included in the overall total.

 

http://www.financialfairplay.co.uk/

 

This simply says that clubs must have such personnel in place to operate; not that overall club -rather than player- wages are used in calculations of restrictions. The press has been ambiguous on this point - at times, simply referring to players wages (which is the formula used for the championship).

Edited 5 August, 2014 by shurlock

[Redslo]

The argument is that we've HAD TO SELL 5 players to enable us to meet FFP, and somehow can't buy replacements because FFP stops us doing so. This is clearly absolute cobblers. We were nowhere near the wage cap, and the Chairman has said the sales had nothing to do with it. Bearing in mind that he could have lied and said "errrr, absolutely it's to meet FFP", completely got out of jail free, and no-one would have been any the wiser for a year or so.

 

That's not an oxymoron either. It's a self-contradicting term, like "the hairy bald man", "the intelligent idiot", etc.

 

*Awaits thread tangent*.

 

No one said we had to sell five players. We are simply limited to increasing our salary above 56 million to the net increase in non-TV income plus the net positive transfer income. Selling the players we did gives far more than the minimum maneuvering room necessary.

Edited 5 August, 2014 by Redslo

[Redslo]

Yes, he's the stat guy for FM. I'm sure he'd love to tell you how one gathers that data. He's also to blame for the Echo not being a paper in the game, and Saints having a "sign Italians" policy in FM14, apparently.

 

That sign Italian policy and NC's high expectations led me to restart the game and play Wolves this past year. Boy were the wolves easy to get back to the premier league--at least with the initial database.

[Redslo]

The more I think about this issue, the more I believe the blog post is way off the mark.

 

Attempting to confirm with a sports lawyer friend but am pretty sure FFP wage restrictions apply only to player wages and not overall club wages (that include director remuneration and general club staff wages). It is definitely the case with the championship.

 

Why does this matter? Because if true, it significantly increases our room for manoeuvre and suggest were nowhere near the relevant limit.

 

Publicly available data on which the blog post (mistakenly) draws refers to overall club wages. In 2013, total wages, including player wages were £47.1m, up from £28.7m in 2012. The claim is that they are around £52m this year - hence the alleged pressure to sell.

 

We know that the club wage to turnover ratio is around 65% (turnover was £72m in 2013).

 

Critically, however, Gareth Rogers, pointed out that the player wage to turnover ratio was only around 40-50% in 2013 -namely around £29m and £36m. A much lower figure and arguably the relevant one from a FFP perspective (see above)

 

If we assume that turnover ratios stay broadly in line this year, our current player wage bill (not total wage bill) is only around £32m and £40m, nowhere the supposed dangerzone suggested by the poster.

 

The above caveat aside, this point should be seen alongside the other evidence -from the unnecessary scale of the sales to official statements- that casts doubt on this theory.

 

This is basically true. I do not know how exactly how much we spent on player wages (and other player payments such as appearance fees and loyalty bonuses) in 2013-2014. It is possible that we were so far below the 52 million cap that this years 56 million cap gives us plenty of maneuvering room. But I do not believe it would have allowed us to give raises to the want away players to match what they could earn elsewhere

[Window Cleaner]

This is basically true. I do not know how exactly how much we spent on player wages (and other player payments such as appearance fees and loyalty bonuses) in 2013-2014. It is possible that we were so far below the 52 million cap that this years 56 million cap gives us plenty of maneuvering room. But I do not believe it would have allowed us to give raises to the want away players to match what they could earn elsewhere

 

No you need to get this right. If your player salary mass is lower than 52 million £ for the 2013/14 season then FFP rules do not apply to you as far as salary mass is concerned. You are merely bound by the maximum permitted loss rule. As I understand it you could then up your salary mass to 80 million if you wanted to with no effect whatsover.

[Sour Mash]

No you need to get this right. If your player salary mass is lower than 52 million £ for the 2013/14 season then FFP rules do not apply to you as far as salary mass is concerned. You are merely bound by the maximum permitted loss rule. As I understand it you could then up your salary mass to 80 million if you wanted to with no effect whatsover.

Why would that be the rule? It would defeat the purpose wouldn't it? And you'd fail the next year?

[hackedoff]

If this is the case why are we targeting players for positions that do not need strengthening ? We need a back up keeper ( cheaper wages ) rather than an expensive one which may cause Boruc to leave. We are now ( probably ) over stocked with midfielders ( again ups the wage bill ) but very light at centre back and up front. Surely it makes sense using our "credit limit" on players in more vital positions ?

[Redslo]

No you need to get this right. If your player salary mass is lower than 52 million £ for the 2013/14 season then FFP rules do not apply to you as far as salary mass is concerned. You are merely bound by the maximum permitted loss rule. As I understand it you could then up your salary mass to 80 million if you wanted to with no effect whatsover.

 

That is not correct. Let me quote the relevant rule from the BPL Handbook.

 

"E.18. If in any of Contract Years 2013/14, 2014/15 and 2015/16 a Club’s aggregated Player Services Costs and Image Contract Payments:

"E.18.1. exceed £52m, £56m, or £60m respectively; and

"E.18.2. have increased by more than £4m when compared with the previous Contract Year or by more than £4m, £8m or £12m respectively when compared with Season 2012/13; then the Club must satisfy the Board that such excess increase as is referred to in E.18.2 arises as a result of contractual commitments entered into on or before 31 January 2013, and/or that it has been funded only by Club Own Revenue Uplift and/or profit from player trading as disclosed in the Club’s Annual Accounts for that Contract Year."

 

If we were lower than 52 million in 2013-2014, then our limit in 2014-2015 is 56 million plus the club's revenue uplift (essentially non-TV increase in revenue, not profit) plus net transfer income.

 

What my calculations cannot determine, because the information is not publically available as far as I can determine, is how much of our 47 Million payroll expenses for 2012-2013 was for non-players. We know that NC got a little over 2 million pounds himself and there must have been several million spent on coaches and such. But my basic point remains unchanged. We were limited in how much we could raise player's salaries and that limit was not high enough to sign a bunch of good new players and retain the players we had given their inevitable demand for pay increases.

 

Once you accept that you need a net positive transfer income to increase wages, multiple sales are requires. If, for example, we had just sold Luke Shaw for 30 million, then we would have undoubtedly spent more than 30 million on incoming players and would not have had a net positive transfer income to use.

[Sour Mash]

If this is the case why are we targeting players for positions that do not need strengthening ? We need a back up keeper ( cheaper wages ) rather than an expensive one which may cause Boruc to leave. We are now ( probably ) over stocked with midfielders ( again ups the wage bill ) but very light at centre back and up front. Surely it makes sense using our "credit limit" on players in more vital positions ?

The point is we want to up our wage expenditure. Player choice will partly be down to Koeman/Reed's choice and isn't necessarily relevant here.

[Redslo]

If this is the case why are we targeting players for positions that do not need strengthening ? We need a back up keeper ( cheaper wages ) rather than an expensive one which may cause Boruc to leave. We are now ( probably ) over stocked with midfielders ( again ups the wage bill ) but very light at centre back and up front. Surely it makes sense using our "credit limit" on players in more vital positions ?

 

My theory doesn't explain this. My guess is that selling Lovren was never part of the plan. My guess is that the board viewed Luke Shaw as the best one to sell and that Lallana was replaceable and, relatively, overpriced--although given the need to pay off Bournemouth I am not sure this is correct.

 

If my theory is correct we will buy one or two CBs before the transfer deadline. If we don't it either means that the board doesn't know what it is doing or our new coaches likes the CBs we have now.

[waggy]

My theory doesn't explain this. My guess is that selling Lovren was never part of the plan. My guess is that the board viewed Luke Shaw as the best one to sell and that Lallana was replaceable and, relatively, overpriced--although given the need to pay off Bournemouth I am not sure this is correct.

 

If my theory is correct we will buy one or two CBs before the transfer deadline. If we don't it either means that the board doesn't know what it is doing or our new coaches likes the CBs we have now.

 

Nice to see that you are giving them the benefit of the doubt, unlike some coin flippers on here.

[shurlock]

This is basically true. I do not know how exactly how much we spent on player wages (and other player payments such as appearance fees and loyalty bonuses) in 2013-2014. It is possible that we were so far below the 52 million cap that this years 56 million cap gives us plenty of maneuvering room. But I do not believe it would have allowed us to give raises to the want away players to match what they could earn elsewhere

 

Some clues into the composition of our total wage bill i.e. player vs. nonplayer wages were given by Gareth Rogers in the following interview (around the 3m mark)

 

https://audioboo.fm/boos/2033417-exclusive-saintsfc-financial-results-ceo-gareth-rogers-and-director-hans-hofstetter-talk-to-bigadamsport#t=0m4s

 

As I explained, something unprecedented would have had to happen to be anywhere near the wage ceiling, though I agree paying Big Four level wages for the likes of Shaw would create challenges.

 

Note bonuses are not included in calculations of wage restrictions, so technically we could offer wantaway players heavily weighted performance-based contracts and still be OK. Whether they would be willing to bear that kind of risk is another matter.

Edited 5 August, 2014 by shurlock

[Redslo]

Some clues into the composition of our total wage bill i.e. player vs. nonplayer wages were given by Gareth Rogers in the following interview (around the 3m mark)

 

https://audioboo.fm/boos/2033417-exclusive-saintsfc-financial-results-ceo-gareth-rogers-and-director-hans-hofstetter-talk-to-bigadamsport#t=0m4s

 

As I explained, something unprecedented would have had to happen to be anywhere near the wage ceiling, though I agree paying Big Four level wages for the likes of Shaw would create challenges.

 

Note bonuses are not included in calculations of wage restrictions, so technically we could offer wantaway players heavily weighted performance-based contracts and still be OK. Whether they would be willing to bear that kind of risk is another matter.

 

Thanks for that link. It was helpful. Next time I blog about this subject I will incorporate that information.

 

I disagree with you about bonuses not being included in the salary cap calculations. Admittedly, there might be some special Englishnesses in the rules that I, as an American, do not understand, but they seem clear to me. This is from the BPL handbook:

 

A.1.119. "Player Services Costs" means:

(a) the total of all gross remuneration and benefits payable by a Club to or in respect of its Contract Players;

(b) (where applicable) employer’s National Insurance Contributions thereon; and

© any direct contributions made by a Club for a Player’s benefit to a pension scheme or to an employee benefit trust or an employer-financed retirement benefit scheme.

 

"total of all gross remuneration and benefits" should sounds like it would include bonuses. And I think it would have to. What if Man City, for example, structured their player contracts as consisting of nothing but appearance bonuses and bonuses for not finishing in 20th place. That would let them evade the restrictions entirely.

[Whitey Grandad]

National Insurance and pension contributions? Bloody heck, that adds quite a bit.

[shurlock]

Thanks for that link. It was helpful. Next time I blog about this subject I will incorporate that information.

 

I disagree with you about bonuses not being included in the salary cap calculations. Admittedly, there might be some special Englishnesses in the rules that I, as an American, do not understand, but they seem clear to me. This is from the BPL handbook:

 

A.1.119. "Player Services Costs" means:

(a) the total of all gross remuneration and benefits payable by a Club to or in respect of its Contract Players;

(b) (where applicable) employer’s National Insurance Contributions thereon; and

© any direct contributions made by a Club for a Player’s benefit to a pension scheme or to an employee benefit trust or an employer-financed retirement benefit scheme.

 

"total of all gross remuneration and benefits" should sounds like it would include bonuses. And I think it would have to. What if Man City, for example, structured their player contracts as consisting of nothing but appearance bonuses and bonuses for not finishing in 20th place. That would let them evade the restrictions entirely.

 

http://www.independent.co.uk/sport/football/premier-league/manchester-city-fined-49m-for-breaching-uefas-financial-fair-play-rules-9388532.html

 

Will look into it further.

[Redslo]

http://www.independent.co.uk/sport/football/premier-league/manchester-city-fined-49m-for-breaching-uefas-financial-fair-play-rules-9388532.html

 

Will look into it further.

 

That article deals with UEFA FFP not BPL FFP salary cap. It is irrelevant to Southampton until the year after we qualify for Europe.

[Redslo]

I have published a couple more blog posts addressing my earlier error of using the full Southampton salary in my analysis rather than just the player salary portion of it.

 

redsloscf.BlogSpot.com

[Goatboy]

That article deals with UEFA FFP not BPL FFP salary cap. It is irrelevant to Southampton until the year after we qualify for Europe.

 

Loving your positivity Redslo!

[The9]

No one said we had to sell five players. We are simply limited to increasing our salary above 56 million to the net increase in non-TV income plus the net positive transfer income. Selling the players we did gives far more than the minimum maneuvering room necessary.

 

Or we could have actually tried to develop some new revenue streams...

[Redslo]

Or we could have actually tried to develop some new revenue streams...

 

True. And, if they are to be believed, the new board is working on this. Of course, that wouldn't have happened fast enough to hold last year's team together.

[Lallana's Left Peg]

True. And, if they are to be believed, the new board is working on this. Of course, that wouldn't have happened fast enough to hold last year's team together.

 

But it also becomes harder to do when you sell all of your best and marketable players...

[The9]

True. And, if they are to be believed, the new board is working on this. Of course, that wouldn't have happened fast enough to hold last year's team together.

 

That's not what Cortese (probably) says.

[Whitey Grandad]

Or we could have actually tried to develop some new revenue streams...

 

That takes some time. We should have started some time ago but there again we've only been in the Premier League for two seasons.

 

But it also becomes harder to do when you sell all of your best and marketable players...

 

A very limited appeal outside the local area.

[Kingsland Codger]

Many thanks Redslo for your blog.

 

You conclude ... "Therefore, it simply was not possible to keep the team together and bring in new players in any significant amount or of any significant quality. "

 

and yet this appears to be incompatible with Mr Reed's statement of April 25 2014 where he said "we want to improve the squad going forward, we want to retain the players we’ve got" - "Our intention is to keep this very good team together and build on it by bringing in players to improve upon it"

 

Can any forum member shed any light on this?

 

http://www.dailyecho.co.uk/sport/11172160.Les_Reed_s_Saints_statement_in_full/

[Redslo]

Many thanks Redslo for your blog.

 

You conclude ... "Therefore, it simply was not possible to keep the team together and bring in new players in any significant amount or of any significant quality. "

 

and yet this appears to be incompatible with Mr Reed's statement of April 25 2014 where he said "we want to improve the squad going forward, we want to retain the players we’ve got"

 

 

This is only speculation. I have no inside knowledge. I was (and still am) considering writing a blog analyzing that statement by Reed.

 

First, Reed used the term "want" rather than "will". Maybe he was misleading us with technical truths. However, I don't think so.

 

I think that at the time the board thought that MP was staying. I think MP was leading them to believe that would happen. I think the Board believed that if MP stayed the long term contracts would hold. In other words, the players would stay and not need to have their salary raised. In effect, this is my everything is nearly fine plus scenario from my 5 August 2014 blog except that Lambert stays too. Osvaldo would be sold for a good amount saving both his salary and providing some funds for transfer. The team would then get in a few more players. There would be plenty of salary cap space. Possible under this scenario KL would put it a bit more money or no such infusion would be necessary given the TV money.

 

But, if I am right, this scenario was completely unrealistic but Les Reed did not know that. MP was going and, inevitably, some players would too. But who knows. I could be completely wrong--although I stand by my understanding of the Salary Cap rules.

Edited 9 August, 2014 by Redslo

[PhilippineSaint]

Redslo is nearly to sensible for this forum

[Redslo]

Redslo is nearly to sensible for this forum

 

Me eat lunch when night time in England. Yum.