[Archived] Championship Clubs Introduce Financial Fair Play

[Kamy100]

Seen as we seem to be heading towards the Championship this will affect us.

The Championship Clubs voted to implement Financial Fair Play for next season. It is based on Uefa’s Financial Fair Play Model. Basically it will man that owners won’t be able to use loans to fund the club. Also owners would only be able to put in £6 million next year, £5 million year after and £3 million year after that. For example if these rules had been in place when QPR went up they would've been fined circa £15 million as they spent £25 million which was put in by the owners etc.

This could be good news for Rovers, it will force Venky’s to actually run the club properly or sell up. It also means that next season Rovers spending power would be enhanced due to the parachute payments (they are classed as income) if these payments were used to fund the club (especially as the wage bill has been reduced drastically):

More Details Here

[Rover_Shaun]

Will it affect owners that put in £0?

[koi]

I was going to post this but I as it only comes in for the 2014-15 season I thought it might be wishful thinking..

[joey_big_nose]

I was going to post this but I as it only comes in for the 2014-15 season I thought it might be wishful thinking..

Good. Fair chance we will be knocking about in the Championship circa 2014...

[Ricky]

so is it for next season or not??

[perthblue02]

so is it for next season or not??

The article is quite badly worded but my reading of it, is that it starts next season

"Owners will be allowed to invest £6m next season, £5m the year after, then £3m in the 2014-15 season.

From 2015-16, clubs will be allowed to make a £2m operating loss, as well accept a £3m investment from an owner - allowing for a £5m overall loss."

[Baz]

So what's so fair about only being able to spend what you generate and owners not being able to put what they wish to into a club? Sounds like a rule for clubs with big fan bases to me.

I'm all in agreement that safeguards are put in play to avoid clubs selling future earnings, and risking bankruptcy, but a Jack Walker type of investment simply couldn't happen under these rules, what's so great about that?

Rovers ran a high % wages to turnover over many years on a pretty safe basis, this financial flexibility should be allowed IMO. This looks like a bad way to deal with the issue to me. You shouldn't be allowed to borrow money based on future income streams, but owners should be allowed to put their own cash into a club (not on a loan basis though).

[beastlove]

To be fair it looks like Venkys are trying to run us a business rather than a football club. Under Williams and the Walkers our wages to turnover ratio was far too high. We basically gambled that we would be in the premiership. It became harder and harder as wage demands increased. Venkys have done the right thing by slashing wages but have done it far to quick and have an idiot at the helm. Aston villa are in the same boat

[47er]

Will it affect owners that put in £0?

Quite! Won't affect our club at all. presumably they can continue to sell the best players and "reinvest" a tiny proportion of the proceeds on rubbish?

[neekoy]

Sounds to me like a plan to support "big" clubs and keep those other Owner's from dipping in thier pockets to try and compete.

[longsiders1882]

So what's so fair about only being able to spend what you generate and owners not being able to put what they wish to into a club? Sounds like a rule for clubs with big fan bases to me.

I'm all in agreement that safeguards are put in play to avoid clubs selling future earnings, and risking bankruptcy, but a Jack Walker type of investment simply couldn't happen under these rules, what's so great about that?

Rovers ran a high % wages to turnover over many years on a pretty safe basis, this financial flexibility should be allowed IMO. This looks like a bad way to deal with the issue to me. You shouldn't be allowed to borrow money based on future income streams, but owners should be allowed to put their own cash into a club (not on a loan basis though).

I might be reading this wrong but I think owners can still give money to the club, they just can't loan it. So if a 'Jack Walker' comes along and wants to give a club 20 million a year I think they can. In effect they could do it by simply sponsoring a stand for a ridiculous amount etc, as long as it isn't a loan.

I could be wrong but that is how I read it, it stops clubs being loaded with huge debt. May seem like it just favours big clubs but something has to be done to stop the rot.

[ABBEY]

To be fair it looks like Venkys are trying to run us a business rather than a football club. Under Williams and the Walkers our wages to turnover ratio was far too high. We basically gambled that we would be in the premiership. It became harder and harder as wage demands increased. Venkys have done the right thing by slashing wages but have done it far to quick and have an idiot at the helm. Aston villa are in the same boat

pay peanuts ....

[beastlove]

I might be reading this wrong but I think owners can still give money to the club, they just can't loan it. So if a 'Jack Walker' comes along and wants to give a club 20 million a year I think they can. In effect they could do it by simply sponsoring a stand for a ridiculous amount etc, as long as it isn't a loan.

I could be wrong but that is how I read it, it stops clubs being loaded with huge debt. May seem like it just favours big clubs but something has to be done to stop the rot.

No I am sure donations are capped and sponsorship deals need to be inline with other deals. So no sponsoring pederson for 100 mill.

The fair play rules are good news for rovers

[Kelbo]

Now my understanding of the situation, though Philip will no doubt correct me if wrong, with loans, they have to be paid back, these are indeed preferential creditors in the event of a liquidation or administration, ala Pompey.

If Rovers are relegated, which looks likely and Venkys insistance that they will only finance the club through loans, makes the sale of Rovers more likely and quickly too, as they wont get much money next year for a club skint and struggling in the Championship!

[martypellowe]

Now my understanding of the situation, though Philip will no doubt correct me if wrong, with loans, they have to be paid back, these are indeed preferential creditors in the event of a liquidation or administration, ala Pompey.

If Rovers are relegated, which looks likely and Venkys insistance that they will only finance the club through loans, makes the sale of Rovers more likely and quickly too, as they wont get much money next year for a club skint and struggling in the Championship!

Exactly. But what if they choose not to invest? If clubs are only allowed an operating loss of £5m and the club can't be funded using loans, how will that be a good thing for the club? The owners will not invest a penny. What's the end game from not investing? Administration?

Also what if Venkys Ltd took out loans secured against other lines of business, and then "invested" funds into the club. How would that pan out with the rules? Not that it would happen, mind...

[PAFELL]

No I am sure donations are capped and sponsorship deals need to be inline with other deals. So no sponsoring pederson for 100 mill.

The fair play rules are good news for rovers

How would these new rules be good for Rovers?

[Majiball]

They'll surely make exceptions in the rules for the relegated clubs. Would be very difficult to from 50M+ income to say 20M in one summer as that's a serious amount of player sales and who says they'll shift them.

[j166429]

How would these new rules be good for Rovers?

I agree Pafell. Surely these rules will only allow "big" clubs with lots of income to dominate. Smaller clubs will slowly die out.

[Daniel Louis Grabko (Dan)]

1335405757[/url]' post='1251719']

Sounds to me like a plan to support "big" clubs and keep those other Owner's from dipping in thier pockets to try and compete.

I don't quite understand this viewpoint. Isn't it only the "big" clubs that have the owners who are dipping huge pockets to support paying unsustainable player wages? Isn't it "big" clubs who generate the vast majority of financial loss in the game? Do you think West Brom operates at the same loss as Man City?

Since the biggest clubs operate at the biggest losses, FFP greatly reduces the financial gap between big clubs and smaller ones, not widens it, and means that smaller clubs don't have to risk bankruptcy every season in an effort to compete with them.

FFP is not the complete answer, but it is definitely a huge step in the right direction. Only a universal salary cap would truly ensure parity amongst clubs on a domestic and international basis.

It may well be that we have seen the height of football opulence pass us by...and if that truly is the case, I say cheers to that!

[Majiball]

I don't quite understand this viewpoint. Isn't it only the "big" clubs that have the owners who are dipping huge pockets to support paying unsustainable player wages? Isn't it "big" clubs who generate the vast majority of financial loss in the game? Do you think West Brom operates at the same loss as Man City?

Since the biggest clubs operate at the biggest losses, FFP greatly reduces the financial gap between big clubs and smaller ones, not widens it, and means that smaller clubs don't have to risk bankruptcy every season in an effort to compete with them.

FFP is not the complete answer, but it is definitely a huge step in the right direction. Only a universal salary cap would truly ensure parity amongst clubs on a domestic and international basis.

It may well be that we have seen the height of football opulence pass us by...and if that truly is the case, I say cheers to that!

Man Citys sponsorship deal shows the way forward for big clubs.

[Daniel Louis Grabko (Dan)]

1335503835[/url]' post='1251979']

Man Citys sponsorship deal shows the way forward for big clubs.

No, FFP aims to discount related party transactions in the financial result reporting, so these items will not be allowed.

[Parsonblue]

No, FFP aims to discount related party transactions in the financial result reporting, so these items will not be allowed.

Do you honestly believe that the big clubs won't find a way around this? Of course they will. Having ploughed all the money in they have they are not going to allow regulation to undermine their investment. I agree with Maj, the big clubs will carry on as normal and it's clubs like the Rovers who will struggle with the new rules.

[Daniel Louis Grabko (Dan)]

1335512298[/url]' post='1251995']

Do you honestly believe that the big clubs won't find a way around this? Of course they will. Having ploughed all the money in they have they are not going to allow regulation to undermine their investment. I agree with Maj, the big clubs will carry on as normal and it's clubs like the Rovers who will struggle with the new rules.

The biggest problem is that the PL has not followed suit with the FL at the moment. However, UEFA's FFP will soon force the PL's hand. As much as the big clubs will do all they can to find ways around this, and will succeed for a time, the loopholes will slowly be found and closed. The FFP in its current form is of course not bullet proof, but as I said it is a step in the right direction! It appears that many think the the current state of affairs in the game is preferable??? Really???

It can be criticized for not going far enough, etc and I would agree with those arguments, but to dismiss it out of hand and even try to say that it is actually the brainchild of a big club conspiracy is bewildering to say the least.

Why is it that the general attitude is so fatalistic, that even when there is good news and developments it is poo poo'd away as insignificant or irrelevant or even dismissed as making things worse?

[AggyBlue]

Why is it that the general attitude is so fatalistic, that even when there is good news and developments it is poo poo'd away as insignificant or irrelevant or even dismissed as making things worse?

Living in 'Rip Off Britain' has made the populace extremely cynical

[yoda]

Living in 'Rip Off Britain' has made the populace extremely cynical

France is worse