I get the impression from reading a few posts on here that some still fail to really grasp FFP and the club’s financial position. The following is reworked from part of an article I wrote for AKUTR’s earlier this season with some additional details taken from a post on Loft For Words by Clive Whittingham which help to flesh it out.
The current FFP regulations state that that a Championship club is not allowed to lose more than £39 million over a rolling 3-year period with the third year being based on a projected figure for the current season. This figure assumes that the owners are prepared to inject equity to cover the losses; these can only be £15 million if they are not.
Our last set of published accounts, which are for the year ending May 2016 show a £11 million loss. Before anyone gets too excited thinking 3 of those would be comfortably under £39 million so what is all the fuss about, let’s just examine what was in those accounts. Firstly there was a parachute payment of £24million. This dropped to £19.3m for last season and has dropped again to £9.6 million for this and next season. Secondly that season's accounts also included £4 million from Charlie Austin’s sale to Southampton and our proceeds from Sterling’s transfer from Liverpool to Manchester City, believed to be £10million or thereabouts. Yes, we did have a few high earning players that season such as Sandro, Green, and Fer, but it is also worth remembering that Caulker was out on loan with all his wages covered initially by Southampton and then by Liverpool and incredibly Ferdinand even managed to get a couple of loan fees for him.
To make matters worth, it is my understanding that player’s transfer fees are spread across the term of their initial contract, so the final £2 million of the £8 million we paid for Caulker back in July 2014 will be in lodged in this year’s accounts. There will be smaller amounts to include for the purchase of players such as Washington, Luongo and Smithies as well. Agents’ fees are also treated in this manner as Les Ferdinand was quick to point out when it was revealed that QPR paid more than any other Championship club to agents in the period from 1st October 2015 to 1st February 2016. Ferdinand confirmed that the bulk of the agents’ fees paid in that period were for historical transfers from when the club was in the Premier League, and included some for players who had already left the club.
Lee Hoos has been very open about the operating costs of the club which are in the order of £9 million per year to run. This covers the cost of Loftus Road, training facilities, match day costs etc. The annual revenue from season ticket sales is £5.6 million, so before we’ve even considered paying any player or member of staff a penny in wages we are short by £3.4 million, let alone trying to budget for future transfer fees. General ticket sales, club shop sales, matchday catering and programme sales cannot possibly close that gap.
Hoos has also been very clear about the money coming into the club. When we were in the Premier League our biggest revenue stream was, of course, television money. Since our relegation it has been the parachute payments. When these stop at the end of next season, season tickets will be major source of income.
We’ve already breached the FFP regulations once and are still awaiting the final verdict (within the terms of that process the club are not allowed to discuss this until our punishment is announced), should we breach them again it is a near certainty that we will be put under a transfer embargo until we meet their criteria. This would inevitably result in a fire sale of our better players and the decimation of our squad. So just how badly do you want to gamble the club’s future on a new striker who may turn out to be the next Mike Sheron, or another central defender to go along with the 12 we’ve already got?
The current FFP regulations state that that a Championship club is not allowed to lose more than £39 million over a rolling 3-year period with the third year being based on a projected figure for the current season. This figure assumes that the owners are prepared to inject equity to cover the losses; these can only be £15 million if they are not.
Our last set of published accounts, which are for the year ending May 2016 show a £11 million loss. Before anyone gets too excited thinking 3 of those would be comfortably under £39 million so what is all the fuss about, let’s just examine what was in those accounts. Firstly there was a parachute payment of £24million. This dropped to £19.3m for last season and has dropped again to £9.6 million for this and next season. Secondly that season's accounts also included £4 million from Charlie Austin’s sale to Southampton and our proceeds from Sterling’s transfer from Liverpool to Manchester City, believed to be £10million or thereabouts. Yes, we did have a few high earning players that season such as Sandro, Green, and Fer, but it is also worth remembering that Caulker was out on loan with all his wages covered initially by Southampton and then by Liverpool and incredibly Ferdinand even managed to get a couple of loan fees for him.
To make matters worth, it is my understanding that player’s transfer fees are spread across the term of their initial contract, so the final £2 million of the £8 million we paid for Caulker back in July 2014 will be in lodged in this year’s accounts. There will be smaller amounts to include for the purchase of players such as Washington, Luongo and Smithies as well. Agents’ fees are also treated in this manner as Les Ferdinand was quick to point out when it was revealed that QPR paid more than any other Championship club to agents in the period from 1st October 2015 to 1st February 2016. Ferdinand confirmed that the bulk of the agents’ fees paid in that period were for historical transfers from when the club was in the Premier League, and included some for players who had already left the club.
Lee Hoos has been very open about the operating costs of the club which are in the order of £9 million per year to run. This covers the cost of Loftus Road, training facilities, match day costs etc. The annual revenue from season ticket sales is £5.6 million, so before we’ve even considered paying any player or member of staff a penny in wages we are short by £3.4 million, let alone trying to budget for future transfer fees. General ticket sales, club shop sales, matchday catering and programme sales cannot possibly close that gap.
Hoos has also been very clear about the money coming into the club. When we were in the Premier League our biggest revenue stream was, of course, television money. Since our relegation it has been the parachute payments. When these stop at the end of next season, season tickets will be major source of income.
We’ve already breached the FFP regulations once and are still awaiting the final verdict (within the terms of that process the club are not allowed to discuss this until our punishment is announced), should we breach them again it is a near certainty that we will be put under a transfer embargo until we meet their criteria. This would inevitably result in a fire sale of our better players and the decimation of our squad. So just how badly do you want to gamble the club’s future on a new striker who may turn out to be the next Mike Sheron, or another central defender to go along with the 12 we’ve already got?
