The FFP thread
- Thread starter SydneyTiger14
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Not sure to be honest. But the whole thing is idiotic. Nwakaeme's contract is not going to be the difference between us going over FFP or not even if he was on 100k a week.
The only thing I can think of is if there's a rule around how much your wage bill is allowed to increase by year on year, but that's entirely different to the rolling 39m loss limit.
I assume both cost of new players and payment for KLP are amortized so we would have to spend absolutely shed loads to get into bother
It's why I'm now wondering if it's something to do with increasing wage bill. But if we're that close to the limit then it'd be strange to still be looking at a number of incomings.
It doesn't mean that. Firstly how is the KLP income structured. Is it all up front? If it is that would be unusual.
Also our 'cap' this season would be calculated on P&L over the preceeding years but deals done carry a commitment going forward also, which will also have to comply. I suspect the fact that fat profit from 19/20 drops out of the equation shortly but the loss from the covid season doesn't is having implications.
And yes, most of the financial commitment from this window is wages, not transfer fees. And that commitment lasts the lengths of the contracts, not just the current financial year so has implications going forward also.
The actual payment of the fee has absolutely nothing to do with it. Accounts are on an accrual not cash basis.
Deals done get amortised over the life of the contract as Highpeak said. A 3m fee for Ally over 4 years means the expense in this financial year is only a quarter of the 3m.
That depends how the deals are structured.
If you want to continue dismissing that FFP could possibly be an issue when handing out numerous 7 figure contracts then feel free.
I suspect there will be more on this in the coming days and weeks though.
I actually just mentioned above the potential FFP issue.
You can ignore it if you want.The structure of the deals have nothing to do with it, particularly not the KLP sale. You can keep ignoring it if you want though.
It's a three year rolling arrangement. The clock doesn't start this season for 3 years going forward. We can only spend a maximum of £39m net this season plus whatever profit we made for the past two years. Next year to stay within the rules we would need to make a profit of at least the amount we made 2 years ago.
I suspect if there is "an issue" with FFP it is that, given we were under an embargo when Acun took over
The FFP rules are based on losses made, that’s losses in your filed accounts, not what might happen the next year, or the year after.
We’re not going to trouble the FFP rules, not unless there’s new rules they haven’t announced yet, which seems highly unlikely.
Amortisation is how we write off fees over time. Yes, income in those years will help cover it, but say we receive 4m a year for 4 years for KLP, that covers probably Seri, Tufan,. Figuredos contracts in those years. We are committing well above the KLP fee as things stand.
Then why is Baz mentioning it and why has it popped up today. Coincidence?
And contracts issued this window will have implications for future years. Maybe they are just ensuring they aren't going to fall foul in 2 years time?
FFP doesn’t just start today. It takes account of the previous two years too. So in your extreme example we would definitely breach FFP.
For a third time, it doesn't matter if we get 4m a year for KLP, or 1m a year for 16 years. We sold him for 16m so we record 16m of revenue in the 22/23 accounts. Yes we may well be committing well above the KLP fee but we would have to be spending in the region of 100m above KLP in order to breach FFP in the coming year.
No we wouldn't because spending 200m on 10 year contracts is only a 20m expense in the 22/23 season.
Club had a meeting with the FA to ensure continued compliance with FFP. It was tagged onto one of his transfer update pieces last week. Also tweeted about the nwakaeme deal 'complex' would be one word to describe it. Now this tweet today.
It was a daft example but there's a reason we're spoken about as having the most ffp room and it wasn't so we could sign a few players on 2-4m fees and a few big free agent wages after selling a player for 16m.