FFP benefits bigger clubs

Best 15 minutes of the season. Now please out this away!

 

Wrong thread... But worth it!

 

No. You obviously don't latch onto every bit of output that comes out of SFC. Several times it has been said that FFP has held the club back. Only during last season's fans forum did Les speak his disapproval of FFP and the limits it places on Saints, for several minutes.

 

No one doubts that they disagree with it, but over the past three years we have had miles of space between ourselves and the FFP limits.

 

Exactly.

 

FFP benefits bigger clubs.

So does Bobby Madley.

 

Bobby Madley sounds like a bad country singer or a serial killer.


Or both.

 

Well he killed all our dreams of a point and as for country signer I would spell country differently.

 

Villa, Newcastle being two. The likes of Sheffield Wednesday and Leeds are much of a muchness in terms of their current appeal and fan base. Throw in Wolves, Derby, Brighton, Forest, Norwich, Ipswich, and there's a sprinkling of biggish clubs there.

 

That's just it. We haven't. Les has complained that we can't offer higher salaries we can easily afford because of FFP.

 

Source? Because it's very, very difficult to imagine that to be the case. In 2013-14 and 2014-15, our profit on player sales was such that we could have spent tens of millions more on wages under the PL's version of the FFP guidelines than we did. In fact, it would have allowed us to spend at close to Liverpudlian levels had we used that opportunity to maximize our allowable wage bill.

 

You only have to go back to last season's Radio Solent Fan's Forum. All was explained there about SFC's inability to grow as fast as we might due to FFP. I believe I did mention this earlier in this thread.?
Les, with his usual contriteness tries to keep it short, but it's plain that Saints are operating under a system which keeps them from forging forward at a pace they are quite capable of sustaining, but for FFP. Look it up sometime. I believe you can still see the hour long video of the Fan's Forum on Youtube. And that's not the only time.

 

I suspect it is a lot more complicated than subtracting transfer ins from outs. It has to do with profits and there are a lot of costs to running a club. Also there is a knock on effect when you bring in one player on much higher wages...there'd be a queue outside Les's door the next day. And there may be things none of us have thought about.

 

Profit on player sales is a metric that is found in our books each year. Growth in that line-item can be used to demonstrate why a club has exceeded what would otherwise be its maximum wage bill within the FFP guidelines. Our profit on player sales in '13/'14 was 31.4m; our profit on player sales in '14/'15 was 44.1m.

 

The problem is that these explanations become self-contradictory. We don't spend big on transfer fees and wages because we want to remain financially healthy; we want to spend big but FFP won't allow us. Only one of these things can be true.

 

You would only need four of the letters.

 

TSS/Schad

Can either/both of you give a summary of your understanding of FFP and where Saints stand against that please? I'm trying to understand where each of you is coming from so I can see if I get either view clearly.

 

I think TSS is agreeing with the OP in how it stops smaller clubs from trying to break the top clubs and arguing that it holds us back.

While Schad is saying as we intend on staying within our means anyway then it shouldn't make a slightest bit of difference to the way the club is run currently. Therefore it doesn't hold us back as we don't intend on progressing by that method.

I think anyway.... please correct me if wrong chaps

 

Sure. There are a few things to remember with the Premier League's financial rules (which are not actually called FFP, but which always get referred to as FFP because it's easier than remembering the name). It isn't a hard wage ceiling; it's a means that the PL has instituted to prevent clubs from spending beyond their revenues, and as such it has a number of features baked in that allow one to scale their wage bill up when revenues increase.

This is a decent primer on it: you start with a 'base' wage cap, which increases incrementally each year. However, it isn't a hard cap: you can exceed that threshold if you can demonstrate that your Club's Own Revenue has increased during that period by more than the baked-in incremental gains. What counts as your club's own revenue is, in effect, everything but the PL's TV revenues (which count both the equal payments made to every club, plus merit payments and facility fees)...thus, increased profit on player sales, increased commercial revenue, prize money from continental competition and match-day income can all be used to justify exceeding the 'cap', because it demonstrates that you are not overspending.

As such, your wage bill could jump drastically in a season if you could, as an example, point out that your profit on player sales jumped year-to-year by 20m, you took in an extra 5m in commercial revenues, your match-day revenues increased by a few million, and you took in a chunk of prize money from the Europa League. This is how Chelsea, in particular, has been able to spend a fortune...not only do they have a high baseline, but they have continuously raised their commercial revenues and registered massive numbers for profits on player sales because of their model of buying up young players and then selling on the ones unlikely to make it. And again, profit on player sales =/= transfer in vs. transfer out in the strictest sense. Chelsea booked a profit on player sales of 65m in '13/'14 despite a net transfer spend of 40-50m, because of the accounting treatment that is applied.

UEFA's rules are more to the point: it's all about profit and loss and paying your bills on time. What you spend on wages or transfer fees is immaterial, you just can't lose money hand over fist.

We have registered very large increases in our profit on player sales since '12/'13. Our commercial revenues have also increased substantially, and we have a chunk of cash from increased match-day revenues and European competition. This is all money that could have been used to dramatically increase our wage bill, if manipulating the PL's rules to maximizing our standing were the goal. And with 45m in paper profits booked over the past two seasons, we weren't going to run afoul of UEFA's rules, either.

 

One can only report on what is being said. If we start to interpret then we muddy the waters straight away. Best to keep things simple.