An FFP thread

[David Hodgson]

Seems like we need one. It's going to be rearing its head for a while yet.

 

I know its been posted elsewhere but this site is brilliant for all things FFP : http://www.financialfairplay.co.uk/financial-fair-play-explained.php

 

Seems to me that regardless of just how ruthless (or not) UEFA actually are in dishing out the punishments to non-compliers, that teams are already jumping through hoops to try and not be caught out by it. There can be no doubting now that it is having an effect on the way clubs are behaving in the transfer market. Does the Mata to Man U deal happen without FFP, for instance ?

 

So, what next, not just for us, but for the likes of City and Chelsea, or Man U without the CL ? Is it a given Chelsea can just blow us out of the water with a fee and wage offer for someone like Luke Shaw, or is the field already much more even ?

[honourablegeorge]

If we get in the CL, and stay in, then we're one of the big boys. We're already the only club near the top of the revenue list with no CL. New TV deals and CL money would mean we outstrip almost every non English club money wise, and FFP levels that playing field for us with the likes of Chelsea - if not for the Sheikh-based clubs with their ropey sponsorships. Stadium pushes us on further.

 

Flip side is that if we don't get in the CL and stay in - with CL revenue increasing massively from that loony BT Sports deal - he gap becomes almost impossible to bridge.

[rednotdead]

Two facts worth re-iterating from other thread

1) We're in UCL next year regardless - if we qualify - as we have yet to be monitored by UEFA.

2) For 2015/16 we should be ok but owners will need to convert their loans to the club to equity/capital by end of this year.

 

Also worth noting that UEFA has requested 76 clubs out of this season's 237 in UEFA competition to submit additional information.

First FFP sanctions - smaller infractions and agreed settlements for clubs - will be announced by UEFA in late April/early May. Larger sanctions - perhaps including bans from UCL - to be announced in June.

[Tones]

 

Flip side is that if we don't get in the CL and stay in - with CL revenue increasing massively from that loony BT Sports deal - he gap becomes almost impossible to bridge.

 

Good point. Now is a great time to be breaking back in to the top 4, but yeah we have to stay there.

[Cam]

Good point. Now is a great time to be breaking back in to the top 4, but yeah we have to stay there.

You need to specualte to accumulate. And this is what will call FSG's bluff. If they want us to own us & succeed they will need to invest. If they want us to increase in value and sell us for a profit they will need to invest.

 

And by invest I mean in players. Top ones. Investing in the stadium isn't as important given the crazy TV money.

 

Getting into that top 4 is crucial for the next couple of years. As George says... with the new TV money the gap is too big. And once that gap is there it closes off the sugar daddy dream too. Gone will be the days when a billionaire will look at cheap clubs just outside of the top spots and think "hmmm, with minimal investment of a few hundred million I can bridge that gap and reap rewards". The top 4 will be too rich themselves.

[Sir Tokyo Sexwale]

Liverpool made a £50m loss in the 2012-13 financial year, according to the club's annual accounts. The figures, for the year to 31 May 2013, show that the club made an operating profit of £15m but were pushed into the heavy loss by the writing down of players' contracts, an accounting requirement, and a £13m loss on the sale of players.

 

The £50m loss, which follows £41m reported for a ten-month period to 31 May 2011, appears to put Liverpool's total loss very much higher than the €45m (£37m) total permitted by Uefa for this two-year period under its financial fair play rules. The club, which stated that the figures show it is making "good progress" financially, did not comment on whether it is likely to be considered in breach of FFP when Uefa assesses clubs in the next two months. The rules do, however, include exemptions Premier League clubs expect to rely on in order to pass, including expenditure on youth development, stadium and other infrastructure, which Uefa encourages, and an allowance for players' contracts entered into before the rules came into force in 2010.

 

The accounts predate the summer signings, which included Simon Mignolet for £9m from Sunderland and Mamadou Sakho, £18m from Paris Saint-Germain, and the £15m sale of Andy Carroll to West Ham, for whom Liverpool paid £35m in the early months of ownership by the Boston-based Fenway Sports Group. The total net spending on these players to augment Brendan Rodgers's squad was £53m, the accounts state.

 

FSG in 2012-13 made a loan to Liverpool of £47m to repay a £38m loan taken out to develop stadium plans, and reduce bank debt by £9m. That was in addition to the £22m FSG had, net, loaned to give ballast to the club's finances since it took over from Tom Hicks and George Gillett in 2010, taking FSG's outstanding loans to Liverpool to £69m. The £200m the club owed to Royal Bank of Scotland at the time of the bitterly contested takeover was paid off by FSG effectively as the price of taking over the club.

 

That loan from FSG, together with Liverpool's borrowing from banks, which was £48m, meant that the club's net debt at 31 May last year was £114m, up from £87m the previous year. That is before FSG commits Liverpool to the expansion of Anfield, after the scrapping of the long-standing plans for a new stadium on Stanley Park; the local council is currently buying up neighbouring houses as part of the redevelopment plan. Liverpool have made it clear they will borrow substantially to fund the stadium expansion.

 

The club's income showed a relatively modest increase to £206m in 2012-13 from the £169m reported for a ten-month period to 31 May 2011 in the previous accounts. That was mostly accounted for by significantly increased commercial income, up from £64m to £98m due to sponsorship deals, which are a priority for the managing director, Ian Ayre, under FSG's ownership. FSG has from the beginning of its ownership been focused on the worldwide following Liverpool have, and is intent on pursuing the international multiple sponsorships pioneered by Manchester United.

 

Liverpool's wage bill, £132m, was not excessive for the current financial size of the club, representing 64% of turnover, towards the upper end of what is generally considered healthy. Nor does that scale of pay, mostly to the players, put Liverpool in the top bracket of Premier League clubs. Manchester United, who won the title in Sir Alex Ferguson's final year, paid £181m in wages in 2012-13, while Manchester City's wage bill under the ownership of Sheikh Mansour of Abu Dhabi was £233m, more than £100m in excess of Liverpool's.

 

The highest paid director at Liverpool was paid a salary package of £1.035m; it is presumed to be Ayre, as he is the only full-time director on the board of the club. The other directors are John Henry, Tom Werner and David Ginsberg, all of FSG, which owns the Boston Red Sox baseball franchise, and Michael Gordon, who founded the Vinik investment firm in Boston and is also a Red Sox board member.

 

Ayre praised FSG as "smart investors" who continue to invest in Liverpool, with loans, "to realise the true value of their investment long term". He also said that with the much-improved performances on the pitch under Rodgers and increasing commercial income, the club is heading towards financial stability, although the 2012-13 figures show the deficit from not competing in the European Champions League.

 

"These results demonstrate that the financial health of the club continues to make good progress," Ayre told the Liverpool Echo. "We have taken a measured approach to bring back financial stability to this great club by ensuring it is properly structured on and off the pitch."

[Rimbeux]

You need to specualte to accumulate. And this is what will call FSG's bluff. If they want us to own us & succeed they will need to invest. If they want us to increase in value and sell us for a profit they will need to invest.

 

And by invest I mean in players. Top ones. Investing in the stadium isn't as important given the crazy TV money.

 

Getting into that top 4 is crucial for the next couple of years. As George says... with the new TV money the gap is too big. And once that gap is there it closes off the sugar daddy dream too. Gone will be the days when a billionaire will look at cheap clubs just outside of the top spots and think "hmmm, with minimal investment of a few hundred million I can bridge that gap and reap rewards". The top 4 will be too rich themselves.

 

 

How much more should the club be borrowing?

[Cam]

How much more should the club be borrowing?

Loads.

 

It's sh*t or bust. We can be well-run like Villa or we can go for glory. We need to get that big TV money; it's a short-term gamble. Brendan will get us there on the cheap but we won't stay there on the cheap. Spend in the knowledge the telly money can pay it off.

[RP]

Loads.

 

It's sh*t or bust. We can be well-run like Villa or we can go for glory. We need to get that big TV money; it's a short-term gamble. Brendan will get us there on the cheap but we won't stay there on the cheap. Spend in the knowledge the telly money can pay it off.

 

 

Have you seen what happened to Leeds?

 

Don't want to follow in their footsteps.

 

I expect investment in the summer, but not "sh*t or bust".

[Rimbeux]

Loads.

 

It's sh*t or bust. We can be well-run like Villa or we can go for glory. We need to get that big TV money; it's a short-term gamble. Brendan will get us there on the cheap but we won't stay there on the cheap. Spend in the knowledge the telly money can pay it off.

 

 

How are Villa a well run club, they lose 50m a year. As do we, but with some hope of getting on a even keel. Even disregarding regulations, there is financial gravity to consider

[surf]

How are Villa a well run club, they lose 50m a year. As do we, but with some hope of getting on a even keel. Even disregarding regulations, there is financial gravity to consider

 

starring leonardo di caprio and sandra bullock

[Rimbeux]

starring leonardo di caprio and sandra bullock

 

 

[Sir Tokyo Sexwale]

Have you seen what happened to Leeds?

 

Don't want to follow in their footsteps.

 

I expect investment in the summer, but not "sh*t or bust".

 

exactly, you need stability. Leeds was literally s*** or bust. One wobbly season & the whole show came crashing in

[RP]

exactly, you need stability. Leeds was literally s*** or bust. One wobbly season & the whole show came crashing in

 

 

But some LFC fans would really want to see us go down that route. Can't get my head round it.

[honourablegeorge]

exactly, you need stability. Leeds was literally s*** or bust. One wobbly season & the whole show came crashing in

 

 

Never mind Leeds - it f***ing happened to us.

[Metro]

On a tangent, if we qualify for Europe by finishing the Premier League in the first three what would be our seeding position?

[Rimbeux]

On a tangent, if we qualify for Europe by finishing the Premier League in the first three what would be our seeding position?

 

 

Same, where we finish affects where we start in the competition and how much of the pie we get

Edited March 10, 2014 by Rimbeux

[Swan Red]

http://www.telegraph.co.uk/sport/football/teams/manchester-city/10766475/Manchester-City-to-be-made-to-pay-a-high-price-for-spending-spree-under-Uefa-Financial-Fair-Play-rules.html

 

Could City actually be in trouble here

[McBain]

We find you guilty of spending £149m recklessly and with scant and wilful disregard of the rules and, yes indeed the spirit of the game!. I hope this 8 thousand pound fine will teach you a harsh lesson

[Gunga Din]

http://www.telegraph...Play-rules.html

 

Could City actually be in trouble here

 

 

doubt it. FFP is unworkable. they arent going to ban them. and i doubt a fine equivalent to a days wages of one of their players is going to deter them.

[Red Yoda]

We find you guilty of spending £149m recklessly and with scant and wilful disregard of the rules and, yes indeed the spirit of the game!. I hope this 8 thousand pound fine will teach you a harsh lesson

 

 

If they are found guilty, unfortunately I have to agree with your possible punishment scenario.

[David Hodgson]

http://www.telegraph.co.uk/sport/football/teams/manchester-city/10766475/Manchester-City-to-be-made-to-pay-a-high-price-for-spending-spree-under-Uefa-Financial-Fair-Play-rules.html

 

Could City actually be in trouble here

 

A transfer ban would be handy.

[Gerry]

A transfer ban would be handy.

 

A fine does nothing.

A curb on the team they can field in Europe sounds like next to nothing.

A transfer ban would indeed make a difference though.

[richwilks]

3 points deduction in the group stage nails it. UEFA get their best teams in the competition still, teams are at a disadvantage.

[Bailo]

Are we not at risk of this as well?