Financial Fair Play / Profit & Sustainability

[The Prophet]

Just now, The College Dropout said:

I think they have already passed a rule that means this would be banned from this season onwards - selling assets to sister companies. But it wasn’t banned at the time and the deal is FMV so tough titties. 
 

Again if there’s the will and enough resources to circumvent FFP, it’s possible. Chelsea prove it time and again.  

 

Iirc there was a discussion about closing the loophole at the AGM, but they couldn't come to an agreement.

 

It's prohibited by UEFA though.

[The College Dropout]

3 minutes ago, Decky said:

We need to start bending the rules and using every loophole going now tbh. 

 

Just now, Scoot said:

 

That's fine, but what's pissing me off more is we're not doing shit like this. We seem to be goody 2 shoeing along. 

This is what I’ve been saying in the PIF thread.  If we want to sign proven PL quality and almost guarantee European football for the next 3 years. We need to bend the rules.  

[andyc35i]

What would suggest? Serious question and not a dig

[Jackie Broon]

The issue isn't the sale of the hotels really, it's the management contract which means that Chelsea still get the revenue from them. That's clearly not fair market value, who would ever buy a hotel and then sign a contract with the previous owner that they still get all of the revenue?

 

 

Edited September 4 by Jackie Broon

[Kid Icarus]

1 hour ago, mondonewc said:

I would be shocked if that's the general feeling? And anyone who thinks that way is fucking nuts

Would 1,000,000% be on board with us doing what City and Chelsea did, as in buy every top player around as they were allowed to do. We've not won a thing in forever, I couldn't give a shit how we do it, just want to see us win something, the fact we are the richest club in the world and aren't even allowed to compete at the top levels is a pure wind-up!

 

We can poll it. I'm sure the wider fanbase would be different, but the general feeling on here (from posts anyway) doesn't seem to match up with us wanting to be another Chelsea or Man City. 

[Turnbull2000]

Taking the fucking piss. We've been forced to weaken our squad, meanwhile Chelsea will in probability finish above us this season and deprive us of Europe once again.

[timeEd32]

I think a lot of the frustration about us not bending the rules or, especially legally challenging them, is greatly underestimating the blowback that would come against PIF/Saudi Arabia. 

 

It's entirely possible we're just not that high a priority or that they don't want to spend limitless amounts. But they also don't want to be seen as public enemy #1 in the world of football and that's how it would be portrayed regardless of the facts.

[The Prophet]

I don't think we'll make a fuss until we feel that we've exhausted all legal means of increasing commercial revenue. We've still not hit that ceiling yet.

 

I'd also think we'll have a very close eye on the Man City - related party transaction case.

 

 

Edited September 4 by The Prophet

[Jonas]

Proponents of these rules intimate that growing revenues naturally is the right thing to do, like the 6, but they've deprived other clubs - Villa here - of the means to do exactly that and exactly what those 6 did to grow their revenues by spending, having relative success, sustaining and buiilding on it with more spending then reaping the rewards.

Knowing full well that if Villa spent more on top of finishing 4th, building the way they all did, the way you're supposed to apparently, they'd take a place at the trough and we cant have that.

Its an absolute swizz

 

 

Edited September 4 by Jonas

[Jonas]

3 hours ago, AyeDubbleYoo said:

Seeing a half empty stadium for a CL game would be quite something. 
 

I wouldn’t have gone if Newcastle charged that. 

Was loads back in the day. Bayern Munich, Milan, Inter, Juventus, Real Madrid,Barcelona, Liverpool.

[gbandit]

The PL is doing an incredible job of destroying itself and the game. Quite remarkable the damage they relentlessly inflict on it 

[Hudson]

2 hours ago, Scoot said:

 

That's fine, but what's pissing me off more is we're not doing shit like this. We seem to be goody 2 shoeing along. 

So what do we own that we could sell to the sister company ? And what’s your suggestion for bending the rules ?

[Keegans Export]

I'm not necessarily saying I agree with them but I can imagine the PIF contingent thinking we finished 4th, then 7th despite major injury/suspension disruption, we (apparently) had enough money in the budget to chase Guehi at £60m+, so why rock the boat excessively? 

 

Obviously the Anderson/Minteh situation wasn't ideal but perhaps they think there is enough wriggle room to achieve our objectives as it stands?

[Nobody]

With the new PSR rules, doesn't the three year rolling period disappear? Effectively meaning that if a team such as ourselves were to sell a big player for a huge sum, it has to be spent that same year, as you're only allowed to spend 80% of turnover or whatever it is? 

[timeEd32]

1 minute ago, Nobody said:

With the new PSR rules, doesn't the three year rolling period disappear? Effectively meaning that if a team such as ourselves were to sell a big player for a huge sum, it has to be spent that same year, as you're only allowed to spend 80% of turnover or whatever it is? 

 

UEFA's version allows for player sales to be averaged over three years, so most likely the PL would do the same.

[madras]

9 minutes ago, timeEd32 said:

 

UEFA's version allows for player sales to be averaged over three years, so most likely the PL would do the same.

Explain that with an example please.

[timeEd32]

3 minutes ago, madras said:

Explain that with an example please.

 

A club makes the following sales:

 

Current year: £0

Year - 1: £0

Year - 2: £50m

 

In the accounts for the current year they can show £16.67m of player sales to add to their revenue because of the £50m sale in the first of that three year period.

 

Now let's fast forward to the next year and say they only made £18m from player sales. The £50m year is gone so now it's:

 

Current year: £18m

Year -1: £0

Year -2: £0

 

Now they can only show £6m of sales.

 

(One note on this: while phasing in these rules UEFA allowed clubs to basically pick whatever their highest number was at first. For example, in the first option they could show £50m because it happened in the three year period and in the second example they'd show the full £18m. But this has been getting phased out and the full set of new rules begins next season, which enforces the three year average AFAIK.)

[HaydnNUFC]

5 hours ago, The College Dropout said:

Ambitious clubs like Villa and us need expensive ticket prices because of FFP.

 

[Wolfcastle]

Lot of these problems could be easily solved, its just that in every change of rules the advantaged clubs have to be further advantaged that makes it complicated so you get a ladder of who can spend what based on achievements made before these rules came in but after other clubs (ourselves, Everton, Villa, Leeds, Blackburn, Forest) had been displaced at the top by them, rather than a blanket spend limit.

[Terraloon]

4 hours ago, Jackie Broon said:

The issue isn't the sale of the hotels really, it's the management contract which means that Chelsea still get the revenue from them. That's clearly not fair market value, who would ever buy a hotel and then sign a contract with the previous owner that they still get all of the revenue?

 

 

 

It’s moved on a bit in that BlueCo entered into an agreement with a company called Ascott who are now managing the hotels.

 

Ascott and Chelsea are now in a strategic partnership whereby Ascott are now Chelsea’s “ Global Hotel Partners” I know little to nothing about Ascott but they seem to be marketing stays at the hotel linked to hospitality games , tours etc .

 

There is a launch event in the next week or two and although the numbers haven’t been made public but at the moment we seem to be announcing a number of global partnerships generally the suggestion is they are worth around a million or two PA but the Ascott one seems to be worth a far bit more I had seen it suggested it was circa £7 -£10 million PA

[Terraloon]

1 hour ago, timeEd32 said:

 

A club makes the following sales:

 

Current year: £0

Year - 1: £0

Year - 2: £50m

 

In the accounts for the current year they can show £16.67m of player sales to add to their revenue because of the £50m sale in the first of that three year period.

 

Now let's fast forward to the next year and say they only made £18m from player sales. The £50m year is gone so now it's:

 

Current year: £18m

Year -1: £0

Year -2: £0

 

Now they can only show £6m of sales.

 

(One note on this: while phasing in these rules UEFA allowed clubs to basically pick whatever their highest number was at first. For example, in the first option they could show £50m because it happened in the three year period and in the second example they'd show the full £18m. But this has been getting phased out and the full set of new rules begins next season, which enforces the three year average AFAIK.)

The three year cycle I believe can only be applied if clubs have qualified for a UEFa Licence ( participated ) in European competitions for three consecutive years.

Also I am not sure that Clubs that use FRS accounting principles ( amortisation etc) can opt to use the method you describe 

[timeEd32]

4 minutes ago, Terraloon said:

The three year cycle I believe can only be applied if clubs have qualified for a UEFa Licence ( participated ) in European competitions for three consecutive years.

Also I am not sure that Clubs that use FRS accounting principles ( amortisation etc) can opt to use the method you describe 

 

Yes, if using amortisation for purchases then you first have to deduct the remaining book value. I should have specified "player sale profit," which is not necessarily the same as the full transfer fee.

 

I don't think the first part is true as that would be incredibly unfair to clubs who don't always qualify, though that would also be quite typical. 

[timeEd32]

13 minutes ago, Terraloon said:

The three year cycle I believe can only be applied if clubs have qualified for a UEFa Licence ( participated ) in European competitions for three consecutive years.

Also I am not sure that Clubs that use FRS accounting principles ( amortisation etc) can opt to use the method you describe 

 

Here's that section of UEFA's regulations (relevant parts bolded). There's no mention of needing to be in European competitions before or after this:

 

Quote

Article 93 Calculation of squad cost ratio

 

93.01 A licensee’s squad cost ratio is calculated as the sum of:

i. employee benefit expenses in respect of relevant persons;

ii. amortisation/impairment of relevant persons’ costs; and

iii. costs of agents/intermediaries/connected parties (if not included in i or ii above);

divided by the sum of:

iv. adjusted operating revenue; and

v. net profit/loss on disposal of relevant persons’ registrations and other transfer income/expenses.

 

93.02The squad cost ratio numerator is the sum of i), ii) and iii) above. The squad cost ratio denominator is the sum of iv) and v).

 

93.03 The elements of the squad cost ratio are defined in Annex K.

 

93.04 The relevant periods for the calculation of the squad cost ratio are:

a. the 12-month period to the 31 December during the licence season for elements i) to iv) above; and

b. the 36 months to the 31 December during the licence season, prorated to 12 months, for element v) above.

 

[Terraloon]

17 minutes ago, Terraloon said:

The three year cycle I believe can only be applied if clubs have qualified for a UEFa Licence ( participated ) in European competitions for three consecutive years.

Also I am not sure that Clubs that use FRS accounting principles ( amortisation etc) can opt to use the method you describe 

 

11 minutes ago, timeEd32 said:

 

Yes, if using amortisation for purchases then you first have to deduct the remaining book value. I should have specified "player sale profit," which is not necessarily the same as the full transfer fee.

 

I don't think the first part is true as that would be incredibly unfair to clubs who don't always qualify, though that would also be quite typical. 

 Apologies I misread the rule 3 year cycle refers to playing in national competitions 

[Paully]

Ooof

 

https://www.dailymail.co.uk/sport/football/article-13813261/Premier-League-left-EIGHT-FIGURE-legal-bill-taking-Man-City-court-wins-having-pay-3-2m-following-PSR-case-involving-Everton.html