Leicester 'could face points deduction next season'

[ClaphamFox]

The Economist published this article on FFP/PSR last week. It's behind a paywall, but they basically argued that FFP rules are both anti-competitive and unnecessary because they are designed to solve a problem that barely existed in the first place. I found these two paragraphs interesting:

 

"But a core trade-off remains: stability versus competition. By capping spending relative to club revenues, the rules limit the ways in which challengers can outmuscle richer incumbents. As a result an expensive but once-viable path to success has been closed off. Manchester City lost money for eight consecutive seasons between 2007 and 2014, before posting eight seasons of pre-tax profit from 2015 during which it won the league five times. Academics at Sheffield Hallam University have found that competitive balance deteriorated across the five largest European leagues after the introduction of FFP. Across all top divisions in Europe the number of different top-four finishers declined by 10%. 

 

"Advocates for the rules emphasise the devastation for fans when clubs go bust. Bury FC, a stalwart of English football’s third and fourth tiers, collapsed in 2019 and now languishes in the ninth tier, even after a fan-funded rescue. But most insolvencies are more benign. Stefan Szymanski, a sports economist at the University of Michigan, has compiled data on every bankruptcy in the top four divisions since 1945 and found no club that had vanished entirely. England’s football clubs are remarkable examples of corporate longevity. “It’s hard to imagine any other industry where there were 100 businesses a century ago and they’re all still around,” he says."

 

Edited 5 March by ClaphamFox

[Ric Flair]

I think it'll come crashing down soon, but in the meantime many clubs will be hit. Fingers crossed we navigate through it without long term impact to our ability to be competitive in the top 2 divisions.

[st albans fox]

Given that we don’t actually have a very very  wealthy owner willing to spend on the club, is ffp such a bad thing for us???

[Basildon Fox]

3 minutes ago, st albans fox said:

Given that we don’t actually have a very very  wealthy owner willing to spend on the club, is ffp such a bad thing for us???

According to Tanner we would love to splash some cash but we are constrained from doing so.

 

The whole process is doomed to fail. There was virtually no movement in the Jan transfer window as teams are hamstrung in spending.  It will happen again in the summer too as clubs will not want to risk any money on a bad buy. No big players will come from abroad as wages will be affected.  Of course this will not affect the big 6 so much so the gap gets even wider.

 

The Premier League sees itself as the biggest and best.  Sky market it as the best league in the world and pay accordingly.  Both of these will be hard to justify without big money being spent on players. They will not allow the product to become inferior.  Rightly or wrongly, that is where we are at.

[st albans fox]

9 minutes ago, Basildon Fox said:

According to Tanner we would love to splash some cash but we are constrained from doing so.

 

The whole process is doomed to fail. There was virtually no movement in the Jan transfer window as teams are hamstrung in spending.  It will happen again in the summer too as clubs will not want to risk any money on a bad buy. No big players will come from abroad as wages will be affected.  Of course this will not affect the big 6 so much so the gap gets even wider.

 

The Premier League sees itself as the biggest and best.  Sky market it as the best league in the world and pay accordingly.  Both of these will be hard to justify without big money being spent on players. They will not allow the product to become inferior.  Rightly or wrongly, that is where we are at.

Splashing some cash in the championship is a very different thing to in the prem

 

my point is that if ffp is ditched then I reckon we would be a long way down the league ref our spend.  And historically those that spend the least tend to be near the relegation area over a period. 

[orangecity23]

Meanwhile, the Liverpool 's of the world are about to make 10 million just off a documentary filming Klopps last season. To go with all their revenue from sponsors, Champions League, shirt manufacturer etc etc.

Don't worry smaller clubs, invest in your academy, then you can produce home grown players to compete against the big 6 .... and here come Liverpool to take your best youngsters. Payment? When they feel like it sometime later.

Well, get a cup run then, win some prize money... and Liverpool and Man Utd get an extra 50k for round 5, even though all ties are on TV, because BBC and ITV like them so much they dump our tie to iPlayer so it somehow isn't worthy of the full fee?

 

Man Utd want a new stadium though, can them have some taxpayer money pweeease?

[Gamble92]

8 minutes ago, orangecity23 said:

Meanwhile, the Liverpool 's of the world are about to make 10 million just off a documentary filming Klopps last season. To go with all their revenue from sponsors, Champions League, shirt manufacturer etc etc.

Don't worry smaller clubs, invest in your academy, then you can produce home grown players to compete against the big 6 .... and here come Liverpool to take your best youngsters. Payment? When they feel like it sometime later.

Well, get a cup run then, win some prize money... and Liverpool and Man Utd get an extra 50k for round 5, even though all ties are on TV, because BBC and ITV like them so much they dump our tie to iPlayer so it somehow isn't worthy of the full fee?

 

Man Utd want a new stadium though, can them have some taxpayer money pweeease?

You sum it up perfectly 

[coolhandfox]

1 hour ago, Ric Flair said:

Yes, these new rules are harsh. However, at the time it seemed to impact us in 2022 it was only relevant to those who qualify for Europe. We hadn't done at that point having finished 8th and although we harboured ambitions to be back there ASAP, our wage bill was not sustainable even on the old rules (UEFA or otherwise). We essentially had to qualify for Europe every season to maintain the wage structure and have a bit of wriggle room for new signings.

 

I've little sympathy for us, we made many mistakes. I didn't like our change in approach to what we'd been successful at in the first place.

Other than not selling one asset a year we don't really change our approach as such.

 

 

[Chocolate Teapot]

1 hour ago, Basildon Fox said:

According to Tanner we would love to splash some cash but we are constrained from doing so.

 

The whole process is doomed to fail. There was virtually no movement in the Jan transfer window as teams are hamstrung in spending.  It will happen again in the summer too as clubs will not want to risk any money on a bad buy. No big players will come from abroad as wages will be affected.  Of course this will not affect the big 6 so much so the gap gets even wider.

 

The Premier League sees itself as the biggest and best.  Sky market it as the best league in the world and pay accordingly.  Both of these will be hard to justify without big money being spent on players. They will not allow the product to become inferior.  Rightly or wrongly, that is where we are at.

That's a very easy line to throw out to the press and its something to hide behind if the cash dries up is all I have to say on that.

[Ric Flair]

21 minutes ago, coolhandfox said:

Other than not selling one asset a year we don't really change our approach as such.

 

 

Started paying more for players (presumably in an attempt to minimise risk on less unproven players) and paying more in wages from the off. Culminated in us being no more successful in these players doing well for us and lumbered with them on huge wages.

[Col city fan]

No doubt about it, last season was an absolute fookin disaster for this football club.

Shite signings, shite football, God knows how Rodgers and Rudkin stayed in their jobs for so long.

Etc…

Utter rubbish 

[fox in the sox]

TalkSport now rehashing the Sun story.

[Seventyseven]

I hadn’t realised we were quite so bad with FFP that it could lead to a points deduction but have been saying for a while to those laughing at Forest and Everton the rules are going to hurt us. There won’t be a lot to spend at all on promotion,.

[HybridFox]

Might not be able to afford Vesty next year 

[Guest glasgowfox]

Even with a big points difference I think we would still stay up, the likes of Stoke, Birmingham and Sheffield United will finish below us

[Ian Nacho]

EFL Statement: Leicester City

General

6 Mar

Words: EFL

Share

 

Earlier this season, based on financial information submitted by the Club, the EFL’s independent Club Financial Reporting Unit (CFRU) concluded that the Club was forecasting to breach the Profitability and Sustainability (P&S) loss limits for the three-year period ending with financial year 2023/24.   

The CFRU determined that it was appropriate under P&S Rule 2.9 to require Leicester City Football Club to submit a business plan to demonstrate how it planned to comply with the EFL’s P&S spending limits.  

The Club argued that the relevant P&S Rule did not apply to it, meaning the CFRU had no right to require a business plan in respect of Season 2023/24.   

That matter was referred by the Club to the independent Club Financial Reporting Panel (CFRP) which concluded that under the Rules as currently written, Rule 2.9 did not apply to the Club and so it was under no obligation to submit and agree to a business plan.  

The CFRP decision has been published today and will help in informing the EFL on the potential Rule amendments that will be proposed for consideration by Championship Clubs in the future to ensure all Clubs are treated equally under the Rules.  

Leicester City is responsible for meeting its obligations in respect of the P&S Rules which will be assessed along with the submissions of all other Clubs in accordance with the League’s established processes. 

The League will be making no further comment on this matter at this time.  

The CFRP decision can be found here

 

https://www.efl.com/news/2024/march/06/efl-statement--leicester-city/

 

Edited 6 March by Ian Nacho

[Greg2607]

So what does that mean in English then??? @Tommy G any idea??

[niyaminski]

Ermmmm what’s on citys socials?

 

Should I be getting worried because right now I am!

[Tommy G]

2 minutes ago, Greg2607 said:

So what does that mean in English then??? @Tommy G any idea??

EFL wanted us to submit a business plan, and we disagreed, it was referred to the independent CFRP which agreed with LCFC. 
 

To conclude I think reading between the lines we are  absolutely on the brink of some kind of potential penalty/points deduction. 
 

Promotion is massive or we are ducked. 

[niyaminski]

Alright boys.

 

Time to get our purple flags out like Everscum did earlier this season.

[Greg2607]

8 minutes ago, Tommy G said:

EFL wanted us to submit a business plan, and we disagreed, it was referred to the independent CFRP which agreed with LCFC. 
 

To conclude I think reading between the lines we are  absolutely on the brink of some kind of potential penalty/points deduction. 
 

Promotion is massive or we are ducked. 

Probably why we didn't sign sensi then??

[pkonline]

4 minutes ago, Greg2607 said:

Probably why we didn't sign sensi then??

Yes - apparently we wanted to structure the deal and payments in a way to ensure it didn't fall foul of FFP - it was too late to sort on the final day on the transfer window.

[Corky]

29 minutes ago, Tommy G said:

EFL wanted us to submit a business plan, and we disagreed, it was referred to the independent CFRP which agreed with LCFC. 
 

To conclude I think reading between the lines we are  absolutely on the brink of some kind of potential penalty/points deduction. 
 

Promotion is massive or we are ducked. 

Think we will probably fall foul of their rules anyway given previous losses.

[Tommy G]

5 minutes ago, Corky said:

Think we will probably fall foul of their rules anyway given previous losses.

No one really knows for sure but like I said we are in real squeaky bum territory 

[Tommy G]

27 minutes ago, Greg2607 said:

Probably why we didn't sign sensi then??

Probably - or it’s rudkins fault which is the default opinion!