Relegation, League 1, financial implications

[izzymuzzet]

PSR is a bit of a mess in terms of its design but ultimately if you're spending a very high percentage of your turnover on player salaries that is only sustainable as long as the owner is willing and able to fund the losses. He was, now he isn't (or can't), so we're screwed. That would be the case under any financial regulatory framework. 

[Terraloon]

2 hours ago, ClaphamFox said:

Do we have any idea of how much has been drawn down already?

That is the 64k$ question.

 

In the 24/25 there is mention of two sums post 30/6/25 being drawn down in respect of PL distributions.

 

The only thing we know is what the accounts show us

 

Edited 23 April by Terraloon

[Pliskin]

5 minutes ago, izzymuzzet said:

PSR is a bit of a mess in terms of its design but ultimately if you're spending a very high percentage of your turnover on player salaries that is only sustainable as long as the owner is willing and able to fund the losses. He was, now he isn't (or can't), so we're screwed. That would be the case under any financial regulatory framework. 

This essentially is what it all comes down to. 
 

Top’s ability and or desire to inject a lot of money into the club. 
 

Next season, a lot of the problems can be fixed, but the biggest issue is, we lose £50m before a wage is paid, the kind of money Top would have to put into the club to allow us to properly reset would need to be considerable. 

[Wsl]

13 minutes ago, HankMarvin said:

It’s also not quite as easy as “offload every player on 50k plus” it’s like trying to flog a banged up old shit heap of a car for £20k 

 

Like this for sale for 10K. It is still recognisably a bus. Apparently it starts and moves, but needs a lot of work to restore it. Much like most of our midfield.

[Philkeavo]

My hunch: in the summer we'll stop/reduce payments to players, in breach of contract. The better players will immediately go elsewhere (if they can get anyone to sign them) but unpaid wages stay as a debt on the club. Some players will stay in the hope of a financial recovery and the chance that unpaid amounts are eventually paid. E.g. Luke Thomas' agent needs to tell him there's little chance of getting his £30k pw over the next 3 years. But if he walks when LCFC breach his contract, where does he go (Cov?)... And for how much in wages (little)?

[Jattdogg]

It's all a bit swahili  to me

 

I just want to know how ****ed we are and the sooner we know, the better. 

 

Rest is guessing and hearsay and comes down to legal shit. Doesn't sound good no matter how it's spun though.

[Terraloon]

16 minutes ago, Philkeavo said:

My hunch: in the summer we'll stop/reduce payments to players, in breach of contract. The better players will immediately go elsewhere (if they can get anyone to sign them) but unpaid wages stay as a debt on the club. Some players will stay in the hope of a financial recovery and the chance that unpaid amounts are eventually paid. E.g. Luke Thomas' agent needs to tell him there's little chance of getting his £30k pw over the next 3 years. But if he walks when LCFC breach his contract, where does he go (Cov?)... And for how much in wages (little)?

Not paying players in accord with their contract to would lead to a registration embargo.The  players would be able to claim justification in ripping up their contracts and leaving claiming sporting just cause. Players leaving would have to have their values impaired putting even greater pressure on the numbers.

 

Football creditors , which is how unpaid players are classified would be treated in preference to all other creditors. but more of an issue would be that with out protection of an insolvency event my guess would be that the club would expelled from the EFL.

[Philkeavo]

30 minutes ago, Terraloon said:

Not paying players in accord with their contract to would lead to a registration embargo.The  players would be able to claim justification in ripping up their contracts and leaving claiming sporting just cause. Players leaving would have to have their values impaired putting even greater pressure on the numbers.

 

Football creditors , which is how unpaid players are classified would be treated in preference to all other creditors. but more of an issue would be that with out protection of an insolvency event my guess would be that the club would expelled from the EFL.

So, as you articulate a rather more positive outcome than we currently anticipate 😹.

[1972 Fox]

12 hours ago, ClaphamFox said:

Do we have any idea of how much has been drawn down already?

If I was a betting man.....

[Tommy G]

13 hours ago, HankMarvin said:

It’s also not quite as easy as “offload every player on 50k plus” it’s like trying to flog a banged up old shit heap of a car for £20k 

No it won’t be easy but we’ll have to be creative, maybe some loans out and paying a small % of wages etc. whatever happens we can’t have anyone on those kind of wages next season 

[CUJimmy]

2 hours ago, Tommy G said:

No it won’t be easy but we’ll have to be creative, maybe some loans out and paying a small % of wages etc. whatever happens we can’t have anyone on those kind of wages next season 

Problem is we don’t know what kind of wages players will be on.  It was widely reported that they had relegation clauses if we went down into the Championship but we don’t know if there is a further reduction built in for relegation to L1.  The club hierarchy didn’t seem to think this was a possibility until 10pm on Tuesday so I am not confident.

 

With the possible exception of JJ nobody in the matchday squad is PL ready so we are looking at upper/middle Championship teams where average salaries are less than £15k.  Like him or not Winks is a better than average Championship player but I doubt anyone is going to pay him more than £25k a week or £30k at a push.  That leaves us a big gap to fill for a year until he is out of contract.  Best bet might be the relegated clubs but he didn’t like making the easy journey up to Leicester for training so I can’t see him going to Wolves or Burnley.  If Spurs get relegated though …