Financial fair play in the Championship

[ta-fc]

Fairly random one but I was half listening to talksport this morning and they were mentioning the potential for Financial Fair play being applied to the Championship as early as next season... Surely this isn't the case cause we could be in trouble!

[Leicester_Numan]

I'm afraid it's true and we'll be docked points as our outgoings are massive compared to our income. If it comes in next season, we'll have to get rid of most of the squad whether we like it or not, or they'll have to take new contracts with massive pay cuts and we know they wont do that. It's unlikely it'll be next season though as clubs would need at least a seasons warning before it definitely starts to sort themselves out. What it does mean for clubs at our level is the clubs that have bigger gates will generally have more income so more they can spend. We can't spend more than we make though. Most clubs at this level are much the same size so we'll all be pretty evenly matched. Any advantage will have to come from a good academy, scouting, coaching and management. Basically, we need promotion next season before it kicks in. We need the tv income and better sponsorship deals to balance out the ridiculous wages some of our players are on. Odds are we'll go bust before it kicks in anyway

[Bert]

I know very little about this. Could we not just have a record breaking sponsorship deal handed to us by King Power?

[_Fatboyslow_]

I know very little about this. Could we not just have a record breaking sponsorship deal handed to us by King Power?

Like a cool £30 million !!!!!

[Raw Dykes]

I wouldn't worry about it too much. I'm pretty sure it's being introduced by a small amount each season.

If anything, I think it might help us. If it forces us to start paying players more sensible wages, then I think we'll sort out one of the major problems we have. I'm pretty sure having such a gulf between the biggest contracts and the rest of the squad's has been a big factor in our disappointing season. It can't be good for morale when suddenly a few players arrive on huge wages, who clearly aren't working any harder or playing any better than the players on smaller wages.

A potential problem we have is being overcharged for players because every other club knows how rich we are. FFP should stop this happening eventually.

As one of the bigger clubs in the division, we'll be at an advantage when every club is forced to spend according to what they earn. It also should help that our wealthy owners are sponsoring us.

[Babylon]

I'm afraid it's true and we'll be docked points as our outgoings are massive compared to our income. If it comes in next season, we'll have to get rid of most of the squad whether we like it or not, or they'll have to take new contracts with massive pay cuts and we know they wont do that. It's unlikely it'll be next season though as clubs would need at least a seasons warning before it definitely starts to sort themselves out. What it does mean for clubs at our level is the clubs that have bigger gates will generally have more income so more they can spend. We can't spend more than we make though. Most clubs at this level are much the same size so we'll all be pretty evenly matched. Any advantage will have to come from a good academy, scouting, coaching and management. Basically, we need promotion next season before it kicks in. We need the tv income and better sponsorship deals to balance out the ridiculous wages some of our players are on. Odds are we'll go bust before it kicks in anyway

FFP has still not been fully agreed.

Even if it did come in next season you are still allowed to make a £12m loss the first season

Amounts you can lose and any fines/points deductions for doing so would come in over a long period of time. Massively unlikely that any fines would be dished out within the first few years. Clubs already have players tied to contracts on set wages.

[Electricity Sports 1960]

King Power lent us £53m up to May 2011 and will almost certainly be more now. It's also not a gift but a loan with 8% interest payments. I really worry about what would happen if they ask for the money back. We have no assets? Interest payments will be millions? Docked points could also a big problem?

[Leicester_Numan]

I know very little about this. Could we not just have a record breaking sponsorship deal handed to us by King Power?

Like everything else, they'd probably make the club pay them back . It was their idea to have the video screens and upgrade everything but instead of paying for it themselves, they loaned the club the money to do it and they expect to be repaid with interest

[ta-fc]

Would a Loan be an issue? Surely if we manage our outgoings with revenue coming in a loan would be irrelevant. Think about it another way if loans were included as part of the FFP mandate clubs would never be able to build new grounds?

[Guest MattP]

King Power lent us £53m up to May 2011 and will almost certainly be more now. It's also not a gift but a loan with 8% interest payments. I really worry about what would happen if they ask for the money back. We have no assets? Interest payments will be millions? Docked points could also a big problem?

It's a loan, they want it back and some more.

We are in big trouble, we will need 3-4 seasons in the premiership to cover our losses over the last 2-3 years very quickly.

[Leicester_Numan]

Would a Loan be an issue? Surely if we manage our outgoings with revenue coming in a loan would be irrelevant. Think about it another way if loans were included as part of the FFP mandate clubs would never be able to build new grounds?

That's a good point and may have been one of the reasons it's taking so long for it to come in. I would think stadium building loans will be excluded from it but operating loans wont be

[Ozwin]

FFP is a load of dodgy bollocks to keep the big teams big as the little teams little.

[Leicester_Numan]

FFP is a load of dodgy bollocks to keep the big teams big as the little teams little.

Well, that's not what it's intended for but it will be the outcome. Football is going to become very predictable with not much competition. We'll never see another club do a Forest or a Wimbledon

[Leicester_Numan]

If stadium building loans are included then we'll probably see stands and stadiums built in the same way as they are on the later versions of LMA Manager, where companies pay for the development in return for naming rights, free advertising and percentage of the gate receipts for years to come

[Lobsterboyuk]

King Power lent us £53m up to May 2011 and will almost certainly be more now. It's also not a gift but a loan with 8% interest payments. I really worry about what would happen if they ask for the money back. We have no assets? Interest payments will be millions? Docked points could also a big problem?

When the club reported results they described the loan as being underwritten by Vichai - so against King Power not LCFC - Although the distinction is a moot point if his finances go tits up.

It's not clear where the Loan comes from but the assumption that it's the Thai's is not necessarily the complete story.

It is possibly coming from money markets,

Using a loan to finance growth is not a scary concept so long as the gearing is not excessive and turnover is healthy -

If the source of the money is actually from the markets then the 8% comes from the shocking state of those markets with hideous rates for risky ventures such as football club growth.

The truth is hidden behind private matters including commercially confidential agreements so who knows - but the management of such levels of debt is not the same as a residential mortgage I.e. none of this necessarily means imminent adminstration or that the Thai's are directly profiting from the debt

[unreachable]

http://www.independent.co.uk/sport/football/football-league/uefas-financial-fair-play-rules-for-the-championship-put-on-hold-7619284.html

The Independent

Thursday 05 April 2012

Uefa's Financial Fair Play rules for the Championship put on hold

"At a time when some of Europe's highest-spending clubs are waiting to see if any of their competitors might mount a legal challenge to Uefa's Financial Fair Play regime, the Football League appears likely to water down plans to introduce a stringent regime to the Championship from next season.

The League announced in June 2011 that FFP rules restricting clubs' spending to 60 per cent of turnover would be introduced from next season. Its schedule set February's quarterly meeting of all 72 clubs as the deadline for proposals to be ratified. But the financialfairplay.co.uk website has established that the deadline passed without resolution and, with all 24 clubs in the division not due to sit down again until the League's AGM in June, it seems next season is now too close to enforce a system under which clubs will be penalised for failing to restrict their spending.

A season without any punishment for failure – effectively testing the system but delaying implementation for a year – is one of a number of options. West Ham indicated last year they were willing to fight FFP by judicial review.

Portsmouth's administrator, Trevor Birch, warned at Manchester's Soccerex convention last week that the Championship had become "a scene of carnage" and "a catastrophe" in financial terms, as clubs pursue the dream of top-flight football, and cited FFP rules as the solution.

But the proposals are beset with a number of problems, not least how a transfer ban, which is one of the proposed penalties, could realistically be imposed, since clubs in breach of FFP might be in the Premier League before the trigger for such a ban – the previous season's accounts – were published.

For instance, Southampton have recently revealed their financial results for last season when, in the course of securing promotion from League One, their wage-to-turnover ratio was a mighty 93 per cent and they incurred losses of £11.5m. But increased TV rights and commercial income and the sale of Alex Oxlade-Chamberlain to Arsenal will now see them come close to breaking even. They are also heading for the Premier League where, seemingly, no punishment could be applied.

Agreeing a legal framework for FFP only four months before the next season starts seems implausible. Clubs in the Premier League were given two years' notice. Uefa now accepts that those clubs travelling towards breaking even will be looked upon favourably."

[yorkie1999]

Are we doomed?

we are if we get into any european cups!

[Foxes_Trust]

We are monitoring this closely, and have a copy of a presentation that was made to the Football League a few months ago.

The recommendation put forward in that was initial sanctions for clubs who do not break even to start in the 2013/14 season.

It also covers the topic of "related party" transactions in terms of stadium sponsorship (or any other large value sponsorships) and a calculation of "fair value" would apply to close off the perceived loophole that Man City appear to be exploiting

[Lobsterboyuk]

We are monitoring this closely, and have a copy of a presentation that was made to the Football League a few months ago.

The recommendation put forward in that was initial sanctions for clubs who do not break even to start in the 2013/14 season.

It also covers the topic of "related party" transactions in terms of stadium sponsorship (or any other large value sponsorships) and a calculation of "fair value" would apply to close off the perceived loophole that Man City appear to be exploiting

My assumption is that the football league will be pushed on to the back foot chasing ever more creative accounting to inflate revenue and deflate expenses by the bigger clubs and the legislation will always be behind and achieve little in practice

[dave the caveman]

We are monitoring this closely, and have a copy of a presentation that was made to the Football League a few months ago.

The recommendation put forward in that was initial sanctions for clubs who do not break even to start in the 2013/14 season.

It also covers the topic of "related party" transactions in terms of stadium sponsorship (or any other large value sponsorships) and a calculation of "fair value" would apply to close off the perceived loophole that Man City appear to be exploiting

Why would they close that "loophole"? What actual benefit is there in completely preventing investment in football clubs? Can't see how immobilising clubs in that way will help anyone

[Milton Keynes Fox]

Why do everyone love King Power and Top if they're simply making 8% more money than they've injected into us, it isn't an investment it's a loan, i don't see why they're so liked if true.

[Libertine Dream]

Its a load of rubbish that will have as much of a negative effect as a positive one. Theyre the ones that created the Champions League which resulted in the creation of the Premier League which has meant massive amounts of money gets chucked at football trying to get to those riches.

All that will happen is, Doncaster will never stand a chance and Leeds with bloody Ken Bates will benefit. Likewise in League 2, Bradford will prosper and Stanley will struggle even more so

[Babylon]

Why do everyone love King Power and Top if they're simply making 8% more money than they've injected into us, it isn't an investment it's a loan, i don't see why they're so liked if true.

To get the money back out they need premier league football, without it the money isn't there for them to have back.

[Libertine Dream]

Why do everyone love King Power and Top if they're simply making 8% more money than they've injected into us, it isn't an investment it's a loan, i don't see why they're so liked if true.

You do realise that in business rarely do you get investment that doesn't have to be paid back in some way. Its not a grant, they can't just give money away. Did you not realise that Forest owed Doughty 70 million because he kept them going every month, he wasn't going ro just give a large amount of his fortune away

[wellyfox]

More to the point of paying it back can anyone actually tell us what they have payed to put KP on the shirt and the stadium.

I don't like the owners and what there money has done to our club and unless they have signed a deal for the naming rights they are the worst pimps going.

I don't trust em never have and never will.