Financial fair play in the Championship

[dave the caveman]

Sad that this thread has descended into yet another orgy of toothless and itrational criticisms of the owners

[Guest MattP]

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.

English football fans love people who turn up and thrown cash at things, it's the new fad in football since Roman arrived at Chelsea and it's continued since. You are already starting to see a lot of these owners vanishing though and that will increase as they realise making money out football is a far different prospect to what they originally thought.

[Guest MattP]

Sad that this thread has descended into yet another orgy of toothless and itrational criticisms of the owners

I'm sorry am I supposed to be happy that for the small cost of £57million (+8%) my football club now has four big screens and is in a worse position than when they arrived whilst running at a 15million a year loss. (which will increase on May 31st 2013)????

Fantastic. Brilliant. Thank you Top.

Thank god we don't have a chairman like Norwich's, Readings or Swansea's...they will never have the money to go up.

[Milton Keynes Fox]

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

English football fans love people who turn up and thrown cash at things, it's the new fad in football since Roman arrived at Chelsea and it's continued since. You are already starting to see a lot of these owners vanishing though and that will increase as they realise making money out football is a far different prospect to what they originally thought.

I'd much rather not have the investment than having to pay 8% on everything.

[dave the caveman]

I'm sorry am I supposed to be happy that for the small cost of £57million (+8%) my football club now has four big screens and is in a worse position than when they arrived whilst running at a 15million a year loss. (which will increase on May 31st 2013)????

Fantastic. Brilliant. Thank you Top.

Thank god we don't have a chairman like Norwich's, Readings or Swansea's...they will never have the money to go up.

Why are you blaming Top? The owners supplied the money, it's not their fault that it was wasted. Your examples are nonsensical, you seem to be suggesting that Top should have known that employing a highly decorated ex-England manager and giving him almost limitless funds wouldn't work. You seem to be suggesting that we should have intentionally spent less money and got a less well known manager because that's what worked elsewhere. What planet are you on?

[dave the caveman]

You are already starting to see a lot of these owners vanishing though

Examples?

and that will increase as they realise making money out football is a far different prospect to what they originally thought.

Proof that these millionaire/billionaire business people are so poor at business?

[Happy Fox]

It is partly Andrew Neville's fault he was the transfer negotiator wasn't he? I wouldn't be surprised if the Thais sack him.

[Vlad the Fox]

FFP is flawed and benefits the top teams who can generate more income.

Severely capping wages and transfer fees will ease a lot of the financial problems facing clubs as well as creating a more level playing field in the transfer market.

Agents should be seriously restricted or even all fee's paid to national FA's who pay a wage to employed agents who oversee transfer/wage negotiations. Along side this match day squads should include a certain number of academy players.

Essentially they need to be looking at bringing costs down right along the board including the price of tickets that we the supporters have to pay because while things continue as they are prices will increase at too quick a rate and as a result increasingly fewer numbers of us will be able to afford it.

[Guest MattP]

Why are you blaming Top? The owners supplied the money, it's not their fault that it was wasted. Your examples are nonsensical, you seem to be suggesting that Top should have known that employing a highly decorated ex-England manager and giving him almost limitless funds wouldn't work. You seem to be suggesting that we should have intentionally spent less money and got a less well known manager because that's what worked elsewhere. What planet are you on?

Errrr.....because chairman should take responsibility for the managers they appoint??

I'm saying you should try and get value for money, anyone with half a brain (go back and check my posts if you want from last pre season) knows that just throwing money at people very rarely works in this division.

What planet am I on? One where I believe a sensible fiscal plan is the way forward for medium sized football clubs like ours. The pound signs have gone to your and many others heads and you completely lost touch of reality.

[Guest MattP]

Examples?

Proof that these millionaire/billionaire business people are so poor at business?

The Icelandics at West Ham, Gaydamek at Pompey, Venkys at Blackburn, there are more and tons more to come....it's just starting now.

I have absolutely no idea what you mean in the second question, they are clearly excellent businessmen (though it helps having the Thai government giving you a monopoly on duty free) but I have no idea how this means you are going to get football immediately right when you have never had any experience in it whatsoever and the marketing from the outside looks as bad as ever.

[Libertine Dream]

I'd much rather not have the investment than having to pay 8% on everything.

It'd only be a problem if we went up and got relegated and didnt get straight back up.

[dave the caveman]

Errrr.....because chairman should take responsibility for the managers they appoint??

I'm saying you should try and get value for money, anyone with half a brain (go back and check my posts if you want from last pre season) knows that just throwing money at people very rarely works in this division.

What planet am I on? One where I believe a sensible fiscal plan is the way forward for medium sized football clubs like ours. The pound signs have gone to your and many others heads and you completely lost touch of reality.

So you think having a "sensible fiscal plan" necessarily improves on field performance? Strange because most clubs in the football league have a "sensible fiscal plan" and yet most clubs in the football league are nowhere near success unless you count abject mediocrity as success.

Regardless of how romantic the idea of poverty stricken clubs rising from the ashes to claim promotion is, the fact of the matter is that almost every team promoted from the champ in the last decade has been among the top few wage/transfer spenders in the league. Just throwing money around doesn't get you success, but you almost definitely do need to spend a bit to get promotion.

Clearly the rare examples of championship clubs who have got promoted without a significant financial advantage have an exceptional manager to thank. So yeah, I guess shame on Top for not being able to appoint a ****ing genius. If only he wasn't foreign maybe he'd be able to work miracles.

[Guest MattP]

So you think having a "sensible fiscal plan" necessarily improves on field performance? Strange because most clubs in the football league have a "sensible fiscal plan" and yet most clubs in the football league are nowhere near success unless you count abject mediocrity as success.

Regardless of how romantic the idea of poverty stricken clubs rising from the ashes to claim promotion is, the fact of the matter is that almost every team promoted from the champ in the last decade has been among the top few wage/transfer spenders in the league. Just throwing money around doesn't get you success, but you almost definitely do need to spend a bit to get promotion.

Clearly the rare examples of championship clubs who have got promoted without a significant financial advantage have an exceptional manager to thank. So yeah, I guess shame on Top for not being able to appoint a ****ing genius. If only he wasn't foreign maybe he'd be able to work miracles.

You seem to be under the impression clubs should spend well out of their means for a chance of promotion even if it means landing themselves into serious financial trouble.

I believe you spend what you earn, if that lessens your chance of promotion so be it, that's life. What I certainly know is running up debts of 57million and running at a 15 million loss within 2 years of someone taking over is rash, not sensible and downright irresponsible.

So yes shame on top, not for his appointment of Sven or Nige, but for signing these ridiculous cheques that leaves the business he owns owing a ridiculous amount of money to its benefactors in not even 20 months at the helm.

[Guest MattP]

It'd only be a problem if we went up and got relegated and didnt get straight back up.

With what we owe and will owe after the next two years declarations will need 3-4 seasons at least in the premier league to pay off. We'll need a damn good manager as well.

[dave the caveman]

You seem to be under the impression clubs should spend well out of their means for a chance of promotion even if it means landing themselves into serious financial trouble.

I believe you spend what you earn, if that lessens your chance of promotion so be it, that's life. What I certainly know is running up debts of 57million and running at a 15 million loss within 2 years of someone taking over is rash, not sensible and downright irresponsible.

So yes shame on top, not for his appointment of Sven or Nige, but for signing these ridiculous cheques that leaves the business he owns owing a ridiculous amount of money to its benefactors in not even 20 months at the helm.

This is what your vendetta comes down to then, a basic lack of understanding of how football investment works combined with a general mistrust of foreign owners. Fair enough. You're wrong, but fair enough.

[Guest MattP]

This is what your vendetta comes down to then, a basic lack of understanding of how football investment works combined with a general mistrust of foreign owners. Fair enough. You're wrong, but fair enough.

lol

Go on then, I've worked in finance with venture capitalists, educate me on the finer points of understanding football investment and Vichai's masterplan.

General mistrust of foreign owners? Not because they are foreign, I'm wary of anyone who turns up anywhere promising the world bearing gifts.

[Lobsterboyuk]

lol

Go on then, I've worked in finance with venture capitalists, educate me on the finer points of understanding football investment and Vichai's masterplan.

General mistrust of foreign owners? Not because they are foreign, I'm wary of anyone who turns up anywhere promising the world bearing gifts.

And none of them use leverage and gearing to fund their investments? In your opinion - what is an acceptable level of gearing for a club the size of Leicester?

[Out Foxed]

In your opinion - what is an acceptable level of gearing for a club the size of Leicester?

keith weller's tights

[Lobsterboyuk]

keith weller's tights

Those were never acceptable - great player, shame about the dress sense...

[Guest MattP]

And none of them use leverage and gearing to fund their investments? In your opinion - what is an acceptable level of gearing for a club the size of Leicester?

Hard to estimate as Football is strange as it can't really be compared to any other business, I wouldn't personally want to risk more than 15-20million on any championship football club so to run up our levels of debt in this short space of time is incredible.

It depends what the intention is, if it's to use us to market King Power across Europe for the future the amount could be anything but I think you would be looking at a bigger club than us to do that. If it was to get us promoted and sell us on ASAP then investment has already exceeded what they would get for us in 2 years time assuming we go up.

Didnt like him but Mandaric had the best idea, take a club on its knees, get the local media in your pocket, buy it for a pittance from petrified shareholders and just hang in there spending fairly little until you finally appoint someone who gets it right.

[Captain...]

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

Can you prove that please rather than spreading lies, our outgoings are less than our income, our losses have come from investment in assets, i.e. players which can be sold to recoup losses if necessary, but these outlays are offset by loans and paying them back +8% will be taken into account in our outgoings. We also owe money to our owners so they control the re-payment schedule which is much better than owing money to a financial institution.

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?

If they asked for it back, and we couldn't pay it they would have to sell the club or force us into adminstration, which means the club would be asset stripped and our debts would be met to the best of the administrators means which is normally a fraction of the actual amount, so they would lose a lot of money, it is not in their interest to let us go into administration, they would lose a lot of money and reputation, the club would survive and start again.

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

Yes they are business men, that is how business works, you lend someone money so they can improve their revenue and then pay it back at interest to compensate for the loss of earnings incurred by not having that sum of oney sitting in a bank account.

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.

Do you have the figures to back that up or are you just guessing? A season in the premiership is worth 90million more or less, then there is the increased exposure and sponsorship deals you can negotiate on the back, this whole venture is about promoting King Power, it is worth more to them us being in the prem than just the money.

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.

They have invested 59 million when buying the club, they also invest more every year, but it is not sensible to just pump a limitless amount money into a club, so anything on top of that will need to be done in the form of loans, especially with the FFP rules limiting such activities.

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.

Please give one valid reason why you don't trust them? They have intrinsically linked their brand to our club, the reputation of King Power lies very closely to that of our club, if this club is financially mismanaged it will damage the name King Power much more than it will the name Leicester City. You may not like them for any decisions they have made regarding Sven or NP, but not to trust them with the club is ridiculous.

What planet am I on? One where I believe a sensible fiscal plan is the way forward for medium sized football clubs like ours. The pound signs have gone to your and many others heads and you completely lost touch of reality.

They took a caluclated financial gamble, with the Sven experiment, it didn't work, they had the funds to gamble and lose, it cost Sven his job, now they are taking a more frugal approach with a more restrained manager, it will not necessarily lead to instant success, but hopefully they will help NP build a team for the future.

This panic over the owners is unfounded and frankly ludicrous, they are business men, they know how to be successful, and they know how to manage money, they have been aware of the incoming FFP rules and gambled on throwing money at the club to get promotion while they still could, now they will be forced to be more careful with their/our money.

They are actually restricted from financially mismanaging the club, which means our future as a club is safe, they are still investing in the club, as well as having access to large sums of money available to us in the forms of loans, they are securing big sponsorship deals with King Power and other asian businesses, the kind of deals other clubs in our position cannot make.

It is stupid that people need reassuring that they have the interests of the club at heart, they would gain nothing from us failing, they would lose a lot if we did a hell of a lot more than you or I.

[Lobsterboyuk]

Hard to estimate as Football is strange as it can't really be compared to any other business, I wouldn't personally want to risk more than 15-20million on any championship football club so to run up our levels of debt in this short space of time is incredible.

It depends what the intention is, if it's to use us to market King Power across Europe for the future the amount could be anything but I think you would be looking at a bigger club than us to do that. If it was to get us promoted and sell us on ASAP then investment has already exceeded what they would get for us in 2 years time assuming we go up.

Didnt like him but Mandaric had the best idea, take a club on its knees, get the local media in your pocket, buy it for a pittance from petrified shareholders and just hang in there spending fairly little until you finally appoint someone who gets it right.

Yes, we don't really know - but the Thai's know it's a gamble - but we are looking at least of quadrupling of income if we get promoted and they really start ticking the box on making LCFC a brand in Thailand. That is a difference compared to some of the tinpot investors of ill repute who have cut and run - these guys have a compelling plan to build football in their homeland - rather than spend daddy's money on a football folly

Back OT if we don't go up soon then we are in trouble:

2010/11 - Non staff Operating Costs - 15million + Staff costs = 16.5million

2010/11 - Income 17.3 million

Hence the operating loss of 14.3 million plus the 2.7 million interest minus player transfer fee profit of 1.8 million for that year to give the 15 million loss

So we are at 200% of income

But who know's what the structure of the debt is? Could be convertible bonds that get swapped for equity just prior to FFP coming in to effect and with no big signings for 2012/2013 and some creative accounting and "bingo" - FFP obligations met. Or not!

This is a key point - we just do not know - fun to speculate - or scary shit - but right now it's all just hypotheses...

[Vlad the Fox]

The one thing no one seems to mention in any of these threads is that when Susan Whelan was appointed she stated that their aim was to make the club self sufficient. Now I'm quite sure that premiership football will have to be involved to make this happen but there is a plan in place. To get there will cost money which they are willing to spend. As for talk of them pulling out they have stated on a number of occasions they are here for the long term and have given us no indication to think otherwise. You can look at figures all day long and argue both sides. People should just relax a bit.

[unreachable]

As has been said King Power are in too deep to pull out until we get access to the riches that the Premiership brings.

[stourbridgefox]

All anyone needs to know about venture capitalists is that they will be first against the wall come the revolution !!