Guest Basildon Fox Posted 18 May 2013 Posted 18 May 2013 But I question yet again. Discounting over inflated sponsorship deals etc. is a restraint of trade. There is no way that if the football league tried to enforce the measures stated while ignoring a lucrative contract that a court of law would favor the FL in a case that went to court. If that is wrong then I would love to find out why.
reynard Posted 18 May 2013 Posted 18 May 2013 It is pretty difficult to see how we can get near the £3m loss figure without some very creative accountancy. Getting rid of 10 players on £1m a year would only go half way and in the current financial environment it is hard to see the club raising much extra revenue from fans or from the UK advertising and sponsorship sector.
yorkie1999 Posted 18 May 2013 Posted 18 May 2013 So if the owners of leicester city bought hinckley united, then used hinckley united to buy and pay their players and ran them at a loss, would that be shown up on leicester citys books.
Greatness_Since_1884 Posted 18 May 2013 Posted 18 May 2013 How can you 'make more shares'? Surely if you own 100% no more can be made? This is coming from a finance novice btw.
Goddard Posted 18 May 2013 Posted 18 May 2013 Just jumped to this topic and admittedly haven't read all posts but rather than an intercompany loan which obviously has no effect on profit and loss (other than interest), could the owners just pay thus in sponsorship.obvioulsy the risk on their part is that they have no legal or financial entitlement to this cash injection back. But my view would be that if they were in it for the reasons they promote and won't be jumping ship if things get tricky, they would pay this sponsorship until they received the benefits. At this point they could, if desired, sell their shares or benefit from the merchandising/promotion of their brand. I don't know how the league/ accounting body will dictate what is an arms length value for the sponsorship, but this would be the risk for transfer pricing legislation.
ADK Posted 18 May 2013 Posted 18 May 2013 Can see alot of legal challenges and shit up ahead tbh. Would love to get clear of this division asap.
yorkie1999 Posted 18 May 2013 Posted 18 May 2013 How can you 'make more shares'? Surely if you own 100% no more can be made? This is coming from a finance novice btw. i think if you own 100% of the shares, you reduce the worth of each share thereby increasing the amount of shares. You then sell the extra shares off, but the money raised from selling the shares comes back to you, so you still end up with at least the same amount of value or more but you've reduced your share holding. I think.
MooseBreath Posted 18 May 2013 Posted 18 May 2013 It is pretty difficult to see how we can get near the £3m loss figure without some very creative accountancy. Getting rid of 10 players on £1m a year would only go half way and in the current financial environment it is hard to see the club raising much extra revenue from fans or from the UK advertising and sponsorship sector. How do you know how far off it we are now? The last lot of accounts were for Sven's era, we don't know yet how much of a loss we've been running under Nigel. Except for a few outstanding high earners our current squad doesn't look especially expensive to me. The likes of RDL, James, Wood, Knocky, Drinkwater etc are all players we should be able to afford without going into massive debt.
Iwan is a Welshman Posted 18 May 2013 Posted 18 May 2013 Thanks for the excellent breakdown Foxblogger. I have a feeling that, as a barrier to trade, the system may not stand up to a challenge in a European court (although I can't think of a specific way that that would pose a problem at the moment.) Undoubtedly though the Football League has it's heart in the right place with FFP and the introduction of strong measures to clamp down on football's cavalier approach to spending is a good thing. Let's hope they enforce it to the letter of the law. Bear in mind also that any loopholes that arise can always be closed. It won't be very easy for companies to pump money into clubs outside of the rules though.
Chrysalis Posted 18 May 2013 Posted 18 May 2013 The issue I have with FFP is simple. Its unfair, the 'fair' is completely misleading. Its very clear its actually in place to protect the big clubs but under the guise to protect the small clubs going bust. Liverpool and co unhappy they getting threatened by the likes of man city and chelsea. As to why our division voted for it I have no idea other than some chairman who dont understand it properly. that doesnt mean I support a system where we spend to bankruptcy but I a spending cap should be equal size to every club, so if one club can spend 10million a season its the same for every club in the divison. FFP basically stifles outside investment, makes it very hard for clubs to mvoe up the ladder, and clubs been relegated from the EPL now have an even bigger advantage. cardiff and hull both had heavy losses this season, in a enforced FFP they likely would not have gone up. same with southampton last year. Also this FFP actually excludes relegated clubs in their first season down.
EdinburghFox Posted 19 May 2013 Author Posted 19 May 2013 So if the owners of leicester city bought hinckley united, then used hinckley united to buy and pay their players and ran them at a loss, would that be shown up on leicester citys books. I don't think you can win 2 clubs in England to prevent that.
Foxblogger Posted 19 May 2013 Posted 19 May 2013 The issue I have with FFP is simple. Its unfair, the 'fair' is completely misleading. Its very clear its actually in place to protect the big clubs but under the guise to protect the small clubs going bust. Liverpool and co unhappy they getting threatened by the likes of man city and chelsea. As to why our division voted for it I have no idea other than some chairman who dont understand it properly. that doesnt mean I support a system where we spend to bankruptcy but I a spending cap should be equal size to every club, so if one club can spend 10million a season its the same for every club in the divison. FFP basically stifles outside investment, makes it very hard for clubs to mvoe up the ladder, and clubs been relegated from the EPL now have an even bigger advantage. cardiff and hull both had heavy losses this season, in a enforced FFP they likely would not have gone up. same with southampton last year. Also this FFP actually excludes relegated clubs in their first season down. I think the Football League would argue that they are not stopping investment, so long as it is sustainable. That's why under FFP in the Championship certain expenses do not count. Want to build a new stand, or an entirely new stadium? You can write it off against you losses. Want to invest in your academy so that your club brings through talented youngsters? You can write it off against your losses. What you can't do is loan in millions of pounds at a high rate of interest to a club and blow the money on players and Premier League wages in the hope that promotion will follow. As we know from bitter experience, that's no guarantee. And as you rightly point out, Leicester are hardly alone. What FFP is designed to do is get clubs investing in ways that promote the long term future of the game. The Football League chairman have at least got the sense to know that it's not sustainable for English football's second tier to be saddled with billions of pounds of debt, the vast majority of which has accumulated by heavy spending on players and agents, money that goes straight out of the game.
Guest Col city fan Posted 19 May 2013 Posted 19 May 2013 I think the Football League would argue that they are not stopping investment, so long as it is sustainable. That's why under FFP in the Championship certain expenses do not count. Want to build a new stand, or an entirely new stadium? You can write it off against you losses. Want to invest in your academy so that your club brings through talented youngsters? You can write it off against your losses. What you can't do is loan in millions of pounds at a high rate of interest to a club and blow the money on players and Premier League wages in the hope that promotion will follow. As we know from bitter experience, that's no guarantee. And as you rightly point out, Leicester are hardly alone. What FFP is designed to do is get clubs investing in ways that promote the long term future of the game. The Football League chairman have at least got the sense to know that it's not sustainable for English football's second tier to be saddled with billions of pounds of debt, the vast majority of which has accumulated by heavy spending on players and agents, money that goes straight out of the game. Great post..
Foxblogger Posted 19 May 2013 Posted 19 May 2013 So if the owners of leicester city bought hinckley united, then used hinckley united to buy and pay their players and ran them at a loss, would that be shown up on leicester citys books. It's not really a case of whether it would show up on the books or not. There are already clear rules against one club having a direct influence over another in this way. http://www.football-league.co.uk/regulations/20110629/section-9-association-dual-interests_2293633_2125750
Foxblogger Posted 19 May 2013 Posted 19 May 2013 But I question yet again. Discounting over inflated sponsorship deals etc. is a restraint of trade. There is no way that if the football league tried to enforce the measures stated while ignoring a lucrative contract that a court of law would favor the FL in a case that went to court. If that is wrong then I would love to find out why. I know what you're saying. UEFA seem pretty confident they're complying with European Law, but I'll guess we'll just have to wait and see.
Guy1960 Posted 19 May 2013 Posted 19 May 2013 I know what you're saying. UEFA seem pretty confident they're complying with European Law, but I'll guess we'll just have to wait and see. They're all a bunch of crooks so what do they know FPP is like EPPP a scheme implemented to make the closed shop even more tight.
Harry - LCFC Posted 22 January 2014 Posted 22 January 2014 http://www.financialfairplay.co.uk/financial-fair-play-explained.php This seems like a decent site. Not the time to look at it yet so it could be rubbish but for anyone still unsure what it's all about this might be helpful.
_Fatboyslow_ Posted 22 January 2014 Posted 22 January 2014 Can any tell me if the figure of £300 million turnover includes the parachute payments for clubs coming down ?
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