Ewetube Posted May 30, 2014 Share Posted May 30, 2014 I have a certain (grudging) sympathy for QPR with their FFP farago. Due to the football league's lack of integration with the premier league a club can operate completely differently, with wanton abandon, and then be relegated only to be told they have to work within strict confines. There has to be a cross-league general standard for FFP, or it will be only a moral baton for the likes of Sam Rush to beat richer clubs with. I don't really have any sympathy with QPR (the club); their fans are a different matter. The club's owners took a big gamble, lost and now they must face the consequences. Link to comment Share on other sites More sharing options...
G STAR RAM Posted May 30, 2014 Share Posted May 30, 2014 There'd be no amortisation charges though,which is what counts-the asset would merely be recorded on the balance sheet,with the corresponding entries (required in double entry book keeping) being either a reduction in cash (paid in full),an increase in creditors (full amount still owed),or,more likely, a combination of both. In response to an earlier post by GSR,I can see nothing in FFP that allows for amounts to be moved into a following year. Got to be a major flaw that a team could make £100million profit one year but then not be allowed to reinvest it all the following year without getting a major fine. Wonder if you could change your accounting policy to only writing off a players transfer fee at the end of his contract?! Would go against accounting practice of course! Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 Got to be a major flaw that a team could make £100million profit one year but then not be allowed to reinvest it all the following year without getting a major fine. Wonder if you could change your accounting policy to only writing off a players transfer fee at the end of his contract?! Would go against accounting practice of course! I think the skies would be full of pigs the day a Championship club made £100m profit,but I take your point.Even if your second point were allowed,you would only probably produce loss spikes when the write downs occurred. Link to comment Share on other sites More sharing options...
G STAR RAM Posted May 30, 2014 Share Posted May 30, 2014 I think the skies would be full of pigs the day a Championship club made £100m profit,but I take your point.Even if your second point were allowed,you would only probably produce loss spikes when the write downs occurred. Was meant to say £10million! Understand the spike effect but would potentially give teams 3 or 4 years to gamble on getting promotion! Link to comment Share on other sites More sharing options...
davenportram Posted May 30, 2014 Share Posted May 30, 2014 Would profit from a season being reinvested be disallowed? I thought it was the introduction of new investment that was limited. If the cash was already in the bank would that class as new investment. Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 Was meant to say £10million! Understand the spike effect but would potentially give teams 3 or 4 years to gamble on getting promotion! Probably why it's not allowed. Link to comment Share on other sites More sharing options...
CumbrianRam Posted May 30, 2014 Share Posted May 30, 2014 Still think the only punishment you should get for breaking the rules should be points deductions and automatic relegations for entering admin. Big fine for promotion breaks the whole premise and what are these "charities", prefer it going to grassroots IF these fines can be applied. I'm sure clubs would prefer a 20 mill fine and promotion than no fine and being stuck in a low turnover league if they had enough money to pay. Transfer bans is barn door after the horse is bolted and clubs could still use "emergency loans" I guess. Points deductions could actually have an impact on how well the team would do Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 Would profit from a season being reinvested be disallowed? I thought it was the introduction of new investment that was limited. If the cash was already in the bank would that class as new investment. It wouldn't be disallowed-at any time you could invest whatever you liked,but the snag is that the repercussions of such investment (if on players) in the form of increased wages/amortisation would negatively impact profits for the duration of contracts issued. Link to comment Share on other sites More sharing options...
davenportram Posted May 30, 2014 Share Posted May 30, 2014 I meant it wouldn't cont towards the limit on funds provided by owners to cover losses. Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 Still think the only punishment you should get for breaking the rules should be points deductions and automatic relegations for entering admin. Big fine for promotion breaks the whole premise and what are these "charities", prefer it going to grassroots IF these fines can be applied. I'm sure clubs would prefer a 20 mill fine and promotion than no fine and being stuck in a low turnover league if they had enough money to pay. Transfer bans is barn door after the horse is bolted and clubs could still use "emergency loans" I guess. Points deductions could actually have an impact on how well the team would do Completely agree about grassroots.As for points deductions,I doubt this could have got through.We must remember that the Football League is its constituent member clubs and it obviously took a lot of talking to get the eventual (probably heavily watered down) version agreed. I find it irritating that any club that voted this through should now contest it,however I do have a small amount of sympathy for those clubs relegated from the Prem that had no say in it.Eddie made the point that QPR knew about it for 3 years,but you can hardly prepare for life in the Championship (each year) whilst trying to remain competitive in the Prem. If you cut your cloth for the Championship whilst in the Prem,it would most probably become self fulfilling.I knew from day one that this particular issue was likely to give problems. Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 I meant it wouldn't cont towards the limit on funds provided by owners to cover losses. The point I'm trying to make is that there's no limit to the amount of funds owners put in,but they must put in equity to cover certain losses.For example,this year £5m of losses are allowed if covered by equity (£3m for acceptable deviation bringing total allowed up to £8m). Let's say that we actually made an £8m FFP loss and were forced to put in £5m-there's absolutely nothing to stop us putting in a further £10m,say, and go buying players as long as such actions allowed us to stay within allowable FFP losses in future years (and as I said earlier the main implications of such actions would be wages/amortisation). I'm trying to understand where you're having difficulty,and I know it can't be easy if you don't have accounting experience,but I'll try this. The act of investment in itself doesn't affect the Profit and Loss account-the only initial entries would be an increase in capital,balanced by an increase in the asset of cash,both of which are Balance Sheet items.It's only when you start applying such cash that you may impact P/L,e.g. buy players (reduce cash,increase intangible fixed assets,both B/S items) and thus introduce amortisation and wages,both of which are P/L items. Link to comment Share on other sites More sharing options...
davenportram Posted May 30, 2014 Share Posted May 30, 2014 I get you now. Thanks The difficulty in understanding where people have problems is the art of being a good teacher. Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 The one tweak you could possibly make to FFP would be to allow clubs to spread any profit/loss on sale of players evenly over,say, 3 years for FFP purposes (internal accounts being unchanged).Then if we were to sell an ex Academy product for £6m,we could buy players for this amount and the annual amortisation would match the revised annual profit on player sales. However,if a club were to find itself in difficulty with FFP one year (poorer year than expected/declining attendances) it might welcome the chance to sell a player at a book profit and have that full profit count towards FFP. So it aint easy. Link to comment Share on other sites More sharing options...
observer Posted May 30, 2014 Share Posted May 30, 2014 The one tweak you could possibly make to FFP would be to allow clubs to spread any profit/loss on sale of players evenly over,say, 3 years for FFP purposes (internal accounts being unchanged).Then if we were to sell an ex Academy product for £6m,we could buy players for this amount and the annual amortisation would match the revised annual profit on player sales. However,if a club were to find itself in difficulty with FFP one year (poorer year than expected/declining attendances) it might welcome the chance to sell a player at a book profit and have that full profit count towards FFP. So it aint easy. ramblur, I agree that it needs some tweaks but the problem with the above is that you would get clubs (chelsea already said they are trying to do this snapping up all of the 16-19 year old and then selling them when they get to 21-22 Clubs would look at an academy as a revenue stream instead of development tool. Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 I get you now. Thanks The difficulty in understanding where people have problems is the art of being a good teacher. Although I've no formal teaching experience,I have given Maths grinds to the kids of various friends,and was pleasantly surprised to find I did seem to have the knack of working out where difficulties lay. I knew that kids who aren't good at Maths tend to dislike the subject (or worse) so I made a point of first finding out what their interests were (English football,Gaelic games,bands etc). I then ditched the text book questions and made up my own (making use of the mental agility my own terrific teachers had taught me) incorporating their interests.I had very good results-all bar one increased their grades,sometimes dramatically.The one failure had no interest whatsoever-he started off bouncing an orange from hand to hand,saying it increased his concentration.I'm sure it soared when he dropped it. I do however realise that one on one is far easier than the classroom. Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 ramblur, I agree that it needs some tweaks but the problem with the above is that you would get clubs (chelsea already said they are trying to do this snapping up all of the 16-19 year old and then selling them when they get to 21-22 Clubs would look at an academy as a revenue stream instead of development tool. The only point I was trying to make was that in a situation where you had to sell a player for big money,e.g player wanted to play in the Prem, FFP could make it difficult for you to spend the proceeds on replacements. Link to comment Share on other sites More sharing options...
sage Posted May 30, 2014 Share Posted May 30, 2014 Don't know much about Algebra, don't know what a slide rule is for... Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 Don't know much about Algebra, don't know what a slide rule is for... You hands must be sore from bouncing oranges,sage . I seriously wouldn't have a clue how to use a slide rule.Having come from humble roots my parents couldn't afford to buy me one,thank heavens. Link to comment Share on other sites More sharing options...
sage Posted May 30, 2014 Share Posted May 30, 2014 but I do know that one and one is two... Link to comment Share on other sites More sharing options...
ramblur Posted May 30, 2014 Share Posted May 30, 2014 but I do know that one and one is two... You were even juggling. Link to comment Share on other sites More sharing options...
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