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"My calculations suggest that #ReadingFC are a long way from being compliant with  FFP, even after excluding academy, community & infrastructure (estimated at £5m a year) plus £2m COVID impact, and including £15m profits from sale of stadium and training ground."

#ReadingFC chief executive Nigel Howe neatly summarised the club’s FFP dilemma: “The only way that we can stay within the regulations is to sell some of the players that we have bought to help us succeed, so it’s a bit of a Catch-22.”

#ReadingFC stated objective is “to strive for promotion to the Premier League, without jeopardizing the club’s financial position.” Like many other Championship clubs, funding from the owners is vital, though this will not help meet FFP targets. It’s a tricky balancing act.

All the work of Swiss Ramble please visit his page to read his excellent summary

Covid rules may save them from a penalty next season but the next........

Looks like 2 options, take it on the chin at the risk of relegation or go for broke next season (surely they will under an embargo though).  Failure could be catastrophic.  Whilst PS is still there the rule is push one year, if it doesn't succeed try to tread water for the next 2 then go again.  Reading are carrying 2 unaffordable seasons and have used up their tangible assets

 

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9 minutes ago, Gaspode said:

Shows what a farce FFP has become - it was intended to prevent teams from over-spending and thereby putting their futures in doubt and yet it's now almost forced clubs with any sort of ambition to do exactly that.....

the parachute payments create a completely unfair environment

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3 hours ago, Spanish said:

image.png.324c2e7ba7ca11879590e2b85f4e7ee9.png

"My calculations suggest that #ReadingFC are a long way from being compliant with  FFP, even after excluding academy, community & infrastructure (estimated at £5m a year) plus £2m COVID impact, and including £15m profits from sale of stadium and training ground."

#ReadingFC chief executive Nigel Howe neatly summarised the club’s FFP dilemma: “The only way that we can stay within the regulations is to sell some of the players that we have bought to help us succeed, so it’s a bit of a Catch-22.”

#ReadingFC stated objective is “to strive for promotion to the Premier League, without jeopardizing the club’s financial position.” Like many other Championship clubs, funding from the owners is vital, though this will not help meet FFP targets. It’s a tricky balancing act.

All the work of Swiss Ramble please visit his page to read his excellent summary

Covid rules may save them from a penalty next season but the next........

Looks like 2 options, take it on the chin at the risk of relegation or go for broke next season (surely they will under an embargo though).  Failure could be catastrophic.  Whilst PS is still there the rule is push one year, if it doesn't succeed try to tread water for the next 2 then go again.  Reading are carrying 2 unaffordable seasons and have used up their tangible assets

 

There have been massive question marks over Reading for a couple of seasons. In fact,  I believe they somehow got out of a soft embargo without making any sales, then went out and spent £12m on Puscas and Joao

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21 hours ago, Spanish said:

the parachute payments create a completely unfair environment

Everyone can see this but the EFL. 

Until they are removed you will always have clubs pushing to the limit, finding creative ways to balance the books in an attempt to get promoted. 

Owning a Championship club is cutting a hole in your wallet and watching money fall out as you walk. 

How’s it financial “fair” play when 3 clubs have millions chucked at them for failing saying go on, give it another go.

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14 minutes ago, David said:

Everyone can see this but the EFL. 

Until they are removed you will always have clubs pushing to the limit, finding creative ways to balance the books in an attempt to get promoted. 

Owning a Championship club is cutting a hole in your wallet and watching money fall out as you walk. 

How’s it financial “fair” play when 3 clubs have millions chucked at them for failing saying go on, give it another go.

I’ve said it before and I’ll say it again:

parachute payments were intended to help clubs pay off contracts of expensive premier league payments. The whole issue would be fixed if they just changed the rule slightly to say they should be ring fenced for this purpose and this purpose alone. 

instead clubs abuse them and use the parachute payments to by massively expensive players, which not alone drives the market up across the whole championship, but also leaves the clubs in exactly the mess the parachute payments were supposed to create when they run out of money to actually pay off the contracts. 

in fact, it would be nice if the parachute payments were a fixed amount, or the value of the premier league contracts, which ever is less, so they don’t end up with an excess of a few million they can start chucking about. 

but I think the damage has been done now and the market has been destabilised forever. 

it really losses me off sometimes how inept these people are, running an international multi billion pound industry, and they can’t seem to see these simple issues. How the duck did they ever get a job above the level of chip shop (apologies to anyone who works in a chip shop)?

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2 hours ago, TigerTedd said:

I’ve said it before and I’ll say it again:

parachute payments were intended to help clubs pay off contracts of expensive premier league payments. The whole issue would be fixed if they just changed the rule slightly to say they should be ring fenced for this purpose and this purpose alone. 

instead clubs abuse them and use the parachute payments to by massively expensive players, which not alone drives the market up across the whole championship, but also leaves the clubs in exactly the mess the parachute payments were supposed to create when they run out of money to actually pay off the contracts. 

In fairness, most do make cut backs upon relegation. This season, Norwich and Watford sold players for £40m, Bournemouth over £80m. None of those spent much, if anything at all. However, the parachute payments allowed them to retain players they otherwise wouldn't have been able to afford.

There were some clubs who used the parachute payments to strengthen their squad - Boro, Villa and Stoke stick out in my memory.

What makes matters worse is P&S rules which allow a club to lose £22m more for each season they spent in the PL. 
Using Huddersfield as an example (an ignoring changes for Covid), they had a £87m advantage over other clubs in the 19/20 3 year period. In 20/21, it is a £100m advantage. Even next season, they still have a £90m advantage.

2 hours ago, TigerTedd said:

in fact, it would be nice if the parachute payments were a fixed amount, or the value of the premier league contracts, which ever is less, so they don’t end up with an excess of a few million they can start chucking about. 

but I think the damage has been done now and the market has been destabilised forever. 

it really losses me off sometimes how inept these people are, running an international multi billion pound industry, and they can’t seem to see these simple issues. How the duck did they ever get a job above the level of chip shop (apologies to anyone who works in a chip shop)?

 

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They should replace parachute payments with a wage subsidy scheme. Whereby any player retained after relegation has 70% of their wages and bonuses funded by this scheme. It will stop clubs who don’t invest when in the PL from profiting further. If the club sells the player, then the subsidy for that player ends. They will then be fishing in the same pond as the rest of the division when recruiting as there will be no PL subsidy on new players. 

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Looks like they’re in serious trouble if they don’t go up this year - we know that feeling all too well. Guess they’ve got a season like we’re having now to look forward to then, I’m sure they’re waiting on Sheikh Khaled’s arrival with £60m of monopoly money...

I still absolutely hate the whole concept of FFP. Profit and sustainability my arse. There’s nothing sustainable about these current regulations, other than sustaining the current status quo at the top. Clubs without parachute payments simply can’t compete without jeopardising their futures because of these rules - so many clubs decide to take the gamble, with potentially catastrophic consequences, as we well know. In my view FFP will be responsible for the deaths of more football clubs than it saves.

 

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  • 4 months later...
On 16/04/2021 at 07:25, David said:

Everyone can see this but the EFL. 

Until they are removed you will always have clubs pushing to the limit, finding creative ways to balance the books in an attempt to get promoted. 

Owning a Championship club is cutting a hole in your wallet and watching money fall out as you walk. 

How’s it financial “fair” play when 3 clubs have millions chucked at them for failing saying go on, give it another go.

The EFL are in between a rock and a hard place as if they don't guarantee strong parachute payments it puts clubs in a position where they can't change the squad sufficiently to compete in the premier league. That would more than likely lead clubs to not taking more of a risk on trying to improve the squad sufficiently to make a real fist of the premier league but simply take the cash on offer by the premier league for a year and accept relegation. This would harden the top 12-13 premier league positions permanently and promoted clubs would all do a Norwich and take their chances but really accept relegation.  In essence, you could easily kill the potential for competition stone dead by eliminating the soft landing that is required for clubs to be able to effectively use the premier league money to try and stay up there and improve. 

The only real solution that is even remotely realistic that I can see is to change the % of distribution of money that comes from the premier league down to the championship to balance the differences out. At some point the money becomes less of a factor as we're all playing in the second division, so if there is more money to spread around theoretically it should make the transfer market more competitive as money then becomes less of a factor. It's either that or the league accepts a hard cap on wages and transfer fees period but I just can't see that happening. 

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2 hours ago, Leeds Ram said:

The EFL are in between a rock and a hard place as if they don't guarantee strong parachute payments it puts clubs in a position where they can't change the squad sufficiently to compete in the premier league. That would more than likely lead clubs to not taking more of a risk on trying to improve the squad sufficiently to make a real fist of the premier league but simply take the cash on offer by the premier league for a year and accept relegation. This would harden the top 12-13 premier league positions permanently and promoted clubs would all do a Norwich and take their chances but really accept relegation.  In essence, you could easily kill the potential for competition stone dead by eliminating the soft landing that is required for clubs to be able to effectively use the premier league money to try and stay up there and improve. 

The only real solution that is even remotely realistic that I can see is to change the % of distribution of money that comes from the premier league down to the championship to balance the differences out. At some point the money becomes less of a factor as we're all playing in the second division, so if there is more money to spread around theoretically it should make the transfer market more competitive as money then becomes less of a factor. It's either that or the league accepts a hard cap on wages and transfer fees period but I just can't see that happening. 

Pigeon hole the parachute payments specifically for paying off premier league contracts. Put it in a protected pot that can be used for no other purpose. Simples. 

parachute payments are there so that clubs don’t have to be afraid of putting players on big expensive contracts only to get relegated and still have to pay them off with a fraction of the income. But they abuse the payments by buying even more expensive players, hoping they’ll just get promoted again within the 3 years. That’s not what parachute payments are for. 

so it shouldn’t be too difficult to just clarify what the payments are for, and make sure they’re spent only on that. 

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1 minute ago, TigerTedd said:

Pigeon hole the parachute payments specifically for paying off premier league contracts. Put it in a protected pot that can be used for no other purpose. Simples. 

parachute payments are there so that clubs don’t have to be afraid of putting players on big expensive contracts only to get relegated and still have to pay them off with a fraction of the income. But they abuse the payments by buying even more expensive players, hoping they’ll just get promoted again within the 3 years. That’s not what parachute payments are for. 

so it shouldn’t be too difficult to just clarify what the payments are for, and make sure they’re spent only on that. 

Yep, and ensure contracts include either selling price if relegated and/or wage reductions too.

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43 minutes ago, TigerTedd said:

Pigeon hole the parachute payments specifically for paying off premier league contracts. Put it in a protected pot that can be used for no other purpose. Simples. 

parachute payments are there so that clubs don’t have to be afraid of putting players on big expensive contracts only to get relegated and still have to pay them off with a fraction of the income. But they abuse the payments by buying even more expensive players, hoping they’ll just get promoted again within the 3 years. That’s not what parachute payments are for. 

so it shouldn’t be too difficult to just clarify what the payments are for, and make sure they’re spent only on that. 

I was thinking of something similar. Instead of ringfencing it, make it so that the clubs can nominate say 3 players, and the league will pay up their contracts. They effectively become free agents and can sign where they want to. Would need some rules in as to when players are eligible (don't sign a player last minute at ridiculous wages thinking it doesn't matter if you go down because someone will pay it off) but might work.

Unfortunately there's too many teams thinking they could benefit from windfall relegation parachute payments for it to change. Unless there's a consensus that it's causing pain not absolving pain, it'll remain like it is for the foreseeable future.

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3 hours ago, Carnero said:

They're in talks with Andy Carroll now FFS

Baba Rahman, Danny Drinkwater, Andy Carroll.... some embargo this is

"As a result of these Financial Fair Play amendments, clubs will now report on a four-year period that covers 2017/18-2020/21 instead of three years 2017/18-2019/20."

"However, years three and four will be assessed together with the total Adjusted Earning Before Tax from both periods averaged into one reporting period."

I think 2020 is lost as a year where penalties will be awarded.  Muck up Y4 and I think they can expect significant scrutiny.  Still their timing was lucky on the face of it.  Not sure but as it currently reads the 2022 reporting will be for 3 years

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