FFP was put on hold, back on again

[ramblur]

In respect of the parachute payments I believe this is not counted as investment. In the first season they have the ability to use the parachute payment to attempt to get straight back up but if fail then they have to adhere to the revenue balance of this scheme. Also looking at this sanctions placed onto teams who are fined means that clubs within the league benefit. For example Leicester with the millions they have spent would fall foul of the sanctions and fines could run into the millions and this would be split between the other teams. The gamble of spending for promotion may have just become a bit bigger as failure means fine and/transfer embargo.

Looking at the teams in the top 6 could see some struggling WHU and Birmingham for example one of these teams will be suffering next year and the squad will have to be reduced. Then teams like Leicester and Ipswich could face similar problems and managers like Warnock who wants to totally revamp his team may not be able to do as much as they want as they have to balance the sheets.

We have done the donkey work already and over the next couple of seasons we could steal a march on these clubs who are not ready

Parachute payments are treated as normal revenue and so all 4 chute payments (unless promoted earlier) would count towards revenues.I can see how some might be confused over the situation regarding relegated sides (from the Prem).You have to remember that sanctions in any season relate to results from the season before,so in the case of a relegated side would relate to the Prem season and it is their regulations rather than Championship regulations that would apply in that first season.The actual financial results of that first season in the Championship would however be the basis of any sanctions applied the following year.

I see nothing in what's been released thus far to alarm the likes of WHU,Brum or Leicester.There'll be 2 years without sanctions,so it doesn't matter to them if they don't comply with what will effectively be mere guidelines in these years, and they'll all be able to have 3 bites of the cherry (this year+ the next 2).

[uttoxram75]

I see where you're going with this Ramblur.

Derby are (virtually) already in compliance with regs that won't be enforced fully for 3 seasons. We will continue to be at a disadvantage and rely solely on Nigel to produce rabbits out of a hat or a couple of the youngsters making enough contribution to sneak a play off/promotion.

Meanwhile other clubs will be paying players 10k, 15k or more, while we're offering them 4k -6k.

[sage]

It would seem to that now is the time to buy the best young players from the lower leagues who might attract a decent transfer fee but won't be on silly wages.

[Hucknall Ram]

I see where you're going with this Ramblur.

Derby are (virtually) already in compliance with regs that won't be enforced fully for 3 seasons. We will continue to be at a disadvantage and rely solely on Nigel to produce rabbits out of a hat or a couple of the youngsters making enough contribution to sneak a play off/promotion.

Meanwhile other clubs will be paying players 10k, 15k or more, while we're offering them 4k -6k.

I see what you are saying but on the other hand will they knowing that they will have reduce the wage bill in 1,2 and 3 seasons time, they might get in a situation like we did with Bywater, Leacock, Varney, Pearson etc where there on high wages and unable to move on, it would be gamble if they did other those wages.

[ramblur]

I see where you're going with this Ramblur.

Derby are (virtually) already in compliance with regs that won't be enforced fully for 3 seasons. We will continue to be at a disadvantage and rely solely on Nigel to produce rabbits out of a hat or a couple of the youngsters making enough contribution to sneak a play off/promotion.

Meanwhile other clubs will be paying players 10k, 15k or more, while we're offering them 4k -6k.

Wouldn't surprise me if we're already way ahead of where we'd need to be in 3 years time,uttox.You only have to look at the following link that davenport put up earlier to see what the years of grace are about:-

[url=http://www.twtd.co.uk/news.php?storyid=20372]http://www.twtd.co.uk/news.php?storyid=20372

So the likes of Leicester,who recruited heavily this year,probably involving 3 year contracts,can just let contracts run down to comply(in the 3rd year,no need to comply before)- no Bywater or Leacock situations at all.Hell,they could even recruit again this summer without massive risk.Because accounts have to be submitted to the League by Dec1 (in respect of the previous season),it means that even if you'd transgressed in the previous year,you couldn't be hit with an embargo in the summer-it's only the Jan window onwards that are affected.Should they have been promoted,I guess they wouldn't give 2 hoots about the fine.In any event,it appears that you'd be able to make a fairly sizeable loss before sanctions kick in. If they were to gain promotion in the next 2 years there'd be no sanctions whatever their overspending may be.

I see no mention of break even in the rules themselves,the holy grail we seem to aspire to,so I think it reasonable to assume that break even is for the owners' benefit,rather than an FFP necessity.

In short,whilst others will be taking advantage of loopholes to gain a competitive advantage,we seem hell bent on placing ourselves at a competitive disadvantage.

[McRamFan]

I see what you are saying but on the other hand will they knowing that they will have reduce the wage bill in 1,2 and 3 seasons time, they might get in a situation like we did with Bywater, Leacock, Varney, Pearson etc where there on high wages and unable to move on, it would be gamble if they did other those wages.

I think that is why there is the impliment now, and give time to get up to speed before bringing in the sanctions. I think half of the teams in the division would be hit if it was implimented in full.

I think that no more than 6 would 'gamble' on promotion in the next few seasons, as the risk would be too great, look at leicester, and the way it is set up, a chairman with deep pockets couldn't just bale out the club. This is a good thing as it should stop the Pompey situation, where all revenue and more where going to the playing staff, and when they went under, the suppliers are the ones that take the hit.

[ramblur]

I think that is why there is the impliment now, and give time to get up to speed before bringing in the sanctions. I think half of the teams in the division would be hit if it was implimented in full.

I think that no more than 6 would 'gamble' on promotion in the next few seasons, as the risk would be too great, look at leicester, and the way it is set up, a chairman with deep pockets couldn't just bale out the club. This is a good thing as it should stop the Pompey situation, where all revenue and more where going to the playing staff, and when they went under, the suppliers are the ones that take the hit.

Bit of a double edged sword there McRamFan.Our attendances have been steadily declining,if our owners' policy fails then who is going to be able to pull us out of the doldrums as there'll be a clamp on equity a new owner could introduce.Thank heavens break even doesn't feature in the rules-at least there's a bit of leeway the way things stand.

[McRamFan]

Bit of a double edged sword there McRamFan.Our attendances have been steadily declining,if our owners' policy fails then who is going to be able to pull us out of the doldrums as there'll be a clamp on equity a new owner could introduce.Thank heavens break even doesn't feature in the rules-at least there's a bit of leeway the way things stand.

I think the decline in attendances has been impacted more by the recession, however the I can see that some have stayed away because we are not spending.

I agree it is a risk, and I suppose I want football to become more stable and more sustainable. I do not like the fact that a billionaire who is a little bored one day can buy a club, throw money at it and then bugger off leaving the club, the fans, and the community distroyed.

Also look at the dodgy practices that are going on Rangers, Pompey, Birmingham, us when the 3 Amigos where here, I would like to see it stopped and if this works then great. I feel that FFP is a good move to protect clubs, however I also feel that more needs to be done further down the line.

[Hucknall Ram]

A bit part also the number of away fans are down

[ramblur]

I think the decline in attendances has been impacted more by the recession, however the I can see that some have stayed away because we are not spending.

I agree it is a risk, and I suppose I want football to become more stable and more sustainable. I do not like the fact that a billionaire who is a little bored one day can buy a club, throw money at it and then bugger off leaving the club, the fans, and the community distroyed.

Also look at the dodgy practices that are going on Rangers, Pompey, Birmingham, us when the 3 Amigos where here, I would like to see it stopped and if this works then great. I feel that FFP is a good move to protect clubs, however I also feel that more needs to be done further down the line.

I'd have nothing against FFP,if it weren't for the hugely distorting parachute payments.As I suspected,because sanctions are retrospective (based on previous year's results),relegated clubs can now budget on the basis of a normal Championship season's income + £8m (the lower value of the chute payments) for 4 years (and still be able to make allowable losses,rather than break even).There's already evidence that promoted clubs aren't spending heavily and thus relegation for such clubs merely sends a financially strong club back down into the mix.It's also quite noticeable that the usual suspects that flirt with relegation have stopped spending in the Jan window (and don't seem to be spending much in summer).I suspect the reason for this is that banks are no longer willing to fund them,and these clubs may actually be paying debt down.If this is happening,it's bad news for us because relegation for them wouldn't be as onerous.

We could argue why attendances are falling,but in the end it doesn't really matter.If our owners persist with a break even dogma (when FFP doesn't demand it),then what happens if income continues to decline?Clough said some time ago that we needed 2 or 3 quality players,but the way we're supposed to be acquiring same doesn't seem too convincing.The truth is,if our owners had the inclination ,they could fund these players and any increase in wages would still leave us comfortably complying with FFP.

In my humble opinion Leicester have done exactly the right thing in trying to 'escape' while the goings good-the mistake they seem to be making is in panicking when instant results aren't forthcoming,and changing manager.If Pearson gets them up in the next 2 years,their approach will have been vindicated.

[McRamFan]

I'd have nothing against FFP,if it weren't for the hugely distorting parachute payments.As I suspected,because sanctions are retrospective (based on previous year's results),relegated clubs can now budget on the basis of a normal Championship season's income + £8m (the lower value of the chute payments) for 4 years (and still be able to make allowable losses,rather than break even).There's already evidence that promoted clubs aren't spending heavily and thus relegation for such clubs merely sends a financially strong club back down into the mix.It's also quite noticeable that the usual suspects that flirt with relegation have stopped spending in the Jan window (and don't seem to be spending much in summer).I suspect the reason for this is that banks are no longer willing to fund them,and these clubs may actually be paying debt down.If this is happening,it's bad news for us because relegation for them wouldn't be as onerous.

We could argue why attendances are falling,but in the end it doesn't really matter.If our owners persist with a break even dogma (when FFP doesn't demand it),then what happens if income continues to decline?Clough said some time ago that we needed 2 or 3 quality players,but the way we're supposed to be acquiring same doesn't seem too convincing.The truth is,if our owners had the inclination ,they could fund these players and any increase in wages would still leave us comfortably complying with FFP.

In my humble opinion Leicester have done exactly the right thing in trying to 'escape' while the goings good-the mistake they seem to be making is in panicking when instant results aren't forthcoming,and changing manager.If Pearson gets them up in the next 2 years,their approach will have been vindicated.

Looking at the bit below, copied from the BBC:

Owners will be allowed to invest £6m next season, £5m the year after, then £3m in the 2014-15 season.

From 2015-16, clubs will be allowed to make a £2m operating loss, as well accept a £3m investment from an owner - allowing for a £5m overall loss.

The way I see it is that if we break even, then we have 3m that the owners can invest in 2014 onwards, yes we are allowed to make a loss of 5m, however that stops investment in the squad.

I take your point with Leicester, and their approach could be the right way, only time will tell. However it seems that our owners are quite cautious, and maybe this is because of the damage that was done under BD and PJ, and we were paying players a lot of money to do nothing.

Totally agree that the parachute payments does distort the whole concept of FFP, and could resort in pretty much the same teams yo-yoing between the divisions, ala WBA, season after season.

Finally, I agree that the board has little inclination to fund say 3 players worth 1m in one season, that could have a Barker/Shackell impact on the team, and we seem to gamble on a Bryson/Maguire deal and only one seems to work. However, I am glad that we are stable, pleased with what is being done Academy and Commercially, slightly frustrated its going to be a long journey back 'to the promised land', Though I feel that we will get there.....eventually!

Right off to a dark room, finance always melts my brain, hence why I read your posts more than comment on them 'http://www.dcfcfans.co.uk/public/style_emoticons/<#EMO_DIR#>/smile' class='bbc_emoticon' alt=':)' />

[ramblur]

.

The way I see it is that if we break even, then we have 3m that the owners can invest in 2014 onwards, yes we are allowed to make a loss of 5m, however that stops investment in the squad.

Why invest £3m in 2014,why not now?

[McRamFan]

Why invest £3m in 2014,why not now?

Agreed 'http://www.dcfcfans.co.uk/public/style_emoticons/<#EMO_DIR#>/smile' class='bbc_emoticon' alt=':)' />

[ramblur]

The League's site has put up the following:-

[url=http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html]http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html

Unless I've misread something,allowable losses (without sanctions) would appear to equate to the line "Total permissable allowances"-hardly over demanding and nowhere near break even.Whilst it appears that players' amortisation will be included in the calculations,the depreciation of fixed assets won't.Our own fixed asset depreciation comes in at c£2m and fluctuates little (due to the long term nature of such assets),therefore to get our 10/11 results in line with the new model,our £7.7m loss would turn into an FFP loss of £5.7m (and that's without considering youth development)..........and still we continue cutting back.

[uttoxram75]

The more you read about it the more it looks like a sop to the bigger prem clubs. It all seems to be aimed at stopping smaller clubs gate crashing the party rather than the greater good of football.

There was talk a few years ago of foreign investors wanting a guarantee of no relegation before they ploughed their millions into the prem clubs.

I reckon it'll evolve into a Prem 1 and Prem 2 eventually with very little cash trickling down to the lower leagues and grassroots.

[Butthead]

ironically FFP is corperate jargon for Fit For Purpose, took me ages to translate that to english too

[alexxxxx]

i know full accounts are published a year after, but surely it would be in the interests in the football league if these accounts could be submitted to the FL the September after the financial year end.

now i'm not totally sure if there are specific reasons why it takes so long to process accounts, but surely sanctions could be brought earlier...

[uttoxram75]

i know full accounts are published a year after, but surely it would be in the interests in the football league if these accounts could be submitted to the FL the September after the financial year end.

now i'm not totally sure if there are specific reasons why it takes so long to process accounts, but surely sanctions could be brought earlier...

Even the big accountancy firms need a bit of time to hide the cash in off shore tax havens...

[smiffy]

The more you read about it the more it looks like a sop to the bigger prem clubs. It all seems to be aimed at stopping smaller clubs gate crashing the party rather than the greater good of football.

There was talk a few years ago of foreign investors wanting a guarantee of no relegation before they ploughed their millions into the prem clubs.

I reckon it'll evolve into a Prem 1 and Prem 2 eventually with very little cash trickling down to the lower leagues and grassroots.

I totally agree, all designed to strengthen the big clubs hold.

[uttoxram75]

I totally agree, all designed to strengthen the big clubs hold.

As is the EPPP, to let the rich clubs pick up the best young players cheaply.