|
|
Joined: Mar 2011
Posts: 8,163
1st Team Squad
|
|
1st Team Squad
Joined: Mar 2011
Posts: 8,163 |
My understanding of the basic elements of FFP are:
1) The FFP process began in 2011. Clubs have 3 years to 'break even' (this means reporting losses of less than £39.5m between 2011-2014). These losses will have reduce to £26.3m over the next 3 year period.
2) Clubs that report losses in excess of the above 'may' face exclusion from european competitions. "May" face exclusion. I'm very dubious about this.
3) Rich owners will not be able to use their own wealth to circumnavigate the rules.
If FFP had started 3 years ago to take effect this season, ourselves, city, utd and chelsea would be in trouble. With that in mind, are we likely to see an increase in FSG's investment in the squad or a decrease? Of course, they 'could' throw millions and millions around in the hope that we win the league, not worrying about european football. I'm not sure of that is financially viable though. I could understand them sacrificing a place in the europa league by missing the FFP targets but but would they risk missing out on CL football IF we did manage to finish in the top 4?
My guess is this: last year, at the very start of the 1st FFP period, they gave kenny in excess of £100m to build a squad that would only need tweaking for the next 3 seasons. This would mean that at the end of 2011 our losses would be huge but would have evened themselves out by 2014, as they aren't planning on investing much more money into the team over the next few years. In other words, our hopes of CL football were wholly dependant on kenny's signings.
Plausible?
|
|
|
|
|
Joined: Jan 2010
Posts: 22,926
Liverpool Legend
|
|
Liverpool Legend
Joined: Jan 2010
Posts: 22,926 |
My understanding of the basic elements of FFP are:
1) The FFP process began in 2011. Clubs have 3 years to 'break even' (this means reporting losses of less than £39.5m between 2011-2014). These losses will have reduce to £26.3m over the next 3 year period.
2) Clubs that report losses in excess of the above 'may' face exclusion from european competitions. "May" face exclusion. I'm very dubious about this.
3) Rich owners will not be able to use their own wealth to circumnavigate the rules.
If FFP had started 3 years ago to take effect this season, ourselves, city, utd and chelsea would be in trouble. With that in mind, are we likely to see an increase in FSG's investment in the squad or a decrease? Of course, they 'could' throw millions and millions around in the hope that we win the league, not worrying about european football. I'm not sure of that is financially viable though. I could understand them sacrificing a place in the europa league by missing the FFP targets but but would they risk missing out on CL football IF we did manage to finish in the top 4?
My guess is this: last year, at the very start of the 1st FFP period, they gave kenny in excess of £100m to build a squad that would only need tweaking for the next 3 seasons. This would mean that at the end of 2011 our losses would be huge but would have evened themselves out by 2014, as they aren't planning on investing much more money into the team over the next few years. In other words, our hopes of CL football were wholly dependant on kenny's signings.
Plausible? But 60% of that expenditure was financed by player sales and the investment is depreciated over the number of years of the contract. It's true that things are dependent on revenues and Champions league qualification plays therefore a huge role.
|
|
|
|
|
Joined: Mar 2011
Posts: 8,163
1st Team Squad
|
|
1st Team Squad
Joined: Mar 2011
Posts: 8,163 |
Sounds like a catch-22 situation for every club wanting to be in the CL that isn't already there. They'd need to spend a colossal fortune over a pediod of several years to break into the top 4.....and then if they succeed they'd be booted out for breaking FFP rules! It looks like city, utd, arsenal & chelsea will be the top 4 club until long after we're all dead.
|
|
|
|
|
Joined: Jan 2010
Posts: 22,926
Liverpool Legend
|
|
Liverpool Legend
Joined: Jan 2010
Posts: 22,926 |
With their current wage structure, i am not sure Chelsea and City will fit in, but then their owners can pour through other means like sponsorship, but I don't know how Michel Platini is going to monitor this. It can end up in massive law suits or a break-away league as the big clubs wanted to do before that Champions league was introduced.
|
|
|
|
|
Joined: Sep 2012
Posts: 791
Under 18 Player
|
|
Under 18 Player
Joined: Sep 2012
Posts: 791 |
The maximum debt is €5 million unless the owner covers the debt for equity up to a maximum of €45 million (2014/15) and the debt trend needs to be decreasing each year.
This means that in theory abramovich et al, can spend an extra €45 million on transfers (break even deficit) but have to write off the debt as the club cannot owe it back to them. No longer can they provide interest free directors loans for players. This is done by them devaluing their own equity and essentially buying it back. It is a personal loss to the owner, not the club.
What it also means is that the only viable solution is to make the clubs finances break even, or not play in europe.
|
|
|
|
|
Joined: Sep 2012
Posts: 791
Under 18 Player
|
|
Under 18 Player
Joined: Sep 2012
Posts: 791 |
There are 8 punishments:
1 Reprimand / Warning
2 Fine
3 Deduction of Points
4 Withholding of Revenue from UEFA competition
5 Prohibition to register new players for UEFA competitions;
6 A restriction on the number of players that a club may register for UEFA competitions
7 Disqualification from a competition in progress
8 Exclusion from future competitions
I don't think a top team would ever be excluded, but the rules are there to try to make things fair. If a team tries to abuse the rules e.g. with the owner pumping in cash for equity, this trend will flag up and I would assume they would get a warning and maybe a transfer ban for future European competitions.
Atlético Madrid have been Warned and Fined due to their current financial situation. The main reason for this is not anything to do with debt (as this only happens in 2014) but due to the fact that they owe another club money. This relates to the Falcao deal as they are rumoured to still owe Porto €34 million.
With that deal potentially worth €47 million, it is possible that they are being forced to sell him unless they pay off Porto.
|
|
|
|
|
Joined: Aug 2010
Posts: 9,605
1st Team Squad
|
|
1st Team Squad
Joined: Aug 2010
Posts: 9,605 |
€ 47 Million for Falcao?? He must be nearly as good as Torres then, 'ey?! 
|
|
|
|
|
Joined: Jan 2010
Posts: 22,926
Liverpool Legend
|
|
Liverpool Legend
Joined: Jan 2010
Posts: 22,926 |
Abramovich has already written off more than 500m, so he will probably be writing off more and ask Gazprom to sign sponsorship deals eithe with Chelsea or with individual players to reduce thier wages. Basically, there are so many loopholes that it would be interesting to see how this works out. I am saying that because I haven't seen Chelsea reducing their spending this season, they must be having a plan.
|
|
|
|
|
Joined: Dec 2010
Posts: 11,128
1st Team Regular
|
|
1st Team Regular
Joined: Dec 2010
Posts: 11,128 |
This will end up as things always end up in football.
The big clubs will threaten a breakaway European League and FFP will be discreetly brushed under the carpet.
Money talks
|
|
|
|
|
Joined: Jan 2010
Posts: 22,926
Liverpool Legend
|
|
Liverpool Legend
Joined: Jan 2010
Posts: 22,926 |
This will end up as things always end up in football.
The big clubs will threaten a breakaway European League and FFP will be discreetly brushed under the carpet.
Money talks I agree, then we'll see what FSG will do.
|
|
|
|
|
