Football League AGM

[Saint_John]

As the Football League's AGM is currently going on in Cyprus at the moment and there has been various hints that there MAY be new rules restricting the amount of money that clubs can spent.

I thought we should have a thread to discuss because there will probably be a number of issues resulting that MAY affect Nicola's 5 year Plan. Having said that we appear to be holding back ST money until the new financial year - 1st July (ONLY Club I know of) and I bet the new shirts will not be available until after that date as well.

 

Anyhow I have found the 1st article (Paul Fletcher of the BBC) talking about the AGM.

http://www.bbc.co.uk/blogs/paulfletcher/2011/06/football_league_agm.html#291907

The solution being proposed in the Championship is a variation of Uefa's Financial Fair Play Initiative, the long-term aim of which is to make sure that clubs will only be able to spend what they generate. In other words, they must live within their means.

"We have come up with a number of scenarios for the Championship ....

Clarke feels "prudently optimistic" that a system to control spending will happen in one form or another precisely because this is an initiative being driven by the clubs. The cynic in me thinks that the bigger clubs focused on reaching the top flight will be disinclined to sign up to any system that might clip their wings in the transfer market.

Clarke is unsure exactly when a set of rules might be introduced in the Championship

and before anyone questions the location

I should also add that the FL has got sponsorship to cover costs from, among others, the Cyprus Tourist Board.

Of course the CHEATS F.C. get a few mentions (@88 @91).

[Matthew Le God]

- Any decisions on restricting clubs won't come in any time soon. It'll be at least one season away, possibly more.

- Cortese would have been aware of this for a long time, it isn't out of the blue and would have plans for it.

- Any changes won't effect the amount of money you can spend on infrastructure (at the stadium, training ground or academy).

- Saints will have one of the largest turnovers in the Championship apart from those with parachute payments remaining.

- Saints may even be able to get round any implemented measures if the Liebherr estate gifts the club money and is turned into equity.

[Doctoroncall]

I heard that even if passed, any new rules will not come into effect until the 2014 season.

[Matthew Le God]

I heard that even if passed, any new rules will not come into effect until the 2014 season.

 

Which is beyond the end of the initial "5 year plan" when Cortese took charge of the reigns.

[wild-saint]

Sowhats to stop saints signing a "sponsorship deal" with a company in the leibherr estate fro circa £15 per year? That would be an easy way to inject cash into the business to get around the rules.

[wild-saint]

Sowhats to stop saints signing a "sponsorship deal" with a company in the leibherr estate fro circa £15 per year? That would be an easy way to inject cash into the business to get around the rules.

£15 million i meant!

[Gemmel]

Sowhats to stop saints signing a "sponsorship deal" with a company in the leibherr estate fro circa £15 per year? That would be an easy way to inject cash into the business to get around the rules.

 

Tax.

 

At the moment we can inject money into the club through Directors loans, which then can be turned into equity and neither party are subject to tax (It can even be deductable for the person / company loaning). If money comes in as revenue, its taxable - which at best is 33%.

 

Its not quite as simple as has been suggested as to buy something from the shop or sponsor this or that for huge amounts of money. That said, I am sure there are some ways around it.

[saintscottofthenortham]

The gap between Premier League & Football League looks set to get even greater then.

[Crazy Diamond]

The gap between Premier League & Football League looks set to get even greater then.

 

Exactly my thoughts.

 

Oh sorry, 'This'.

[Matthew Le God]

The gap between Premier League & Football League looks set to get even greater then.

 

UEFA are implementing a similar system that will impact on Premier League clubs.

[derry]

The new kit is being unveiled on 23rd July at the triangular tournament.

[Pilchards]

The new kit is being unveiled on 23rd July at the triangular tournament.

 

wow that's random.

 

I will join in, the new DVD for last season will be out soon.

[saintscottofthenortham]

UEFA are implementing a similar system that will impact on Premier League clubs.

 

Only with regards to the Champion League is it not? And let's be honest... After a few winks, brown envelopes and dodgy handshakes... It won't happen.

[SuperMikey]

The new kit is being unveiled on 23rd July at the triangular tournament.

 

No, the new kit will be worn for the first time at the triangular tournament, it'll probably be revealed a few weeks before that I should imagine.

[Matthew Le God]

Only with regards to the Champion League is it not?

 

Any club that wants to participate in an UEFA competition has to break even over a rolling 3 year period. 2011/12 and 2012/13 accounts will be used to determine a club's licence application in the 2013/14 season.

 

http://www.bbc.co.uk/news/business-12908466

Edited 9 June, 2011 by Matthew Le God

[Saints foreva]

Doesn't this new proposed rule give those with parachute payments even more of an advantage?

[aintforever]

That's typical, finally get owned by billionaires and they change the bloody rules.

 

This could obviously have a negative effect on us.

[Saint_clark]

Doesn't this new proposed rule give those with parachute payments even more of an advantage?

 

Indeed. They've got an extra few million coming in which they're allowed to spend.

(For "few" see "sh*t loads")

[Matthew Le God]

That's typical, finally get owned by billionaires and they change the bloody rules.

 

This could obviously have a negative effect on us.

 

- Any decisions on restricting clubs won't come in any time soon. It'll be at least one season away, probably more.

- Cortese would have been aware of this for a long time, it isn't out of the blue and would have plans for it.

- Any changes won't effect the amount of money you can spend on infrastructure (at the stadium, training ground or academy).

- Saints will have one of the largest turnovers in the Championship apart from those with parachute payments remaining.

- Saints may even be able to get round any implemented measures if the Liebherr estate gifts the club money and is turned into equity.

[aintforever]

- Any decisions on restricting clubs won't come in any time soon. It'll be at least one season away, probably more.

- Cortese would have been aware of this for a long time, it isn't out of the blue and would have plans for it.

- Any changes won't effect the amount of money you can spend on infrastructure (at the stadium, training ground or academy).

- Saints will have one of the largest turnovers in the Championship apart from those with parachute payments remaining.

- Saints may even be able to get round any implemented measures if the Liebherr estate gifts the club money and is turned into equity.

 

1: We will probably be in this league more than 1 season

2: All clubs are aware of it

3: Building a bigger stadium probably wont help us in The Championship where we will rarely sell out

4: We are not a big Championship club so this is nonsense

5: Our only hope of gaining an decent advantage if these rules come into effect

[stevegrant]

Indeed. They've got an extra few million coming in which they're allowed to spend.

(For "few" see "sh*t loads")

But they also have a legacy wage bill from the Premier League, so they still won't have much (if any) spare cash to spend.

[St Marco]

4: We are not a big Championship club so this is nonsense

 

Depends on your definition of big?

 

If you mean by attendances then our average of 22161 last season would of put us around 6th. In the championship you would imagine that would go up by about 3k-4k which would put us 2nd behind Leeds.

In the championship we are deffinatly one of the bigger fish based on infrastructure and attendance for sure.

[100%Red&White]

4: We are not a big Championship club so this is nonsense

 

You've got to be joking?

 

I wouldn't call us a 'big' club if we were in the Prem but we would be a decent 'middle' size with potential to grow.

 

But in the Championship the only clubs I'd say were 'bigger' are Leeds and West Ham. The likes of Derby, Forest, Leicester, Brum and ourselves are big clubs at this level and with a reasonable season we'll get better gates than all of those bar maybe Derby - and as our tickets cost a fair bit more we'll be generating more income to prop up our already healthy finances.

[Matthew Le God]

1: We will probably be in this league more than 1 season

2: All clubs are aware of it

3: Building a bigger stadium probably wont help us in The Championship where we will rarely sell out

4: We are not a big Championship club so this is nonsense

5: Our only hope of gaining an decent advantage if these rules come into effect

 

1) You can't say that at this point, with three months of the transfer window left.

2) So what? My point was that Cortese would have known that these plans were in the pipeline for a long time and would have made Saints plan fit them ages ago. Saints would be in a far better position than most to do so in the Championship.

3) I didn't say the club would expand St Mary's in the Championship. What I said was that the club would have one of the highest turnovers in the Championship apart from those with parachute payments. The improvements Saints make to the academy and training ground will improve the club in areas where other Championship clubs won't.

4) Why aren't Saints a big club in the Championship? How many clubs do you consider to be bigger? I'm not saying Saints are the biggest either, West Ham and Leeds United are bigger. You could put together a strong argument to put Saints 3rd or 4th in the league though.

5) Not the only hope, these rules won't include investment in the training ground, academy or stadium. All of which can receive or have received investment that gives Saints an edge.

Edited 9 June, 2011 by Matthew Le God

[wild-saint]

Tax.

 

At the moment we can inject money into the club through Directors loans, which then can be turned into equity and neither party are subject to tax (It can even be deductable for the person / company loaning). If money comes in as revenue, its taxable - which at best is 33%.

 

Its not quite as simple as has been suggested as to buy something from the shop or sponsor this or that for huge amounts of money. That said, I am sure there are some ways around it.

 

Agreed it wuld be taxable revenue but you only pay tax on your profits so if the money is offset against cost (ie transfers runnumg costs etc) and the company breaks event then tax is irellivant.

[Gemmel]

Agreed it wuld be taxable revenue but you only pay tax on your profits so if the money is offset against cost (ie transfers runnumg costs etc) and the company breaks event then tax is irellivant.

 

I am no tax expert and as said previously, I am sure there are ways around it, but what you have written isn't quite true

[aintforever]

1) You can't say that at this point, with three months of the transfer window left.

2) So what? My point was that Cortese would have known that these plans were in the pipeline for a long time and would have made Saints plan fit them ages ago. Saints would be in a far better position than most to do so in the Championship.

3) I didn't say the club would expand St Mary's in the Championship. What I said was that the club would have one of the highest turnovers in the Championship apart from those with parachute payments. The improvements Saints make to the academy and training ground will improve the club in areas where other Championship clubs won't.

4) Why aren't Saints a big club in the Championship? How many clubs do you consider to be bigger? I'm not saying Saints are the biggest either, West Ham and Leeds United are bigger. You could put together a strong argument to put Saints 3rd or 4th in the league though.

5) Not the only hope, these rules won't include investment in the training ground, academy or stadium. All of which can receive or have received investment that gives Saints an edge.

 

Of course having a billionaire owner gives Saints an edge, my point is that it will be nowhere near the edge we could have if we can't spunk millions on new players. That is an undeniable fact.

[Matthew Le God]

Of course having a billionaire owner gives Saints an edge, my point is that it will be nowhere near the edge we could have if we can't spunk millions on new players. That is an undeniable fact.

 

Depends how the estate of Markus Liebherr puts any money into the club, any financial changes by the Football League may allow the club to still spend his money on players if converted into equity. It also won't limit investment on infrastructure, which will help increase revenue streams and boost turnover, freeing up money to be used elsewhere.

Edited 9 June, 2011 by Matthew Le God

[Joey-deacons-left-nut]

1: Extend the Stadium by 15k

2: Set those extra seats to "Super dooper expensive prices" so no one buys them.

3: The Liebherr family buy all 15k as season tickets.

4: Enjoy the extra cash.

[Matthew Le God]

1: Extend the Stadium by 15k

2: Set those extra seats to "Super dooper expensive prices" so no one buys them.

3: The Liebherr family buy all 15k as season tickets.

4: Enjoy the extra cash.

 

Peterborough managed to do similar on a smaller scale...

 

http://www.peterboroughtoday.co.uk/news/letters_emails_2_17116/your_posh_say_15_000_season_ticket_you_can_see_messi_for_4_000_a_season_less_than_watching_posh_1_2474285

[aintforever]

Depends how the estate of Markus Liebherr puts any money into the club, any financial changes by the Football League may allow the club to still spend his money on players if converted into equity. It also won't limit investment on infrastructure, which will help increase revenue streams and boost turnover, freeing up money to be used elsewhere.

 

Obviously if there are ways around it it won't matter, but we wouldn't be able to do what we did this/last season (rack up £7mill odd of debt) under the new rules.

[Matthew Le God]

Obviously if there are ways around it it won't matter, but we wouldn't be able to do what we did this/last season rack up £7mill odd of debt under the new rules.

 

Did Saints though? The accounts for 2009/10 show no definite date for that to be paid back (if ever).

Edited 9 June, 2011 by Matthew Le God

[OldNick]

surely this will help any clubs relegated from the PL more than the likes of us.

[mikee]

Ironically, these rule, if implemented, would make it more attractive to sell some of our better youngsters as this would generate significant revenues that could be spent buying.......errr....older players.

[labibs]

Sowhats to stop saints signing a "sponsorship deal" with a company in the leibherr estate fro circa £15 per year? That would be an easy way to inject cash into the business to get around the rules.

 

The Uefa Financial Fair Play (FFP) rules dictate that any sponsorship deals, purchases etc must be at reasonable market value, to stop people doing exactly this. Basically the authorities decide if you are trying to get round the rules and will come down on you hard if you do so. It remains to be seen how effective they will be in actually punishing clubs though.

 

This rule would benefit the parahcute playment clubs a lot in the NPC, but it would see Saints relatively well placed, at least in the NPC. Will not come in for several years yet. If nothing else, clubs would have to be given time to allow existing player's contracts to run out so they can adjust to the new way of doing things.

 

Transfer expenditure would also become very important. Fees are written down over the length of the contract for the player. So if you buy a £5m player on a 5 year contract, this will show as a £1m cost to the club, every year until he is out of contract.

[Itchen_block4]

The club are investing heavily in youth development and scouting to get the best value for money. I presume that type of expenditure won't be penalised under the new rules? Even if it was, I doubt it's comparable to what some teams are spending on wages and signings.

 

Cortese needs to manage carefully to keep the Liebherrs on board, so I should imagine fiscal stability is part of his plans. I can't see him or Adkins throwing silly money around in an effort to gamble on promtion before measures come in.

[labibs]

The club are investing heavily in youth development and scouting to get the best value for money. I presume that type of expenditure won't be penalised under the new rules? Even if it was, I doubt it's comparable to what some teams are spending on wages and signings.

 

Cortese needs to manage carefully to keep the Liebherrs on board, so I should imagine fiscal stability is part of his plans. I can't see him or Adkins throwing silly money around in an effort to gamble on promtion before measures come in.

 

As far as I know, spending on youth development is exempt from the FFP rules. You would still have to pay for scouting, but this (I imagine) would be nominal against players wages and transfer fees. In fact producing youth players becomes even more important, as a home-grown player will have no value in a club's accounts (As you didn't buy him from another club, there is no 'asset' to depreciate)

[saintalan]

At least we have a Chairman with the right background (Banker to a Swiss billionaire!), if we cant trust the man with this background then there is little hope!

 

BTW this place aint the same since Deppo lost his sole avatar status!

[simo]

If only we had some one with a finance background running this club !

[rallyboy]

seeing how the football authorities have punished reckless spending, kept crooks out of the game, and not allowed any clubs to trade insolvently, they will need a complete change of their own staff to make any of this work.

I wouldn't trust the current lot to be able to sit the correct way on a toilet, so I have no confidence in them enforcing financial restrictions.

And the ideas proposed seem to be designed to make the Prem a closed shop and keep all other league clubs in their place - unable to compete.

With massive cash in the top division and similar restrictions imposed at all levels it will be the same three up and down - until the end of time.

[Doctoroncall]

Which is beyond the end of the initial "5 year plan" when Cortese took charge of the reigns.

 

Actually, I think it maybe soon from what Mr Clarke has said so far: Clarke said if the proposal was passed the next six months would be spent on developing a system and ensuring it was fair and transparent.

 

I suppose all will be revealed after the FL clubs meeting.

 

I know for sure 2014 will be when UEFA's rule will commence.

[stevegrant]

Did Saints though? The accounts for 2009/10 show no definite date for that to be paid back (if ever).

Regardless of the argument as to whether we will or won't ever have to pay back the £20m listed as a long-term liability in the group accounts, the simple answer is "Yes, we did rack up an additional £7m of debt during that period".

[Junction 9]

Can someone expalin to me the primary reason for creating these new rules. Is it to stop mega money owners creating and unfair situation amongst clubs, or is it to stop clubs with no money spending beyond their means in a bid to be successful?

[Saint_John]

The Football League are saying "things were agreed in principle" ??

 

http://www.football-league.co.uk/footballleaguenews/20110610/fair-play-to-the-football-league_2293334_2374252/0,,10794,00.html

 

At their Summer Conference, Football League clubs have made significant progress towards achieving greater financial sustainability by agreeing to adopt UEFA's Financial Fair Play framework.

Clubs in all three divisions voted in favour of developing rigourous new measures aimed at delivering a 'break even' financial model at clubs.

In giving 'in principle' support to the introduction of the UEFA model, Championship clubs agreed to work towards the introduction of new regulations, to be developed and approved, by the beginning of the 2012/13 season.

In addition to supporting the objectives of Financial Fair Play from 2011/12, League 1 clubs have also agreed to introduce the Salary Cost Management Protocol (SCMP). The SCMP limits spending on player wages to a proportion of total turnover and acts as a tool to deliver Financial Fair Play.

Clubs in League 2 also support UEFA's Fair Play ethos and currently operate the SCMP successfully at a 60% threshold, which will reduce to 55% next season.

Football League Chairman Greg Clarke said: "This is a very important step forward for professional football as it will help our clubs exert greater control over their finances. Much more work needs to be done, but I am hugely encouraged and impressed by the energy and focus of our clubs on this issue.

"They have been the catalyst for change and have shown a real desire to self-regulate in this area. I congratulate them on taking this bold step."

The decision of clubs to adopt the Financial Fair Play framework followed a day of debate about The League's financial future and presentations from Clarke and Andrea Traverso, UEFA's Head of Club Licensing and Financial Fair Play.

[SaintNeil90]

This rule is ridiculous. It weakens teams in the Championship and makes the gap between the Premiership and Championship ever larger.

[stevegrant]

Can someone expalin to me the primary reason for creating these new rules. Is it to stop mega money owners creating and unfair situation amongst clubs, or is it to stop clubs with no money spending beyond their means in a bid to be successful?

A little from A, a little from B, I think.

 

While many smaller clubs are envious of the situation where other clubs suddenly have loads of money to spend because they acquire rich owners, it does also create a situation where everything becomes inflated and the clubs without that sort of cash feel they have to stretch themselves to breaking point in order to keep up.

 

In a rather perverse way, many clubs have been asking for the FA/PL/FL to impose spending rules for years, because they simply don't trust themselves not to spend more than they can afford in a gamble to gain success.

[SaintNeil90]

A little from A, a little from B, I think.

 

While many smaller clubs are envious of the situation where other clubs suddenly have loads of money to spend because they acquire rich owners, it does also create a situation where everything becomes inflated and the clubs without that sort of cash feel they have to stretch themselves to breaking point in order to keep up.

 

In a rather perverse way, many clubs have been asking for the FA/PL/FL to impose spending rules for years, because they simply don't trust themselves not to spend more than they can afford in a gamble to gain success.

 

That is their problem. If the rule in being brought in because some clubs are richer than others then it is just pure jealousy and a way of clipping the more lucky clubs wings.

[SaintBobby]

I can't see how the rules are enforceable relating to donations of cash. I can see how you could be punished for debt, obviously.

 

If a major donation is received from the Liebherr estate how is this qualitatively different to a fan throwing £20 into a "Save our Saints" bucket?

 

Surely, the efforts going on at places like Plymouth and Stockport to keep these clubs alive are entirely based on people giving cash freely or buying things at above the normal market rate (Peter Reid's FA Cup runners up medal etc). If Plymouth and Stockport et al could only sell things at market rate - and couldn't accept donations - they'd be doomed. This can't possibly be the intention of the Financial Fair Play rules.

 

One difference this might make to philanthropists/billionaires is that they will have some loss of control. If they have to give money over to their clubs rather than frame them as loans, then they ahve less of a sword of Damacles over the club's board. But that doesn't seem to be a problem at Saints where the Liebherrs have always been very hands off.

[stevegrant]

That is their problem. If the rule in being brought in because some clubs are richer than others then it is just pure jealousy and a way of clipping the more lucky clubs wings.

And it'll be our problem if either the current owners want the club to be run sustainably (which I believe NC has said is part of the 5-year plan), or they sell and any new owners want the club to be run sustainably, but when we approach players to sign them, they demand more money than we can afford on the basis of "well, you could afford it two years ago, why not now?". Do we then miss out on the player because we're running the club sensibly, or do we cave in and overstretch ourselves, in which case we run the risk of ending up where we were in 2009 all over again...

 

Ignore the short-term benefits of having a rich benefactor, that funding will not be around forever, regardless of how much we'd like it to be. There will come a time when we won't be able to call upon the Liebherr estate to subsidise us, at which point, once again, it does become our problem.

[positivepete]

Regardless of the argument as to whether we will or won't ever have to pay back the £20m listed as a long-term liability in the group accounts, the simple answer is "Yes, we did rack up an additional £7m of debt during that period".

 

Although we do not know how that £7m is made up, it may be a provision for the cost of upgrading the training ground. P&L is not the same as cash flow.