Pardon my ignorance but can someone explain to me how this ffp works. Talking to a Villa fan the other day who told me they had money to spend but are restricted by these ffp rules I don’t know or really care if he’s right or wrong on that to be honest but I looked at us and we are apparently handicapped ffp wise by not owning the Ricoh and having other or extra income but if we sell a player for say £2million does that mean we could sign a player for £2m or 4 for £500k each or even 10 for £200000 each. Our gates aren’t brilliant but were better than most in our division and I believe we will be the same this season too, I’m puzzled so can anyone enlighten me please.
FFP ? (2 Viewers)
- Thread starter Magwitch
- Start date
pastythegreat
Well-Known Member
No, FFP means you can spend 65% of your total income revenue. So if you sell a player for £1m you can spend £650k on another.
But it doesn't just relate to spending money on players. It's money the club can spend across everything.
Wages for groundsmen, hotels when the players stay overnight for away games, backroom staff, player wages. It's not just for buying players in. It covers EVERYTHING!
Something put in place to stop the rich (Man City, PSG, Real Madrid) buying their way to titles and levelling the playing field. Yet ALL they do is find ways around putting money into clubs using "advertising"! ie the Quatar royal family own PSG. Spring the word Quatar on the sleeve of the shirt and say they sponsor the kit and dish out £250m for Neymar!
Yes you're right that not owning our ground we are handicapped by not making money 365 days a year. We make money from ticket sales and shirt sales and advertisements. Hense the reason NOPM is more likely to kill CCFC before it kills SISU!
But it doesn't just relate to spending money on players. It's money the club can spend across everything.
Wages for groundsmen, hotels when the players stay overnight for away games, backroom staff, player wages. It's not just for buying players in. It covers EVERYTHING!
Something put in place to stop the rich (Man City, PSG, Real Madrid) buying their way to titles and levelling the playing field. Yet ALL they do is find ways around putting money into clubs using "advertising"! ie the Quatar royal family own PSG. Spring the word Quatar on the sleeve of the shirt and say they sponsor the kit and dish out £250m for Neymar!
Yes you're right that not owning our ground we are handicapped by not making money 365 days a year. We make money from ticket sales and shirt sales and advertisements. Hense the reason NOPM is more likely to kill CCFC before it kills SISU!
Terry_dactyl
Well-Known Member
And also why there was such a fuss about access to food sales etc?
christonabike
Well-Known Member
Sky Blue Pete
Well-Known Member
Excellent about villla
Different rules for different divisions I reckon
Different rules for different divisions I reckon
skybluesam66
Well-Known Member
so for 2018 / 19
I would expect gate receipts to be at least +£500k
Commercial Revenue + sponsorship + £200k
TV Revenues + £500k
so of that £1.2m we can spend £800k on the team
If JM gives us £3m If we could even keep £1m in the club of that - and spread over 2 years - that would be another £500k on the team per year
We would then have a budget in the region of £3.3m versus the relegation budget which was around £1m lower than that - and would give us a chance
I would expect gate receipts to be at least +£500k
Commercial Revenue + sponsorship + £200k
TV Revenues + £500k
so of that £1.2m we can spend £800k on the team
If JM gives us £3m If we could even keep £1m in the club of that - and spread over 2 years - that would be another £500k on the team per year
We would then have a budget in the region of £3.3m versus the relegation budget which was around £1m lower than that - and would give us a chance
stevefloyd
Well-Known Member
And you still get clubs paying obscene amounts for players and their wages..i think that all players should have a maximum wage cap put on them if the greedy bastards can't live on say £100k a month which is still obscene, then let them leave the sport and use their brains for making a living ....i guess McDonald's would have too many staff then !!!!!!!
SkyBlueCRJ
Well-Known Member
It's a few years old now but I remember reading this half decent article on BBC Sport that explains it... or at least explains the basics
Financial fair play: All you need to know about how it works
Financial fair play: All you need to know about how it works
Specs WT-R75
Well-Known Member
Very different rules between Championship (FFP) and L1/L2 (SCMP). In the championship there is a cap on losses, whereas in L1/L2 there is a % of revenue that you can spend on wages. However "There are no restrictions (in themselves) on the amount a club can lose or spend on transfer fees."
Additionally there are no caps on losses, except that any losses must be funded via equity rather than debt.
Look at this page for more info (and there is a link to SCMP at the top as well):
FFP Explained
Additionally there are no caps on losses, except that any losses must be funded via equity rather than debt.
Look at this page for more info (and there is a link to SCMP at the top as well):
FFP Explained
pastythegreat
Well-Known Member
Sounds about right.
Maybe a little more as we've just had extra gate receipts and tv revenues for the 3 play off games.
And possibly the sales off McNulty and/or Bayliss.
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thekidfromstrettoncamp
Well-Known Member
pastythegreat Do we get money from shirt sales I was under the impression we hived that off along with most other things except Ryton.
pastythegreat
Well-Known Member
I always assumed we did. I know that the shop isn't ran directly by CCFC it's ran by Just Sport, but in selling shirts with our badge on would make us money surely? They sell us the shirts at say £10 per shirt, we add a badge and a logo and sell it on at a profit and keeping that profit?
These are however, just assumptions and I stand to be corrected if anybody knows better?!
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pastythegreat
Well-Known Member
Depends if you're paying their wage or not! If not then you can have as many as you want.
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better days
Well-Known Member
It depends on who's paying the wages
If it's a loan from a Premier League or Championship team to give a young player experience the player's wages are paid by the parent club
Sometimes there is a clause that if the player doesn't get game time the club who've loaned him have to pay all or a greater % of his wages
If it's a player from a lower league team who's come on loan for game time if they're out of favour at the parent club or with a transfer planned at the end of the loan the club to whom he's been loaned pay
These are normally much lower wages so are affordable for L1 & L2 teams
oldskyblue58
CCFC Finance Director
This might make things a bit clearer as to how it affects L1 & L2 teams (in those divisions the calculation is SCMP not FFP). It is not a straight percentage of turnover
SCMP (League 1 & 2)
Salary Cost Management Protocol (SCMP) explained
Update: The EFL have now published more details on SCMP - click here and search for the term SCMP on the page.
Note The info that follows was published before the info from the EFL was made available:
Clubs in the League 1 and League 2 operate within a Spending Constraint framework termed Salary Cost Management Protocol (SMCP). SCMP limits spending on player wages to a percentage of club Turnover. In League 1 clubs can spend a maximum of 60% of their turnover on wages - in League 2, the limit is 55%. There are no restrictions (in themselves) on the amount a club can lose or spend on transfer fees.
Initially introduced into League 2 in 2004/5 for guidance purposes, sanctions for breaching the SCMP thresholds were introduced during the 2011/12 season, with Swindon the first club to be sanctioned under the rules.
The process is interactive with clubs providing the Football League with projections for the spending for the coming season. During the season the clubs provide regular updates on their Turnover and wage bill. Any club that is forecasting a wage spend within 5% of the figure will be scrutinised more closely. Where a club is on course to exceed the limits, the Football League will apply a Transfer Embargo. Crucially, a club doesn't have to overspend to incur the embargo, it only needs to shown to be heading for an overspend. This interactive approach enables clubs to increase their wage bill if their circumstances improve - a successful cup run will generate increased income and the Football League may be able to sanction additional wage spend. Because SCMP doesn't rely on the retrospective scrutiny of club accounts, it is also extremely effective at stopping overspend before the spending actually occurs (something that has been a problem for the Championship's version of FFP).
The Football League's website's explanation of the rules doesn't go into a great deal of detail about how they operate. However they have responded to enquiries and confirmed a number of areas that help us to better understand the rules.
Relegated clubs
The rules apply to all clubs and there is no moratorium for clubs relegated from the Championship. However, Transitional Arrangements are in place whereby clubs are allowed to exclude the wage costs of all players that the club signed pre September of the relegation season, if they were signed on contracts in excess of 3 seasons.
Turnover definition
Under the SCMP rules, the definition of 'Turnover' is particularly important as Turnover is used to determine the maximum wage-spend. Within a traditional accounting perspective, there are usually only three elements of turnover:
However the Football League use a is broader definition of Turnover. Crucially, the FL Turnover figure includes donations from the owners to the club and injections of equity. Loans from club owners are understandably not included in the Turnover figure as these would result in growing club debts. up club debts. In League 1 and League 2, a wealthy owner can therefore fund the club spending in a way that is not permitted in other divisions. Manchester City and Leicester for example seem set for punishment for their excessive losses (from UEFA and the Championship respectively) despite the fact that the owners have injected hard cash into the club to finance the spending.
Profit on player sales
Any profit made on player sales is included within Turnover on a cash basis when the instalments are received.
Player Wages and deductions
Under SCMP, 'Wages' relates to player wages only (director remuneration and general club staff wages are not included in the SCMP calculation). Player wages included in the SCMP calculation relate to all contract players (full contract, non-contract, multiplicity etc.) and loan players. Wage costs for players loaned out to other clubs are deducted for the period of the loan. Wage costs for Youth players on a professional contract are also excluded (i.e. players that have been in the club’s Youth Development scheme and have been given a pro contract); they must be 20 years of age or under at the start of the season to be discounted from the SCMP calculation.
Direct Costs incurred within Turnover
Within Turnover, clubs can include such things as Hospitality/Banqueting income (whether it is match day or non-match day income). The direct costs have to be deducted to reach a figure that is submitted on the SCMP return. For Hospitality/Banqueting for example, the Direct costs are all costs directly attributable to put on a hospitality/banqueting event. This would include food & beverage, direct staff and cleaning costs such as laundry etc.
SCMP (League 1 & 2)
Salary Cost Management Protocol (SCMP) explained
Update: The EFL have now published more details on SCMP - click here and search for the term SCMP on the page.
Note The info that follows was published before the info from the EFL was made available:
Clubs in the League 1 and League 2 operate within a Spending Constraint framework termed Salary Cost Management Protocol (SMCP). SCMP limits spending on player wages to a percentage of club Turnover. In League 1 clubs can spend a maximum of 60% of their turnover on wages - in League 2, the limit is 55%. There are no restrictions (in themselves) on the amount a club can lose or spend on transfer fees.
Initially introduced into League 2 in 2004/5 for guidance purposes, sanctions for breaching the SCMP thresholds were introduced during the 2011/12 season, with Swindon the first club to be sanctioned under the rules.
The process is interactive with clubs providing the Football League with projections for the spending for the coming season. During the season the clubs provide regular updates on their Turnover and wage bill. Any club that is forecasting a wage spend within 5% of the figure will be scrutinised more closely. Where a club is on course to exceed the limits, the Football League will apply a Transfer Embargo. Crucially, a club doesn't have to overspend to incur the embargo, it only needs to shown to be heading for an overspend. This interactive approach enables clubs to increase their wage bill if their circumstances improve - a successful cup run will generate increased income and the Football League may be able to sanction additional wage spend. Because SCMP doesn't rely on the retrospective scrutiny of club accounts, it is also extremely effective at stopping overspend before the spending actually occurs (something that has been a problem for the Championship's version of FFP).
The Football League's website's explanation of the rules doesn't go into a great deal of detail about how they operate. However they have responded to enquiries and confirmed a number of areas that help us to better understand the rules.
Relegated clubs
The rules apply to all clubs and there is no moratorium for clubs relegated from the Championship. However, Transitional Arrangements are in place whereby clubs are allowed to exclude the wage costs of all players that the club signed pre September of the relegation season, if they were signed on contracts in excess of 3 seasons.
Turnover definition
Under the SCMP rules, the definition of 'Turnover' is particularly important as Turnover is used to determine the maximum wage-spend. Within a traditional accounting perspective, there are usually only three elements of turnover:
- Match-day Income
- Commercial Income (such as sponsorship)
- TV revenue (and any 'merit payments' based on league position)
However the Football League use a is broader definition of Turnover. Crucially, the FL Turnover figure includes donations from the owners to the club and injections of equity. Loans from club owners are understandably not included in the Turnover figure as these would result in growing club debts. up club debts. In League 1 and League 2, a wealthy owner can therefore fund the club spending in a way that is not permitted in other divisions. Manchester City and Leicester for example seem set for punishment for their excessive losses (from UEFA and the Championship respectively) despite the fact that the owners have injected hard cash into the club to finance the spending.
Profit on player sales
Any profit made on player sales is included within Turnover on a cash basis when the instalments are received.
Player Wages and deductions
Under SCMP, 'Wages' relates to player wages only (director remuneration and general club staff wages are not included in the SCMP calculation). Player wages included in the SCMP calculation relate to all contract players (full contract, non-contract, multiplicity etc.) and loan players. Wage costs for players loaned out to other clubs are deducted for the period of the loan. Wage costs for Youth players on a professional contract are also excluded (i.e. players that have been in the club’s Youth Development scheme and have been given a pro contract); they must be 20 years of age or under at the start of the season to be discounted from the SCMP calculation.
Direct Costs incurred within Turnover
Within Turnover, clubs can include such things as Hospitality/Banqueting income (whether it is match day or non-match day income). The direct costs have to be deducted to reach a figure that is submitted on the SCMP return. For Hospitality/Banqueting for example, the Direct costs are all costs directly attributable to put on a hospitality/banqueting event. This would include food & beverage, direct staff and cleaning costs such as laundry etc.
oldskyblue58
CCFC Finance Director
Also whilst much is talked about the SCMP budget each club sets it is not the budget that really counts especially if a club is trying to be self sufficient. It is just a arbitrary calculation. The budget that really counts is the cash flow of the club
There are ways to spend more than the SCMP budget, for example have more youngsters from the clubs youth development scheme
A club can also choose to spend less than the SCMP budget
A club trying to balance income with expenditure might have to spend less than the SCMP budget depending on the other overheads and wages paid
And in any case clubs such as Accrington have shown it isn't just about the size of the budget but more the quality & strength of the team assembled
There are ways to spend more than the SCMP budget, for example have more youngsters from the clubs youth development scheme
A club can also choose to spend less than the SCMP budget
A club trying to balance income with expenditure might have to spend less than the SCMP budget depending on the other overheads and wages paid
And in any case clubs such as Accrington have shown it isn't just about the size of the budget but more the quality & strength of the team assembled