FFP rules (3 Viewers)

[oldskyblue58]

Keeps being mentioned so thought it would be useful to post the replies I have had regarding the calculation from the Football League

income

Income generated by a club that forms part of its football activities such as, commercial revenues, gate revenues, solidarity payments, Football League payments, donations, net transfer income (transfer fees paid) all make up the relevant income within the SCMP guidelines.

The relevant income figure for SCMP will be a portion of total turnover, but not necessarily agree to total turnover figure in the accounts.

Salary calculation

SCMP splits turnover into ‘normal income’ and ‘football fortune’ income. For League 1 clubs both these forms of income go into determining how much money a club can spend in relation to wages. In League 1’s case, this is set at 65% of turnover. This is calculated on an on-going basis going forward.

All player wages are included in the calculation. This covers basic wage, bonuses, appearances and any other add-ons. The calculation also includes PAYE, medical costs, cars and travel and also agent payments. Basically the full cost of a player is included. Players included are all contract players (full contract, non-contract, multiplicity etc.) and loan players. Players loaned out are deducted for the period of the loan. Players not included are youth players on a professional contract (i.e. players that have been in the club’s YD 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.

SCMP relates to playing staff only.

 

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[SkyblueBazza]

Can hear the sound of pennies dropping all across the forum..!

 

[oldskyblue58]

there is a rider to that ........ unless you have funds from other sources (loans, owners deep pockets etc) then you might not have the cash to max out to 65% of turnover. If there are direct costs associated with that turnover (eg catering would have the costs of food and staff wages etc) then if that cost equates to more than 35% of the sales there is not 65% left to pay out on players wages.

It is not as simple as taking 65% of turnover and paying it out as player wages. the calculation sets the limit but the limit might not be possible to fund

 

[Jack Griffin]

Can hear the sound of pennies dropping all across the forum..!

I certainly already understood the general idea, the detail OSB has got is interesting (though ISTR he posted it before some time ago).

 

[Mary_Mungo_Midge]

We've discussed this before on other threads. Good idea to head a thread with it though.

I think the figure for this season would be south of a £4m cap. Makes the offer to McGodrick of the rumoured £10K-per-week quite incredible; as that would be a huge percentage on one player; bearing in mind a 25-man squad would average closer to £3K per player, per week.

And even more amazing when - according to some - we need increased revenue to 'compete', yet this offer was made within the auspices of this year's FFP, and would have made him the best-paid player in this division by some distance

 

[oldskyblue58]

yes I did JG ..... just thought it would be useful to people to repost

 

[ashbyjan]

Just a bit more info re the salary cap. Actually to be accurate as a League 1 side we are under the rules of Salary Cost Management Protocol.
Below are a couple of sites explaining the rules.

http://www.financialfairplay.co.uk/resources/wsc0001.pdf
http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html

 

[Godiva]

FFP is more than a salary cap. It also put's a limit to a clubs losses and the extend of loans. I don't think it has been implemented in the lower leagues yet - but it will come.
FFP will in the future force football clubs into selfsustainable entities rather than being dependent on sugar daddys.

 

[Tad]

It all sounds great, but I'm sure clubs will find a way around it.

 

[Jack Griffin]

Godiva - that remains to be seen, that is the prevailing strategy, but there are no guarantees about how long it will be maintained.
I hope it does become a permenant fixture, but we all know that succeeding generations are capable of forgetting the lessons of the past & may let their ambitions override common sense.