Financial fair play (1 Viewer)

kingharvest · Feb 27, 2012

Just thinking, with this coming into effect very soon - unless we but the ground aren't we likely to be in a worse position than most?

I'm assuming ffp is something like Your wages can only be a certain percentage of your turnover? Well if our only major revenue streams are ticket sales/merchandise/TV, then our turnover without player sales must be pretty low.

Now if we go down, and tv money all but disappears, it's even worse.

So for us to be competitive anyway, owning the ground is crucial, but when FFP comes in, surely it's absolutely critical?

Tell me if I'm wrong on any of that - I haven't read the rules on FFP

cstring82 · Feb 27, 2012

Personally I think not owning the ground regardless of FFP is bad, the club must be missing out on hundreds of thousands of pounds if not more on non football events.

I hope if any take over goes through that something can be done about it!

Otis · Feb 27, 2012

Well the council and Higgs Trust etc. will have to see that there may no longer be a football club if we have to get revenue in through owning the ground. Certainly not in it's current form.

Godiva · Feb 27, 2012

kingharvest said:
Just thinking, with this coming into effect very soon - unless we but the ground aren't we likely to be in a worse position than most?

I'm assuming ffp is something like Your wages can only be a certain percentage of your turnover? Well if our only major revenue streams are ticket sales/merchandise/TV, then our turnover without player sales must be pretty low.

Now if we go down, and tv money all but disappears, it's even worse.

So for us to be competitive anyway, owning the ground is crucial, but when FFP comes in, surely it's absolutely critical?

Tell me if I'm wrong on any of that - I haven't read the rules on FFP

In this league FFP dictates that any club can only spend 100% of the clubs income on player wages. As we have been cutting wages all season we should now be one of a handfull clubs who are in compliance. Other clubs will need to reduce wages significantly ... here's looking at you Leicester!

Should we get relegated we can only spend 55% of the clubs income on player wages. Our income would be reduced from approx £8mio (I am guessing here as we don't know the figure yet) this season to approx £5mio in league 1.
In short, we would need to reduce wages to about half of what we currently spend.

It sounds like a dramatic change, and it is. But the rules kick in for all clubs. If we stay up we are ahead of most clubs in terms of compliance - if we get relegated we will need to offload quite a few players, so don't expect us to bounce straight back ... we won't have the team of today.

Oh, and the rules and the basic economics stays unchanged even if there was a change of ownership!

Sick Boy · Feb 27, 2012

This is why it is of the utmost importance to survive.

It really does make me angry that people have been putting their own personal agendas before the club's livelihood.

Wrenstreetcarpark · Feb 27, 2012

Like who Sick Boy?

Sick Boy · Feb 27, 2012

Wrenstreetcarpark said:
Like who Sick Boy?

Take a look in this thread - 'Fans Support of Andy Thorn: A sign of just how far we have fallen'?

How can someone hope their team is relegated?!

ashbyjan · Feb 27, 2012

Relegation would be a complete nightmare for the team and all those working for the club - remember with a big drop in revenue there will be redundancies in back room staff at Ryton, people like the coaches etc and also at the clubs offices at the Ricoh but could someone with more knowledge of these things tell me if there is some sort of period of grace when a relegated club goes from 100% of turnover to 55% - is this overnight? Surely there is some adjustment period?

Grendel · Feb 27, 2012

Actually I am sceptical anyway. If a team is relegated then surely they take the revenue from the prior year so effectively championship revenue.
Also what happens if a club ignored it. The penalties look vague.

Sick Boy · Feb 27, 2012

ashbyjan said:
Relegation would be a complete nightmare for the team and all those working for the club - remember with a big drop in revenue there will be redundancies in back room staff at Ryton, people like the coaches etc and also at the clubs offices at the Ricoh but could someone with more knowledge of these things tell me if there is some sort of period of grace when a relegated club goes from 100% of turnover to 55% - is this overnight? Surely there is some adjustment period?

Relegation would be a disaster for the club.

People still seem to imagine that SISU will quickly leave once we are relegated, allowing Hoffman to come in with ££ for Thorn to win us the league.

It it utter madness.

Skyblue4u · Feb 27, 2012

They don't come into force until 2014/15 so we could be non league by then anyway under SUSI

Grendel · Feb 27, 2012

Especially under the 5 year plan some people have in mind.

Lord_Nampil · Feb 27, 2012

ashbyjan said:
Relegation would be a complete nightmare for the team and all those working for the club - remember with a big drop in revenue there will be redundancies in back room staff at Ryton, people like the coaches etc and also at the clubs offices at the Ricoh but could someone with more knowledge of these things tell me if there is some sort of period of grace when a relegated club goes from 100% of turnover to 55% - is this overnight? Surely there is some adjustment period?

You would think there is an adjustment period, Forget us for a second and think of Forest and Brizzle, they would surley be in a bit of a mess if they went down, same with the likes of Huddersfield, Wednesday,Preston, Mk dons, United and Charlton in the league below...

kingharvest · Feb 27, 2012

Taken from the Football League website is the below dated from 30/11/11. It gives no indication to the levels - but suggests a vote is happening this month, and that the rules will come into effect as of next season.

"At a meeting at Coventry City's Ricoh Arena, Championship Clubs have given 'in principle' support to Football League proposals for a new Financial Fair Play framework for The League's flagship division.

The proposals will now be put to a formal vote in the new year.

Following the decision a Football League spokesman said: "At today's meeting, owners and executives of Championship clubs re-affirmed their commitment to the principles of Financial Fair Play as a means for encouraging financial sustainability at club level.

"After further discussions about the practical implementation of Financial Fair Play, clubs agreed that the proposals should be finalised and taken forward to the next meeting of Championship clubs at Derby in February for final ratification.

"If approved, the new rules would take effect from the start of the 2012/13 season.

Jack Griffin · Feb 27, 2012

Ld Nampil is right there is a period of adjustment which can be used to move towards the target of 55% of turnover in league one, after all you can't really measure it till the audited accounts come out & that is likely to impose a year delay for a start. In short there is a bit of leeway for 3 or 4 years .

King harvest is wrong about ownership of the ground helping, the Arena Company took out a £20Million loan it is paying off, any profit made above the repayments gets ploughed back into the Arena Company. It really will not help, there will be no dividend to add to the CCFC group accouts till the loan is paid off, maybe another 15years to go.

Godiva · Feb 27, 2012

Skyblue4u said:
They don't come into force until 2014/15 so we could be non league by then anyway under SUSI

kingharvest said:
Taken from the Football League website is the below dated from 30/11/11.

"If approved, the new rules would take effect from the start of the 2012/13 season.

The rules have been known for a long time and the clubs have been given the opportunity to plan accordingly.
Come next season and panic will spread among the fans in clubs where owners didn't prepare in time.

kingharvest · Feb 27, 2012

Jack Griffin said:
Ld Nampil is right there is a period of adjustment which can be used to move towards the target of 55% of turnover in league one, after all you can't really measure it till the audited accounts come out & that is likely to impose a year delay for a start. In short there is a bit of leeway for 3 or 4 years .

King harvest is wrong about ownership of the ground helping, the Arena Company took out a £20Million loan it is paying off, any profit made above the repayments gets ploughed back into the Arena Company. It really will not help, there will be no dividend to add to the CCFC group accouts till the loan is paid off, maybe another 15years to go.

ah - cheers for this, i had no idea.

kingharvest · Feb 27, 2012

However - If the club own the ground (and in turn the arena company in some format) then no matter what repayments on loans have to go out, Turnover is turnover. Its not 55% of profits, its 55% of turnover isn't it? You could be turning over £1bn and making no profit, yet be allowed to spend 55% of it on wages.

chiefdave · Feb 27, 2012

wouldn't they have to allow players to be sacked? If you've got players on contract how can you reduce your wage bill if nobody wants to sign them? Sure we'd rather not have paid Freddys wages all season but don't seem to have any option to get rid of him.

kingharvest · Feb 27, 2012

Thats a difficult one though. You'd think they'd have the option to make players redundant...but then they lose potential income through a sale, and they'd have to compensate the player.

I imagine what we might see are far more short term contracts

lordsummerisle · Feb 27, 2012

Skyblue4u said:
They don't come into force until 2014/15 so we could be non league by then anyway under SUSI

Fire up the Quattro.

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