Feeling the pinch: Clubs braced for cuts as FFP arrives with teeth – Up the Football League we go – FourFourTwo

Feeling the pinch: Clubs braced for cuts as FFP arrives with teeth – Up the Football League we go – FourFourTwo.

An Excerpt:

OK, so it won’t hurt quite like George Foreman in his prime but after over two years of discussions, Financial Fair Play finally arrives packing a punch.

Though sanctions don’t arrive until the 2014/15 campaign, clubs in the second tier and below have been warned. Failure to adhere to the League’s strict framework can result in consequences ranging from transfer embargoes to heavy financial penalties.

It is not a test to trick clubs, nor is it designed to catch them out. Simply, the Football League doesn’t want another Portsmouth on its hands.

Football: Net Spend, Salary and Wage -Turnover Ratio

Taken from a comment in the Guardian website:

Net spend is NOT the primary financial factor when it comes to transfer strategy.Wage-turnover ratio is much more important.

Man United are firm about keeping it below 50% Utd’s wage-turnover ratio is currently around 46%. Its hovered between 45 & 50% since the Glazers took over. Turnover has actually increased since the Glazer’s took over and as a result, the 08/09 wage bill increased from £123m to £132m in 09/10.

People love to talk about the burden of debt on the club and how this negatively impacted the amount of money SAF has to spend. Yes, it might affect how much money SAF can bid for a players, but it doesn’t affect the wages Utd can offer to players. Turnover (revenue), is calculated before the debt payments are deducted. The debt has no impact on the wage structure or the contracts Utd can offer to players. Utd could have given SAF £100m to spend on players, but he probably still wouldn’t have been able to offer Nasri the wages City were offering him because of the strict wage structure at Utd.

And when we Arsenal fans crib about why we could not get Juan Mata, however much we wanted him…. That’s why.

Six months of the Arsenal Fanshare

And here’s how it is going: via Matt Slater at the BBC Football Blog.

…. It has been done with the full support of the club’s board – and even the major shareholders not on the board. AST has been able to convince everybody that a bigger say for “real fans” does not mean a storming of the barricades.

It is this attitude that has attracted praise for Arsenal and its Fanshare from interested onlookers, such as the Sports Minister Hugh Robertson and Uefa chief Michel Platini.

It is also why MPs sitting on the parliamentary select committee hearings into football governance went to the Emirates last week for their first fact-finding mission.

They met AST representatives, Arsenal manager Arsene Wenger and chief executive Ivan Gazidis, wanting to know how other teams could replicate this consensual approach – no easy task when so many club boards seem to be at war with their fans.

I haven’t checked. Are we, as foreign nationals, allowed to buy Fanshares? If yes, I would certainly like to buy a few. Would I have enough stakes to turn the tide – if at any point in time in the future a tide needs to be turned*? Not really, I don’t see a Barca-like thing happening. But will I have a voice, a say? Yes I will.

* May I pass some kudos in the direction of Ivan Gazidis? Superb work behind the scenes… for a while now.

Mukesh Ambani and Liverpool

(Click Here)

Mukesh Ambani is one smart, smart man. And a proper businessman above everything else.

Owning an IPL team (and he indeed owns Mumbai Indians, the costliest of them all – with Sachin, Jayasuriya, Duminy etc) makes sense because much of the ad revenue goes directly to the owners; plus the Reliance guys have historically have had great clout with the who’s who of India… and owning the biggest IPL team is a major positive in that regard.

What does owning Liverpool give him? Nothing. Can he make money out of Liverpool? He cannot through running the club, the money will have to be ploughed back to the club. Through the eventual sale? Naah, I don’t think Ambani will think that turning around the club and reaping a profit by sale would be worth it because a) the day-to-day hassle would be immense; and b) The glory day of club buy-and-sell is gone. It is not a regulated market like the American sports. The prices will just keep on rising…

Mukesh Ambani isn’t a football buff like Abramovich, so the club will not be a millionaire’s plaything. The Ambanis are not Russian Oligarchs. They are businessmen. And thus, owning a football club does not make financial sense to him at all.

Unfounded rumour, IMHO. False.

Subrata Roy Sahara, however, I am not so sure about.

The Solution? This…

Football is in the firm grip of spivs and miscreants acting as agents without any accountability whatsoever. Get rid of them and get real professionals: lawyers, accountants, etc to act as agents if we must have them. Afterall, these are the same who oversee corporate mergers and acquisitions as well as individual mortgages etc.

In time, put a more professional code of conduct in place for clubs that would treat player and staff contracts as any other; worth every mm of the paper they are written on.

I think it is diabolical that a club like Bolton, one of those I would advocate the introduction of the American sports draft system for their benefit, that such a club could come out and declare with impunity that the only manager on their short list was Owen Coyle who already had a contract with Burnley! And what did Burnley do in return, try to poach O’Driscoll from Doncaster. Prey on the nearest most vulnerable like real life food chains!

The whole system is very dodgy with the only exception of the innocent poor fans without whom there really isn’t an industry at all.

From ny1703, a commentator at the Guardian

Leveraged Buyouts, Salary Caps and the Premier League

An interesting comment on the Glazers and Hicks-Gillette at the Guardian:

Article

Comment 1:

What I question in the article is the assertion that the Glazers and Hicks-Gillette don’t know what they’re doing.
Of course this is not the US but they’ve ran several sports franchises/clubs with little questioning of their stature.

Comment 2:

All of those several sports franchises were in leagues which were financially regulated, with salary caps etc. This leads to predictable cash flows, does not rock the financial boat, and a leveraged buyout should (or at least might) be viable.
The Premier League is not financially regulated, and thus the loans accrued for a leveraged buyout along with the mighty cash spend required year on year just to maintain status quo (and this keeps increasing every year, remember), makes it rather untenable.
While the Glazers and Hicks-Gillete are not stupid and have experience in running several sports franchises, the Premier League is an animal they have no experience in handling.