As long as spending isn't financed by debt I don't really know what the risk is to the clubs themselves. Just have a rule limiting how much external financing a club can have.
Football Finance
- Thread starter King Binny
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I don't disagree with the principle @peterhague puts forward from a financial security perspective. There'd be some difficulties in practice, but that will be the same with any scheme.
My personal view is that cementing the power base in football wasn't a purpose of FFP, but it has undeniably been an effect. I think that power base was pretty well established already. There'd been an Arsenal / United monopoly over the title for years. Prior to the PL era, Leeds won the league then went bust due to financial impropriety. Blackburn doped their way to a title (when it was still allowed) and are nowhere now. Chelsea doped, still going. City doped, still going. Leicester had a fairy tale season and are nowhere now. No-one else has won the league in the PL era.
The clubs who have consistently been in the power base are United, Arsenal, Us, Chelsea, City. Each of those clubs has a pulling power - a combination of history, prospects of success, glamour of the club's identity. Historically we also allowed ourselves to be a springboard for the likes of Suarez and Mascherano.
Think about Wirtz. Most teams in the PL could have afforded him this summer (they have the financial means and in most cases the leeway in their financials), but only those in the power base could have realistically attracted him.
And that's the reality of a loosening of the financial purse strings. If Newcastle, Villa, Forest etc were allowed to spend more, they'd still struggle to attract the very top players, which makes trading harder, and means they'd end up spending inefficiently on the next tier of players (no guarantee of success), or paying huge wages to the mercenaries in the industry (Robinho seems like a classic example when City were up and coming).
Then they'd all get clobbered when they qualified for Europe, where the limits are much harder to meet. And that's the reality here. The clubs outside of Europe already have the capacity to spend beyond their means because they're subject to the much less restrictive PL limits. The issue for a Newcastle is not PSR, it's UEFA's FFP. That's what clobbered Villa last year, and may catch Newcastle this year. If only they had a coveted striker they could sell to trade their way out of the mess they're in.
But that's why you don't hear the mid-table teams moaning. They're doing just fine, thanks.
My personal view is that cementing the power base in football wasn't a purpose of FFP, but it has undeniably been an effect. I think that power base was pretty well established already. There'd been an Arsenal / United monopoly over the title for years. Prior to the PL era, Leeds won the league then went bust due to financial impropriety. Blackburn doped their way to a title (when it was still allowed) and are nowhere now. Chelsea doped, still going. City doped, still going. Leicester had a fairy tale season and are nowhere now. No-one else has won the league in the PL era.
The clubs who have consistently been in the power base are United, Arsenal, Us, Chelsea, City. Each of those clubs has a pulling power - a combination of history, prospects of success, glamour of the club's identity. Historically we also allowed ourselves to be a springboard for the likes of Suarez and Mascherano.
Think about Wirtz. Most teams in the PL could have afforded him this summer (they have the financial means and in most cases the leeway in their financials), but only those in the power base could have realistically attracted him.
And that's the reality of a loosening of the financial purse strings. If Newcastle, Villa, Forest etc were allowed to spend more, they'd still struggle to attract the very top players, which makes trading harder, and means they'd end up spending inefficiently on the next tier of players (no guarantee of success), or paying huge wages to the mercenaries in the industry (Robinho seems like a classic example when City were up and coming).
Then they'd all get clobbered when they qualified for Europe, where the limits are much harder to meet. And that's the reality here. The clubs outside of Europe already have the capacity to spend beyond their means because they're subject to the much less restrictive PL limits. The issue for a Newcastle is not PSR, it's UEFA's FFP. That's what clobbered Villa last year, and may catch Newcastle this year. If only they had a coveted striker they could sell to trade their way out of the mess they're in.
But that's why you don't hear the mid-table teams moaning. They're doing just fine, thanks.
Don't disagree with any of that but an ambitious midtable club could lure a top/near top player with heavy wages. And then fail to surround them with enough talent to keep qualifying for Champions League or even Europa, and then fall afoul of either PSR or UEFA regs. And then be required to dismantle the squad and start again.
I just don't see how teams like Villa or Newcastle can ever realistically aspire to a higher station than their current state without a historic run of value mining the transfer market or taking years to build up their commercial revenue (which itself is compromised by the inability to sustainability acquire marketable players).
I realize my bias as a North American is towards greater equity and competitive balance in sports (despite an otherwise hyper capitalist culture) but it seems fundamentally unfair to me.
I wonder whether it actually helps aspiring clubs to get into Europe. The ones who are financially in a mess would be better opting out until they're on an even keel. They go into Europe, squads are stretched, they struggle, either in Europe or domestically, often both, and then get fined by UEFA for over-spending, removing the financial advantage of competing (I'm pretty sure Chelsea paid more in fines last year than they made winning the competition). And I've said it before, but it is harsh that UEFA has a single set of rules for all three competitions - clubs in the Europa and Conference Leagues shouldn't be fined as heavily as clubs raking it in via the Champions League.
To bridge the gap the in-between clubs really need two things:
1. A coach everyone wants to play for.
2. A big sale to give them the financial muscle to spend without punishment.
Villa had the second (Grealish), then gave the money to Gerrard. A big-name but not a coach everyone wanted to play for.
Newcastle could sell Isak to give them the financial leeway but Europe's top talent isn't queuing up to play for Eddie.
But I doubt we'll ever see a North American-style set of rules and greater equality, but my thesis is that FFP didn't create that advantage for the legacy clubs, it just entrenched it.
FFP: Financial FAIR PLAY.
The clue's in the name isn't it? Back then they weren't even pretending it was about keeping clubs sustainable.
It was about combatting "financial doping" - not a term you hear much these days. In other words, stopping upstarts like City from spending money that wasn't earned.
The clue's in the name isn't it? Back then they weren't even pretending it was about keeping clubs sustainable.
It was about combatting "financial doping" - not a term you hear much these days. In other words, stopping upstarts like City from spending money that wasn't earned.
The case of Villa is interesting and while Gerrard may not have been able to pull top players, the bigger issue is that he just wasn't a very good manager at a big 5 league level.
So, a significant portion of the Grealish money was burned to little effect.
Howe is equally ineffective at pulling players but is a far better manager. They just haven't had the ability to sell a player for such a huge sum (until now, when pride seems to be fucking with their long term interests).
At least broadcasting revenue is shared far more equitably in the Premier League, in comparison with, say, La Liga. No one will ever compete with Barca and Real. Even Atletico are fortunate to sit near the top of the table. In England, clubs like Spurs and, to a slightly lesser extent, Villa and Newcastle can at least sustainably compete for Champions League places, if not the title.
Completely agree that the inequity already existed. And it is unlikely to ever disappear.
It also came in the wake of the Portsmouth financial crisis.
Chelsea in particular caused the inflationary cycle that led to smaller clubs feeling the need to spend beyond their means to keep up.
I'd argue that the "fairness" is questionable too. Who's to say that their (or Chelsea's) "unearned" fiscal resources are any less fair than us, United, Arsenal happening to be strong at the time when broadcasting revenues exploded.
They don't have a fan base though, not really. They're a very local club.
Well quite. What's fair? Almost impossible to say. I was going to write earned in inverted commas but didn't want to come across as any more cynical than I have to.
Agreed fully. Depends on perspective and values. I admit that my perspective when it comes to sports is informed by the North American landscape.
Not claiming it's a universal truth.
I remember soon after Chelsea became a threat back when Abramovich appeared, some interviewer asked Ferguson if he thought it was unfair how they were just buying success. He was like, well try telling that to a loyal Chelsea fan who's followed their team for 50 years and never once seen them even threaten to win the title.
He had a point.
That's kind of where I'm at now. The current system doesn't allow for that.
I also don't think it should become a race to acquire multibillionaire/oil state ownership groups.
Teams should be able to invest according to their resources and aspirations. And those with lesser resources should have their aspirations supported by subsidies from those willing to overspend.
I don't think it will happen but that's why I think a luxury tax is the best solution.
I don't want a free for all like the situation that allowed Chelsea and City to sweep all before them.
That makes things more dynamic in a sense but it's no solution in the long term and at worst, if you get really massive spending like City used to do, then it makes things even less competitive than before - in terms of the top club vs the rest, anyway.
On a selfish level I'm not sure I'd change anything right now because it seems almost optimal for us as LFC fans - good chance of competing, but not of dominating.
On an unselfish level I don't think you need equality or anything like it; I think some kind of hierarchy is fine and probably desirable tbh. But I think you want each club to have a reasonable chance of continuous improvement. So in the current situation I'd want Newcastle or Villa fans to be thinking they've got a decent chance of consolidating as a top 6 team for a couple of years and at the same time building a new team on top of that base which could challenge for the title in, say, year 2 or 3. And if those clubs then found it harder to sustain a title challenger status than us or Arsenal, then I think that's fair enough. So you'd have a kind of natural order but with reasonable fluidity.
Now what system of regulation or subsidies would best achieve that I don't know, but that's the goal I'd be working towards.
He didn't though.
The sporting ideal is a meritocracy. We didn't have that before and we didn't get it with Chelsea either, in fact Chelsea, city made everything even more arbitrary.
The opinion of the self interested Chelsea fan isn't relevant at all. If Chelsea wasnt in London, that supporter would have less chance.
I think that's exactly what he was saying. It's what I was saying by bringing it up. It might not be fair now, but it wasn't fair before either.
I've commented further up this thread about Chelsea and their squad restrictions from UEFA. The information UEFA have put out is a little wooly in terms of how it defines the sanction, referring to the "List A transfer balance" which is "the difference between the cost savings from outgoing players... and the new costs from incoming players".
It isn't clear whether this means players joining and leaving the Club, or players joining or leaving List A. And if it's the former, it isn't clear that they needed to have been on List A last year - e.g. Joao Felix wasn't on the list as he was loaned out, but he could only have been registered via List A. So is he a "List A player" or not? Schrodinger's Felix the Cat.
List A departures
They've done a lot of trading this summer, but only the following players were on List A last year:
Madueke
Sancho (loan ended)
Dewsbury-Hall
Guiu (loaned out - wages saved)
Mudryk (banned) - debatable whether he qualifies as "outgoing" as costs still on the books (possibly not wages as I doubt they'll be paying him at present).
I reckon that saves "costs" (amortisation and wages) of about £53m.
List A arrivals
Estevao
Gittens
Pedro
Hato
Essugo
Delap
I reckon they add costs (amortisation and wages) of £83m.
Net deficit
Doesn't look so bad. Get rid of Nkunku and Jackson and they're just about there.
The kicker
Wesley Fofana and Romeu Lavia weren't on List A last year, so under this analysis, their costs might need to be included too before they can be added to List A. That probably adds £40m odd.
So a shortfall of c. £70m they still need to make up from somewhere. By 1 September.
I may be missing something
Like I say, the full settlement agreement isn't in the public realm so it's possible the way this works is different to my guess. It might be that they can just drop Jackson and Nkunku from the list, rather than needing to sell them, or it may be that the test is based on players who could only be registered via list A (in which case they could count chunky savings on Felix and Kepa, who might have been on List A last year if they'd not been on loan).
And you'd think that Chelsea would have read the fine print and would know what they are doing, especially as they have been so active in selling players this summer. But this is Chelsea. They are still giving out 7 and 8 year contracts, even though there's no longer a benefit for FFP / PSR.
But it really looks to me like there might be a big story coming down the line.
Hope I'm right, don't shoot me if I'm wrong, this is partly speculative on my part.
It isn't clear whether this means players joining and leaving the Club, or players joining or leaving List A. And if it's the former, it isn't clear that they needed to have been on List A last year - e.g. Joao Felix wasn't on the list as he was loaned out, but he could only have been registered via List A. So is he a "List A player" or not? Schrodinger's Felix the Cat.
List A departures
They've done a lot of trading this summer, but only the following players were on List A last year:
Madueke
Sancho (loan ended)
Dewsbury-Hall
Guiu (loaned out - wages saved)
Mudryk (banned) - debatable whether he qualifies as "outgoing" as costs still on the books (possibly not wages as I doubt they'll be paying him at present).
I reckon that saves "costs" (amortisation and wages) of about £53m.
List A arrivals
Estevao
Gittens
Pedro
Hato
Essugo
Delap
I reckon they add costs (amortisation and wages) of £83m.
Net deficit
Doesn't look so bad. Get rid of Nkunku and Jackson and they're just about there.
The kicker
Wesley Fofana and Romeu Lavia weren't on List A last year, so under this analysis, their costs might need to be included too before they can be added to List A. That probably adds £40m odd.
So a shortfall of c. £70m they still need to make up from somewhere. By 1 September.
I may be missing something
Like I say, the full settlement agreement isn't in the public realm so it's possible the way this works is different to my guess. It might be that they can just drop Jackson and Nkunku from the list, rather than needing to sell them, or it may be that the test is based on players who could only be registered via list A (in which case they could count chunky savings on Felix and Kepa, who might have been on List A last year if they'd not been on loan).
And you'd think that Chelsea would have read the fine print and would know what they are doing, especially as they have been so active in selling players this summer. But this is Chelsea. They are still giving out 7 and 8 year contracts, even though there's no longer a benefit for FFP / PSR.
But it really looks to me like there might be a big story coming down the line.
Hope I'm right, don't shoot me if I'm wrong, this is partly speculative on my part.
Have a horrible feeling the Chavs may have pulled off the great escape in the transfer window.
Apparently there was an article last week in the Athletic about this and it said that they were allowed to count 1/3 of any transfer profits on List A players in reaching their target. Based on my numbers, if they are able to count the profit on Jackson they will be there or thereabouts.
But the word seems to be that the Jackson sale is contingent on future appearances which means it shouldn't count as a [rpfot now and they would still be in a pickle. But I bet Uncle UEFA will go soft on them (and to be fair, I'd actually have some sympathy because it's not like they haven't tried to clear the decks and they would only be shafted by Bayern's reluctance to commit to buying Jackson). I suspect they wouldn't have gone back to redo a deal with Bayern unless UEFA had given them the nod.
Apparently there was an article last week in the Athletic about this and it said that they were allowed to count 1/3 of any transfer profits on List A players in reaching their target. Based on my numbers, if they are able to count the profit on Jackson they will be there or thereabouts.
But the word seems to be that the Jackson sale is contingent on future appearances which means it shouldn't count as a [rpfot now and they would still be in a pickle. But I bet Uncle UEFA will go soft on them (and to be fair, I'd actually have some sympathy because it's not like they haven't tried to clear the decks and they would only be shafted by Bayern's reluctance to commit to buying Jackson). I suspect they wouldn't have gone back to redo a deal with Bayern unless UEFA had given them the nod.
Few changes to the Liverpool board of directors:
In - Jenny Beacham (new CFO), Jonathan Bamber (Club's general counsel)
Out - Andy Hughes (Managing Director), Billy Hogan (Chief Executive)
Understand Andy is working his way to retirement and was formerly CFO so it's just a swap for him and Jenny.
Bit surprised Billy is standing down, but I suspect it signals a shift in role for the board.
Aside from the board, the club used to have an executive committee which would meet most weeks and had the key personnel on it, most of whom were not directors. In practice, that was where decisions were made. Suspect that's still the case and the board is now more of about executing formalities, rather than decision-making.
In - Jenny Beacham (new CFO), Jonathan Bamber (Club's general counsel)
Out - Andy Hughes (Managing Director), Billy Hogan (Chief Executive)
Understand Andy is working his way to retirement and was formerly CFO so it's just a swap for him and Jenny.
Bit surprised Billy is standing down, but I suspect it signals a shift in role for the board.
Aside from the board, the club used to have an executive committee which would meet most weeks and had the key personnel on it, most of whom were not directors. In practice, that was where decisions were made. Suspect that's still the case and the board is now more of about executing formalities, rather than decision-making.
How did Liverpool afford their £450m summer of spending?
Liverpool won the Premier League title last season but spent nearly half a billion pounds to revamp their squad this summer. Why? And how did they do it?
How did Liverpool afford their £450m summer of spending?
Liverpool won the Premier League title last season but spent nearly half a billion pounds to revamp their squad this summer. Why? And how did they do it?www.espn.co.uk
Pretty lazy journalism. I read through the whole article and there was no mention of the Coutinho money.
or the Bitcoin investment
Or, more pertinently, the £127m loan from the Dynasty investment which put us in the position where we had the cash to do this. As always, the journos focus on whether spending is permissible under PSR / FFP, and don't ask the question as to where the actual money is coming from.
In other surprise news, water is wet.
Lucrative but not massively over inflated.
The Times always puts a pro-City spin on these stories about the legal cases with the PL. They have that bellend Martin Samuel of course who is on City’s payroll but they have others who are clearly briefed as well.
Reading other articles there's no way this is a win for City and a climbdown by the League, their rules have now been confirmed.
What it does do is bring those clubs using shareholder funds in line
As far as I can make out City’s finance and commercial team can just sit around pissing it up the wall waiting for someone to negotiate a stormingly goods rights deal for something then knock out a contract with whichever part of their empire they fancy and do the same deal plus 10% and they’re sorted
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