Parachute Payments for next season

[Lanterne Rouge]

2 minutes ago, Mr Popodopolous said:

Depends on how much of their debt is split between long term, short term and medium term perhaps. They have a decent set of indicators on paper.

 

In this League? I think us, Leeds, Brentford because of their very profitable transfer model and maybe Millwall and Sheffield United would be reasonably placed in that sense.

QPR- certainly not though they are making big efforts to be run correctly post the PL excess I believe. Still in a hole however.

I`d add Norwich - they seem to be making a determined effort to live within their means. Possibly Ipswich too? PNE as well I think.

[Ska Junkie]

3 minutes ago, Mr Popodopolous said:

Kind of irrelevant in an FFP context the takeover, although infrastructure can get unlimited investment.

As per the rules, 13 million a year for 3 seasons can be lost- that is 8 million shareholder loss, 5 million natural.

That said Leeds well within FFP, so on paper one of the best placed in the League this year or next (IMO of course).

Thanks Mr P.

I do wonder what the advantage of investment is (apart from the obvious infrastructure, debt consolidation stuff) when FFP means you can't use it to improve the playing side? It seems like a tweak in the rules is needed IMHO. 

Another question, as the rules are different in L1 / L2 to the Championship, how do the rules apply to the promoted sides re FFP and acceptable losses? I appreciate all 3 have only been away for 1 season but I don't know how the rules apply to them as their turnover must have been reduced quite considerably in that year?

[WhistleHappy]

If you're interested in or thinking about parachute payments...

Best advice I can give is ....

Don't buy one from this bloke!  

[View from the Dolman]

19 hours ago, Davefevs said:

What none of us know is whether any of the clubs have already borrowed against future parachute payments.  If Villa have, gambling they’d go up this season, then they are under huge financial pressure, let alone recruiting for 18/19 season.  Leeds are servicing a huge debt, and that us holding them back.  Their wage bill isn’t dissimilar to ours (16/17 accounts).

We’ll soon see who the “haves” are and who are the “have nots” as we start to see summer recruitment.  There will be a lot of pressure on some managers to get off to a good start.

Villa and associated Recon companies have definitely been a little active with charges at Companies House but they're a all a little light on detail to judge if they relate to future parachute payments.

Looks like they've borrowed against future transfer revenues for Jordan Amavi in one case though... https://beta.companieshouse.gov.uk/company/02502822/filing-history/MzE5NzczNTE4OGFkaXF6a2N4/document?format=pdf&download=0

[BobBobSuperBob]

They were saying this morning Villas Parachute payments down from 34 million last season to 15.1 next season

 

The figure they quoted that shocked me was if Cardiff , Wolves Fulham stay up for one season they are guaranteed £288 million over the next two seasons from TV rights alone

[screech]

Of course Villa might decide that to hell with the weak threats of fines etc and continue to add to a very good squad. They might think it's worth the risk to push again next season and if they succeed, they wont be back here again for a very long time.

[daored]

19 hours ago, JamesBCFC said:

Comments on a Villa forum suggest that they have.

Theres been talk on there saying "could sell Grealish for £30m to raise some money"

There was a Telegraph article from before the Fulham match that suggested Villa might even have to sell their training ground.

Villa we’re looking to sell their training ground as HS2 is meant to be routed through it, but heard that the government aren’t keen to give them what they want. 

I think there are a number of clubs who could be in financial problems, look at Leeds this week selling a share to another foreign based company. Norwich and Villa would be the concern for this season and of course if Cardiff hasn’t have gone up this year 

@Owl Visiting what’s the finances like at your club ?

[downendcity]

3 hours ago, 123red1 said:

It's amazing the money in going up or coming down, only yesterday there was someone on Sky, saying Yaya Toure who has played less than 20 games in the last two years at Man City has been offered a 2 year contract worth £10m at Wolves. It just shows what you have to compete with to get out of this league. We simply have no chance unless Lansdown sells up to some Middle Eastern Billionaire. Our project will help us as a business, and become better self funding, but the reality is every year we're further away from the Premier League. 

Doesn't matter who owns us, or how wealthy they are, they (the club) will still be still be subject  to the same financial rules that limit losses over a 3 year cycle. 

Our "project". allied with Sl investing his money in the academy and the stadium revamp ( which is allowed under financial rules) is the way that we can be competitive longer term and without the issues that are likely to impact on other clubs - as debated elsewhere on this thread.

 

 

[Owl Visiting]

4 hours ago, daored said:

Villa we’re looking to sell their training ground as HS2 is meant to be routed through it, but heard that the government aren’t keen to give them what they want. 

I think there are a number of clubs who could be in financial problems, look at Leeds this week selling a share to another foreign based company. Norwich and Villa would be the concern for this season and of course if Cardiff hasn’t have gone up this year 

@Owl Visiting what’s the finances like at your club ?

Healthy in the respect of the money available from our chairman, but like other clubs we're apparently close to our FFP limit. Expecting a quiet summer in both directions, don' think we'll be bringing many in but also don't believe that we're under pressure to sell. Some Wednesday fans think otherwise however. 

[The Bard]

23 hours ago, Harry said:

This is a very interesting topic, thanks @old_eastender  

Looking at the 2016/17 wage bills for those teams makes interesting reading :

Swansea were 11th top payers in the Prem with annual wage budget of £98.7m. Clearly that’ll be reduced next season with offloading high earners and relegation clauses, but it’ll likely still be well in excess of the £40m parachute. 

Stoke were 13th highest payers at £84.9m. Again, even with clauses they’ll easily breach the £40m parachute. 

West Brom were 16th highest payers at £79.1. They’re certainly a few mil better off than the other 2 coming down. 

For perspective, Sunderland were at £84.4 when they came down and had very little to spend on new players. I’m likening Stoke & Swansea to their financial situation. They’re not quite the basket that Sunderland were but I can’t see them spending large and they’ll need to make do with the average squads they’ve currently got and try to buy some decent Champ players on average wages using funds they may get from selling their best players. 

WBA, for me, are in a better position. Their squad is better, but I don’t think they’ll lose too many (Evans will likely go for good money). I think they will cope with the wage bill and be able to invest in quality too. 

For the others, Boro have £34m coming. Their wages in 16/17 were £64.9. Again, this would have come down a fair whack last season. Their transfers last year were pretty much on balance - circa £50m spent, circa £48.5 received. I’d imagine their transfers out will not reach those heights again this year, and so you’d think the £34m covers their wages and their transfer spend will be based on pretty much what they accrue. 

Hull are also receiving £34m. Their wages in 16/17 were £61.3m. They spent approx £20m last year on signings, whilst recouping approx £45m, so had a gain of around £25m. Again, they won’t receive anywhere near that for outgoings this year, so I’d imagine they’ll also cut back on incomings. Although my guess would be that their wages are healthier than they were last year as they’ve brought in a fair amount of younger lads on lower wages (well, more reasonable wages at least). 

Villa’s wage bill in 16/17 was £61.5m. We all know they’re on their last parachute of £15m and have made it clear they need to cut back. Their transfers last year were actually a net gain of around £14m (the season before was when they spent bigger). I can see a few big departures, and with the likes of Terry leaving, their wage bill will be more sustainable. Will they spend big? Unlikely. But they’ll still have a very good squad and still be able to attract the better Champ players should they desire. Even with reduced budget, they’ll still be able to pay more than the majority of the league, so I’d expect them to try to pick up 3 or 4 good Champ players but lose 4 or 5 of their highest earners. 

Norwich had a wage bill in 16/17 of £55.1m. They spent approx £15m on players last year and recouped approx £34, so had a net gain of around £19m. They’ll lose Maddison for sure, but I think they’ve probably recovered their wage bill to a level that would be consistent with their turnover. I’d expect them to make a couple of decent signings and again would be able to pay a bit more than at least half the division. 

What does all that mean? I don’t know. I haven’t drawn conclusions from it all to be honest, just thought it’d be interesting to put the figures into the thread for others thoughts. I think it probably means that West Brom will be the best placed financially, Boro, Norwich & Hull should all be coping ok. Villa are the ones who have the most to prove. Swans & Stoke will just need to re-balance their books for a season or two I think. 

Final piece of context. Our wage bill in 16/17 was £20.9m. 

Excellent post.  West Brom look very likely to me next season.  Jonny Evans might go as will Livermore but who else?  Jay Rodriguez looks a great bet to be top scorer in the league.  They showed that managed properly they are solid and difficult to beat. 

Swansea strike me as the next basket case...

[downendcity]

7 hours ago, 123red1 said:

It's amazing the money in going up or coming down, only yesterday there was someone on Sky, saying Yaya Toure who has played less than 20 games in the last two years at Man City has been offered a 2 year contract worth £10m at Wolves. It just shows what you have to compete with to get out of this league. We simply have no chance unless Lansdown sells up to some Middle Eastern Billionaire. Our project will help us as a business, and become better self funding, but the reality is every year we're further away from the Premier League. 

 

4 hours ago, downendcity said:

Doesn't matter who owns us, or how wealthy they are, they (the club) will still be still be subject  to the same financial rules that limit losses over a 3 year cycle. 

Our "project". allied with Sl investing his money in the academy and the stadium revamp ( which is allowed under financial rules) is the way that we can be competitive longer term and without the issues that are likely to impact on other clubs - as debated elsewhere on this thread.

 

 

 

57 minutes ago, Owl Visiting said:

Healthy in the respect of the money available from our chairman, but like other clubs we're apparently close to our FFP limit. Expecting a quiet summer in both directions, don' think we'll be bringing many in but also don't believe that we're under pressure to sell. Some Wednesday fans think otherwise however. 

Q.E.D.

[Mr Popodopolous]

On 27/05/2018 at 18:54, Harry said:

This is a very interesting topic, thanks @old_eastender  

Looking at the 2016/17 wage bills for those teams makes interesting reading :

Swansea were 11th top payers in the Prem with annual wage budget of £98.7m. Clearly that’ll be reduced next season with offloading high earners and relegation clauses, but it’ll likely still be well in excess of the £40m parachute. 

Stoke were 13th highest payers at £84.9m. Again, even with clauses they’ll easily breach the £40m parachute. 

West Brom were 16th highest payers at £79.1. They’re certainly a few mil better off than the other 2 coming down. 

For perspective, Sunderland were at £84.4 when they came down and had very little to spend on new players. I’m likening Stoke & Swansea to their financial situation. They’re not quite the basket that Sunderland were but I can’t see them spending large and they’ll need to make do with the average squads they’ve currently got and try to buy some decent Champ players on average wages using funds they may get from selling their best players. 

WBA, for me, are in a better position. Their squad is better, but I don’t think they’ll lose too many (Evans will likely go for good money). I think they will cope with the wage bill and be able to invest in quality too. 

For the others, Boro have £34m coming. Their wages in 16/17 were £64.9. Again, this would have come down a fair whack last season. Their transfers last year were pretty much on balance - circa £50m spent, circa £48.5 received. I’d imagine their transfers out will not reach those heights again this year, and so you’d think the £34m covers their wages and their transfer spend will be based on pretty much what they accrue. 

Hull are also receiving £34m. Their wages in 16/17 were £61.3m. They spent approx £20m last year on signings, whilst recouping approx £45m, so had a gain of around £25m. Again, they won’t receive anywhere near that for outgoings this year, so I’d imagine they’ll also cut back on incomings. Although my guess would be that their wages are healthier than they were last year as they’ve brought in a fair amount of younger lads on lower wages (well, more reasonable wages at least). 

Villa’s wage bill in 16/17 was £61.5m. We all know they’re on their last parachute of £15m and have made it clear they need to cut back. Their transfers last year were actually a net gain of around £14m (the season before was when they spent bigger). I can see a few big departures, and with the likes of Terry leaving, their wage bill will be more sustainable. Will they spend big? Unlikely. But they’ll still have a very good squad and still be able to attract the better Champ players should they desire. Even with reduced budget, they’ll still be able to pay more than the majority of the league, so I’d expect them to try to pick up 3 or 4 good Champ players but lose 4 or 5 of their highest earners. 

Norwich had a wage bill in 16/17 of £55.1m. They spent approx £15m on players last year and recouped approx £34, so had a net gain of around £19m. They’ll lose Maddison for sure, but I think they’ve probably recovered their wage bill to a level that would be consistent with their turnover. I’d expect them to make a couple of decent signings and again would be able to pay a bit more than at least half the division. 

What does all that mean? I don’t know. I haven’t drawn conclusions from it all to be honest, just thought it’d be interesting to put the figures into the thread for others thoughts. I think it probably means that West Brom will be the best placed financially, Boro, Norwich & Hull should all be coping ok. Villa are the ones who have the most to prove. Swans & Stoke will just need to re-balance their books for a season or two I think. 

Final piece of context. Our wage bill in 16/17 was £20.9m. 

Unsure WBA are in such a good place tbh- agree with a lot of your post but WBA...hard to say. Those figures for wages were 16/17.

Since then? They added- excluding expensive loanees of Krychowiak and half a season of Sturridge:

• Rodriguez from Southampton
• Gibbs from Arsenal.
• Burke from Leipzig.
• Barry from Everton.

None of whom- especially Gibbs- will have been on peanuts. They surely shelled out a decent whack for Gibbs in wages especially.

Also, depending on how the transfers were structured they may have to shell out this summer/season- and I'm using the FFP amortisation formula here:

• £3.0825m for Rodriguez (4 year deal, so fee divided by 4)
• £1.6875m for Gibbs (as above 4 year deal).
• £2.736m for Burke (5 year deal).

Barry falls into a different category as his fee was nominal and a 1 year deal- but he possibly played a sufficient number of games to trigger a 1 year extension- presumably at the same wage.

Hegazi also joined on a 4 and a half year deal,  that's another £1.33m out.

Therefore before any strengthening or restructure using the FFP formula, with wages rising last year and revenue this coming year plummeting (of course Krychowiak and Sturridge off the wage bill will help a lot) you're looking at £8.8m or thereabouts owed in fees.

Meanwhile, the following seem to have release clauses:

• Evans (£3m is it)?
• Dawson also heavily rumoured to have one.
• Chadli
• Rondon

Let's assume all of those move on and it's not looking too good:

• McAuley- aged 38 (Out of Contract).
• Barry- aged 37 (Contractual status unclear).
• Brunt- aged 33 (Out of Contract).
• Morrison- aged 32 (Out of Contract).
• Yacob- aged 30 (Out of contract).
• Nyom- aged 30
• McClean- aged 29
• Robson-Kanu- aged 29

Gabr is also there on loan aged 29.

Their squad therefore isn't too young, is quite aging and they may lose some of their better players for not so much owing to relegation release clauses. To say nothing of the likes of Gibbs, Phillips, McClean, Burke and Rodriguez who could be agitating for moves. You're left with not a lot if those out of contract renew and quite a lot of rebuilding if they move on or are not renewed.

[downendcity]

Just read this on the Villa forum, where many of their fans are suggesting various "constructive" ways around ffp rules, e.g. getting their owner to "sell"naming rights to Vila Park to one of his companies for £100m, because of the financial obstacles they now face.

Rules have changed since last season with punishments now unlimited - including points deduction or demotion . 

Any punishment for breach of the rules will be determined by an independent panel (the ‘Fair Play Panel’).

But what are the potential punishments? Previously the Football League has only been able to either; fine promoted clubs (a fine the Premier League didn’t help them collect), or impose a transfer embargo for historic overspending (which always like a stable-door/horse scenario). With this change, a wide range of punishments are now available. Nothing is off the table; the Football League are now able to impose a points deduction during the current season, or demote a club from an automatic promotion position into the play-offs (or out of the play-offs altogether). Transfer embargoes are also available (with the earliest one potentially applying during the Summer 2017 Transfer window.

For all those City fans who bemoaned us not pushing the boat out more to secure promotion, one look at the sanctions that can be levied against transgressing clubs ( and you can bet your bottom dollar that they would throw the book last a club like ours) should be a reality check. The acid test, of course, is whether the EFL will impose any of these sanctions against a "big" club, should the situation arise.I also smiled at reading this post, made in response to many fans objecting to selling naming rights to Villa Park. You could name Villa Park anything you like really, and it'll always be Villa Park.

It's when you have a new stadium with a janky name (like The Emirates, or The Etihad) that there's nothing else to call it so the name sticks.

I'd happily watch us parading the Champions League trophy around The Durex Thunderdome if that's what was required.  As long as the kit is the right colour and the badge has got a lion on it, I'm all good.

Naming AG the Durex Thunderdome could make   Ashton Get the impregnable fortress we always wanted it to be!

[Major Isewater]

We all know that the parachute payments cannot continue as it is grossly unfair at skews the competition.

Equally , We all suspect , that ' time '  will  be called on this system the very season City get relegated from the Prem .

 

[Alessandro]

On 28/05/2018 at 13:39, screech said:

Of course Villa might decide that to hell with the weak threats of fines etc and continue to add to a very good squad. They might think it's worth the risk to push again next season and if they succeed, they wont be back here again for a very long time.

There is a fair amount of chat that there is a danger of FFP becoming toothless in some situations.

The pressure is on the authorities to prove wrong doing and not just suspect, so as more people look at inventive ways around it (Wolves?) the football league would need solid evidence to impose sanctions.

Imagine a scenario where they impose sanctions and are taken to court and ‘lose’ on a technicality - the potential damages claimed by the football club could ruin the football league.

Think British boxing control and Tyson Fury, where they feared a court battle with Fury that would have bankrupted them if they lost.

[Mr Popodopolous]

2 hours ago, Alessandro said:

There is a fair amount of chat that there is a danger of FFP becoming toothless in some situations.

The pressure is on the authorities to prove wrong doing and not just suspect, so as more people look at inventive ways around it (Wolves?) the football league would need solid evidence to impose sanctions.

Imagine a scenario where they impose sanctions and are taken to court and ‘lose’ on a technicality - the potential damages claimed by the football club could ruin the football league.

Think British boxing control and Tyson Fury, where they feared a court battle with Fury that would have bankrupted them if they lost.

How does it work in other countries then? Because it does- this season examples.

Germany? 1860 Munich got relegated on the pitch- then kicked down a division owing to financial issues or rules breached. Wouldn't call them a small club but 4th tier in Germany now.

Italy? Read in Serie B, something about a side being denied promotion owing to financial issues- maybe even through playoffs.

France? Lille stayed up ON the pitch... Off it though big financial losses forecast- maybe relegated this season due to it.

[WhistleHappy]

5 hours ago, Major Isewater said:

We all know that the parachute payments cannot continue as it is grossly unfair at skews the competition.

***Equally , We all suspect , that ' time '  will  be called on this system the very season City get relegated from the Prem .

 

*** similar thing happened to me a couple of years ago, got to within sniffing distance of a free over 60  bus pass and the swine's moved the goal posts and qualifying age, its now 66 ... same with pension age up to bloody 66 (2022).. 

(It's currently 'under Government review', it'll probably change again as I approach it... )

Wales/Scotland/N I still get their bus passes aged 60, (or Greater Londoner's get a TFL Oyster Card at 60) WHY???

Us City supporters are discriminated against! 

[Mr Popodopolous]

10 hours ago, WhistleHappy said:

*** similar thing happened to me a couple of years ago, got to within sniffing distance of a free over 60  bus pass and the swine's moved the goal posts and qualifying age, its now 66 ... same with pension age up to bloody 66 (2022).. 

(It's currently 'under Government review', it'll probably change again as I approach it... )

Wales/Scotland/N I still get their bus passes aged 60, (or Greater Londoner's get a TFL Oyster Card at 60) WHY???

Us City supporters are discriminated against! 

Politics tbh...

Same reason Casualty moved to Cardiff for example- along similar lines anyway. We as a region just aren't politically important enough compared to other parts of the country so we kinda get overlooked...

[Guest]

13 hours ago, Mr Popodopolous said:

How does it work in other countries then? Because it does- this season examples.

Germany? 1860 Munich got relegated on the pitch- then kicked down a division owing to financial issues or rules breached. Wouldn't call them a small club but 4th tier in Germany now.

Italy? Read in Serie B, something about a side being denied promotion owing to financial issues- maybe even through playoffs.

France? Lille stayed up ON the pitch... Off it though big financial losses forecast- maybe relegated this season due to it.

The difference is subtle but I think it's down to the structure of our game v overseas and the EFL's failure to police FFP from the get-go.

Re the structure FFP is a Football League issue. If you're promoted to the Prem you are no longer under the EFL's jurisdiction. If you break the rules successfully... there's in reality naff all the EFL can do about it until you come back down (subject to points deduction). 

With those examples above, 1860 and Serie B, that was a movement between divisions. In our system that can also happen too albeit it is limited: the Conference for example can (and I'm sure there is a precedent) refuse entry to a club in Administration. You could therefore go from League 2 to the National Leagues. You could get refused promotion to the championship if you haven't got your ground up to scratch. It's all about meeting conditions of the new league as you progress. 

As the EFL has failed so spectacularly in policing FFP it would be hard for them to now apply it dogmatically. If the idea is to preserve competition and make a level playing field how could they justify letting Wolves get away with it last year... what they (Wolves) did last year directly effected Villa in that arguably: Wolves wouldn't have gone up, Fulham would have, Villa would not have met Fulham in play-offs, and it's not level because they now find their claws because Villa went for it last year when finances (parachutes) dictated they could, etc etc etc whilst another willfully broke the rules. A laywer would have great fun advocating against the EFL. 

To my mind the only way FFP can work is to scrap it, bring it in with a new name, and police it from the very start. They couldn't risk it I agree for the very reason @Alessandro highlights.