FFP- How to give it Proper teeth

[Mr Popodopolous]

With the recent Wolves thread, and ways in which it has been breached (Bournemouth, Leicester- and of course QPR. Brighton too, on paper). It's clear FFP isn't yet working as intended. Now there are a lot more tools at their disposal, but are they being used correctly? I would say NO! Well some are, some aren't- work in progress.

With regards FFP, here is how you can make it work correctly.

• Teams going up and in clear breach?

If in clear breach, enforce the penalties now at your disposal. Example- a sliding scale of punishment for breach.

• E.g. Smallish breach?

A fine using the formula.

• Bit bigger breach?

Restrict squad size like what UEFA do with Champions League. (I think the Football League have that power on paper now).

• Bigger breach?

Transfer Embargo.

• If the breach reaches bigger levels?

The hefty fine issue- if in Championship, use instalments if necessary. QPR £40m fine a prime example- make them pay it off at say £4m, over 10 years. Must come from the clubs revenue, not the owner.

• Teams about to reach promotion?

1.  Deduct points- use it if needs be, say a sliding scale of points to breach, factoring in good faith etc. With a maximum of 10 deducted.
2. Say for argument's sake, the team has breached quite significantly but not appallingly. On paper now, the Football League cvan say to a slide in the top 2. 'You've gone a bit too far- playoffs it is for you'.
3. Same goes for playoffs to 7th, probably with a worse breach.
4. If it's a truly appalling breach- kick from top two to 7th let's say.

Football League now expect clubs to provide projected accounts. Projected accounts mean that if say in year 3, a club is in breach over the 3 they can apply the points deductions, removal from top 2 to playoffs and even in extremis stripping of promotion altogether.

Also, do what UEFA do with workarounds and 'discount' suspiciously high sponsorship deals- and particularly in the case of associated companies or potentially associated companies. Allow it to market rate and a bit, and deduct the rest from counting towards income.

Enforce these correctly, and clubs won't be able to take the piss tbh. Basically taking the best of Football League FFP regs, UEFA's regs and mixing and matching the 2. Plus enforcing without fear or favour.

Would like to know what people think?

[ZiderEyed]

Very good post on an interesting topic.

For me all it comes down to is the punishment doesn't fit the crime. Any breach should incur a points deduction, monetary fines don't  and will never cut it.

[Mr Popodopolous]

Fines can work on one level IMO- provided the club isn't in the PL at the time.

Think about it in one way- every pound the club has to pay in a fine, is a pound less they can spend on players or wages (that's when you forbid the owner from just paying it and writing it off).

QPR £4M per year for 10 years? Enforceable as it won't bankrupt the club, and yet it will restrict their ability big time to grow their squad etc.

I do broadly agree on points deductions however- and the ability to strip of playoffs/promotion is an even bigger stick.

I guess the question is too- will the Football League have the courage to enforce their own rules on this? Requirement for projected accounts could be a game changer- on paper at least.

[ZiderEyed]

8 minutes ago, Mr Popodopolous said:

Fines can work on one level IMO- provided the club isn't in the PL at the time.

Think about it in one way- every pound the club has to pay in a fine, is a pound less they can spend on players or wages (that's when you forbid the owner from just paying it and writing it off).

QPR £4M per year for 10 years? Enforceable as it won't bankrupt the club, and yet it will restrict their ability big time to grow their squad etc.

I do broadly agree on points deductions however- and the ability to strip of playoffs/promotion is an even bigger stick.

I guess the question is too- will the Football League have the courage to enforce their own rules on this? Requirement for projected accounts could be a gamechanger- on paper at least.

Good point. It's clear the EFL and Pl are too separate for it to be properly enforceable. 

Maybe City have turned me in to a cynic but it just seems like another way for the FA bigwigs to make more money.

[Mr Popodopolous]

19 minutes ago, ZiderEyed said:

Good point. It's clear the EFL and Pl are too separate for it to be properly enforceable. 

Maybe City have turned me in to a cynic but it just seems like another way for the FA bigwigs to make more money.

Time will tell on the 2nd point, agree on the first.

One thing I do know though, or think anyway- if they have excellent regulations on it- and they can't be bothered to enforce them, they may as well scrap the whole thing.

The whole purpose of projected accounts though- is that they are applicable to the existing season and they have to be with the Football League by 1st March. If in Season 3, so let's say in 19/20 a side is in breach, points can be removed etc before the end of the existing season.

[spudski]

Our previous financial director was one of the people involved in writing up the FFP regs.

As a club, we will know it inside out and any 'loop holes'.

[Mr Popodopolous]

That's very interesting that! Could be an advantage.

If enforced to the letter however and adding in some of the UEFA regs...there won't be any 'loop holes' to exploit.

[Xspence]

I think points reductions/demotions are the only  real way to make it work. The difficulty with fines is it’s a bit like paying off a bribery charge..... reality is a lot of clubs will just accept the fine as a loss of breaking the rules and adapt budget accordingly. I get it affects some more than others but the rules have to be consistent for all and the only way I can see it is with some form of performance sanction to hurt the club from the following season. It would mean the efl and epl agreeing of course. 

The sad fact is the financial gap is only getting bigger and affecting further down the league ladder. Look at league one - last years relegated teams will finish 1st and 2nd with the other team currently 4th. I don’t want a league system where our lower league professional teams are forced to remain that forever more as they cannot hope to compete. 

[Gert Mare]

If they breach the rules and finish in a position to go up they should be denied promotion. Simple as.

[Mr Popodopolous]

5 minutes ago, Xspence said:

I think points reductions/demotions are the only  real way to make it work. The difficulty with fines is it’s a bit like paying off a bribery charge..... reality is a lot of clubs will just accept the fine as a loss of breaking the rules and adapt budget accordingly. I get it affects some more than others but the rules have to be consistent for all and the only way I can see it is with some form of performance sanction to hurt the club from the following season. It would mean the efl and epl agreeing of course. 

The sad fact is the financial gap is only getting bigger and affecting further down the league ladder. Look at league one - last years relegated teams will finish 1st and 2nd with the other team currently 4th. I don’t want a league system where our lower league professional teams are forced to remain that forever more as they cannot hope to compete. 

1. QPR's fine seems fairly exceptional, but make them pay it over 10 years and they will be quite unable to compete- remember paying the fine wouldn't exempt them from obligations to still stay compliant.
2. That's where projected accounts by 1st March kicks in. If you breach in year 3 and will breach it overall, the EFL can actually dock points in the existing season or stop a team in top 2 going up etc- subject to proper enforcement of course.

@Cheesleysmate That is now a penalty that can be handed down.

[Davefevs]

7 hours ago, Mr Popodopolous said:

1. QPR's fine seems fairly exceptional, but make them pay it over 10 years and they will be quite unable to compete- remember paying the fine wouldn't exempt them from obligations to still stay compliant.
2. That's where projected accounts by 1st March kicks in. If you breach in year 3 and will breach it overall, the EFL can actually dock points in the existing season or stop a team in top 2 going up etc- subject to proper enforcement of course.

@Cheesleysmate That is now a penalty that can be handed down.

It’s 3 year rolling too....not every 3 years, in case of misinterpretation.

[Mr Popodopolous]

12 minutes ago, Davefevs said:

It’s 3 year rolling too....not every 3 years, in case of misinterpretation.

That's the one bit of FFP I have trouble getting.

I know the old rule- which is a 3 year period say 2014/15, 2015/16 and 2016/17 seasons. I know how that all works. Rolling period FFP- is that a new thing or?

Forgot to add too, another sanction the Football League can apply is a wage cap- I read that Bolton this season were only able to offer new signings £4,500 per week as a maximum wage!?

Make no mistake, if enforced correctly, these sanctions would have real teeth.

[Davefevs]

10 minutes ago, Mr Popodopolous said:

That's the one bit of FFP I have trouble getting.

I know the old rule- which is a 3 year period say 2014/15, 2015/16 and 2016/17 seasons. I know how that all works. Rolling period FFP- is that a new thing or?

Forgot to add too, another sanction the Football League can apply is a wage cap- I read that Bolton this season were only able to offer new signings £4,500 per week as a maximum wage!?

Make no mistake, if enforced correctly, these sanctions would have real teeth.

It’s always been rolling, otherwise sides would take advantage in the intervening years.

Season 1, 2, 3 becomes

Season 2, 3, 4 becomes

Season 3, 4, 5 etc

Good link here:

http://www.financialfairplay.co.uk/financial-fair-play-explained.php

Re Embargo here....Section 6.1

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/

[Mr Popodopolous]

13 minutes ago, Davefevs said:

It’s always been rolling, otherwise sides would take advantage in the intervening years.

Season 1, 2, 3 becomes

Season 2, 3, 4 becomes

Season 3, 4, 5 etc

Good link here:

http://www.financialfairplay.co.uk/financial-fair-play-explained.php

Re Embargo here....Section 6.1

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/

Cheers- will read those later.

Ah well, rolling must have meant what I thought it did then, broadly.

Does make me puzzled when people say we can just work around FFP...how do you work around a transfer embargo, which in Bolton's case:

• Forbade paying transfer fees.
• Forbade payment of loan fees.
• Forbade salaries of over £4,500 per week for new signings.
• Restricted to a squad size of 23.
• Any loans they did get, only allowed to last a maximum of half a season.

Also as part of it, 4 Under 23 players were obviously classed as counting towards maximum squad size, so were unfortunately restricted to playing for the Under 23's.

 

Quote

 

First year professionals like King, Perry, Jake Turner and Conor Hall are unable to play for the senior squad without counting towards the embargo quota of 23.

Parkinson could not name them in the squad to face Crewe in the Carabao Cup on Wednesday night but while the EFL have given a firm ‘no’ on allowing them to play first team football – he is looking to convince them to sanction a loan elsewhere to aid their development.

 

The Wanderers boss will sit down this week with Under-23s boss David Lee to sort out a plan and is also looking to secure contracts for ‘two or three’ players at development squad level.

 

Anyone know how to work around that? 

[Davefevs]

2 minutes ago, Mr Popodopolous said:

Cheers- will read those later.

Ah well, rolling must have meant what I thought it did then, broadly.

Does make me puzzled when people say we can just work around FFP...how do you work around a transfer embargo, which in Bolton's case:

• Forbade paying transfer fees.
• Forbade payment of loan fees.
• Forbade salaries of over £4,500 per week for new signings.
• Restricted to a squad size of 23.
• Any loans they did get, only allowed to last a maximum of half a season.

Anyone know how to work around that? 

With great difficulty.  Don’t get into that difficulty in the first place?

I’m guessing much depends on your squad at the point of going into Embargo.  If it’s good, you try to ride it out.  If it’s poor, you’re in shit street.

Of course if being under Embargo, also coincides with going into administration, then the administrator appointed is going to try to get rid of as many assets as possible as quickly as possible.  In Bolton’s case didn’t they flog their training ground to Wigan?  

The financial side of football is complex, but as long as most people understand there are rules and we can’t just throw £50k a week at any possible transfer targets, then we won’t get into heated arguments about why we didn’t sign Mitrovic or Grabban. 

[Mr Popodopolous]

4 minutes ago, Davefevs said:

With great difficulty.  Don’t get into that difficulty in the first place?

I’m guessing much depends on your squad at the point of going into Embargo.  If it’s good, you try to ride it out.  If it’s poor, you’re in shit street.

Of course if being under Embargo, also coincides with going into administration, then the administrator appointed is going to try to get rid of as many assets as possible as quickly as possible.  In Bolton’s case didn’t they flog their training ground to Wigan?  

The financial side of football is complex, but as long as most people understand there are rules and we can’t just throw £50k a week at any possible transfer targets, then we won’t get into heated arguments about why we didn’t sign Mitrovic or Grabban. 

Agreed on almost all of that- though I do think that maybe a 4 month loan for Mitrovic or Grabban we could have absorbed even with FFP- given our okay position and strictly as a one off taking a chance.

Provided we didn't go nuts the following summer if we lost in the playoffs or similar. Provided that if it didn't come off we then went back to the Plan.

[Davefevs]

17 minutes ago, Mr Popodopolous said:

Agreed on almost all of that- though I do think that maybe a 4 month loan for Mitrovic or Grabban we could have absorbed even with FFP- given our okay position and strictly as a one off taking a chance.

Provided we didn't go nuts the following summer if we lost in the playoffs or similar. Provided that if it didn't come off we then went back to the Plan.

Probably.  £40k per week for 20 weeks = £800k, plus loan fee, say £500k (total guesswork) = £1.3m.  Sounds absorbable, but then if you’re either of the two players mentioned, do you join us or Fulham / Villa?  I suspect we will end up having paid no less for Diony and Kent with penalty.

In hindsight, no one expected us to drop like a stone.

Good debate though.

[ScottishRed]

Never going to happen - clubs like RM, PSG, Man City, will simply sign new 'sponsorship' deals which will be classified as income - sorted!

Given that RM sold their old training ground to the City council for a hugely inflated cost highlights how the big clubs get around such irritations.

Look at PSG, they sign Neymar for £200m then loan Mbappe with an agreed fee - £ 190m to be paid this summer.

In no way are they complimg with FFP unless they sell Neymar to RM this summer. - which would then beg the question of RM.

[Mr Popodopolous]

1 minute ago, ScottishRed said:

Never going to happen - clubs like RM, PSG, Man City, will simply sign new 'sponsorship' deals which will be classified as income - sorted!

Given that RM sold their old training ground to the City council for a hugely inflated cost highlights how the big clubs get around such irritations.

Look at PSG, they sign Neymar for £200m then loan Mbappe with an agreed fee - £ 190m to be paid this summer.

In no way are they complimg with FFP unless they sell Neymar to RM this summer. - which would then beg the question of RM.

Think you'll find UEFA are really quite strict on it.

Your invention of sponsorship thesis?

That would be why UEFA disallowed/discounted income from sponsorship deals from 2 clubs a few years ago.

Those 2 clubs? PSG and Man City.

UEFA will take a dim view of PSG and will act accordingly.

PSG have a fair few players they can sell to make them compliant of course, but if they don't/can't... UEFA will come down quite hard. Talking a potential expulsion from CL next season.

[Davefevs]

8 minutes ago, Mr Popodopolous said:

Think you'll find UEFA are really quite strict on it.

Your invention of sponsorship thesis?

That would be why UEFA disallowed/discounted income from sponsorship deals from 2 clubs a few years ago.

Those 2 clubs? PSG and Man City.

UEFA will take a dim view of PSG and will act accordingly.

PSG have a fair few players they can sell to make them compliant of course, but if they don't/can't... UEFA will come down quite hard. Talking a potential expulsion from CL next season.

Thanks for the info re sponsorship, I knew they’d tried to get around it, but didn’t know it had now been disregarded as being able to offset against FFP.  

This is why SL can’t just pump equity in.  We still owe him £37m I think??/

[Mr Popodopolous]

9 minutes ago, Davefevs said:

Thanks for the info re sponsorship, I knew they’d tried to get around it, but didn’t know it had now been disregarded as being able to offset against FFP.  

This is why SL can’t just pump equity in.  We still owe him £37m I think??/

Exactly right 

Essentially, the rule as I understand it.

Let's suppose that 'fair'/typical market rate for a club at our level is (just making this number up) 1 million pounds per season in Sponsorship of shirts.

One summer, Hargreaves Lansdown or one of SL's other business interests ride in and offer 10 million a year.

Most would be happy indeed. However, Football League would take severe look at it and chances are, 9 million per year would be disallowed.

A rough summary but pretty plausible based on the Man City/PSG precedent.

[ScottishRed]

30 minutes ago, Mr Popodopolous said:

Think you'll find UEFA are really quite strict on it.

Your invention of sponsorship thesis?

That would be why UEFA disallowed/discounted income from sponsorship deals from 2 clubs a few years ago.

Those 2 clubs? PSG and Man City.

UEFA will take a dim view of PSG and will act accordingly.

PSG have a fair few players they can sell to make them compliant of course, but if they don't/can't... UEFA will come down quite hard. Talking a potential expulsion from CL next season.

I will bow to your greater knowledge and respect for the research you have done, however my gob would be well and truly smacked if PSG are banned from the CL!

Going back to QPR - guilty has charged, what has happened? The square route of **** all.

I truly don't believe UEFA have the stomach to enforce FFP, particularly with the big rich boys as they always have the ultimate threat and they would and could do this, of simply walking away and setting up their own European Super League.

What do they have to lose? Their fans would still turn up and the TV companies would be falling over themselves to get the broadcasting rights, the sponsors would be queuing round the block with their cheque books.

In same ways the 'elite' clubs would completely welcome it.

 

[Mr Popodopolous]

Just now, ScottishRed said:

I will bow to your greater knowledge and respect for the research you have done, however my gob would be well and truly smacked if PSG are banned from the CL!

Fair enough- maybe they won't be banned but it's possible.

They could be heftily punished even if not banned. I think a ban is generally last resort in fairness, dunno how many transgressions that would be.

[JamesBCFC]

@Mr Popodopolous

I dont think a fine, unless significant and actually called in, is really a deterrant.

The clubs breaching FFP, largley, aren't going to be worried about an extra million or two if it results in a good season, if they were that concerned then they wouldn't spend such an amount that leaves them in breach of FFP.

 

Any fine would have to be a significant amount, and spreading it over 10 seasons like in your QPR example would negate its effectiveness.

[Mr Popodopolous]

1 minute ago, JamesBCFC said:

@Mr Popodopolous

I dont think a fine, unless significant and actually called in, is really a deterrant.

The clubs breaching FFP, largley, aren't going to be worried about an extra million or two if it results in a good season, if they were that concerned then they wouldn't spend such an amount that leaves them in breach of FFP.

 

Any fine would have to be a significant amount, and spreading it over 10 seasons like in your QPR example would negate its effectiveness.

4 million a year over 10, while still remaining FFP compliant for a club like QPR at this level would have an effect.

How would they pay it? Selling a key player for big money would help. So too would cutting the wage bill.

5m per year for 8 years? Or vice versa- don't see how it wouldn't have an effect on QPR.

You'd have to judge on a case by case basis though, because clearly a hefty fine wouldn't suit all.

Oh and this is their last season of parachute payments.

In this specific instance, it would have an effect- undoubtedly so.

[JamesBCFC]

23 minutes ago, Mr Popodopolous said:

4 million a year over 10, while still remaining FFP compliant for a club like QPR at this level would have an effect.

How would they pay it? Selling a key player for big money would help. So too would cutting the wage bill.

5m per year for 8 years? Or vice versa- don't see how it wouldn't have an effect on QPR.

You'd have to judge on a case by case basis though, because clearly a hefty fine wouldn't suit all.

Oh and this is their last season of parachute payments.

In this specific instance, it would have an effect- undoubtedly so.

Personally I'd go stricter, 8m a year over 5 years or 10m a year over 4 years if using the 40m example.

The fine should make a big impact on the team recieving it for it to be a true deterrant.

I do agree they should be done on a case by case ruling though.

 

There was orignally talk of QPR being sent down to non-league.

If they were really serious about FFP they would have followed up on that.

[downendcity]

In my view the only way clubs will ever adhere to financial rules is if breaches are punished by points deductions - and meaningful ones at that.

Unfortunately it is unlikely to happen, as they will doubtless be worried about being tied up with legal action from clubs that are penalised. Imagine a club being denied promotion by points penalties, and then taking the FA to court with a bevy of solicitors and accountants arguing that they did not breach financial rules - all the while leaving the premier league and FA in limbo as far as the following season's teams and fixtures are concerned.

My concern is that foreign owners looking to buy English clubs see the £££££ signs resulting from promotion to the prem. and will be tempted to breach the financial rules to help gain promotion because of the financial rewards it will give them. Stay in the prem and they are happy. The worry is that if they are then relegated, like QPR, then if a sever financial penalty is levied, what happens of the owner then ups sticks leaving the club holding he financial baby?

[Davefevs]

5 minutes ago, JamesBCFC said:

Personally I'd go stricter, 8m a year over 5 years or 10m a year over 4 years if using the 40m example.

The fine should make a big impact on the team recieving it for it to be a true deterrant.

I do agree they should be done on a case by case ruling though.

£40m over 1 year, sounds about right to me.  They flouted the rules, deal with the consequences.

[JamesBCFC]

4 minutes ago, Davefevs said:

£40m over 1 year, sounds about right to me.  They flouted the rules, deal with the consequences.

I still think the Football League should have followed up with their threat of relegating QPR to the Conference.

That was the threat if QPR refused to pay the fine- 4 years ago.

QPR have since refused and challenged the fine (more than once?) only accepting they have to pay it now.

 

[Mr Popodopolous]

1 hour ago, downendcity said:

In my view the only way clubs will ever adhere to financial rules is if breaches are punished by points deductions - and meaningful ones at that.

Unfortunately it is unlikely to happen, as they will doubtless be worried about being tied up with legal action from clubs that are penalised. Imagine a club being denied promotion by points penalties, and then taking the FA to court with a bevy of solicitors and accountants arguing that they did not breach financial rules - all the while leaving the premier league and FA in limbo as far as the following season's teams and fixtures are concerned.

My concern is that foreign owners looking to buy English clubs see the £££££ signs resulting from promotion to the prem. and will be tempted to breach the financial rules to help gain promotion because of the financial rewards it will give them. Stay in the prem and they are happy. The worry is that if they are then relegated, like QPR, then if a sever financial penalty is levied, what happens of the owner then ups sticks leaving the club holding he financial baby?

Meaningful points deductions are the way forward I agree.

I don't think a club would succeed ultimately with a legal challenge to being stripped of promotion- no precedent of these types of punishments being overturned in a court of law. However, yeah the Football League would be worried about that- of course they would.

However, a 2015 challenge to UEFA's FFP in one of Europe's top Courts, went in UEFA's favour.

Fait share of dodgy UK owners down the years too, but I don't disagree with the overarching view.