Interesting article on FFP/SCMP in L1

http://www.coventrytelegraph.net/sp...play-league-one-8560150#ICID=sharebar_twitter

 

Transfer fees are not included. What did Mr cryne say about them again?

 

I think, having read through all that, that we could spend whatever we wanted without recourse. You're even allowed to go 5% over the threshold and get a 'slap on the back of the hand'. As with most of these financial rules introduced a few years ago, none of em stick. But they do offer a club/board/owner a shield if they choose to use it. Which we have done, since their introduction. In fact, we were the only club in England following FFP a year before it came in. That worked a ******* treat did that.

 

I am sorry but I do not agree. Furthermore, I think that the picture you are painting will give other BBS readers a false impression of the real position.

First of all, you are not allowed to go 5% over the threshold with no punishment. I think the 5% that you refer to is the 5% under the threshold that will attract scrutiny from the League 1 enforcement agency. Clubs getting that close are asked for assurances that they will not break the SCMP allowance for the full year, thereby placing them on notice both that their position is being monitored and that they may be subject to a transfer embargo if they break through the SCMP limit. The process of review is on going throughout the season.

It is right that Mr Cryne said that he was funding the transfer budget because of SCMP, which I said at the time is not right because transfer fees are not covered by SCMP. However, by funding transfer fees, Mr Cryne is increasing the club's income, and because of this, he is increasing the amount that the club is allowed to spend on player wages by 60% of the amount of his donation. This means that the club may be able to afford the wages of a player that would otherwise be unaffordable under the SCMP rules.

Your statements on here carry a lot of weight with readers. What you have written will be accepted without question by many. I am sorry to say that on this occasion, what you have written gives a false and damaging impression. In my opinion, the SCMP rules do offer the chance to level the financial playing field, although a rich benefactor will always be able to give his club an advantage, even though under the SCMP rules he can never get his money back.

 

The wages to turnover ratio is strictly enforced as I understand it and failure to comply will result in a transfer embargo as Swindon found out.

The transfers thing is straightforward you can either fund transfers out of turnover and have less to spend on wages or fund them through other methods such as a generous owner.

Any rich owner can circumvent the rules by pumping cash into the club.

 

Can I correct you as well because it is important that SCMP is understood.

A club can pay anything it likes and it will not impact upon the SCMP calculation. It really has no part to play in it. However, there is a correlation between the size of a transfer fee and the amount of wages expected by the player. It is this part of the transaction that is caught by the scheme. Posters often think that the transfer fee is the important part of the transaction and forget the amount of money being paid in weekly wages. For example, a player that attracts a £1m fee and who signs a 3 year contract at £10k per week is costing £500k per year for 3 years, £500k per year out of the SCMP allowance. Even if the club can afford that amount of money in the first year, it needs to be sure that it has the revenue streams to pay in years 2 and 3, otherwise a fire sale will ensue.

Rich owners now have to pump cash in as a donation, with little chance of ever seeing it again. Formerly, they typically made loans to the club which could be repayable out of future transfer income. That opportunity is now gone for owners wanting to fund wages expenditure.

 

So if john stones went for 30million and we got 4.5million patrick wouldnt be able to have any of his money he has put in to the club back?

 

You've been away for a few days, clearly, judging by that first sentence. And I stand by my opinion that these 'rules' are easily worked around (we're doing that) and don't really stick. The FFP rules further up the pyramid are much tougher, yet even they are laughable, otherwise QPR would have gone bust years ago.

I'm not denying these rules are 'there', and I'm sure they affect certain clubs. But looking at them, I see them as an advantage for clubs such as ourselves, with an owner willing to throw his own money at it, a diehard fanbase of around 7,000 who buy season tickets regardless, and a club with about 6 players over the age of 20.

I suppose my point was, I won't be buying into the 'finance' excuse anymore, now I've read through the rules. Were Mr Cryne to cease funding the club, were 3,500 season ticket holders not to renew, and were we to sign a load of geriatrics, fair enough. But none of that will happen, so we're good to go.


If you're a supposedly small club (Crewe, Rochdale et al) then I reckon they must see these rules as favouring the bigger clubs. So hardly 'fair play' in my opinion.

 

He has only recently begun putting money into the club via donations (season 2013/14). Prior to that, the money he put in was via loans which currently appear as liabilities on the balance sheet, and at least in theory, he could ask for repayment of it. However, I do not think that he has any intention of asking for that money back, so in theory the position has not changed other than the way in which it is accounted for.

If John Stones were to be sold for £32.2m and we were to be paid £4.5m, I doubt very much whether we would get it all in one lump. The payment of large transfer fees is usually structured as a number of smaller payments and paid over a number of years. In that case, our share would be structured according to the same profile and over the same period. The way that SCMP works, this may be no bad thing because it would affect the SCMP calculation over a number of seasons rather than having a boom and bust situation when we could afford the wages of a player according to the SCMP protocol in the first season but not in subsequent seasons.

 

That was confirmed the last time I spoke to BM. And I fully agree that it's better in stages. I'd still prefer Patrick to take it all though, repay himself what he's put in.

 

Clearly it would be fairer it ever club had exactly the same budget for wages. That would represent a level playing field, but where would you pitch the budget. Would you pitch it at a level that Rochdale could afford, or would you pitch it at a level that Sheffield United could afford and Rochdale could not. There can be no agreement in a world where there is such a stark difference between the haves and the have nots.

SCMP attempts to level the playing field, whilst making some allowance for the differences in budgets because of the differences in turnover of the big clubs and the little clubs. Rochdale do fantastically well to compete in a league that is above their natural level, and Keith Hill is working miracles there. However, that is the top and bottom of it. Rochdale are competing in a league above their level, the level being determined by how many paying fans you have coming through the gates every week. That is the lesson that I am anxious that we understand on here. A club's natural level is defined by SCMP according to how many paying fans you have. The more people who turn up every week, the better the club has of establishing at a higher level. People who call themselves supporters are slowly drifting away from the club and they should understand that by doing so, they are reducing the money that can be paid in wages according to SCMP. That is why the club are working so hard to try and win them back. That is why I was a bit miffed with your original post that saw fit to paint the position differently and tried to tell people that SCMP will not work in the way that I and the club know it will.

 

We're all a bit miffed at me, mate. Don't let it get to you. It's like hope, it's not worth it in the end.

 

That's the point I was trying to make when you were picking at PCs statement, you told me I was wrong. Maybe I worded it poorly.

 

Although my eyes glaze over when I see the minutiae of these things being expounded and explained, it came to me that it surely cannot be right to simply level the playing field "according to how many paying fans you have".

Take Bradford - larger crowds cos they charge less. We could charge each paying fan a quid and fill the ground - would that be to our advantage?

Is it about revenue from paying customers, or about how many turn up?

 

It's about revenue. The statement re 'how many turn up' is just a general statement meaning the more turn up the more the revenue. Obviously different prices scew it a bit.

 

Me too I hope he repays himself from the stones transfer.