Financial Fair Play

[Spursalot]

Re: O/T Financial Fair Play

Southampton spent well beyond their means, on transfer fees and wages, over the previous few seasons. By far the best funded club in the lower divisions, when they were there.

Last year, loans totalling £33 million (from the late owner, Markus Liebherr) were converted into shares.

They've not spent that far beyond their means, you are forgetting some of the players they have sold. They made 30m on Walcott, Chamberlain and Bale over the past five years.


Whilst they are not perfect, they are a good template. They've not spent over 2m on a single transfer for the past three years prior to their promotion. I fail to see where this overspending on transfer fees is from.

 

[Spursalot]

Re: O/T Financial Fair Play

It's major, alright.

But we didn't come anywhere near winning it. Which was the point.

And, sure, we can still compete. Maybe even occasionally win stuff. But, long term, clubs with a massive, inbuilt financial advantage will win far, far more. Virtuous circle.

They could win more. They could also fall from grace. Something that recovering from is difficult with such FFP rules.


Look at Liverpool for instance. they made huge losses that would be unacceptable, yet they have still not made up the ground on the competition.

 

[jimmyb]

Re: O/T Financial Fair Play

They've not spent that far beyond their means, you are forgetting some of the players they have sold. They made 40m+ on Walcott, Chamberlain and Bale over the past five years.


Whilst they are not perfect, they are a good template. They've not spent over 2m on a single transfer for the past three years prior to their promotion. I fail to see where this overspending on transfer fees is from.

I repeat:

Last year, loans totalling £33 million (from the late owner, Markus Liebherr) were converted into shares.

 

[Spursalot]

Re: O/T Financial Fair Play

I repeat:

Last year, loans totalling £33 million (from the late owner, Markus Liebherr) were converted into shares.

If that's all the information you are going to spout, then there's no point in continuing.


The fact that a lot of that money was used to counter the fact they entered administration seems to have eluded you.

 

[jimmyb]

Re: O/T Financial Fair Play

They could win more. They could also fall from grace. Something that recovering from is difficult with such FFP rules.


Look at Liverpool for instance. they made huge losses that would be unacceptable, yet they have still not made up the ground on the competition.

Liverpool had an inbuilt financial advantage over us until Hicks and Gillette saddled them with £40 million per annum in interest payments to service their leveraged buyout of the club.

Nowadays, they no longer enjoy much of a financial advantage over us.

Man Utd are a different animal altogether. They are still miles ahead of the rest even though they, too, are having to service their owner's debts (to the tune of £60 million per annum). Imagine how much further ahead they will be when that is no longer the case.

 

[Spursalot]

Re: O/T Financial Fair Play

Liverpool had an inbuilt financial advantage over us until Hicks and Gillette saddled them with £40 million per annum in interest payments to service their leveraged buyout of the club.

Nowadays, they no longer enjoy much of a financial advantage over us.

Man Utd are a different animal altogether. They are still miles ahead of the rest even though they, too, are having to service their owner's debts (to the tune of £60 million per annum). Imagine how much further ahead they will be when that is no longer the case.

And a large reason that Liverpool failed to make the most of that financial advantage?


Doing things like selling Torres for 50m and buying dross. Their situation is of their own making and had they spent better they would be far more competetive.


The big clubs will make mistakes. They will face bumps in the road and it will be possible for other clubs to take advantage of it.

 

[jimmyb]

Re: O/T Financial Fair Play

If that's all the information you are going to spout, then there's no point in continuing.


The fact that a lot of that money was used to counter the fact they entered administration seems to have eluded you.

Well, if you refuse to acknowledge that information or dismiss it as irrelevant, then I have to agree with you...no point continuing the conversation.

 

[Spursalot]

Re: O/T Financial Fair Play

Well, if you refuse to acknowledge that information or dismiss it as irrelevant, then I have to agree with you...no point continuing the conversation.

Well it is irrelevant. Money loaned to the club to deal with debts created by the previous regime are a one off case.

Nothing to do with the regular financial backing of the business.


If Portsmouth come back up sometime will we point at the fact that someone had to pay off their debts when they took over as proof that they are now badly run? No.

 

[jimmyb]

Re: O/T Financial Fair Play

And a large reason that Liverpool failed to make the most of that financial advantage?


Doing things like selling Torres for 50m and buying dross. Their situation is of their own making and had they spent better they would be far more competetive.


The big clubs will make mistakes. They will face bumps in the road and it will be possible for other clubs to take advantage of it.

But you're talking about a Liverpool that had already fallen from grace and that was no longer within the virtuous circle. Much harder to replace players when you're already floundering. You can't expect every big club to suffer the same, leveraged buyout fate as Liverpool.

And yes, of course big clubs will make mistakes and, occasionally, let other clubs in with a chance. But the odds will always be against those other clubs - even after they've been given their chance. And let's not forget, those other clubs are equally prone to those mistakes. Only difference is that they will be much more vulnerable to the consequences of those mistakes.

 

[Spursalot]

Re: O/T Financial Fair Play

But you're talking about a Liverpool that had already fallen from grace and that was no longer within the virtuous circle. Much harder to replace players when you're already floundering. You can't expect every big club to suffer the same, leveraged buyout fate as Liverpool.

And yes, of course big clubs will make mistakes and, occasionally, let other clubs in with a chance. But the odds will always be against those other clubs - even after they've been given their chance. And let's not forget, those other clubs are equally prone to those mistakes. Only difference is that they will be much more vulnerable to the consequences of those mistakes.

So you agree that it is a gap that can be narrowed, whilst the original point was that it was a gap that 'could never be narrowed'..


So we agree, so i have no idea why you are fighting me on this anymore.. I've kind of lost track along the way.. 8-[

 

[jimmyb]

Re: O/T Financial Fair Play

Well it is irrelevant. Money loaned to the club to deal with debts created by the previous regime are a one off case.

Nothing to do with the regular financial backing of the business.

From just the one season:

"In the year in which Saints won their League One promotion they lost some £11.5m, a figure included in the Liebherr family's considerable contribution to the club's current successful position, and their revenues increased to £16.4m while wages went up to 93 per cent of turnover."

Nothing to do with preexisting debt.

 

[Spursalot]

Re: O/T Financial Fair Play

From just the one season:



Nothing to do with preexisting debt.

Really? That was not how i recalled it.

Fair enough.

 

[jimmyb]

Re: O/T Financial Fair Play

So you agree that it is a gap that can be narrowed, whilst the original point was that it was a gap that 'could never be narrowed'..


So we agree, so i have no idea why you are fighting me on this anymore.. I've kind of lost track along the way.. 8-[

If you believe that every big club is likely to have some financial catastrophe (like an unsustainable leveraged buyout) befall them, then you'd be right to say that the gap could be narrowed.

But the odds on that..............???

 

[Spursalot]

Re: O/T Financial Fair Play

If you believe that every big club is likely to have some financial catastrophe (like an unsustainable leveraged buyout) befall them, then you'd be right to say that the gap could be narrowed.

But the odds on that..............???

Not every club has to, but in a long enough timeline they will.


In twenty years time i would be highly surprised if two of Chelsea/City/United were still in the top three in England.

 

[elltrev]

Re: O/T Financial Fair Play

We spent a brick load of money that we made.


There are a number of clubs placed in the championship who have extremely large support that has waned due to their lack of Premiership football.


Clubs like Nottingham Forest and Leeds being perfect examples. It may take more years than it took spurs, but given effective management they could come through.


Southampton are a good example of this. They have one of the best academies in England, possibly one of the best in the world. Now that they are a Premier League club they can continue to nurture that talent rather than having higher league clubs pinching their potential superstars.

I agree that it is not impossible for a team to enter the elite - Spurs' experience suggests that it is possible. However:

a) It also suggests that it is extremely difficult, as Spurs are the only club to have done it to date. And we had the biggest revenue of the non-Sky-4 teams.
b) Whilst we have broken into the top 4/5, we're still far away from the top 2.
c) This also doesn't mean that the gap between the elite and the non-elite has narrowed, which is what indianspur said - it just means that we have joined the elite.

 

[Spursalot]

Re: O/T Financial Fair Play

I agree that it is not impossible for a team to enter the elite - Spurs' experience suggests that it is possible. However:

a) It also suggests that it is extremely difficult, as Spurs are the only club to have done it to date. And we had the biggest revenue of the non-Sky-4 teams.
b) Whilst we have broken into the top 4/5, we're still far away from the top 2.
c) This also doesn't mean that the gap between the elite and the non-elite has narrowed, which is what indianspur said - it just means that we have joined the elite.

a) Everton were pretty close to doing it.
b) If you can break the top 4, it is only a matter of time before someone breaks the top two.

c) He said the gap between the Elite and Non-Elite is impossible to overcome. Which it is not. If we are part of the elite it makes it even less so. Five years down the line we could be mid table or we could be top of the league. If we're mid table someone else must have overtaken us.


I don't think we're always going to be this good. That is basically what I am saying. If we are the Elite, then Anyone who goes past us must become Elite. If Everton finish above us next season would they then be Elite?


I guess it's where you draw the line about 'Elite'.


Liverpool were Elite for ten years or so. Are they still?

 

[Spursalot]

Re: O/T Financial Fair Play

I agree that it is not impossible for a team to enter the elite - Spurs' experience suggests that it is possible. However:

a) It also suggests that it is extremely difficult, as Spurs are the only club to have done it to date. And we had the biggest revenue of the non-Sky-4 teams.
b) Whilst we have broken into the top 4/5, we're still far away from the top 2.
c) This also doesn't mean that the gap between the elite and the non-elite has narrowed, which is what indianspur said - it just means that we have joined the elite.

a) Everton were pretty close to doing it.
b) If you can break the top 4, it is only a matter of time before someone breaks the top two.

c)If we are part of the elite it makes it even easier to narrow the gap. Five years down the line we could be mid table or we could be top of the league. If we're mid table someone else must have overtaken us.


I don't think we're always going to be this good. That is basically what I am saying. If we are the Elite, then Anyone who goes past us must become Elite. If Everton finish above us next season would they then be Elite?


I guess it's where you draw the line about 'Elite'.


Liverpool were Elite for ten years or so. Are they still?

 

[elltrev]

Re: O/T Financial Fair Play

a) Everton were pretty close to doing it.
b) If you can break the top 4, it is only a matter of time before someone breaks the top two.

c) He said the gap between the Elite and Non-Elite is impossible to overcome. Which it is not. If we are part of the elite it makes it even less so. Five years down the line we could be mid table or we could be top of the league. If we're mid table someone else must have overtaken us.


I don't think we're always going to be this good. That is basically what I am saying. If we are the Elite, then Anyone who goes past us must become Elite. If Everton finish above us next season would they then be Elite?


I guess it's where you draw the line about 'Elite'.


Liverpool were Elite for ten years or so. Are they still?

a) Everton were pretty close? In what way? They qualified for the Champions League once, and didn't even make it to the group stages. Since then their average league position has been 7th, and their turnover in 2010-2011 (last season for which data is available) was £82m, which was £174m less than Arsenal and £249m less than Man United.

b) Pure conjecture, and all evidence suggests otherwise. No-one has come close to doing it for even one season, let alone on a regular basis.

c) No he didn't, he said it can never be narrowed. And as I said, Spurs joining the top teams doesn't mean that it has been narrowed for everyone else.

And in any case I explicitly agreed that it's not impossible to overcome the gap, but said that it is extremely difficult.

Yes, we should be clearer what we mean by 'elite'. I'm speaking mostly in terms of revenue, but also in terms of sustained success in the league. In any case the two are extremely closely correlated in recent years.

In terms of revenue, there is a clear 'break' (in 2010-2011) between Aston Villa, who had the 7th biggest revenue, and Emirates Marketing Project, who had the 6th biggest. From 20th to 7th the average increase in revenue is £3.5m. From 7th to 6th it's £61m. From an average of £3.5m, to £61m. Then it's £10m (City to Spurs), £21m (Spurs to Liverpool), £38m (Liverpool to Chelsea), £34m (Chelsea to Arsenal) and, right at the top, £75m (Arsenal to United).

So I'm talking about those six teams being the current elite. And evem within that elite there are very big differences between each team, MUCH bigger than the differences between the non-elite teams.

Previous to Spurs' CL qualification and City's sugardaddy, the other four were the elite.

EDIT: Data taken from here:http://www.guardian.co.uk/football/2012/may/23/premier-league-accounts-profit-debt

 

[Milas_Spur]

Re: O/T Financial Fair Play

Everton's Champions league qualification in 2005 was well freakish. They managed it with only 61 points. Any other season that would only have been good enough for 7th/8th

 

[jimmyb]

Re: O/T Financial Fair Play

a) Everton were pretty close to doing it.
b) If you can break the top 4, it is only a matter of time before someone breaks the top two.

c) He said the gap between the Elite and Non-Elite is impossible to overcome. Which it is not. If we are part of the elite it makes it even less so. Five years down the line we could be mid table or we could be top of the league. If we're mid table someone else must have overtaken us.


I don't think we're always going to be this good. That is basically what I am saying. If we are the Elite, then Anyone who goes past us must become Elite. If Everton finish above us next season would they then be Elite?


I guess it's where you draw the line about 'Elite'.


Liverpool were Elite for ten years or so. Are they still?

Everton were never close to breaking into the elite. They qualified for the Champions League. Once. That is all. Other than that, they have been a second level Premier League team that has never seriously threatened to dethrone the established elite.

Spurs are the only team from that second level which, without outside investment, has consistently threatened to join the elite. We're not there yet, though, and won't be until we can be fairly confident of playing CL football most seasons.