Premier League finance article in Guardian

[Burnley Ace]

https://www.theguardian.com/football/20 ... nited-city" onclick="window.open(this.href);return false;

Amongst other things we are the only club without a paid director

[dsr]

They need to change the rules so that insolvent clubs aren't allowed into the Champions League. After taking account of loans to shareholders. That appears to leave (from that list) Arsenal, Man City, and us; and Man City will be banned soon, hopefully; so bring on the group stages!

[evensteadiereddie]

We are a remarkable club in so many ways.

[Oshkoshclaret]

3 million income on catering, so that's roughly 1,000 Twixs?

[No Ney Never]

3 million income on catering, so that's roughly 1,000 Twixs?

That's a bit optimistic, you sure its as many as that?

[Colburn_Claret]

They need to change the rules so that insolvent clubs aren't allowed into the Champions League. After taking account of loans to shareholders. That appears to leave (from that list) Arsenal, Man City, and us; and Man City will be banned soon, hopefully; so bring on the group stages!

Oh if only the powers that be had the balls to do that. It would solve so many problems in the modern game at a stroke.

[scouseclaret]

What exactly is the rule with regard to director loans?

I thought beyond a certain level,directors/owners could only pump money in as equity, yet several still seem to be giving big loans despite the clubs being £100s of millions in debt to them already.

[houseboy]

I still don't understand FFP. Does anyone? As far as I know (and I could be hopelessly wrong) clubs could only spend a percentage above their income, that income including gifts from directors. I'm not sure where loans fit in. If that be the case where do City (among others but particualrly them) fall? No-one on this good Earth can tell me that City have an income that covers the money they spend on players or anything like it, so they must be heavilly funded by their owners. Is this not considered 'unfair' with FFP?

I have not had the patience or the inclination to look into it much, especially since the authorities seem to have such a cavalier attitude to implimenting it. It appears to me that the only clubs hit with it are the ones who can least afford it (or who have the least money to spend on legal representation).

I have never in my life had a problem with City (if I were a Manc they would be my team of choice) but they are beginning to ruin the game as a competition and a spectacle with the kind of money they are spending. Saturdays cup final (which I am glad I was on holiday for and didn't see) was an example of why something has to change - a major final that should have been an enjoyable day was destroyed for all (apart from City fans of course) by the total imbalance in funding in football these days. Anyone (again apart from City fans) who enjoyed that should be looking at themsleves and asking 'do we really want this'?

If anyone can clear up my understanding (or lack of it) of FFP (without resorting to links as I rarely ever open them) I would appreciate it.

[aggi]

One thing to note is that UEFA FFP is different to Premier League FFP is different to Football League FFP.

UEFA FFP: Clubs can only spend €5m more than what they earn. However, there are some costs that are excluded (ground/training improvements, youth development, etc) so they may spend more and require loans from owners to cover it. The main controversy here is that if a bumper sponsorship deal is received from a company connected to the owner is that really money that they've "earnt".

Premier League FFP - mainly about controlling wages. Wages can only increase by a small percentage unless the club can illustrate that they earnt more money (not including increasing TV money) to fund it. (I think there is also a limit on losses but it's £100m or something.)

Football League FFP - Back to clubs not being allowed to make big losses. I can't remember what the thresholds are, about £8m or something (and I think £5m can be funded by the owner). If they get promoted then they get fined. If they don't go up then it's transfer bans until they can show they've got the spending under control.

League One and Two have extra rules about what proportion of income can be spent on wages. I think it's 60% or something.

[scouseclaret]

City are he subject of an FFP inquiry which could see them chucked out of the Champions League, but don’t hold your breath...

I was more referring to cases like Brighton - £230m in hock to Tony Bloom, yet he “lent” them another £32m last season.

[martin_p]

What are we paying 17k interest on?

[Bosscat]

What are we paying 17k interest on?

Twix bill

[aggi]

City are he subject of an FFP inquiry which could see them chucked out of the Champions League, but don’t hold your breath...

I was more referring to cases like Brighton - £230m in hock to Tony Bloom, yet he “lent” them another £32m last season.

There can be plenty of reasons why a company is borrowing even though it's making profits. Cash doesn't always match up to what the accounts show (which has been the cause of the demise of many a business).

Just looking at Brighton in 2018.

They made an accounting profit of ~ £18m

They spent about £60m on players. Most of those players will be on 3 or 4 year contracts though so that cost will be spread over 3 or 4 years in the accounts. You've now got something like a £40m difference between cash and the accounts (assuming that the players were paid for up front).

For whatever reason their debtors (money owed to them) have gone right up. Where trade debtors was £1.5m at the end of last year it's now £10m. Maybe they need loans to cover them until that money comes in.

They had a £16m bank overdraft last season that has now gone. It's likely that has been paid off by Tony Bloom.

That's a few examples, there are further things in the accounts that probably also form a part of it.

[Royboyclaret]

What are we paying 17k interest on?

Finance charges on finance leases and other similar hire purchase contracts, plus other loans. (£12k + £5k).

[Royboyclaret]

Finance charges on finance leases and other similar hire purchase contracts, plus other loans. (£12k + £5k).

As an indication how our fortunes have turned round in just a few years the equivalent figure for financial year ended Jun'13 was £1.028 million, of which £270k was interest on Director loans.

[Spijed]

As an indication how our fortunes have turned round in just a few years the equivalent figure for financial year ended Jun'13 was £1.028 million, of which £270k was interest on Director loans.

Royboy, it states that £17k is interest on directors loans. Do you know why they would have needed to lend the club money in recent times?

[Royboyclaret]

Royboy, it states that £17k is interest on directors loans. Do you know why they would have needed to lend the club money in recent times?

Take another look, Spijed, the interest is totally unrelated to Directors.

[MrTopTier]

Brighton have an outstanding loan of £223m to their current owner. Jeez.

[dsr]

Is this true?

Yes. But they aren't worried because the owner is a good bloke and they'll never have to repay it.

Sound familiar?

[aggi]

Fortunately he's not called Eddie.

[Chester Perry]

Yes. But they aren't worried because the owner is a good bloke and they'll never have to repay it.

Sound familiar?

they also rent the Stadium and training ground from him

[Burnley Ace]

There’s an article in today’s Times that had us down as 5th most profitable club in 2017/18 season.

[Dark Cloud]

Yes. But they aren't worried because the owner is a good bloke and they'll never have to repay it.

Sound familiar?

The owner may well be a good bloke and be happy for his money to basically never be repaid, but as has happened at certain other clubs, it becomes a different story if said owner dies, or becomes seriously ill or their core business fails badly and it's then down to other family members to agree and they tend to see things rather differently. The Walker family for example.

[Chester Perry]

There’s an article in today’s Times that had us down as 5th most profitable club in 2017/18 season.

It can be read here - http://www.uptheclarets.com/messageboar ... start=1150" onclick="window.open(this.href);return false; post #1182