I was listening to the Charlton podcast just now (2:30am) and heard a disturbing tidbit. That apparently we sold Konsa for a low amount because we needed cash to avoid breaching FFP rules. And larger bids included deferred payments (larger ones) but less... cash. And we needed cash to avoid an FFP breach.
First off, this would explain why we sold him so cheap. But how the hell can we be at the edge of FFP limits? We've sold so many players that just two years ago we were essentially profitable. One can lose £39m over 3 season. We have not lost that much.
But if it is true, and I were a prospective owner, I would not be too interested in buying a club that has no wiggle room to buy people in the transfer market. This might well be the takeover hangup, if true. I really hope it is not.
Did anyone else hear about this?
Deferred payments would be included in the 2017/18 accounts so I am not sure this makes sense. Contingent payments would not be.
I was listening to the Charlton podcast just now (2:30am) and heard a disturbing tidbit. That apparently we sold Konsa for a low amount because we needed cash to avoid breaching FFP rules. And larger bids included deferred payments (larger ones) but less... cash. And we needed cash to avoid an FFP breach.
First off, this would explain why we sold him so cheap. But how the hell can we be at the edge of FFP limits? We've sold so many players that just two years ago we were essentially profitable. One can lose £39m over 3 season. We have not lost that much.
But if it is true, and I were a prospective owner, I would not be too interested in buying a club that has no wiggle room to buy people in the transfer market. This might well be the takeover hangup, if true. I really hope it is not.
Did anyone else hear about this?
Deferred payments would be included in the 2017/18 accounts so I am not sure this makes sense. Contingent payments would not be.
Yeah I was thinking that as well. If you're paying 5k/month over the cap in wages but in December you're getting a 400k installment payment, it wouldn't make much sense to penalize a club for thinking three months ahead of time. Also, I have to imagine that would provide a strange moving target for that cap number.
In League One it isn’t FFP, but SCMP...Salary Cost Management Protocol.
It limits the amount any club can spend on wages as a proportion of turnover. For L1 it is 60% and for L2 it is 55%.
So anything that adds to revenue helps boost what you can spend on salary. Maybe Katy didn’t realise that...who knows.
There is also a "grace period" (either 1 or 2 season) for teams relegated to League one that allows them to spend more than 60% while they adjust to life in league one, usually because they have players on large legacy contracts from the Championship.
This grace period is often used to mount a title challenge and immediately return to the Championship e.g Blackburn, Wigan etc.
Guessing our grace period is over and we are now an established lower league side with aspirations of playing in The Championship.
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
I’ve heard his real name is Rolond and he has brown teeth.....
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
I’ve heard his real name is Rolond and he has brown teeth.....
And allegedly he would NEVER pass the "Duct Tape Challenge"...
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
Strangely enough Redhenry is a sauce himself; tomato unsurprisingly as you can see and he sits on the same row next to Redpepper, HousesofParliament, Barbiequeue and Sweetchilli, all of whom spill when you give them a good squeeze.
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
Strangely enough Redhenry is a sauce himself; tomato unsurprisingly as you can see and he sits on the same row next to Redpepper, HousesofParliament, Barbiequeue and Sweetchilli, all of whom spill when you give them a good squeeze.
You are so saucy...but I like you... Sauce: Dick Emery outtake circa 1973
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
RedHenry is George the trolley collector at Asda but dont tell anyone because his info will dry up
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
Strangely enough Redhenry is a sauce himself; tomato unsurprisingly as you can see and he sits on the same row next to Redpepper, HousesofParliament, Barbiequeue and Sweetchilli, all of whom spill when you give them a good squeeze.
You are so saucy...but I like you... Sauce: Dick Emery outtake circa 1973
Assume that like FFP an owner can inject as much as they want in equity just not loans so no restrictions in reality are there, the owner just can’t lever the club as highly... although not sure how that would work in respect to salaries as a % of turnover...?
If an owner in L1 can seriously inject any capital they want (as long as it is not debt) then a rich owner has more freedom to spend in L1 than in the Premier League. In one window a new owner here could buy £10M of players and we would be promoted instantaneously.
There has to be some kind of hard caps limit for owner injections, no? If not... wow.
I thought it was the same across all financial fair play in that what the football league / PL want is to stop clubs accumulating huge speculative debt but are not hugely bothered by equity injections given they do not, in themselves, put the club at risk..?
After learning about SCMT, Roland is even more than a loser that I thought.
Although I can see us easily bumping up against the 60% wage limit under SCMT (as a percent of turnover,) RD could easily just directly "inject equity" to cover the difference. He last did that the year we were relegated and he said afterword "this will never be repeated."
CAFC is in NO way in any financial bind. He just no longer wants to put any more of his money in the club and.... that's it. So rather than put any money in at all, Roland uses SCMT as an excuse to asset strip and sell players to the highest cash bidder, even if it is below market value.
For example... our turnover is about £12M. Likely our total wages are 60%, at the limit. £7.2M. He could just inject one million pounds and the problem is over. But instead he sells Konsa below market, uses the transfer "profit" to goose the "turnover," and deal with it that way. LUNACY!
In fact, after reading, I am kind of blown away at how much leeway owners of L1 and L2 clubs have. We could technically spend £500,000,000 on Messi in the winter and it would not breech spending rules under SCMT. In the Premier League, you would get busted for losing all that money.
In a more reasonable scenario, an owner of CAFC could give Bowyer £3,000,000 to spend, buy six top players at £500K each, and we would probably go straight up. In the Championship, this club would easily fetch far more than the £3M spent on top of it's rational League One valuation.
Profits on transfers count as "turnover" for wage limits but money spent on transfers do not count as wages. That's amazing, and again, different than The Championship or PL. You can spend all the money you want on transfers in L1 without any effect on SCMT at all. No limit. You just have to keep first team wages within 60% of the total of turnover + owner equity injections.
Here is a quick article that explains it well (and easier) than the actual EFL document.
RD could have got us out of L1 as fast as he wanted. He just did not want to. His stupidity is almost beyond understanding.
Who is Redhenry and how the feck do you have so many sources? I'm not saying that doubting him at all, as he always has the inside track... Just interested to know
RedHenry is George the trolley collector at Asda but dont tell anyone because his info will dry up
I just think it’s a real shame that someone has been driven from this board for effectively posting in completely good faith information they have which nobody else could possibly get.
James Seed was ridiculously slated by some because things dragged on. Perhaps they should give thought to the other very credible sources we have that also gave some false hope. Richard Murray, Airman Brown both thought things were very close months ago. I am certain that they thought what was said was true.
None of us know why it’s dragged on but taking our frustrations out on credible posters is bang out of order.
I’m very grateful to anyone posting what they have heard even if it’s not ultimately 100% accurate.
Assume that like FFP an owner can inject as much as they want in equity just not loans so no restrictions in reality are there, the owner just can’t lever the club as highly... although not sure how that would work in respect to salaries as a % of turnover...?
If an owner in L1 can seriously inject any capital they want (as long as it is not debt) then a rich owner has more freedom to spend in L1 than in the Premier League. In one window a new owner here could buy £10M of players and we would be promoted instantaneously.
There has to be some kind of hard caps limit for owner injections, no? If not... wow.
Why, though? Would you like a restriction on a capital injection into your business? Would you like a new egg-shaped wine tank? No, sorry, you can't have that, you've already had too much capital expenditure this year. FFP is a joke. Club owners should be allowed to spend what they like how they like. If their business goes bust through mismanagement, tough.
Comments
Thanks Roland.
Profit on player sales
Any profit made on player sales is included within turnover on a cash basis when the instalments are received.
tomato unsurprisingly as you can see and he sits on the same row next to Redpepper, HousesofParliament, Barbiequeue and Sweetchilli, all of whom spill when you give them a good squeeze.
Sauce: Dick Emery outtake circa 1973
There has to be some kind of hard caps limit for owner injections, no? If not... wow.
https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/
Although I can see us easily bumping up against the 60% wage limit under SCMT (as a percent of turnover,) RD could easily just directly "inject equity" to cover the difference. He last did that the year we were relegated and he said afterword "this will never be repeated."
CAFC is in NO way in any financial bind. He just no longer wants to put any more of his money in the club and.... that's it. So rather than put any money in at all, Roland uses SCMT as an excuse to asset strip and sell players to the highest cash bidder, even if it is below market value.
For example... our turnover is about £12M. Likely our total wages are 60%, at the limit. £7.2M. He could just inject one million pounds and the problem is over. But instead he sells Konsa below market, uses the transfer "profit" to goose the "turnover," and deal with it that way. LUNACY!
In fact, after reading, I am kind of blown away at how much leeway owners of L1 and L2 clubs have. We could technically spend £500,000,000 on Messi in the winter and it would not breech spending rules under SCMT. In the Premier League, you would get busted for losing all that money.
In a more reasonable scenario, an owner of CAFC could give Bowyer £3,000,000 to spend, buy six top players at £500K each, and we would probably go straight up. In the Championship, this club would easily fetch far more than the £3M spent on top of it's rational League One valuation.
Profits on transfers count as "turnover" for wage limits but money spent on transfers do not count as wages. That's amazing, and again, different than The Championship or PL. You can spend all the money you want on transfers in L1 without any effect on SCMT at all. No limit. You just have to keep first team wages within 60% of the total of turnover + owner equity injections.
Here is a quick article that explains it well (and easier) than the actual EFL document.
RD could have got us out of L1 as fast as he wanted. He just did not want to. His stupidity is almost beyond understanding.
https://bristolpost.co.uk/sport/football/football-news/financial-fair-play-you-need-888037