Football Finance
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I'm not saying they are carrying it off, but I don't find the idea completely insane, or rather it's no more insane than any other business model built on "things are going up and will continue to go up." I'm talking as a core concept, not how it's implemented, and especially if you have a bunch of other clubs.
That's why I thought I might be missing something. But I think the reason it doesn't work is that they are not starting from zero. If they were at break-even then this is a strategy that might work. But they were a basket case to begin with and rather than throwing risk on top of that, they need to sort their shit out.
And obviously the fundamental risk is that the bottom falls out of the transfer market.
Logical observers thought that the Mbappe and Neymar deals would be a tipping point, and at the very top of the market it is arguable they were. But what has happened is that the next tire of players below them have continued to see massive growth in perceived value.
But the collapse of media deals across European football may be what cools the market back down again. Italian and French clubs are on their arses, other leagues will follow and Spain only has its big two. Even Atletico had to play the numbers game to sign, checks notes, Conor Gallagher.
The worst thing about this story is that I suspect you may have been sad about missing the gin...
Just a quickie (by my standards) on Chelsea. I estimated in a post on Thursday that their squad cost ratio would be about 117%, against a target of 80%. That puts them 37% over.
Per UEFA's FFP rules, the maximum penalty is triggered when a club exceeds the cap by 30%, and the penalty is between 75% and 100% of what they call the "squad cost ratio excess". In Chelsea's case, I estimate this excess at about £190m (it's basically the amount by which their wages / amortisation would need to be reduced to get back to the 80% target).
So UEFA could fine them (in theory) between £142.5m and £190m. The range depends on severity, and if they are at a 37% excess then they're probably near the top of that range (best guess would be 92.5% (£176m) if UEFA applied a straight sliding scale).
Although the rules don't strictly say so, I believe the fine will be limited to the amount of revenue they could earn from being in Europe (which, given they are on the verge of qualifying for the Conference League, is not very much). This is because the fine is implemented by reducing their media payments from UEFA, which implies it would be capped at the amount due.
So in practice, if UEFA doesn't bottle it and implements the rules as intended, and assuming my calculations aren't way out of whack, they'll earn nothing from being in Europe this season, other than their match day income (tickets, catering etc). That income is likely to be consumed by bonus payments to their players, particularly since they won't be able to charge top whack for the tickets as the teams they'll be playing will be shit.
So whether they'd qualified for the Conference, Europa or Champions League, they would've earned sod-all from UEFA. And that's likely to continue to be the case for a few years yet. There's literally no point in them qualifying for Europe.
EDIT - see post below which clarifies that, in fact, the fine would NOT be capped at the total UEFA income for the year.
LMFAO.
Per UEFA's FFP rules, the maximum penalty is triggered when a club exceeds the cap by 30%, and the penalty is between 75% and 100% of what they call the "squad cost ratio excess". In Chelsea's case, I estimate this excess at about £190m (it's basically the amount by which their wages / amortisation would need to be reduced to get back to the 80% target).
So UEFA could fine them (in theory) between £142.5m and £190m. The range depends on severity, and if they are at a 37% excess then they're probably near the top of that range (best guess would be 92.5% (£176m) if UEFA applied a straight sliding scale).
Although the rules don't strictly say so, I believe the fine will be limited to the amount of revenue they could earn from being in Europe (which, given they are on the verge of qualifying for the Conference League, is not very much). This is because the fine is implemented by reducing their media payments from UEFA, which implies it would be capped at the amount due.
So in practice, if UEFA doesn't bottle it and implements the rules as intended, and assuming my calculations aren't way out of whack, they'll earn nothing from being in Europe this season, other than their match day income (tickets, catering etc). That income is likely to be consumed by bonus payments to their players, particularly since they won't be able to charge top whack for the tickets as the teams they'll be playing will be shit.
So whether they'd qualified for the Conference, Europa or Champions League, they would've earned sod-all from UEFA. And that's likely to continue to be the case for a few years yet. There's literally no point in them qualifying for Europe.
EDIT - see post below which clarifies that, in fact, the fine would NOT be capped at the total UEFA income for the year.
LMFAO.
Is it just media payments affected? what about payments within the competition moving through the rounds and wins/draws etc
This is what the rules say:
"The financial disciplinary measure will be permanently withheld by UEFA from the UEFA solidarity and prize money the licensee earns from its participation in UEFA club competitions in the licence season. If the solidarity and prize money generated from UEFA club competitions is less than the financial disciplinary measure, UEFA shall withhold all such solidarity and prize money and the club shall pay the remainder by a deadline set by the CFCB."
So there's two points:
Firstly, in response to your query, it would be "prize money" as well. In practice, solidarity payments (fixed amounts) and prize money are just the means by which the media money is divided up, so when I say "media income" I'm referring to both amounts. We reported it as media income in our accounts and I believe all other clubs do too (although some of them disclose it separately as "UEFA income" or something similar).
Secondly, I was a lazy arse in my previous post, and the wording above says the penalty would NOT be limited to their prize money (see the bit I've added in bold). Ergo, they are fucked, and would have been better off turning down the opportunity to play in Europe.
Leicester have won their appeal against the PSR charges from the Premier League. Basically, the rules are poorly drafted and the decision held that the Premier League didn't have jurisdiction to charge them as they were in the Championship when the charges were raised.
So they got off on a technicality, which is lucky for them because they were fucked otherwise.
So they got off on a technicality, which is lucky for them because they were fucked otherwise.
We've bigger fish to fry.
Call me a glass half full kinda guy, but if it gives Leicester a better chance of staying up then other teams who still have outstanding / pending charges hanging over them (City, Chelsea, Everton) have some added jeopardy.
EDIT
To clarify - City, the 115 we know about, hearing due imminently.
Chelsea - under investigation for off-book payments during the Abramovich era, rumours they'll be charged
Everton - an outstanding technical issue around the treatment of interest from their last hearing which the panel kicked into the long grass to be resolved this year, could lead to further deductions if it goes against them.
EDIT
To clarify - City, the 115 we know about, hearing due imminently.
Chelsea - under investigation for off-book payments during the Abramovich era, rumours they'll be charged
Everton - an outstanding technical issue around the treatment of interest from their last hearing which the panel kicked into the long grass to be resolved this year, could lead to further deductions if it goes against them.
My biggest worry about Everton going down they'll build up a bit of joy winning loads of games and maybe even winning the league. They might end up having a good time down there. The repetitive sadness and frustration is what I wish for them.
Unlucky Blueshite.
They’ll do a Leeds.
or they could go down, end up going out of business and we take over the stadium, paint the seats red and use it as a home for the womens team and the ressies.
Leave it to rot and a reminder to the Neanderthals to why they are so miserable.
I take the same philosophy as I do when wishing for another Utd manager to get sacked. Yes there is risk that the next one may succeed (or Ev might win the championship) but the potential reward is yet another in a long line of Old Toilet failures (or Ev plummeting down the side of the pyramid).
In both cases it's too big a glorious glorious orgasmic glorious reward to be turned off by the risk.
You're right. I concede. Let them go down then dammit.
I didn't think there would be an issue with the valuation but I rather hoped the Premier League would do them for taking the piss, even if what they did isn't prohibited by the rules. If rumours are true that they've tried to do the same with their Ladies team this year then that could be more problematic as it will be worth fuck all and won't pass the fair value test. Although politically it won't be a good look for the PL to say women's football is worth fuck all.
In any event, this hopefully will make the PL more determined to do them on the dodgy deals they're investigating from the Abramovich era.
And they are still going to face some challenges with the UEFA squad cost ratio rules.
Don't give up hope just yet...
I'm all for it. The fat cunt.
He wanted to be face of it so no point crying now. The fat cunt
Bet it's just another way of fiddling FFP
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