What if the Balance sheet of Premier league teams had an impact on league points?

Dots1982 · 01-07-2019 5:35pm #1

So what if you recorded a 40 million loss in the previous season’s accounts and that meant you had a 4 point penalty going into the next season?

And if you recorded a 40 million loss in the previous season but a 40 million profit the previous year before that then that 40 million would reduce your penalty to only two points? So that the accounts of the two seasons ago were given a 50% weighting if they showed a profit.

Would this reduce crazy expenditure of some teams? Would it lead to creative accounting? Would it keep player salary inflation in check? Would it be a good idea?

c.p.w.g.w · 01-07-2019 5:38pm

Dots1982 wrote: »

So what if you recorded a 40 million loss in the previous season’s accounts and that meant you had a 4 point penalty going into the next season?

And if you recorded a 40 million loss in the previous season but a 40 million profit the previous year before that then that 40 million would reduce your penalty to only two points? So that the accounts of the two seasons ago were given a 50% weighting if they showed a profit.

Would this reduce crazy expenditure of some teams? Would it lead to creative accounting? Would it keep player salary inflation in check? Would it be a good idea?

Already have creative accounting and sponsorship deals to circumvent FFP

Harry Palmr · 01-07-2019 6:03pm

This need rather more detial - profit/loss is a meaningless way to describe this situation - suppose a club built a new stand that cost 40m or sold an academy product for 40m quid? Should such transactions count to the bottom line in a given years accounts if points are being deducted?

The best measure of health is EBITDA Net Income+Interest+Taxes+D+A where: D=Depreciation A=Amortization.

Dots1982 · 01-07-2019 6:16pm

Harry Palmr wrote: »

This need rather more detial - profit/loss is a meaningless way to describe this situation - suppose a club built a new stand that cost 40m or sold an academy product for 40m quid? Should such transactions count to the bottom line in a given years accounts if points are being deducted?

The best measure of health is EBITDA Net Income+Interest+Taxes+D+A where: D=Depreciation A=Amortization.

If you build a new stand you’ve got to be able to have the money to do it and would the money for a new stand be all put on one P&L statement? They could take out a loan and just have interest payments spread out over 30 years.If they sell a player for x million profit then good for them. They done good.

Your point is good though. If there’s a better way to do it then feel free to add the detail,

NIMAN · 06-07-2019 2:48pm

I'd prefer to see teams lose points for conduct, fighting with refs, etc.

Would improve the game a lot more, than handing out a £20,000 fine to a team or player who would spend it on a night out.

CSF · 06-07-2019 3:26pm

What is the purpose of punishing clubs further for making a loss? Are we saying that it’s ok to run commercially funded in smaller amounts by tonnes of people from far corners in the world, but that it’s not ok to be funded for a large amount by someone from a far corner in the world?

I’m all for ensuring that clubs continue to prosper and not fold but surely a more effective way of doing this is by having more strict rules around the ownership of football clubs and liability to ensure that clubs aren’t at risk of a wealthy owner f*cking off leaving behind a pile of debt.

Dots1982 · 06-07-2019 4:58pm

CSF wrote: »

What is the purpose of punishing clubs further for making a loss?

The thinking behind it would be that you shouldn’t be able to spend your way to success.

CSF · 06-07-2019 5:08pm

Dots1982 wrote: »

The thinking behind it would be that you shouldn’t be able to spend your way to success.

But that’s not what it’s achieving is it? If you’re making millions upon millions in the Asian commercial markets, you can still spend your way to success. Man United, Real and Barca have been spending their way to success for a long time now and concerns around that were never going to carry any weight.

Teams like Man City and PSG haven’t changed the way teams achieve success nor even begun the trend in the money coming in from abroad.

They’ve just changed how it’s done, and some people don’t like it. That’s fine. People are entitled to their opinions, opinions which are typically driven by who we support in the first place. But I don’t see why it should be against the rules.

It should instead be regulated to ensure owners can’t just rack up a tonne of debt and then p*ss off leaving the club in big trouble. If owners want to sign contracts that come outside projected incomings (with accounts signed off by professionals) they should have to act as guarantor for those contracts.

Dots1982 · 06-07-2019 5:32pm

By spending their way to success I took it as assumed it would be money going out that wasn’t coming in on the other side of the accounts.

The issue you describe about owners coming in and racking up debt and then leaving doesn’t seem to be an issue in elite level football that I’m aware of. Malaga maybe though I’m not familiar of the current situation there. Any other cases?

CSF · 06-07-2019 5:42pm

Dots1982 wrote: »

By spending their way to success I took it as assumed it would be money going out that wasn’t coming in on the other side of the accounts.

The issue you describe about owners coming in and racking up debt and then leaving doesn’t seem to be an issue in elite level football that I’m aware of. Malaga maybe though I’m not familiar of the current situation there. Any other cases?

I’m not saying it’s a common occurrence. But it seems to be the fear. Otherwise what is the issue?

If we’re gonna treat football as a commercial product (which we have to be realistic it is these days), what is the problem here? The money is coming into their accounts, it’s just being funded by a different source.

NIMAN · 06-07-2019 5:49pm

Nearly every team sport in the world is won by those who spend the most.
There are ways to find or cover up money, so it would never work.

If we wanted a more even playing field, in football for example, we need the return of the foreigner rule.

If every EPL team had to have say6 English men, every La Liga team 6 Spaniards etc, then football would be a lot more entertaining.

Dots1982 · 06-07-2019 5:50pm

CSF wrote: »

I’m not saying it’s a common occurrence. But it seems to be the fear. Otherwise what is the issue?

If we’re gonna treat football as a commercial product (which we have to be realistic it is these days), what is the problem here? The money is coming into their accounts, it’s just being funded by a different source.

Ok I don’t see how its the fear in the premier league. I haven’t heard anything about this or read anything.

Anyway back on topic the reason would be, to repeat, there should be a deterrent to teams being able to spend their way to success. If the money is coming into their accounts from revenue streams, there is no problem. If a team is racking up 100 million in an annual loss that they get a 10 point deduction.

If you personally think there is no problem with teams racking up huge losses to buy success then that’s fine. Others may not feel the same.

Blinky Plebum · 06-07-2019 6:46pm

Salary caps would be only thing that would level the playing field.Anything else is a waste of time.

How would it be a level playing field if Manchester Utd have more revenue and therefore can spend more than the smaller clubs can.

Your idea actually produces a less equitable situation than the present at least with the sugar daddy buying success for a club or teams going into debt it give them a chance of success.

Salary caps combined with some sort of wealth tax/profit sharing to prop up the smaller clubs would help level the playing field.

the_pen_turner · 06-07-2019 6:56pm

For every rule like this there are 10 ways around it. People are paid to find loopholes in systems like this. This is what makes the big clubs as successful as they are

It would lead to clubs outside those rules buying the players and loaning them to the real club
Or create a situation where some outside party owners the player and leased them to the club

CSF · 06-07-2019 6:57pm

Dots1982 wrote: »

Ok I don’t see how its the fear in the premier league. I haven’t heard anything about this or read anything.

Anyway back on topic the reason would be, to repeat, there should be a deterrent to teams being able to spend their way to success. If the money is coming into their accounts from revenue streams, there is no problem. If a team is racking up 100 million in an annual loss that they get a 10 point deduction.

If you personally think there is no problem with teams racking up huge losses to buy success then that’s fine. Others may not feel the same.

Why is it ok if it’s coming from commercial income but not from commercial investment. The end result is the same.

Dots1982 · 06-07-2019 7:20pm

CSF wrote: »

Why is it ok if it’s coming from commercial income but not from commercial investment. The end result is the same.

I don’t know to be honest where the origin or meaning of that question is.

It’s income and expenditure measured against each other to form a profit or loss. Not sure what I can say more.

CSF · 06-07-2019 7:23pm

Dots1982 wrote: »

I don’t know to be honest where the origin or meaning of that question is.

It’s income and expenditure measured against each other to form a profit or loss. Not sure what I can say more.

No, I know they are different income sources. I’m not disputing that. I’m just asking why one is ok, and one isn’t.

What if the Balance sheet of Premier league teams had an impact on league points?

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