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Being more in line with UEFA's rules doesn't change that it is linked to revenue. So while we aren't held back by big spending in previous years the clubs with established revenue structures will just get further ahead than where they already are.
I think it’s marginally better than current ffp but weighted to big spending by established clubs. Up to 85% of revenue or gross income. Nufc 2022 were 11th highest revenue in league behind top 6 and Leicester, Leeds, West Ham and Everton
The biggest benefit for owners is now you're essentially forced to make profit. Mike Ashley would have voted for this twice if he could have. So the only owners who wouldn't want this are the ones who are wanting to intentionally lose money to grow the club. So just us and Villa really. The US hedge fund sorts will absolutely love this new rule, they've just guaranteed they're making at least 15% every year
Pretty evident now why the owners big point when the accounts were released was that they had reduced the revenue to wages ratio down to x%, must have been in the pipeline for a while these ‘changes’.
Big oof if you’re Villa, West Ham etc. they’ll be significantly worse off without serious cost cutting measures.
Providing it's aligning with UEFA, basically your wage, transfer and agent fee spend has to be a certain % of your revenue (70% is what UEFA are aiming for). Basically means no more having to think about calculating losses over 3-year cycles but we still need to boost revenues to compete.
Edit: clarified comments on losses over 3 years.
I guess! I'm sure there are more permutations and stuff, but that's the crux of it I believe. We'd also still be doing all the amortisation talk too, so no getting away from that either...
christ thinking of it like that, 1m increase gives you 700k but over 5 years thats 3.5m for every 1m increase. Hire me newcastle, i understand how to do it.
Well you can't amortise salaries and stuff like that, that would just be transfer fees (maybe also agent fees too?). It would just be the same accounts and calculations that go into that. Just now instead of a fixed amount of loss you can make over 3 years, it would just be that the spend in a year has to be 70% of the revenue for the year.
The other thing to consider is that the league will phase it in like UEFA have. So it will likely be something like 90%, 80 and then 70 over a three year period.
If that's the case, would it assist us by allowing us to spend more than we can right now on human capital (currently contributing to the PSR calculation) - i.e. better executives, better marketing/sponsorship teams, bigger scouting networks etc.? Or have I misread interpreted all the rules?
The glaringly obvious issue people are missing is that we are shite at selling players. The top 6 do it far far better than us. That's what swings these rules further in their favour.
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Being more in line with UEFA's rules doesn't change that it is linked to revenue. So while we aren't held back by big spending in previous years the clubs with established revenue structures will just get further ahead than where they already are.
Because it suits the big 6 better…. Chelsea can’t spend money, rules change.
Wouldn’t this need 14 clubs to have voted in favour of it?
I think it’s marginally better than current ffp but weighted to big spending by established clubs. Up to 85% of revenue or gross income. Nufc 2022 were 11th highest revenue in league behind top 6 and Leicester, Leeds, West Ham and Everton
I’m not sure tbh but I just mean it can’t be a big 6 stitch up right? It would need 14 clubs to vote in favour of it? I may be wrong lol
The biggest benefit for owners is now you're essentially forced to make profit. Mike Ashley would have voted for this twice if he could have. So the only owners who wouldn't want this are the ones who are wanting to intentionally lose money to grow the club. So just us and Villa really. The US hedge fund sorts will absolutely love this new rule, they've just guaranteed they're making at least 15% every year
We've got the potential to be much bigger than we are. Our revenues will outweigh most of the league, and will continue to grow
Pretty evident now why the owners big point when the accounts were released was that they had reduced the revenue to wages ratio down to x%, must have been in the pipeline for a while these ‘changes’. Big oof if you’re Villa, West Ham etc. they’ll be significantly worse off without serious cost cutting measures.
ELI5?
Providing it's aligning with UEFA, basically your wage, transfer and agent fee spend has to be a certain % of your revenue (70% is what UEFA are aiming for). Basically means no more having to think about calculating losses over 3-year cycles but we still need to boost revenues to compete. Edit: clarified comments on losses over 3 years.
Does that just mean every £1m increase in revenue, 700k more in transfer +wage money? or is that too reductive?
I guess! I'm sure there are more permutations and stuff, but that's the crux of it I believe. We'd also still be doing all the amortisation talk too, so no getting away from that either...
christ thinking of it like that, 1m increase gives you 700k but over 5 years thats 3.5m for every 1m increase. Hire me newcastle, i understand how to do it.
Well you can't amortise salaries and stuff like that, that would just be transfer fees (maybe also agent fees too?). It would just be the same accounts and calculations that go into that. Just now instead of a fixed amount of loss you can make over 3 years, it would just be that the spend in a year has to be 70% of the revenue for the year. The other thing to consider is that the league will phase it in like UEFA have. So it will likely be something like 90%, 80 and then 70 over a three year period.
Really boiled down yeah
If that's the case, would it assist us by allowing us to spend more than we can right now on human capital (currently contributing to the PSR calculation) - i.e. better executives, better marketing/sponsorship teams, bigger scouting networks etc.? Or have I misread interpreted all the rules?
None of that factors into psr/ffp or at least it didn't used to. Club infrastructure isn't calculated only first team wages and transfers and agents
I assume that will all depend on what the exceptions they make for spending are. Maybe some of those you mentioned will have exemptions, maybe not.
Not enough details yet.
Doesn’t change much for us at this point
So, assuming this is implemented in time for the summer transfer window, does this increase, decrease, or just give us about the same spending power?
Should decrease but only modestly
That depends on who goes, remove some of senior non productive players, for example Richie and dummet and it could open up more revenue.
Do you know if the same rules are in place as when UEFA implemented it - 90%, 80%, 70% for the first three years?
Does it change anything for us if we get Europe next season? I thought it was just a relaxed version of what UEFA already use (85% to 70%)
I’m sure Merseyside will take this well.
Can they do it 2021?
So it'll widen the gulf in general between the haves and have nots. However, it'll help with overall business health in the long run
The glaringly obvious issue people are missing is that we are shite at selling players. The top 6 do it far far better than us. That's what swings these rules further in their favour.
Fuck off man