Liverpool Message Board
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Robert, I'd agree with you that its wages that are really the issue that can weaken a clubs finances, while the transfer fee's while headline grabbing are really not a major issue. But not sure they are really a zero sum game, as they still are payments that have to be paid, and therefore impact the bottom line. For some clubs (buying clubs) they are a drag on profitability, while I do agree for others (selling clubs) they are an important source of income.
So for example, and I may not have the figures exactly correct as I'm doing this from memory, but for the Torres transfer, Chelsea paid out 50M as a transfer fee, and pay him around 200K a week (I'm guessing on that number), over a 5 year contract. So for the club books that's a 10M charge per year of his contract for the transfer fee, and just over 10M cost for his salary. Of course that's using simple sums which be different when transfer fee's involved scheduled payments, bonuses, or a makeweight is in place, but one way or another they need to be accounted for on the books.
But on what you'd recommend actually I don't think they are far from what FFP will actually do. FFP does allow clubs to operate with a loss, but they need to balance the books over a 3 year accounting period. So if a club wants to deficit spend in order to try to move to the next level (from mid table to EL qualifying, or to push for a top 4 finish) they are allowed to do that, however will need to make up for that deficit spending at some point during that accounting period.
The only real difference is that they do need to include transfer fees (amortized over the length of the contract). For me that is appropriate.
But at the end of the day, one key thing to remember is that FFP is not about leveling the playing field between the rich and not so rich clubs. Successful clubs who generate large revenues will always have more to spend on salaries and transfer fees than less successful clubs. It’s also not something to prevent a club investing to try to move to the next level, whether (if similar rules are applied domestically) to gain promotion or to gain access to the lucrative income European football provides. But what it’s supposed to do is ensure that investment is done in a measured way and we try to prevent owners taking down clubs which punishes fans much more than owners if they use risky strategies.
What its suppose to prevent, or limit is what almost happened to us with owners willing to buy the club using debt, and borrowed to buy players like Torres, taking the club a gnats hair away from liquidation when the bet went sour. Or the borrowing Portsmouth did to gain a bit of silverware only to see things implode when the owner loss interest and decided to walk away. I'm pretty sure Alexandre Gaydamak still has a few pennies to rub together while football fans on the south coast still feel the pain he caused.
FFP may or may not help us compete with the richer clubs in Europe, but the fact we are very lucky not to be in Portsmouth shoes after the Toxic Texan is a very good reason I think FFP or something with the same goal is a very good idea. If Roman ever decides to play with another of his toys and ignore CFC the way Gaydamak did, I think Robert you might start thinking the same way.