Derby

KenilworthSkyBlue

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Nov 20, 2019
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I had slightly misunderstood what you were suggesting.

You previously were on about how onerous FFP is yet you seem to be saying something about having real time monitoring of spending. How would that not be onerous to a club and costly for the EFL to maintain?

You talk about scrapping FFP because the framework doesn't work then say the tax system should change and evolve when that doesn't work. This is exactly my point. We don't scrap the entire tax system because some people are not playing fair and have found ways around it. We update it, add in clauses to close loopholes. It's a constantly evolving system and forever will be because there will always be someone trying to find a way to avoid following the rules. So why should we not do the same practice with FFP? The fundamentals of what it's trying to achieve are correct. Owners have tried to find loopholes to avoid that, so we update and change the way FFP is applied to prevent that happening.

You're throwing the baby out with the bathwater.

The point I'm saying is what is it you actually propose as an alternative? There's lots of business speak and vague stuff about 'new systems', 'working with clubs', 'spending freely with the system' (which is what FFP does) in there, but I don't see any actual proposal as to what this alternative would be or look like. Why would it not suffer from the same problems of being avoided by clubs?
Because it doesn't come at a serious cost.

Around half of the Championship is reportedly in breach of the P&S rules. If half of the UK was avoiding tax then there's a fundamental flaw in the framework and it would have to change, no?

I've mentioned at least 3 ideas to drive change but fine. The real issue with FFP is that it doesn't incentivise clubs/owners to change their spending habits. So, I'd probably start there. They also need to stop implementing rules that incentivise overspending.

As for regulation replacements I'm not anywhere near qualified to put any forward en-masse and the issue is, is that revenue within the game has grown to such a level that whatever solution people come up with, will be filled with holes. I'd suggest although I dislike them and think it probably won't work, the only way to drive sustainability within football in the UK as a whole in the immediate term would be to introduce a soft salary cap. But those again could be exploited and will likely make it harder for smaller clubs such as Wycombe or Accrington to achieve promotions.
 
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oldskyblue58

CCFC Finance Director
Apr 16, 2010
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Here are a few proposals that might change owners spending habits

Clubs to be run as proper businesses by not having the football creditors rules. Don't argue these are ordinary businesses then give those businesses special rules outside of those available to every other commercial enterprise

Owners input of funds can only be done by issue of shares or interest free unsecured loans subordinate to the ordinary creditors. Should reduce debt and interest burdens. Allows owners to "invest" if they want to

All transfers to be paid at point of sale/purchase. Excluding contractual add ons of course which fall due when achieved.

Think that might focus a few minds. If an owner wants to waste money then it hurts him not the club or those that trade with the club.

Other matters
Of course Owners run a coach and horses through the regulations they approve the rules of the private members club they are part of. Turkeys don't vote for Xmas. Perhaps an independent body or oversight committee with the power to drive change. With the teeth to punish as a last resort but to primarily advise oversee and encourage change but also regulate. Would need substantial financing of course and that is a major problem. Too much self interest stifles change. It cannot be a government controlled set up because that could create problems for the FA and national team with FIFA

The problem with "punishing" by restricting future use of funding to rectify is that players are locked in to contracts that the clubs must meet or be in breach and pay compensation. Players are the major burden on any club and often locked in for 2 or 3 years or more. What if financial results dip further in the following season/s. What happens If you restrict in that manner the only solutions would seem be to sell players on to make it possible and that could easily be seen as a restriction of trade or more owner debt. Let alone the legal challenges and clever accounting that would leave it open to similar problems. Like or not no two clubs operate or report in the exact same manner

The review I believe is meant to be every six months. Clubs are well aware how their competitors are doing and the efl for example has the information the clubs allow them to have. What the efl do not have is the resource to operate it efficiently and promptly. The clubs also operate a number of different platforms, there is no common basis. Of course the members of the leagues could change that because they are all committed to change and improvement.... except they are not. Proportionately those costs are going to fall hardest on the L2 teams than the championship. I see no case for people outside of the private members club paying for it.

The quality and calibre of the owners or custodians of the clubs need to be properly investigated when they come in. In fact checks should be carried regularly of existing owners because circumstances and motivations change. Transparency of ownership is essential imo and not hidden behind an arbitrary 10% rule so often abused. That of course means owners voting for and funding change..... not going to happen

I think if you want change then it is going to be very difficult to achieve because for it to happen all of the clubs have to be operated as proper businesses not protected by archaic rules outside of the Companies Act designed simply to maintain the status quo. Those with most to lose have to vote it in ......

You have also got to ask why clubs are reluctant to fund proper regulation and powers to enforce it. The excuse is that it costs too much and clubs are struggling financially. The sceptic in me thinks in large part it's more to do with what that proper regulation and investigation might reveal. It is afterall the owners that would need to vote in any rule change with a 75%+ majority

Rules and regulations are essential and provide the context within which the collaboration can take place. The rules need a thorough and independent review. They don't need to be totally changed but they need to be capable of review and change to react to changing circumstances.

Blue sky thinking isn't going to achieve this as will draconian rules and regulations not either.

Fans pressure does come in to this because restrict owners abilities to fund is going to create substantial pressure on those owners by fans who are largely not football finance aware. You only have to look at Facebook to see the abuse that could well ensue

Frankly lip service is being paid to change because of self interest, From all parties. If change is needed then no half measures. But know there will be consequences and some clubs will go bust because of it

I do not see much of the above happening of course ......

Just my thoughts
 
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Sky_Blue_Dreamer

Well-Known Member
Aug 16, 2018
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Here are a few proposals that might change owners spending habits

Clubs to be run as proper businesses by not having the football creditors rules. Don't argue these are ordinary businesses then give those businesses special rules outside of those available to every other commercial enterprise

Owners input of funds can only be done by issue of shares or interest free unsecured loans subordinate to the ordinary creditors. Should reduce debt and interest burdens. Allows owners to "invest" if they want to

All transfers to be paid at point of sale/purchase. Excluding contractual add ons of course which fall due when achieved.

Think that might focus a few minds. If an owner wants to waste money then it hurts him not the club or those that trade with the club.

Other matters
Of course Owners run a coach and horses through the regulations they approve the rules of the private members club they are part of. Turkeys don't vote for Xmas. Perhaps an independent body or oversight committee with the power to drive change. With the teeth to punish as a last resort but to primarily advise oversee and encourage change but also regulate. Would need substantial financing of course and that is a major problem. Too much self interest stifles change. It cannot be a government controlled set up because that could create problems for the FA and national team with FIFA

The problem with "punishing" by restricting future use of funding to rectify is that players are locked in to contracts that the clubs must meet or be in breach and pay compensation. Players are the major burden on any club and often locked in for 2 or 3 years or more. What if financial results dip further in the following season/s. What happens If you restrict in that manner the only solutions would seem be to sell players on to make it possible and that could easily be seen as a restriction of trade or more owner debt. Let alone the legal challenges and clever accounting that would leave it open to similar problems. Like or not no two clubs operate or report in the exact same manner

The review I believe is meant to be every six months. Clubs are well aware how their competitors are doing and the efl for example has the information the clubs allow them to have. What the efl do not have is the resource to operate it efficiently and promptly. The clubs also operate a number of different platforms, there is no common basis. Of course the members of the leagues could change that because they are all committed to change and improvement.... except they are not. Proportionately those costs are going to fall hardest on the L2 teams than the championship. I see no case for people outside of the private members club paying for it.

The quality and calibre of the owners or custodians of the clubs need to be properly investigated when they come in. In fact checks should be carried regularly of existing owners because circumstances and motivations change. Transparency of ownership is essential imo and not hidden behind an arbitrary 10% rule so often abused. That of course means owners voting for and funding change..... not going to happen

I think if you want change then it is going to be very difficult to achieve because for it to happen all of the clubs have to be operated as proper businesses not protected by archaic rules outside of the Companies Act designed simply to maintain the status quo. Those with most to lose have to vote it in ......

You have also got to ask why clubs are reluctant to fund proper regulation and powers to enforce it. The excuse is that it costs too much and clubs are struggling financially. The sceptic in me thinks in large part it's more to do with what that proper regulation and investigation might reveal. It is afterall the owners that would need to vote in any rule change with a 75%+ majority

Rules and regulations are essential and provide the context within which the collaboration can take place. The rules need a thorough and independent review. They don't need to be totally changed but they need to be capable of review and change to react to changing circumstances.

Blue sky thinking isn't going to achieve this as will draconian rules and regulations not either.

Fans pressure does come in to this because restrict owners abilities to fund is going to create substantial pressure on those owners by fans who are largely not football finance aware. You only have to look at Facebook to see the abuse that could well ensue

Frankly lip service is being paid to change because of self interest, From all parties. If change is needed then no half measures. But know there will be consequences and some clubs will go bust because of it

I do not see much of the above happening of course ......

Just my thoughts
Certainly a few things there I definitely agree on.

Getting rid of the football creditors rule is no.1 on the list. Can't believe it's even allowed.

Only allowing input of funds via share issue or interest-free loans is another.

Fees payable up front I also agree with, although I would still allow add ons as these can be useful to a club over longer term, as well as stuff like percentage of sell on fees.

I would like to see wages set up more business like, with pay grades for a basic income depending on first team/U23 etc based on 'fixed' income like TV and league money, then have a heavily incentivised PRP for variable income like gate receipts, merchandise and money earned from tournament placings etc and distributed according to match time. I admit it would be quite technical and would be very difficult to get clubs to agree to something like that though.
 

Sky_Blue_Dreamer

Well-Known Member
Aug 16, 2018
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Because it doesn't come at a serious cost.

Around half of the Championship is reportedly in breach of the P&S rules. If half of the UK was avoiding tax then there's a fundamental flaw in the framework and it would have to change, no?

I've mentioned at least 3 ideas to drive change but fine. The real issue with FFP is that it doesn't incentivise clubs/owners to change their spending habits. So, I'd probably start there. They also need to stop implementing rules that incentivise overspending.

As for regulation replacements I'm not anywhere near qualified to put any forward en-masse and the issue is, is that revenue within the game has grown to such a level that whatever solution people come up with, will be filled with holes. I'd suggest although I dislike them and think it probably won't work, the only way to drive sustainability within football in the UK as a whole in the immediate term would be to introduce a soft salary cap. But those again could be exploited and will likely make it harder for smaller clubs such as Wycombe or Accrington to achieve promotions.
So we agree that clubs need oversight because they won't do it themselves and that the current FFP is being abused by owners.

Where we seem to disagree is that you believe there would be some far better system to be built from scratch that would be much better, I don't. Maybe I'm just not creative enough to think of it but history shows that whatever rules you bring in someone will try, and eventually succeed, in getting around them. You even say yourself that whatever solution people come up with will be filled with holes.

The 'soft salary cap' is what FFP is effectively. It says teams can spend a certain percentage of their income on wages. Issue is what teams are classifying as income and as you also say those can be exploited.

I'm not sure how you incentivise people to stay within the spending limits? I'm afraid punishment for me is the only way you can make it work. Given that on the whole money buys success the only thing that would incentivise is giving clubs more money. But no way can the authorities afford to offer enough money to make it more worthwhile to the big clubs to stay with the limits than just spend excessively. It's the reason why we send people to prison for stealing or attacking people rather than giving money to people that don't.

Even if you did bring an incentives system in clubs would just look for ways to bend the rules to make it so they qualify for the incentives just as they try and bend them now to avoid penalties and sanctions.

Btw, I think you'd probably find a huge amount of people are avoiding tax. How may people pay someone cash in hand to do a job and it doesn't go through the books? The entire accounting industry basically exists to find ways for businesses to avoid tax via loopholes. Most of the time the amounts are not big enough to be cost-efficient to chase up (but added together make up a lot) while the huge sums are hard to prove because those involved have money and access to expertise. It's a system that is being abused constantly but you have to accept it cannot be perfect and it is constantly updated to try and minimise the amount it's being abused (often with limited effect).
 

fernandopartridge

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Dec 9, 2011
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and still the EFL won't give them a fitting punishment...
51.2.3 the standard punishment is a transfer embargo

The league can step in to reroute any transfer fees Derby might receive to the club that has not received its instalments.

Derby also have to pay interest at a rate of Barclays Bank rate + 5% until the payments are made.

There are other rights the league has to refer it to the Disciplinary Commission which I think is what will happen.
 
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Ccfcisparks

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May 13, 2011
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51.2.3 the standard punishment is a transfer embargo

The league can step in to reroute any transfer fees Derby might receive to the club that has not received its instalments.

Derby also have to pay interest at a rate of Barclays Bank rate + 5% until the payments are made.

There are other rights the league has to refer it to the Disciplinary Commission which I think is what will happen.
Thats fair punishment. I just don't understand how they've been allowed to sign new players.
 

fernandopartridge

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Thats fair punishment. I just don't understand how they've been allowed to sign new players.
The overriding objective of the EFL is to provide for a meaningful competition so I can understand why they have. If we were in Derby's shoes we'd want similar dispensation.
 

Sky Blue Harry H

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There seems to have been an in the know, reliable reporter that Derby and the EFL are in negotiations over a 9 point deduction (which the EFL want, but Derby don't !!) Can't see them escaping anything less than a 6 point 'hit'.
 

ccfcrob

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May 25, 2011
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Whilst this is all being dragged out Wycombe have to play an entire season in League 1. They are the only ones that have been punished by this
 

Sky Blue Harry H

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Whilst this is all being dragged out Wycombe have to play an entire season in League 1. They are the only ones that have been punished by this
And the Derby fans to be fair. Like most fans, a quicker decision is preferable. It must feel like a death by a thousand cuts. I don't feel sorry for the club per se, but not nice for any set of fans.
 

Grendel

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Sep 19, 2011
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Thats fair punishment. I just don't understand how they've been allowed to sign new players.
They have to have 23 players of professional standing and they only had 18
 

NorthernWisdom

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They have to have 23 players of professional standing and they only had 18
Yeah, in terms of keeping the club going, too, having them play competitive games rather than wreck the youth team's confidence by getting a hammering each week (meaning nobody turns up to watch and the finances take another hit), helps prospective footballers rather than shaft them completely, and makes the club slightly saleable.

Nobody wants to see any club go bust after all.
 

Sky Blue Harry H

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We got in arguably a far worse mess, and can probably consider ourselves lucky to still have a league club.
The difference was that SISU probably (can't remember) probably paid the bills to relevant parties on time. Mad now I come to think about it, but I've almost forgotten what our deduction was for - assume it was just the moving out of the City bit? Mea culpa for having binned that memory regarding such a love of my life (probably like trying to forget about a loved one cheating on you?! - not that I'd forget that)
 

Grendel

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The difference was that SISU probably (can't remember) probably paid the bills to relevant parties on time. Mad now I come to think about it, but I've almost forgotten what our deduction was for - assume it was just the moving out of the City bit? Mea culpa for having binned that memory regarding such a love of my life (probably like trying to forget about a loved one cheating on you?! - not that I'd forget that)
We went into administration
 

Sky Blue Harry H

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As Fernando has said before, anyone wishing for a harsh punishment best be careful, as our outlook hardly looks rosy
We're not doing anything wrong at the moment are we? Even if warwick University doesn't materialise, there's no way Wasps will want to bin us off.
 

NorthernWisdom

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Apr 23, 2013
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We went into administration
We got two points deductions in fact, didn't we? One for going in, and one for not exiting appropriately. Given the fact our accounts were such a bit of a mess that the administrator couldn't find the golden share, we formed a new club (Otium Entertainment Ltd trading as Coventry City Football Club) to take the place in the league etc, we can probably consider ourselves to have got off lightly.

And the league haven't enforced (as expected!) our promises over a new ground...
 

Sky_Blue_Dreamer

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The overriding objective of the EFL is to provide for a meaningful competition so I can understand why they have. If we were in Derby's shoes we'd want similar dispensation.
Derby tried to get away from 'meaningful competition' by overspending and covering it up with misleading accounts to give themselves an advantage over others. There's still 23 other teams in the division so I'd say that's sufficient for a meaningful competition.

If we were in Derby's shoes we'd want the same dispensation. Doesn't mean we should get it.

Make bed. Lie in it.
 

Colin Steins Smile

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If derby have failed to pay a transfer instalment to another club then the EFL should ban them from future transfers and give them a points deduction.
Additionally, the failure to pay HMRC, along with not submitting audited accounts to companies house could end up with further sanctions via the courts.
 

skybluegod

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May 13, 2011
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I understand that Derby owe the transfer instalment to Peterborough......not sure which player it's for.
I'd assume Marriott maybe? He's the last one I remember going from Peterborough to Derby. Think he resigned on a free for them this summer!
 

JimmyHillsbeard

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Feb 21, 2013
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Leicester have a billionaire writing blank cheques it would be impossible not to succeed
It would be very possible not to succeed. Cardiff under Vincent Tan, Man Citeh under Thaksin Shinawatra, QPR owned by Lakshmi Mittal, Fulham under Al-Fayed and now under Shahid Khan - all showed how it was possible to be owned by billionaires who were willing to spend and spend and nevertheless failed.
 
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