Financial Fair play rules (1 Viewer)

coundonskyblue · Oct 3, 2011

Perhaps Clouting could explain why were not taking this approach?

http://www.thenorthernecho.co.uk/sport/9285137.Quinn_steps_down_as_Sunderland_chairman/

New Sunderland chairman:

Short added: "I can assure our fans that it's the same group of people continuing to lead the club.
"With financial fair play rules coming into effect it is essential for the long-term success of the club that we develop interests on a global scale and there's no-one better than Niall to sell the ethos of Sunderland to an international audience.

"His profile, coupled with his vast knowledge of the game and the business, means he is perfectly placed to bring Sunderland to the forefront internationally.
"This new challenge begins immediately as he represents the club at the prestigious Leaders in Football conference in London this week, after which he travels to Korea with Steve Bruce and Mike Farnan, International Marketing Director.
"Trips to territories such as Vietnam, India, Abu Dhabi and Africa are also taking place in the coming months."

I'm not suggesting that as a championship team we could market ourselves abroad, but the basic message is increasing revenue not cutting costs.

Nonleagueherewecome · Oct 3, 2011

Because venture capitalists are not about expansion. They are simply using the fairplay regulations-the detail, or even confirmation of, we still await-to do what these firms do anyway. I've posted this many times, and have bitter personal experience of it, but the gameplan is usually the same.

That is; reduce all costs and overheads to a bare minimum, therefore reducing losses, without increasing quality of end product, value, or doing anything in the customers interests other than one hell of a lot of PR. Use capitalisation of existing assets to pay costs, arguing "we don't need them anyway" (with my company it was our customer database..they got 3m for it, and they only bought our company for 1m!) Then sell at a profit, actually leaving the company weaker than it was before you got involved-all that weakening of infrastructure ("savings") does of course have an impact on end product. But if it looks like something that was losing money now isn't, they've done enough.

Read up on Southern Cross for a high profile version of similar behaviour.

That's how it works in most cases...they contribute nothing and are the parasite companies that Balls and Milliband spoke about last week. The glaring alteration in strategy with us is that these companies like to get in and out with a quick buck-they rarely make long-term investments, which means they've screwed it up with us (duh!) I've always argued that private equity won't work in football, and so it has proven.

coundonskyblue · Oct 3, 2011

Nonleagueherewecome said:
Because venture capitalists are not about expansion. They are simply using the fairplay regulations-the detail, or even confirmation of, we still await-to do what these firms do anyway. I've posted this many times, and have bitter personal experience of it, but the gameplan is usually the same.

That is; reduce all costs and overheads to a bare minimum, therefore reducing losses, without increasing quality of end product, value, or doing anything in the customers interests other than one hell of a lot of PR. Use capitalisation of existing assets to pay costs, arguing "we don't need them anyway" (with my company it was our customer database..they got 3m for it, and they only bought our company for 1m!) Then sell at a profit, actually leaving the company weaker than it was before you got involved-all that weakening of infrastructure ("savings") does of course have an impact on end product. But if it looks like something that was losing money now isn't, they've done enough.

Read up on Southern Cross for a high profile version of similar behaviour.

That's how it works in most cases...they contribute nothing and are the parasite companies that Balls and Milliband spoke about last week. The glaring alteration in strategy with us is that these companies like to get in and out with a quick buck-they rarely make long-term investments, which means they've screwed it up with us (duh!) I've always argued that private equity won't work in football, and so it has proven.

I don't see how Sisu cannot see that it will not work with a football club. A football clubs value is based on it's league position, so just by cutting costs sisu will never get their money back (boo hoo).

One of the basic principles of a capitalist society is that you have to speculate to accumulate, we seem to have been taken over by capitalists who don't understand capitalism!

Nonleagueherewecome · Oct 3, 2011

I think Ranson sold them a strategy entirely out of keeping with their usual one-they smelt the potential profit at a relatively cheap investment. When the credit crunch happened, they cut the purse strings and reverted to their usual gameplan. They were kinda trapped, and this is the only strategy they have available or know in these circumstances.

In terms of not understanding football.. I really don't think they do. Onye's comments about leaving the board-the experts-in charge of the company do stack up in that sense. But after failing to follow through, again I assume due to the credit crunch, Ranson should have gone then-he has no experience of running a company the way they are doing now, and they weren't backing his vision anymore. The only aspects of that we saw from him was the "cost cutting" of shockingly over-paid "assets", Borrowdale/Kyle etc. But him going has left them "football expert"-less, leaving them utterly clueless with regard to the relationship between investment in squad and results. Normally, they are in a sphere where they can patch things up and hide it. You get found out very soon in football.

coundonskyblue · Oct 3, 2011

I agree it makes sense when they say about leaving the experts in charge, but then they should have done exactly that and players should have only been sold with Ransons/Colemans permission.

I think the credit crunch must be why their plan changed, but this still shows them as crap business people. Northern Rock collapsed in Sept 2007, they bought us in Dec 2007, by that time the whole world could see what was coming!

Nonleagueherewecome · Oct 3, 2011

coundonskyblue said:
I think the credit crunch must be why their plan changed, but this still shows them as crap business people. Northern Rock collapsed in Sept 2007, they bought us in Dec 2007, by that time the whole world could see what was coming!

Mmm, that is a really good point...I always assumed things went Pete Tong re:credit crunch a bit later, but if the writing was already on the wall...they don't have much of an excuse! Maybe they never were going to back Ransons plan? After all he said the idea was to buy the ground immediately. Maybe it was they who suckered him, maybe they wanted Prozone...and as I say above, speculation and expansion is not these firms modus operandi-it's cheap buy, cut costs, in and out, quick buck. "Investment" always sounded fishy with such backers.

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