http://www.bbc.co.uk/sport/0/football/27224806http://www.bournemouthecho.co.uk/sport/cherries/clubnews/11180579.AFC_Bournemouth__Cherries_declare___15million_losses/?ref=rssIt's been mentioned elsewhere, but still this is a staggering figure. And their wage bill in L1 was £11m, whereas our
Championship wage bill was £7.5
I would imagine they'll be struggling to meet the FFP target for 2013/14 (bearing in mind the wages they are giving someone I won't mention) unless Lallana leaves Southampton (they'll get 25% of the transfer fee)
Comments
It appears this was part of the deal.
Large debts from large clubs always find another mug buyer to purchase them, clubs like Bournemouth won't.
Then they will be expecting sympathy from the footy community and everyone will say how hard done by the fans are.
It seems almost impossible to break even in the Champ but this sort of excess is voluntary and mad.
When they signed Yann Kermorgant they were safe from relegation and yet, realistically, would have needed a miracle to make the Play-Offs. Why then pre committ scarce budget by offering a 32-year old an expensive two and a half year deal? They've also sunk a rumoured £400,000 which they'll simply need to write off over the length of the contract; it's highly unlikely they'll be able to sell Yann for a fee. It really doesn't make any sense.
I really hope that the Football League has the cojones to enforce the FFP rules.
Have we not f up a sell on?
They didn't have it?
The interesting thing with the Lallana transfer clause, is that it would only be triggered when Soton sold him. Thus if he moved in the current financial year, the profit would offset any losses. If he moved in August, the profit would go into the 2014/15 accounts.
There are a number of clubs operating at or over the limits and thus inflating player salaries. Let us see how the rules are enforced this time.
In future should a club with 10,000 fans be allowed to outbid a club like Charlton for players if they are overspending?
Should a small IT start up company be able to pay higher salaries to people than Google so they can get better talent and grow their business?
I just can't see FFP working.
I see your point about small start ups but without some framework then the competition for promotion (and the Premier League title) is about who has the richest owner and not who has the best footballing set up.
I can see FFP working mainly because the vast majority of clubs signed up to it. But it will have unintended consequences and we also have higher parachute payments arriving so around 10-12 clubs will have extra revenue (and extra costs with their inflated player contracts)
I recently heard that the US restrict sports clubs to $150M of debt - perhaps this is something the authorities should look at too?
However, the background to FFP is what some economists call an "Arms Race". Once some Clubs begin to spend more than they earn, to speculate to accumulate, others have no choice other than to do the same, not just in an attempt to win promotion, but simply to survive in the Championship.
The result is a classical Arms Race outcome in which everybody is losing money, but in which nobody gains. As this process gathers momentum, losses continue to rise while individual Clubs simply stand still. This very process eventually led to the total debts of Championship Clubs exceeding £1billion.
The solution to this "everybody loses" outcome was a colective agreement by all Clubs in the Championship to limit losses. That agreement was designed to be and is in the interests of all Clubs - though the term "fair play" is misleading. The difficulty with such an arrangement, of course, is that each individual Club has an incentive to cheat. If everybody else stops spending then you gain if you don't play by the rules.
To address this obvious difficulty the Clubs also agreed that those Clubs which cheated, including themselves, should be sanctioned. The chosen sanction, a restriction on player registrations, ought to be very effective.
This was all very rational and in American Sports there are many arrangements of this kind, salary caps for example, despite the US being a cathedral of capitalism. This is because those who own US Sports franchises understand that free markets don't always work and deliver good outcomes even if the looney right haven't got there yet.
It will be very interesting to see what happens now. No doubt Clubs facing sanctions will resist, but if changes in the rules are anything more than transitory, i.e. to ease adjustment, it will very disappointing and further evidence of what an unruly rabble Football Club owners typically are.