Financial fair play rules

[bingo70]

Was going to put this in the rangers administration thread but thought it probably deserves a thread of it's own.

Just seen on Twitter that the SPL are meeting on Monday to discuss making changes to the rule book to take into account financial fair play and i was wondering what likely changes can be made.

I don't know how the specifics of it work in Germany and France but if teams are not living within their means i think they can be relegated, i'd love that to be enforced here as we've been getting stung for this going back to Livi beating us in the cup when we had a bunch of kids playing and they had a team of players they couldn't afford, we then had Mowbreys team not finishing where it should have due to Hearts bonkers financial situation.

I'm guessing rules like this wouldn't relegate a club like us that generally run at a profit but go through a couple of bad years and run at a loss but more penalise clubs that can't submit accounts on time and are spending way more than their income with no real business plan in place, i'm also wondering how any rules would affect the 'speculate to accumulate' model and how this is likely to influence any possible outside investment.

[alfie]

Make all clubs submit accounts to be reviewed by the Tache, and if they don't meet his tight fiscal standards then they are booted out? :dunno:

[jgl07]

Make all clubs submit accounts to be reviewed by the Tache, and if they don't meet his tight fiscal standards then they are booted out? :dunno:

Who will that leave in the SPL?

Hibs, Celtc, Motherwell?

[alfie]

Who will that leave in the SPL?

Hibs, Celtc, Motherwell?

Guaranteed third place and a european spot?! :greengrin

[EuanH78]

Who will that leave in the SPL?

Hibs, Celtc, Motherwell?

St. Mirren, St. Johnstone and Inverness as well I would think at least.

[Ozyhibby]

£5m salary cap per season. It's the only way to ensure the title is not a cakewalk for Celtic every season. Anything else is just a waste of time.

[bingo70]

£5m salary cap per season. It's the only way to ensure the title is not a cakewalk for Celtic every season. Anything else is just a waste of time.

Do we not spend much more than that on wages already?

[Ozyhibby]

Do we not spend much more than that on wages already?

No

[bingo70]

No

How much do we typically spend on wages p/year now?

If there was to be a cap on wages i would rather we did it so it was in line with turnover, i know this would still allow celtic to pay much more than anyone else however with a club the size of celtic it is that's always going to be the case, a cap of just say £5m doesn't allow clubs to grow, improve the fan base and then continually improve the wages year on year as the support grows.

[Ozyhibby]

The level of the cap could be adjusted annually if the league felt the need.

[alfie]

A salary cap as a percentage of turnover wouldn't stop growth.

[cocopops1875]

Did someone not say that a salary cap would be against trading rules in Europe ? Thus never going to happen

[bingo70]

The level of the cap could be adjusted annually if the league felt the need.

As much as it pains me to say it that'd be totally unfair on Celtc, to put it up as other clubs need it but limit them to a figure way below what they can legitimitely spend on players would be pretty harsh.

Not suggesting i'd shed any tears for them right enough but realistically i can't see any way this rule could be brought in, i think percentage of turnover wouldn't solve the problem of it not being a competitive league but it would stop teams overspending to get unsustainable results


A salary cap as a percentage of turnover wouldn't stop growth.

That was my point, we need to encourage teams to grow there turnover and not just limit the top clubs from spending what they can actually afford so its easier for the smaller clubs to catch up

[Ozyhibby]

Did someone not say that a salary cap would be against trading rules in Europe ? Thus never going to happen

Lots of people say that but they are all wrong.

[bingo70]

Did someone not say that a salary cap would be against trading rules in Europe ? Thus never going to happen

There's a salary cap in other sports like the english premiership in rugby (i think) so i doubt it'd be against any trading rules

[killie-hibby]

How much do we typically spend on wages p/year now?

If there was to be a cap on wages i would rather we did it so it was in line with turnover, i know this would still allow celtic to pay much more than anyone else however with a club the size of celtic it is that's always going to be the case, a cap of just say £5m doesn't allow clubs to grow, improve the fan base and then continually improve the wages year on year as the support grows.


In the real world where most of us live, £5m is a lot of money. This would give a pool of 40 players £2403 each per week. Before SKY put in money most players would earn no more than double the national average wage.

[jgl07]

Did someone not say that a salary cap would be against trading rules in Europe ? Thus never going to happen

Rugby League operate with a salary cap.

I am not sure how it works though.

[J-C]

Rugby League operate with a salary cap.

I am not sure how it works though.


In the NFL the teams are capped, the owner the jigs the salaries between the players.
So quarterback, top receivers and runningbacks would get the biggest salories, the rest would then get what the management thought they deserved until the money was used up, this also happens in the MLS.

[bingo70]

In the real world where most of us live, £5m is a lot of money. This would give a pool of 40 players £2403 each per week. Before SKY put in money most players would earn no more than double the national average wage.

It's a huge amount of money so if a team used that salary cap of £5m trying to buy success but failed and couldn't afford it we'd still be running the risk of a team going bust mid season like we are now, the only purpose of a salary cap of £5m would be to allow other teams to catch up with the old firm, it wouldn't in anyway stop teams other than rangers or celtic overspending.

[J-C]

It's a huge amount of money so if a team used that salary cap of £5m trying to buy success but failed and couldn't afford it we'd still be running the risk of a team going bust mid season like we are now, the only purpose of a salary cap of £5m would be to allow other teams to catch up with the old firm, it wouldn't in anyway stop teams other than rangers or celtic overspending.


I think all teams should be able to prove that they could afford this salary cap, if not the cap should be adjusted per teams income.

[PaulSmith]

Neil Doncaster has just added to this on his blog, see spl web for full statement

[Sas_The_Hibby]

Guaranteed third place and a european spot?! :greengrin

And relegation?! :greengrin

[bingo70]

I think all teams should be able to prove that they could afford this salary cap, if not the cap should be adjusted per teams income.

Exactly, the cap should be variable depending on what teams can afford.

Having it as a fixed amount may be too high a figure for it to make any difference to teams or it may be too low so it unfairly holds teams back.

[alfie]

And relegation?! :greengrin

I'm surprised it took someone so long to notice my glaring omission :greengrin

[NYHibby]

Did someone not say that a salary cap would be against trading rules in Europe ? Thus never going to happen

Those comments are not about a salary cap. They are about creating a maximum wage that some people here keep posting about.


Exactly, the cap should be variable depending on what teams can afford.

Having it as a fixed amount may be too high a figure for it to make any difference to teams or it may be too low so it unfairly holds teams back.

A number of people here are confusing two different issues. Are you creating a salary cap to ensure financial sustainability or you are creating one to promote competitive parity like the NFL? The two potential goals are not the same thing.

[bingo70]

Those comments are not about a salary cap. They are about creating a maximum wage that some people here keep posting about.



A number of people here are confusing two different issues. Are you creating a salary cap to ensure financial sustainability or you are creating one to promote competitive parity like the NF? The two potential goals are not the same.

I'm trying to ensure financial stability, considering what's going on just now that's got to be priority imo

[Andy74]

Neil Doncaster has just added to this on his blog, see spl web for full statement

Hearts and Rangers will be lining up to vote that through right enough. :rolleyes:

[Ozyhibby]

How about a team being able to spend up to 60% of their turnover up to a maximum of £5m.
Achieves financial stability and sporting parity all in one go. Everyone's a winner except the old firm.

[Andy74]

How about a team being able to spend up to 60% of their turnover up to a maximum of £5m.
Achieves financial stability and sporting parity all in one go. Everyone's a winner except the old firm.

You can forget any maximum limit quite so low.

There is no danger clubs with the turnover the size of Celtic will be made to spend only a fraction of it and about a fifth of what they do now on wages.

Something just based on turnover is sensible though.

[NYHibby]

How about a team being able to spend up to 60% of their turnover up to a maximum of £5m.
Achieves financial stability and sporting parity all in one go. Everyone's a winner except the old firm.

Our wages, for all staff, were £4.3m last year. Even if you exclude non-football staff, there is no way we would be under your £3m.

I don't understand why you keep posting £5m for turnover. Our turnover last year, which was the lowest in years, was £7m. There is a zero percent chance any salary cap would be set below what we spend.

[pacorosssco]

Guaranteed third place and a european spot?! :greengrin

Nope . Knowing Hibs the board would go out and sign Neil Alexander for 10 Million and 60k a week 8 year contract as well as bringing Riorden in again on back dated pay from 2006 to new improved current wage of 30K a week thus ensuring we missed out on third.

[Ozyhibby]

Our wages, for all staff, were £4.3m last year. Even if you exclude non-football staff, there is no way we would be under your £3m.

I don't understand why you keep posting £5m for turnover. Our turnover last year, which was the lowest in years, was £7m. There is a zero percent chance any salary cap would be set below what we spend.

I never mentioned a turnover of £5m once. You must have made that up in your own head.
I picked a salary cap of £5m because it is slightly above what we spend.

[NYHibby]

I never mentioned a turnover of £5m once. You must have made that up in your own head.
I picked a salary cap of £5m because it is slightly above what we spend.

You need to learn how to use commas.

I reread your post and your lack of a comma changes the whole meaning of your post. You wrote they can spend up to 60% of at most £5m. This is a £3m cap not £5m.

There is a huge difference between "spend up to 60% of their turnover up to a maximum of £5m" and "spend up to 60% of their turnover, up to a maximum of £5m". Neither of these is great drafting though.

[Bishop Hibee]

Transfer embargo for clubs not submitting their accounts on time as happens in the Football League in England would be a start. I assume this doesn't happen in the SPL given Hearts late submission :dunno:

[ancient hibee]

Salary cap will never happen and rightly so.A club should be able to benefit for making a success of the business.What if players were badly injured but could not be replaced in the transfer window because the cap would be breached?

[millarco]

Transfer embargo for clubs not submitting their accounts on time as happens in the Football League in England would be a start. I assume this doesn't happen in the SPL given Hearts late submission :dunno:

Is that much of a punishment though given the window's shut? Hearts may have missed out on signing Beattie but aside from that I don't see how it really affects clubs, unless the ban is extended into the summer months.

[NAE NOOKIE]

Salary cap will never happen and rightly so.A club should be able to benefit for making a success of the business.What if players were badly injured but could not be replaced in the transfer window because the cap would be breached?

The trouble with the first part of your post AH is that we have a league with two gigantic clubs, with the rest trailing miles behind with no hope of ever effectively bridging the financial gap. If Hibs for instance were to reach a situation where the stadium was full to capacity every home game we would still be between 30,000 to 40,000 paying punters behind the likes of celtic.

So even if Hibs reach the maximum potential their facilities will allow we would still only be the 3rd biggest club in Scotland with about as much chance of winning the league as we do now.

The SPL needs a wage cap in order to give the other non OF clubs a chance in the league and cups. Imagine if you were to wake up at the start of every season thinking you had as much chance of winning the league as you did of being relegated. Would that not be a league worth watching? The only down side I can see is that the OF away support might dwindle, but would that matter if home supports went up by even 1,000 fans at every home game, who might also visit the club shop etc. Theres a hell of a lot more money to be made from that than a visit from 4,000 weegies and their glory hunting hangers on 4 times a season.

As for the second part of your post. Thats why it should be a wage cap of £5,000 per player as supposed to a finite figure of say £5,000,000 for your full squad. Though I wouldnt be against a club being allowed to pay a maximum of two players, say £8,000 each so that each team would have a chance to make a reasonably exciting signing. Any player moaning about that would have to suck it up like they have to in American Football, where a quarterback earns millions more than a defensive end.

[Onion]

Was going to put this in the rangers administration thread but thought it probably deserves a thread of it's own.

Just seen on Twitter that the SPL are meeting on Monday to discuss making changes to the rule book to take into account financial fair play and i was wondering what likely changes can be made.

I don't know how the specifics of it work in Germany and France but if teams are not living within their means i think they can be relegated, i'd love that to be enforced here as we've been getting stung for this going back to Livi beating us in the cup when we had a bunch of kids playing and they had a team of players they couldn't afford, we then had Mowbreys team not finishing where it should have due to Hearts bonkers financial situation.

I'm guessing rules like this wouldn't relegate a club like us that generally run at a profit but go through a couple of bad years and run at a loss but more penalise clubs that can't submit accounts on time and are spending way more than their income with no real business plan in place, i'm also wondering how any rules would affect the 'speculate to accumulate' model and how this is likely to influence any possible outside investment.

The rule for clubs to submit all player contracts to the SFA didn't stop the Huns from cheating, so why do we think and other "rules" will keep the Of or Yams in check ? Sadly, life isn't "fair" and when you have the political clout of the Huns (supported by hypocrites like our First Minister) the efforts of smaller clubs like Hibs to play by the rules are futile.

The acid test will be what they do with the Huns in the next few weeks when they go to the wall, having KNOWINGLY cheated by having multiple player contracts against the rules of the SFA and FAILED to pay their taxes as required by the LAW. If this was an individual, they would end up in JAIL for a very long time. Let's see what our justice ministers and football authorities do with institutional cheating and thieving :confused:

[Beefster]

We wouldn't have been quite so keen on financial fair play rules when we were finishing third under McLeish.

[Kaiser1962]

The SPL needs a wage cap in order to give the other non OF clubs a chance in the league and cups. Imagine if you were to wake up at the start of every season thinking you had as much chance of winning the league as you did of being relegated. Would that not be a league worth watching?

Why stop at the SPL? Why not set it at a level that all 40 senior clubs can afford then you would truly achieve the parity some seem to desire?

[Ozyhibby]

It's not just about parity, it is also about financial stability. Since the SPL started we have had five clubs go into admin because they overstretched themselves trying to compete with the old firm.

[Ozyhibby]

You need to learn how to use commas.

I reread your post and your lack of a comma changes the whole meaning of your post. You wrote they can spend up to 60% of at most £5m. This is a £3m cap not £5m.

There is a huge difference between "spend up to 60% of their turnover up to a maximum of £5m" and "spend up to 60% of their turnover, up to a maximum of £5m". Neither of these is great drafting though.

I apologise for my poor grammar. Product of a poor school system.

[greenginger]

Salary cap will never happen and rightly so.A club should be able to benefit for making a success of the business.What if players were badly injured but could not be replaced in the transfer window because the cap would be breached?


How about a salary cap for the 18 players named on the team lines for SPL matches. That would'nt hinder Celtic in Europe and there is a kind of precedent with the under 21's quota in the 18 already.

Only draw-back is teams would have to have a Chartered Accountant in their coaching staff ( not that there is anything wrong with that :greengrin)

[MrSmith]

I apologise for my poor grammar. Product of a poor school system.

Not having a go mate, but the statement in bold is a bit unfair - we all make our own choices to engage or disengage! I had a poor experience of school too but, as I got older, I realised that it indeed, was of my own doing.

[Kaiser1962]

It's not just about parity, it is also about financial stability. Since the SPL started we have had five clubs go into admin because they overstretched themselves trying to compete with the old firm.


So why not set a wage level that suits Arbroath or Berwick, so that they can compete and remain financially stable? £5m, which I have seen mentioned, is out of all but about 5 clubs reach.

[Ozyhibby]

Last time I look Arbroath and Berwick were not in the SPL. I said £5 because it was figure that would only curtail the spending of the old firm.

[Eyrie]

The squad cap would have to be a proportion of turnover. 60% is regarded as generally sustainable, but it could be as high as 70%. There could then be a maximum debt-to-income ratio to stop clubs simply running at a loss over a long number of years and building up a problem.

This would mean that a club which is commercially successful can have a larger player budget. It would also mean that clubs don't have a target figure which is beyond their means to fund.

[Beefster]

Last time I look Arbroath and Berwick were not in the SPL. I said £5 because it was figure that would only curtail the spending of the old firm.

The problem is your suggestion is designed to help Hibs (seeing as we'd be one of the top payers not actually affected). The argument can then be made to make the cap even lower so that Dunfermline, St Mirren, ICT and co can play on a level playing field too.

What do the clubs do with the money they earn but can't spend?

[Kaiser1962]

Last time I look Arbroath and Berwick were not in the SPL. I said £5 because it was figure that would only curtail the spending of the old firm.


So the SPL becomes a closed shop?


I surmised that your proposal was designed to stimulate competion in the league, and as someone else mentioned, in the Cups. If you set a wage cap at £5m then it may as well remain unchanged as it will hinder only 3 clubs (at the time of writing :wink:), another two would remain pretty static and to the other 35 clubs it may as well be £50m given the likeliehood that any of them will get anywhere near it.

[Ozyhibby]

I set it at that level because to set it any lower would risk some clubs not voting for it. If you lower it to say £2m per season then maybe the old firm would be joined by Hibs, hearts, aberdeen and Dundee utd in saying no thanks. It would need to be voted on, so I set it at a level where it only effected the old firm. I personally would not care if they set it at £4m which is the level set in rugby union.

[ScottB]

I don't think you could have a wage cap in any fashion other than a percentage cap against turnover, I think PWC recommend 60% so that would do.

Yeah, Celtic and Rangers could still spend more, but likewise we could spend more than the clubs smaller than us. I don't feel a need for all clubs to be created equal, because they simply aren't, just for the distribution of income to be fair and to stop teams like Rangers, Hearts, Gretna, Livingston et all from spending vast amounts of money they simply can't afford.

[Liberal Hibby]

The problem is your suggestion is designed to help Hibs (seeing as we'd be one of the top payers not actually affected). The argument can then be made to make the cap even lower so that Dunfermline, St Mirren, ICT and co can play on a level playing field too.

What do the clubs do with the money they earn but can't spend?

Make the caps tradeable - so clubs can buy other teams salary allowances. For example Celtc have a £5m cap - but need to spend £20 - so they have to make an offer for other teams' allowances. Say Dunfermline only spend £2million, so have £3m free - Celtc can make them an offer for it (as they can with Arbroath and Berwick). So imagine Dunfy sell the £3million spare for £0.5 million - it means they can probably afford to spend a bit more each season (particulalry if they offer a longer term deal) - Celtc can still attract the big names - but have to recycle money throughout the Scottish game.

[Ozyhibby]

They have a system like that in the states where clubs who wish to spend above the cap can do so only if they pay a 30% fee of whatever they spend back to the other teams in the league. So if Celtic wish to spend £8m and the cap is £5m then they have to give the league £1m to share amongst all the other teams.
That and equal tv money would go along way to making our league more interesting.

[Phil D. Rolls]

The rule for clubs to submit all player contracts to the SFA didn't stop the Huns from cheating, so why do we think and other "rules" will keep the Of or Yams in check ? Sadly, life isn't "fair" and when you have the political clout of the Huns (supported by hypocrites like our First Minister) the efforts of smaller clubs like Hibs to play by the rules are futile.

The acid test will be what they do with the Huns in the next few weeks when they go to the wall, having KNOWINGLY cheated by having multiple player contracts against the rules of the SFA and FAILED to pay their taxes as required by the LAW. If this was an individual, they would end up in JAIL for a very long time. Let's see what our justice ministers and football authorities do with institutional cheating and thieving :confused:

WE know where they LIVE!

[GreenPJ]

The problem is your suggestion is designed to help Hibs (seeing as we'd be one of the top payers not actually affected). The argument can then be made to make the cap even lower so that Dunfermline, St Mirren, ICT and co can play on a level playing field too.

What do the clubs do with the money they earn but can't spend?

Pay off debt, employ better youth coaches, first team coaches, fitness coaches, lower the entrance into games to encourage more fans.

[Keith_M]

We wouldn't have been quite so keen on financial fair play rules when we were finishing third under McLeish.


Why? What was it Hibs were doing then that would have broken those rules?

[Beefster]

Why? What was it Hibs were doing then that would have broken those rules?

Overspending.

[ScottB]

Why? What was it Hibs were doing then that would have broken those rules?

Spending way beyond our means? Hell we've been doing it the last couple seasons too.

I would also venture having a rule that no club can begin a season if they owe outstanding debts to the taxman, let's stamp this one out right now, failure to pay tax should result in expulsion from the league, no more of the Hearts style liquidation orders every 3 months.

[Beefster]

Make the caps tradeable - so clubs can buy other teams salary allowances. For example Celtc have a £5m cap - but need to spend £20 - so they have to make an offer for other teams' allowances. Say Dunfermline only spend £2million, so have £3m free - Celtc can make them an offer for it (as they can with Arbroath and Berwick). So imagine Dunfy sell the £3million spare for £0.5 million - it means they can probably afford to spend a bit more each season (particulalry if they offer a longer term deal) - Celtc can still attract the big names - but have to recycle money throughout the Scottish game.

Good idea. It has to be something like this or a percentage of turnover.

[PeeJay]

I don't know how the specifics of it work in Germany and France but if teams are not living within their means i think they can be relegated ...


Here's an interesting read on the German Bundesliga, showing (IMO) how to set up things vis-a-vis financing and licensing properly (apologies if some of you've all read it before - the SPL authorities haven't it would seem)

http://www.publications.parliament.uk/pa/cm201011/cmselect/cmcumeds/writev/792/fg84.htm

[Keith_M]

Overspending.


Could you be a bit more specific. For instance, what was our wages to turnover ratio (or any other detail of the overspending)?


I always thought that most (though obviously not all) of the debt incurred was because of the costs of rebuilding the stadium. However, I don't have any figures to prove or disprove that.


FWIW, I think there should be new Financial Fair Play rules. There should be a wages to turnover ratio employed over a rolling number of seasons, as it's unworkable over one season. There should also be stiff penalties invoked for non payment of tax and also for consistent late payment of players.


I for one wouldn't have a fixed salary cap, as such, as it could be considered to penalise success.

[Andy74]

Overspending.

To some extent but probably not more than we turned over for an extended period.

Also not to the exclusion of paying taxes, suppliers or players! There was also the promise then of bigger TV money income in the future which suddenly went so that the borrowing was no longer servicable.

I see what you are saying though and it's right that we should be caught by this like everyone else.

It needs to be turnover based though so teams can rightly increase income and get to use that.

How we can more fairly spread the income is a factor though as a cap won't bring us closer to the OF.

The main point of this should be to ensure no cheating by spending way more than you get. I think its criminal that there has been no way to stop the likes of Hearts, Gretna and Livingston from doing others out of cups or league places by 'spending' what thery didn't have.

[GreenPJ]

The problem is your suggestion is designed to help Hibs (seeing as we'd be one of the top payers not actually affected). The argument can then be made to make the cap even lower so that Dunfermline, St Mirren, ICT and co can play on a level playing field too.

What do the clubs do with the money they earn but can't spend?

Pay off debt, employ better youth coaches, first team coaches, fitness coaches, lower the entrance into games to encourage more fans.

[Beefster]

Could you be a bit more specific. For instance, what was our wages to turnover ratio (or any other detail of the overspending)?


I always thought that most (though obviously not all) of the debt incurred was because of the costs of rebuilding the stadium. However, I don't have any figures to prove or disprove that.


FWIW, I think there should be new Financial Fair Play rules. There should be a wages to turnover ratio employed over a rolling number of seasons, as it's unworkable over one season. There should also be stiff penalties invoked for non payment of tax and also for consistent late payment of players.


I for one wouldn't have a fixed salary cap, as such, as it could be considered to penalise success.

I don't have the actual figures but IIRC, we lost something like £8m between relegation and 2002 or 2003. Our debt was up at £15-18m at one point, of which the ground didn't even account for half.

[Keith_M]

I don't have the actual figures but IIRC, we lost something like £8m between relegation and 2002 or 2003. Our debt was up at £15-18m at one point, of which the ground didn't even account for half.


Then thank goodness for the Golden Generation and Super Rod's bargaining powers :greengrin

[Kaiser1962]

I always thought that most (though obviously not all) of the debt incurred was because of the costs of rebuilding the stadium. However, I don't have any figures to prove or disprove that.


Very little of the debt for the rebuilding of the stadium was met by the club. The costs of the redevelopment at that time were met by the holding company.

[bighairyfaeleith]

Make the caps tradeable - so clubs can buy other teams salary allowances. For example Celtc have a £5m cap - but need to spend £20 - so they have to make an offer for other teams' allowances. Say Dunfermline only spend £2million, so have £3m free - Celtc can make them an offer for it (as they can with Arbroath and Berwick). So imagine Dunfy sell the £3million spare for £0.5 million - it means they can probably afford to spend a bit more each season (particulalry if they offer a longer term deal) - Celtc can still attract the big names - but have to recycle money throughout the Scottish game.

I can't think of a good reason why this would not work. I like it.