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Premier League: Clubs 'risk bankruptcy' with promotion

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http://www.bbc.co.uk/sport/football/4156447

"It is understood that some of the 19 promoted clubs would have broken even but for player bonuses triggered by those successes.

Bell

believes his report has highlighted the risks associated with pushing

too hard for promotion, particularly when the Premier League is split on how future broadcasting revenue is shared.

"Owners

who accept the risk of relegation but also preserve the balance sheet

face much better prospects if the club is indeed relegated, with

Burnley, Norwich and Newcastle proving to be excellent examples
," he

said."

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Hang on a mo - that suggests we have adopted what you might call ''good practice''; I''m sure others will be along shortly to tell us why that isn''t the case....

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Even as a youngster, I have admired Burnley. Small place, big history, and now competing in the PL without going daft.

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The Premiership would work a lot better if they introduced a salary cap and strict financial rules are adhered to. Unfortunately it will never happen, as they would be frightened of losing their star players to overseas.

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The PL is worth too much money to do anything like that now, for the same reason a spending cap will never happen in F1 either. The big teams would never allow it and that have too much power now.

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Clubs like ours are stuck in a bit of a catch 22 when it comes to the Premier League- we don''t want to raise our wage bill too much as we''re not ''established'' but in order to become that you need to raise the wage bill.

I honestly believe football needs to bubble to burst and a massive financial reset at some point in the near future.

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I read an interesting article by Matthew Syed recently when he put forward the view that one of the main drives for a European Super League is actually because it would enable the owners of the big clubs to impose a wage cap. At the moment the big leagues won''t do it because they know that if they do then other leagues will be able to poach their best players by simply offering higher wages. His view was that owners of the big clubs see a super league as a solution to this because if all of the biggest clubs are in the same league then they could impose a wage cap with less risk of players being poached. They could thus cap wages and make bigger profits as a consequence. That said the same issue would no doubt still arise with the Chinese or American clubs etc offering more.

I don''t think anyone would argue that our approach was far wrong when we got promoted or were up in the premier league other than I would argue that we should have spent more at the start of our last premier league season rather than trying to buy in January to get ourselves out of a hole which resulted in the horrific Naismith debacle. You could also say that as our prudent approach was geared towards ensuring we had a good chance of returning if we got relegated then it illustrates further what a failure last season was, especially as the other two clubs cited alongside us are now back in the premier league. Newcastle are a bit different but essentially the approach taken by us and Burnley rely on very good decision making at board level and resourceful transfer market work. Sadly last season neither were evident.

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[quote user="Jim Smith"]I read an interesting article by Matthew Syed recently when he put forward the view that one of the main drives for a European Super League is actually because it would enable the owners of the big clubs to impose a wage cap. At the moment the big leagues won''t do it because they know that if they do then other leagues will be able to poach their best players by simply offering higher wages. His view was that owners of the big clubs see a super league as a solution to this because if all of the biggest clubs are in the same league then they could impose a wage cap with less risk of players being poached. They could thus cap wages and make bigger profits as a consequence. That said the same issue would no doubt still arise with the Chinese or American clubs etc offering more.

I don''t think anyone would argue that our approach was far wrong when we got promoted or were up in the premier league other than I would argue that we should have spent more at the start of our last premier league season rather than trying to buy in January to get ourselves out of a hole which resulted in the horrific Naismith debacle. You could also say that as our prudent approach was geared towards ensuring we had a good chance of returning if we got relegated then it illustrates further what a failure last season was, especially as the other two clubs cited alongside us are now back in the premier league. Newcastle are a bit different but essentially the approach taken by us and Burnley rely on very good decision making at board level and resourceful transfer market work. Sadly last season neither were evident.[/quote]No such thing exists, Syed is as boring at writing as he was at table tennis.

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A problem for City was the first season in PL with Lambert relegation clauses were in play and relegation did not prove to be a financial disaster. But relegation meant players we bought were not going to agree to such clauses because of the likelihood of being relegated which of course came to fruition. And led to our current situation which will remain until the likes of Jarvis and Naismith and our other big earners contracts expire.

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[quote user="pete"]A problem for City was the first season in PL with Lambert relegation clauses were in play and relegation did not prove to be a financial disaster. But relegation meant players we bought were not going to agree to such clauses because of the likelihood of being relegated which of course came to fruition. And led to our current situation which will remain until the likes of Jarvis and Naismith and our other big earners contracts expire.[/quote]When we went down in 2014 McNally said every player had a relegation clause. Was he lying? As to 2016, since all those contracts were still being negotiated by the same McNally the chances are they also still had relegation clauses as well.

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[quote user="Jim Smith"]I read an interesting article by Matthew Syed recently when he put forward the view that one of the main drives for a European Super League is actually because it would enable the owners of the big clubs to impose a wage cap. At the moment the big leagues won''t do it because they know that if they do then other leagues will be able to poach their best players by simply offering higher wages. His view was that owners of the big clubs see a super league as a solution to this because if all of the biggest clubs are in the same league then they could impose a wage cap with less risk of players being poached. They could thus cap wages and make bigger profits as a consequence. That said the same issue would no doubt still arise with the Chinese or American clubs etc offering more.

I don''t think anyone would argue that our approach was far wrong when we got promoted or were up in the premier league other than I would argue that we should have spent more at the start of our last premier league season rather than trying to buy in January to get ourselves out of a hole which resulted in the horrific Naismith debacle. You could also say that as our prudent approach was geared towards ensuring we had a good chance of returning if we got relegated then it illustrates further what a failure last season was, especially as the other two clubs cited alongside us are now back in the premier league. Newcastle are a bit different but essentially the approach taken by us and Burnley rely on very good decision making at board level and resourceful transfer market work. Sadly last season neither were evident.[/quote]I like this conversion to understanding and praising prudence, Jim, but it hardly fits in with your several posts earlier this season complaining that the club should have had a potentially financially disastrous splurge/kept high earners this summer to try to win promotion before the parachute payments ran out.

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[quote user="PurpleCanary"][quote user="Jim Smith"]I read an interesting article by Matthew Syed recently when he put forward the view that one of the main drives for a European Super League is actually because it would enable the owners of the big clubs to impose a wage cap. At the moment the big leagues won''t do it because they know that if they do then other leagues will be able to poach their best players by simply offering higher wages. His view was that owners of the big clubs see a super league as a solution to this because if all of the biggest clubs are in the same league then they could impose a wage cap with less risk of players being poached. They could thus cap wages and make bigger profits as a consequence. That said the same issue would no doubt still arise with the Chinese or American clubs etc offering more.

I don''t think anyone would argue that our approach was far wrong when we got promoted or were up in the premier league other than I would argue that we should have spent more at the start of our last premier league season rather than trying to buy in January to get ourselves out of a hole which resulted in the horrific Naismith debacle. You could also say that as our prudent approach was geared towards ensuring we had a good chance of returning if we got relegated then it illustrates further what a failure last season was, especially as the other two clubs cited alongside us are now back in the premier league. Newcastle are a bit different but essentially the approach taken by us and Burnley rely on very good decision making at board level and resourceful transfer market work. Sadly last season neither were evident.[/quote]I like this conversion to understanding and praising prudence, Jim, but it hardly fits in with your several posts earlier this season complaining that the club should have had a potentially financially disastrous splurge/kept high earners this summer to try to win promotion before the parachute payments ran out.[/quote]

I''ve never called for a "splurge" Purple - I have though called for a calculated gamble this season on the basis that its last chance saloon in terms of financial competitiveness. I also think we could have made a bit more of a calculated gamble in our summer transfer windows when in the prem. If you get the scouting right then signing players for reasonable money should not be that big a risk as they will generally have re-sale value but perhaps with the recruitment/scouting in the last premier league season its a blessing in disguise that we didn''t spend any more!

For the same reasons I would be very angry if any of our crown jewels were sold in January at the first sight of a vaguely decent offer for them. The likes of Nelson, Klose and Maddison will all still be worth plenty of money in the summer so we should not sell any of them whilst we still have a chance to get back out of this league, however tempting it might be to bank £10m for one of them in January.

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[quote user="PurpleCanary"][quote user="pete"]A problem for City was the first season in PL with Lambert relegation clauses were in play and relegation did not prove to be a financial disaster. But relegation meant players we bought were not going to agree to such clauses because of the likelihood of being relegated which of course came to fruition. And led to our current situation which will remain until the likes of Jarvis and Naismith and our other big earners contracts expire.[/quote]When we went down in 2014 McNally said every player had a relegation clause. Was he lying? As to 2016, since all those contracts were still being negotiated by the same McNally the chances are they also still had relegation clauses as well.[/quote]

Rumour has it Purple that our desperation to get certain signings over the line in the last transfer window prior to our relegation may have led to such clauses not being included in a couple of contracts (or at least not in the same form as previously) but it is purely rumour. There is no proof either way and so far as I am aware the club has never commented on it (or perhaps been asked).

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[quote user="Jim Smith"] I''ve never called for a "splurge" Purple - I have though called for a calculated gamble this season on the basis that its last chance saloon in terms of financial competitiveness. I also think we could have made a bit more of a calculated gamble in our summer transfer windows when in the prem. If you get the scouting right then signing players for reasonable money should not be that big a risk as they will generally have re-sale value but perhaps with the recruitment/scouting in the last premier league season its a blessing in disguise that we didn''t spend any more!

For the same reasons I would be very angry if any of our crown jewels were sold in January at the first sight of a vaguely decent offer for them. The likes of Nelson, Klose and Maddison will all still be worth plenty of money in the summer so we should not sell any of them whilst we still have a chance to get back out of this league, however tempting it might be to bank £10m for one of them in January.[/quote]Jim, I don''t have your posts to hand but from memory you said we should not have offloaded as many high-earners as we did, and should have been more ambitious with our summer signings. I will happily withdraw "splurge" but the reality is we had to start this summer on reducing the wage bill, while what you were advocating would not have achieved that. It might even have increased it.That "calculated gamble" of yours, which is betting everything on being promoted, was simply not one we could afford to take. If we had done that and it didn''t work the cuts we would have to make next summer would be horrendous.Thanks for the rumour about having ditched relegation clauses. As you say, only a rumour, and even if true only applying to some or all of the few we bought in the winter.

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I can''t recall precisely what I said (and what I did say would have been before we finally signed a couple of centre backs at the end of the window) but it was as much born out of the fact we were clearly hawking around certain players (such as Nelson and Tettey ) who I felt it more important to keep if we were to be competitive this season. I was not completely adverse to selling Howson although I did not want him sold to Boro and I felt the club manufactured the move. I was not against releasing any of the higher earners we released. Must admit though Trybull has been a very pleasant surprise and has removed some of my concerns over selling both Howson and Dorrans at the same time.

I would be delighted to offload a couple more high earners if we could find takers for Jarvis and Naismith!

Re the contract rumour, yes just a couple although obviously in the case of Naismith pretty disastrous if true!

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It has been widely repeated that Naismith in particular is still being paid something like £2.5m on a contract that runs to the end of next season (i.e. a year after the end of parachute payments).  It would certainly be highly plausible given how long we tried to persuade him to come - we clearly wanted to sign him the previous summer and the talks were lengthy before he finally signed at a time when the risk of relegation was very real.  It also wouldn''t be surprising if something similar was agreed to persuade Klose to join at that point.

 

It''s impossible to be sure either way, but it would certainly help to explain why it has been difficult to offload Naismith and my guess is that it is true, and if so, it was a major error of judgement both by AN (to pursue the signing of a player with so little to offer to such lengths) and the club to agree to that length of commitment. 

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[quote user="Jim Smith"]we were clearly hawking around certain players (such as Nelson and Tettey ).......[/quote]Stuart Webber told me at one of the forums that Oliveira wouldn''t be going anywhere when the Wolves rumour was circulating, so I don''t know why you think he was clearly being "hawked around".

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[quote user="Jim Smith"][quote user="PurpleCanary"][quote user="pete"]A problem for City was the first season in PL with Lambert relegation clauses were in play and relegation did not prove to be a financial disaster. But relegation meant players we bought were not going to agree to such clauses because of the likelihood of being relegated which of course came to fruition. And led to our current situation which will remain until the likes of Jarvis and Naismith and our other big earners contracts expire.[/quote]When we went down in 2014 McNally said every player had a relegation clause. Was he lying? As to 2016, since all those contracts were still being negotiated by the same McNally the chances are they also still had relegation clauses as well.[/quote]

Rumour has it Purple that our desperation to get certain signings over the line in the last transfer window prior to our relegation may have led to such clauses not being included in a couple of contracts (or at least not in the same form as previously) but it is purely rumour. There is no proof either way and so far as I am aware the club has never commented on it (or perhaps been asked).[/quote]

Key actions taken in

the business within the last 12 months include: 

-    Ensuring financial position

remains strong despite relegation, due to no debt 
and relegation clauses in all player

contracts 

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[quote user="nutty nigel"][quote user="Jim Smith"][quote user="PurpleCanary"][quote user="pete"]A problem for City was the first season in PL with Lambert relegation clauses were in play and relegation did not prove to be a financial disaster. But relegation meant players we bought were not going to agree to such clauses because of the likelihood of being relegated which of course came to fruition. And led to our current situation which will remain until the likes of Jarvis and Naismith and our other big earners contracts expire.[/quote]When we went down in 2014 McNally said every player had a relegation clause. Was he lying? As to 2016, since all those contracts were still being negotiated by the same McNally the chances are they also still had relegation clauses as well.[/quote]

Rumour has it Purple that our desperation to get certain signings over the line in the last transfer window prior to our relegation may have led to such clauses not being included in a couple of contracts (or at least not in the same form as previously) but it is purely rumour. There is no proof either way and so far as I am aware the club has never commented on it (or perhaps been asked).[/quote]

Key actions taken in

the business within the last 12 months include: 

-    Ensuring financial position

remains strong despite relegation, due to no debt 
and relegation clauses in all player

contracts 

[/quote]Thanks, nutty. I thought that was the case for the 2016 relegation squad as well as for the 2014 squad, but hadn''t found that confirmation.

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That "calculated gamble" of yours, which is

betting everything on being promoted, was simply not one we could afford

to take. If we had done that and it didn''t work the cuts we would have

to make next summer would be horrendous.Unfortunately it doesn''t seem to dawn on some posters that contracts are longer than one season.Whoever we signed this summer we would have to pay for a season, or usually two more seasons afterwards.That is what has sunk so many clubs after leaving the PL. What could be afforded this season will not be after we lose £32m in parachute payments. Trying to ''hawk round'' players on high contracts would simply mean clubs offering to take thos contracts on a part of the cost ie leaving us with a fair bit to pay... with no player !

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