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lake district canary

The new tv "windfall"

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I''ve read time after time on here that the new deal will bring untold wealth to the club and everything is going to be fantastic,  but in reality, this money is not the massive boost people think it is going to be.   The premiership is a money drain, mainly due to players'' wages and yes, we might be able to afford three or four players at extra cost,  but it is not imo going to make that much difference to the ability of the team to compete in the league, as every team in the premiership benefits from this "windfall" so will also be buying three or four better players too.  

The truth is that the money will  be soaked up in increased transfer fees and larger wage demands due to players/agents/clubs from other leagues and countries knowing there is more money in the pot.   So as welcome as the cash will be, it is not going to make a huge amount of difference in the club''s ability to compete in the league - which at the end of the day is what matters.    It will just make players/agents more greedy and deepen the culture of  money being the main focus of  a sport where local people will become more and more disenfranchised from their clubs.  

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Exactly this...However the way I see it (and choose to believe) is that with us pretty much safe, gaining that money next season will secure the long term future of our club, and looking at Portsmouth who 5 years ago sat 6th in the prem and sat awaiting an FA cup final, it''s easy to see how quickly things change.

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First we pay off our debts which helps us going forward.

 

In competing with other teams in the Prem, obviously everyone is getting extra money so relatively we are no better off.

 

It will make buying English players more expensive as they are mainly bought by English clubs who''ll have more money.  It means shopping overseas will become more important as the prices are more reasonable and will be pushed up much less by this (if at all).

 

But it does make it harder for teams coming up from the Champ.  Funnily enough, the last couple of years the promoted teams have done well, with none relegated last year, and only one this year.  Given that spending on player wages is highly correlated with success, you''d expect them to struggle, or to need more outside backing which obviously now has some restrictions via the fair play rules.

 

Also it makes it harder for wealthy individuals to put enough money in to make a difference.  If you look back to Blackburn in the 90s, Jack Walker bankrolled them to win the title with amounts that would only be modest nowadays.  People with serious money can still put in enough to help clearly, but it''s harder than it used to be.

 

Finally I think it makes relegation more of a problem even with parachute payments because the drop in income is so big.  It must be very hard to run a club with turnover of £90m in a way that it can cope with going down to more like £15m before parachute payments are added on.  It''s no coincidence that a lot of Prem teams have gone down 2 tiers recently - just look at where Wolves and Blackburn are now.

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While it is true that no Premier League club will gain an advantage over another - there are obvious gains to be made over teams in Europe and even further overseas. The effects have already been seen in the signing of RVW.

 

The arguement that fees, wages and agents costs will all go up are valid to an extent - but £8.5m is still £8.5m - the value of that money in the real world has not altered and for a club like Sporting who are in need of cash they will happily accept it.

 

In the long term it won''t mean Norwich''s future is guaranteed due to the increased costs in player wages etc, but in the short term it means a club like Norwich will be able to attract players of a calibre never previous available. Between Premier League clubs I imagine even average players will start to attract fees of around £10m - but prices in Holland, France, Spain and Portugal aren''t going to increase dramatically - in fact the price of players from those leagues is falling due to the respective economies of the host countries. The key is to avoid a bidding war with other Premier League clubs of course, but a little smart thinking over transfers will see unprecedented results. This is unarguable becuase it has already happened.

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The big advantage next season is that we will no longer be handicapped by the debt repayments. Staxing up last year and this year would be an outstanding achievement.

Financially, we will still be in the bottom 5 next season and therefore one of the favourites to be relegated as league position is 70% - 80% dependent on the wage bill you can pay.

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There will be more of a levelling up financially for us and a leveling down for ''richer'' clubs as Financial Fair Play comes in. This means that we will be more competitive in the Premier League than ever before.   

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Unfortunately that is simply not true as clubs are still allowed to make up to 105m of losses over 3 years. The premier league FFP rules are a complete farce as they mainly simply rubber stamp existing practices. It is just window dressing. They only make it harder for a Portsmouth to occur.

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T,Which explains why all the big clubs were in favour and many of the smaller clubs (although not us) voted against. I''m not that bothered by FFP, because even if it had more teeth, big clubs (like big companies the world over) will alays find ways to circumvent the system. The acid test for me with the whole FFP concept will whether Platini has the balls to tackle PSG who are apparentlly concocting the most massive sponsorship deal ever seen in sport as a way of continuing their spend spend spend strategy. Having said that, PSG are French, which I am sure will have no influence on Platini!!I less pessimistic than you about next season becuase now that we have cleared the structural debt, our financial position is not going to muhc different to most other mid-table sides (WBA, Fulham, Stoke etc). Even those clubs with rich owners (Fulham, Villa, Sunderland) are showing less inclination to dip into their own pockets and it could be argued that the increased TV money makes this less necessary. The key for us is buying wisely and doing a ''moneyball''.As for next seasons relagation, I really wouldnt fancy Cardiff, Hull and whoever emerges from the play offs to be as strong as West Ham and Southampton have been this year. The joker in the pack is Brighton (if they go up) because of Poyet and his brand of football.Onwards and upwards

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[quote user="T"]Unfortunately that is simply not true as clubs are still allowed to make up to 105m of losses over 3 years. The premier league FFP rules are a complete farce as they mainly simply rubber stamp existing practices. It is just window dressing. They only make it harder for a Portsmouth to occur.[/quote]

 

Quite. And it will not just be the owners of mega-clubs that can keep the playing field unlevelled. I don''t know what Fayed''s finances are like now but he can certainly more easily afford to put up to £35m a year into Fulham than any of our directors can with us. I doubt they could stump up £3.5m a year.

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The biggest aspect of this happening is in relation to relegation should it happen.With the increased finances and lack of debt, we''d be in a prime position to come straight back up, whereas teams who''ve missed the boat here will need to get their finances from another source (e.g. a foreign investor) in order to compete.It''s likely going to lead to a core of the same 20-26 teams in the prem from now on unless there''s some SERIOUS investment in another CCC club, or one of these ''core'' clubs drops the ball massively.

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Indy,It would be interesting to look at the stats for relageated teams. There seem to be two types. The likes of West Brom, Newcastle and West Ham who bounce back at the first attempt and those that languish for years if they dont bounce back at the first attempt. I cant remember a single team who has got relegated that has then got promoted back in anything other than the first season whilst still enjoying the parachute. Certainly Wolves and Blackburn are making heavy weather of it this year, and that''s depsite Blackburn still having a fairly decent squad (Dann, Olssons, Rhodes, Murphy) by Championship standards.

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[quote user="Louis Cyphre"]Indy,It would be interesting to look at the stats for relageated teams. There seem to be two types. The likes of West Brom, Newcastle and West Ham who bounce back at the first attempt and those that languish for years if they dont bounce back at the first attempt. I cant remember a single team who has got relegated that has then got promoted back in anything other than the first season whilst still enjoying the parachute. Certainly Wolves and Blackburn are making heavy weather of it this year, and that''s depsite Blackburn still having a fairly decent squad (Dann, Olssons, Rhodes, Murphy) by Championship standards.[/quote]

 

I think there are other factors behind the scènes with Blackburn!

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Purple - of course, but this reinforces the fact that money itself is not the answer. Ditto QPR in the prem this season.

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[quote user="Louis Cyphre"]Indy,

It would be interesting to look at the stats for relageated teams. There seem to be two types. The likes of West Brom, Newcastle and West Ham who bounce back at the first attempt and those that languish for years if they dont bounce back at the first attempt. I cant remember a single team who has got relegated that has then got promoted back in anything other than the first season whilst still enjoying the parachute. Certainly Wolves and Blackburn are making heavy weather of it this year, and that''s depsite Blackburn still having a fairly decent squad (Dann, Olssons, Rhodes, Murphy) by Championship standards.
[/quote]

 

Hull are about to do this, but yes it certainly isn''t common.

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Bethnal - are they still getting parachute money? Looking at their squad, they havent splashed the cash on transfers and their wages will be relatively modest. All credit to Bruce because I wouldn''t have fancied them at the start of the season. Having said this, they are goig to face a hell of a job to stay up next season.

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One bonus, at lease people will stop saying that Everton (who''ve been in the Premiership since it''s inception) are doing remarkably  well with very little income !

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I hadn''t realised we had avoided relegation so I won''t join in this thread.

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Whilst the tv money might not make a dramaric increase initially, don''t underestimate it. Anyone who saw the figures released last week from club accounts last year will see we have great financial potential:

We had the 4th highest profit after tax (11/20 didn''t make one)

7 Teams relied more on TV money for revenue than us (Wigan highest 88%, us around 66%)

We had the 8th highest commercial revenue

We had the second lowest wages in the league and had the lowest % of revenue spent on wages (49% to QPR''s 91%, Villa 87%)

We were one of 6 clubs with little or no net debt

And we had the 4th highest cash balance (£17m)

These figures will have changed this season, but not dramatically. Yes other clubs rely on owner input, but we will be a force in a few years time if we can remain in this league.

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Swindon,Great point - it never ceases to iritate me when they talk about Moyes being a miracale worker on a shoe string. This is an urban myth propogated by lazy journalists and pundits. Everton''s wage bill last year was £63M compared to our £37M. For this extra £26M they earned 9 points more than us. Lambert and Hughton have achieved much more relative to Moyes.

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[quote user="Gnasher"]Whilst the tv money might not make a dramaric increase initially, don''t underestimate it. Anyone who saw the figures released last week from club accounts last year will see we have great financial potential:

We had the 4th highest profit after tax (11/20 didn''t make one)

7 Teams relied more on TV money for revenue than us (Wigan highest 88%, us around 66%)

We had the 8th highest commercial revenue

We had the second lowest wages in the league and had the lowest % of revenue spent on wages (49% to QPR''s 91%, Villa 87%)

We were one of 6 clubs with little or no net debt

And we had the 4th highest cash balance (£17m)

These figures will have changed this season, but not dramatically.
Yes other clubs rely on owner input, but we will be a force in a few years time if we can remain in this league.[/quote]

 

We had a large cash balance (and so no net debt) in part because we didn''t pay off the real external debt of around £11m, not to mention the £4m we owe directors. I would be surprised if we had anything like that amount left over at the end of the current financial year.

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Last season: ViIlla 18m loss, Fulham 18m loss, Sunderland 32m loss, Stoke 10m loss. This indicates the amount that these clubs are subsidised by their owners and the financial handicap we will continue to be up against next season as these losses will still be allowed under Premier FFP.

Swansea and West Brom are notable exceptions which shows what can be done. However, they are exceptions. There are numerous other clubs who are a similar size to Norwich without wealthy benefactors and also some with benefactors. They are in the Championship and League One. Ultimately the outperforming players that allow a club to overachieve its financial circumstances get creamed off by richer clubs so long term the odds are you will be relegated at some stage. Its just reality. The good news for us anyway is that a more genuine form of "financial fair play" is being introduced to the Championship which should improve the chances for those who are relegated from the Premier League. For some reason though there is a lot lower correlation between finances and points in the Championship than the Premier League. Maybe because the Championship is more financially even or because of the financial differentials between the Premier League and the Championship means players that can really make a difference are at least squad players in the Premier League.  

 

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Everton have the 10th largest wage bill but have consistently finished higher than this. They are the one club who has conistently outperformed their financial position over the long term. 

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[quote user="PurpleCanary"]

[quote user="T"]Unfortunately that is simply not true as clubs are still allowed to make up to 105m of losses over 3 years. The premier league FFP rules are a complete farce as they mainly simply rubber stamp existing practices. It is just window dressing. They only make it harder for a Portsmouth to occur.[/quote]

 

Quite. And it will not just be the owners of mega-clubs that can keep the playing field unlevelled. I don''t know what Fayed''s finances are like now but he can certainly more easily afford to put up to £35m a year into Fulham than any of our directors can with us. I doubt they could stump up £3.5m a year.

[/quote]

From our perspective it''s not the limit on losses that will make an impact, it''s the cap on wage increases. Wet Spam are already moaning that they won''t be able to afford to sign Andy Carroll because of this whereas we are one of only a few teams who currently have a total wage bill of less than £50m so we are at an advantage in that we can increase our overall wage spend by more than most of our competitors (I think that there''s possibly only ourselves, Swansea Wigan and Reading that have <£50m wages this year).

This coupled with the sudden increase in TV money and our paying off the debt means that we should be able to steal a march on most other teams in the lower-mid table by improving our team relatively more than they can in this first season

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[quote user="PurpleCanary"]

[quote user="T"]Unfortunately that is simply not true as clubs are still allowed to make up to 105m of losses over 3 years. The premier league FFP rules are a complete farce as they mainly simply rubber stamp existing practices. It is just window dressing. They only make it harder for a Portsmouth to occur.[/quote]

 

Quite. And it will not just be the owners of mega-clubs that can keep the playing field unlevelled. I don''t know what Fayed''s finances are like now but he can certainly more easily afford to put up to £35m a year into Fulham than any of our directors can with us. I doubt they could stump up £3.5m a year.

[/quote]

From our perspective it''s not the limit on losses that will make an impact, it''s the cap on wage increases. Wet Spam are already moaning that they won''t be able to afford to sign Andy Carroll because of this whereas we are one of only a few teams who currently have a total wage bill of less than £50m so we are at an advantage in that we can increase our overall wage spend by more than most of our competitors (I think that there''s possibly only ourselves, Swansea Wigan and Reading that have <£50m wages this year).

This coupled with the sudden increase in TV money and our paying off the debt means that we should be able to steal a march on most other teams in the lower-mid table by improving our team relatively more than they can in this first season

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[quote user="swindoncanary"]One bonus, at lease people will stop saying that Everton (who''ve been in the Premiership since it''s inception) are doing remarkably  well with very little income ![/quote]But Everton are a good example of an established Premier League club without a billionaire to bankroll them and provide a warning to every club below them in the league table.Everton don''t have a low income, but it is low relative to the top four clubs in Premier League. What they do have is a large wage bill, a large debt and as a result, an annual loss in profits. Which becomes even larger when their players up for contract renewal threaten to leave unless they get more money.  David Moyes has essentially hit a glass ceiling.This is how the new Premier League income will be swallowed up.

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[quote user="PurpleCanary"]

[quote user="T"]Unfortunately that is simply not true as clubs are still allowed to make up to 105m of losses over 3 years. The premier league FFP rules are a complete farce as they mainly simply rubber stamp existing practices. It is just window dressing. They only make it harder for a Portsmouth to occur.[/quote]

 

Quite. And it will not just be the owners of mega-clubs that can keep the playing field unlevelled. I don''t know what Fayed''s finances are like now but he can certainly more easily afford to put up to £35m a year into Fulham than any of our directors can with us. I doubt they could stump up £3.5m a year.

[/quote]

Well, needless to say, I don''t agree due to the fact that that 105m loss over 3 years is not much compared to losses that Chelsea, Man Utd and Man City have allowed themselves to incur over many previous years in transfer fees and wages. Thus they will be a lot more restricted than previously, but of course it will need careful monitoring by the authorities to catch those clubs flouting the new regulations.

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Cornish Sam I agree that the wage restricions may help to some extent but they can still increase wages by 4m next season, 4m the next season and 4m after that above 52m limit and the limit only applies to TV money not additional commerical and match day income. There is also nothing to stop benefactors subsidizing the clubs infrastructure and academies. I do think because of the the debt repayment and the wage restrictions we will be able to close the financial gap to some extent but only to some extent. We will still be at a fianncial disdvantage to most clubs just less than it was. The clubs were not voting for fair play but to maintain the current status quo as far as possible given the introduction of the UEFA rules.

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ManU made a 5m loss last season (mainly due to payments to owners and lenders). Chelseas a 4m loss amd Man City a 99m loss ManU had a turnover of 320m last season, Chelseas 261m and ManC 169m. It is primarily ManC which will be impacted by the new rules

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The bottom line is that it''s not necessarily how much money you have to spend but how your club is managed. We get more ''punch'' to each pound as we simply do not squander money like our competitors.  QPR and Portsmouth have shown us the way not to go.....  

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With 70 to 80 percentage correlation between wages and points/position 70 -80% of the "bottom line" is how much you have to spend on wages and 20 to 30 percent is how you spend that money.

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