There are lots of difficult jobs in football but right up there is being the person who needs to tell a baying mob that the club needs to live within its means, ask Fergus, or Peter. Baying mobs are under no obligation to read financial information, they are not answerable to the consequences of their demands. If they are subsequently proven to be wrong, they will not even think back to their baying days.
Over the summer, a friend suggested that then-Newco chairman John Bennett had finally stepped up to the mark. When interviewed he mentioned “sustainability” (or a variant, like unsustainable) no fewer than five times. He even asserted, “Football clubs are really good at spending other people’s money”.
Sustainability is the goal-den word in football; it can cost you trophies in the short-term, when a lemming club edges closer to the cliff, but the future is yours, if you can cope with the baying mob.
The mob got too much for Bennett, all that talk of sustainability is for the birds now. Instead, the mob have a cheerleader shouting for £50m of other people’s money to be spent to compensate for whatever inadequacies inflict their lives. The cheerleader is not offering a penny, he too wants to spend other people’s money.
Facing the media yesterday, interim chairman, John Gilligan was on to a hiding to nothing. All he could do is talk about getting the right investment, adding, “it has to be the right [other]people”.
Most football clubs go decades without winning a major trophy. It is their lot; fans are still fans; they accept their place in the world. Celtic may never again win the Big One, but we are still fans and we can still dream.
The transition from being contenders to also-rans is difficult, ask fans of Aberdeen or Dundee United, but they cope and continue to support their team. Acceptance of reality is the key. You have fewer resources, you will win less, but you will appreciate those wins more when they come. Talk of other people’s money just adds to the distress.
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Auldheid on 24th September 2024 2:56 pm….
Many thanks.
I am trudging through the UEFA FSR documents. I need a life….:)
Bottom line seems to be that:
A club can bring in money on a share issue, but this in itself is not a relevant Revenue. The club could spend that money on expanding the stadium. That could be a relevant expense, and the additional revenue could be deemed to be relevant.
What is unclear to me is, how that would work, if the club spent the money on a player, and then sold him on. Which is what dodgy dave used to do….
Thanks again,
Weeron
Malmo going well, Big Phil and the Zombies got their work cut out on Thursday
Bhoyjoebelfast 2.59
Ffs hahahaha 😆
Didn’t Big Phil and the Zombies play at the ole Burns’ Howff?
Gary
They don’t even know where they’re playing Hibs on Sunday
If No Man is An Island
How did we get to Gilligan’s Island?
THE RETURNOF WEERON on 24TH SEPTEMBER 2024 3:17 PM
My take on it
Any income from issuing of more shares (investment from existing or new shareholders) doesnt qualify as relevant football income for the revenues/costs calculation. So they wouldn’t be able to add any investment from issuing new shares to what the football club generates to help with falling within the 70% limit.
“What is unclear to me is, how that would work, if the club spent the money on a player, and then sold him on. Which is what dodgy dave used to do…”
They can spend the money how they want, but it wont be included in the income amount for the 70% limit. And they could buy a player for £10m and sell him 6 months later but only the (book) profit would be included in the relevant income amount. So buy someone for 10m, keep him for a year and he’s worth £8m in the accounts, sell him for £10m and you’ve only made a profit of £2m.
“The club could spend that money on expanding the stadium. That could be a relevant expense, and the additional revenue could be deemed to be relevant.”
It would be a relevant and allowable expense, and any extra income from the stadium would qualify as relevant but, the expense for the stadium would be shown as a depreciation cost over the life of the stadium, not in one hit, so over 30 years for example. Shares issued to the value of £60m, seats added, but only 2m allowable expenses every year. So the benefits wouldn’t be that great.
What an equity investment would do would help with the losses they keep making and that Uefa have capped. But Uefa have increased the amounts so they’re unlikely to find themselves in much trouble.
If I was them I would take the money, and spend it on capital projects, like more seats, that would guarantee an increase in income over a time and spend the rest on young players who don’t add much to the costs but could be worth a lot in income if they’re sold for a profit.
They cant blow a load of money on players with no chance of selling them at a decent profit. They need that profit now or they’ll go over the 70% limit.
The returnof weeron on 24th September 2024 3:17 pm
Auldheid on 24th
=/=/=
Yup. That was my interpretation too.
It makes sense not to stop real investment which can create football income that qualifies, but in no sense can income from share sales be classified as football earnings.
It makes me laugh how the term ” investment” in Scottish football iro R2ngers means paying for a better standard of player and lining their pockets with OPM instead of a means of investors getting a return on their investment.
Journalists like English know the difference but has one Scottish journalist or radio presenter ever made the distinction or explained how FSR hobbles R2ngers?
On the rules: there is one interesting aspect for those who say FSR won’t make a difference because the SFA as licensing body will bend the rules if needed.
Not after the SFA were exposed to UEFA as untrustworthy following the grant of the UEFA licence in 2011.
Not only has the overdue payable rule been strengthened but UEFA introduced an additional monitoring period to check any changes since the grant of licencse.
They have also made it clear in FSR that Licencing submissions by clubs must align with their audited published accounts.
What is not clear to me yet is what do clubs, Celtic included of course, have to detail in those accounts that make it easy for the SFA as licensor to identify the cost of the player squad and of course the relevant football earnings broken down into each category of earnings.
It will be interesting to see what is published in the AGM papers.
Perhaps something Paul67 can provide a heads up on?
This is important because if both elements can be clearly identified in the accounts, then supporters and shareholders will have a greater degree of transparency than in the past and where there is transparency accountability follows.
Not that I think Celtic have anything to fear or hide having played a part in FSR development but such a change will inform supporters more about Celtic as a business and hopefully reduce if not end some of the uninformed (due to lack of transparency) opinions that create disharmony between The Board and the support.
Buy 10 players in one window for 1.6m each and you wold be looking at a 4m expense a year over 4 years in the Uefa calculations.
Find two O’Rileys out of them and sell them after two years. That year looks like an increase in income of £46m which can be used to make sure you’re safe for three years.
I guess the argument is that they could also spend the £16m on transfer fees and wages in the hope that they will improve their chances of CL football over the four years which also brings and increase in income.
AULDHEID on 24TH SEPTEMBER 2024 5:06 PM
What is not clear to me yet is what do clubs, Celtic included of course, have to detail in those accounts that make it easy for the SFA as licensor to identify the cost of the player squad and of course the relevant football earnings broken down into each category of earnings.
I think the expenses are more than just the football department – all the clubs administration expenses including directors salaries are included, so the total wage bill from the annual accounts would be used with a few exemptions
Amortisation expense from the accounts would be used for cost of transfers in, profit from sales would be added to the income amount
https://documents.uefa.com/r/UEFA-Club-Licensing-and-Financial-Sustainability-Regulations-2023/J.1-Summary-of-the-calculation-of-the-football-earnings-Online
Article 86 Calculation of football earnings and aggregate football earnings
86.01
Football earnings are the difference between relevant income and relevant expenses calculated in respect of a single reporting period.
Relevant expenses are equivalent to the sum of the following elements, as described in Annex J.3 below:
Expenses – Costs of sales/materials
Expenses – Employee benefit expenses – players
Expenses – Employee benefit expenses – other employees
Expenses – Other operating expenses
Amortisation/impairment of player registrations and/or costs of a player’s registration
Loss on disposal of player registrations
Amortisation/impairment of release costs for other personnel or release costs for other personnel
Other non-operating expense
Finance costs and dividends
Relevant expenses must be increased if any of the elements listed in a) to i) above include the item below, as described in Annex J.3 below:
Expense transaction(s) below fair value
Relevant expenses may be decreased if any of the elements listed in a) to i) above include either of the items listed in k) and m) below, as described in Annex J.3 below:
Non-monetary debits/charges
Expenditure directly attributable to non-football operations not related to the club
Financial contribution set out in a settlement agreement with the CFCB and/or a financial contribution imposed by the CFCB in respect of the stability and/or cost control requirements
https://documents.uefa.com/r/UEFA-Club-Licensing-and-Financial-Sustainability-Regulations-2023/J.3-Relevant-expenses-Online
details the relevant expenses:
Expenses – Employee benefit expenses – players
All forms of consideration in exchange for services rendered during the reporting period by registered players. Includes consideration for the termination of employment.
Expenses – Employee benefit expenses – other employees
All forms of consideration in exchange for services rendered during the reporting period by all employees other than registered players, including directors, management and those charged with governance. Includes consideration for the termination of employment.
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I think we talk about player wages and transfer fees/profit in relation to the 70% ratio because its the one thing the club has most control over – the rest of the costs , if not fixed, are very difficult to cut.
I might be wrong, though
celtic40me on 24th September 2024 4:55
My reply to weeron about alignment with audited club accounts might answer the same question I was asking when I first read FSR on player cost ceiling.
The key thing is that money from share sales cannot be spent immediately on improving player quality.
Growth over the longer term is OK but not a quick fix and the baying blue mob don’t do growth.
Don’t forget all clubs have to comply with the same rules and the transparency effect I mentioned, if alignment with accounts produces such, means any ” creative accounting” attempts can be seen by them.
That article I linked to earlier comparing FSR with the FA Version of FFP leans towards FSR being a tighter means of control.
They know they’ve no money now, I think, they can’t make the next step – live within our means and improve slowly. Ripe grounds for someone to promise the glory days will be back.
AULDHEID on 24TH SEPTEMBER 2024 5:28 PM
The key thing is that money from share sales cannot be spent immediately on improving player quality.
Uefa cant stop them from spending the cash on what they want, they just cant include it in the allowable income figures. The expense would appear in the calculation, but the income that paid for the players wouldn’t.
Two years is very short term for them to see a big return on their investment. Smart scouting and a manger who buys into the plan could see a very big profit that could be included in their submissions. We need to be mindful of it ourselves and make sure we’re still looking to boost our operating income with decent profit from player trading every year
AULDHEID on 24TH SEPTEMBER 2024 5:28 PM
That article I linked to earlier comparing FSR with the FA Version of FFP leans towards FSR being a tighter means of control.
Sorry, I didnt see that.
AULDHEID
I should be more careful about what I find on the internet. This is also on the Uefa website and suggests it is only football department costs
Cost control and the squad cost rule
The new regulations will see clubs subject to squad cost controls for the first time. The cost control rule restricts spending on player and coach wages, transfers, and agent fees to 70% of club revenues. (The gradual implementation will see the percentage at 90% in 2023/2024, 80% in 2024/2025, and 70% in 2025/2026). This requirement provides a direct measure between squad costs and income to encourage more performance-related costs and to limit the market inflation of wages and transfer costs of players.
Celtic40me
I know that in the past Celtic lumped all wages paid to employees under the one heading for public consumption.
To do that now without making the distinction between player squad spend would only inflate what is taken into account in the ratio calculation, which in turn takes the ratio nearer to the 70%. This would be inaccurate as in giving the impression more of the football earnings was being spent on players than truthfully was.
Practically I don’t see how the Licensor can do a proper calculation without knowing true player squad spend and football earnings.
From memory FSR defines what roles the playing squad consists of.
Players
Manager
Coaches being obvious.
I can see why in the past clubs would not want what they spend on players being public in the days when the difference was a few K a year and might affect recruitment, but the gap is almost taken for granted now and clubs are resigned to and operate in their place in the wage market.
AULDHEID on 24TH SEPTEMBER 2024 5:51 PM
I’d agree with all that, but I can’t see a time when the club publishes the wage bill. I think it’s too commercially sensitive, unless they want to mage a point out of it like the blow off show off Huns have done in the past.
Celtic40me
I’ve forgotten more about FSR than I remember.
Thanks for that information as it reminds me why I thought FSR a game changer.
I was paying attention more to the change to overdue payable rules given 10 years claiming Rangers had one in 2011 but was more pleased to see the playing squad ratio introduced as it stopped R2ngers putting our game at risk.
There are lots of difficult jobs in football but right up there is being the person who needs to tell a baying mob that the club needs to live within its means, ask Fergus, or Peter. Baying mobs are under no obligation to read financial information; they are not answerable to the consequences of their demands. If they are subsequently proven to be wrong, they will not even think back to their baying days.
————————————————————————————————————————
Too true Paul and, unfortunately you can’t reason people out of a position that they haven’t reasoned themselves into. It has been a long and unpredictable road for the club to get to the position it is now in – who’d have ever forecast a world-wide pandemic ten years ago? The club has not only planned and managed an astonishing financial achievement, but has also delivered unprecedented on-field success with forty-one honours in twenty-four years at the same time.
Next year’s accounts could find us having £100m in the bank account. Since the turn of the century we have only once gone without a title win for three years. That looks unlikely to happen in the foreseeable future, however if it did occur, the loss of revenue would be negligible – i.e. the difference between c£4m for winning and c£2m as runners-up. However the hit from missing out on the Champions’ League with automatic qualification now looking to be gone over the next 2/3 years is a significant factor. Of course there will be the consolation of the Europa League, but the difference in prize money is substantial and would affect our financial performance.
Celtic has effectively fireproofed itself against any ‘bumps in the road’ over any three year period and for that we should be grateful. I am not going to get into actual numbers and financial projections, I’ll let others do that; it’s the principle of sustainability and the guardianship of the club that I am highlighting. It’s because we look after the business and plan ahead that it is extremely unlikely we would ever fall foul of UEFA’s financial rules and regulations.
So we will not be ‘spending all the f****** money’ anytime soon, no matter who is baying!!!
Paul 67 et al,
If im honest i can’t say im that interested about the mob over the river.
Imo, there is no old firm, but on these pages we give them far too much coverage.
Freeze them out. Let them go.
We have bigger fish to fry.
A European league in all but name.
Another domestic league to win
Domestic cups to give competitive game time to our squad players.
Soooo much positivity to bother about the huns negativity.
HH. IBWT.
PS : I think our team and officials look really smart in their Forbes Tailoring suits. Much nicer than George. 😀
AULDHEID on 24TH SEPTEMBER 2024 5:59 PM
Thumbs up
Apologies to Weeron if I hijacked your question
With our Forbes tailored suits, we really are sofishticated fish in a small pond.
Result in point3 of thread
https://x.com/HRCScotland/status/1838186580571303956/photo/1
HH
3.Engage with the Irish Community: Actively collaborate with the Irish community and relevant stakeholders to develop and implement measures that address ethnic and religious prejudice.
Hh
Celtic40me
Return of wee WeeRon
I found the answer to what information must be presented in annual accounts to comply with FSR.
The connection between a submission for a licence and annual audited accounts in respect of football earnings is covered at at
https://documents.uefa.com/r/UEFA-Club-Licensing-and-Financial-Sustainability-Regulations-2022/Article-91-Football-earnings-information-Online
91.03
Football earnings, aggregate football earnings, equity and contributions must be calculated and reconciled by the licensee to the annual financial statements and/or underlying accounting records which must also be submitted to UEFA.
and for squad cost information
https://documents.uefa.com/r/UEFA-Club-Licensing-and-Financial-Sustainability-Regulations-2022/Article-94-Squad-cost-information-Online
94.03
The elements of the squad cost ratio must be calculated and reconciled by the licensee to the annual financial statements, interim financial statements, underlying accounting records and player identification table, including the minimum information in respect of each relevant player as set out in Annex F.6.
but when it comes to player identification the table must be reconciled with accounts by an auditor but the list need not be published/
https://documents.uefa.com/r/UEFA-Club-Licensing-and-Financial-Sustainability-Regulations-2022/F.6-Player-identification-table-Online
F.6 Player identification table
F.6.1
All licence applicants/licensees must prepare and submit to the licensor a player identification table.
F.6.2
The player identification table must be provided to the auditor, who must reconcile the aggregate figures in the player identification table to the relevant figures in the balance sheet and profit and loss account in the annual financial statements and interim financial statements. However, the player identification table does not need to be disclosed within the annual financial statements or interim financial statements.
I did wonder how the latter would be handled because of commercial in confidence terms.
So UEFA are depending on the auditor of a club’s accounts to verify alignment between accounts and licence application which SFA would have to rely on.
quis custodiet ipsos custodes?
A bit like 2011.
https://www.bbc.co.uk/sport/football/articles/cgryg9598q1o
Do you think we could the stadium upgrade done in 2½ years?
AULDHEID on 24TH SEPTEMBER 2024 7:44 PM
Thanks. That makes sense.
BACK TO BASICS – GLASS HALF FULL on 24TH SEPTEMBER 2024 7:46 PM
Maybe we should do like the Milan clubs and build a new one with the Huns. Our money and their project management skills would get the job done in time.
I don’t see how you get a ROI by investing in most clubs. The best way is to take a struggling club and improve it such that it earns at a higher level.
Fergus made a packet due to buying a struggling privately owned club, getting fans and investors to pay for the new stadium, charge way more for seats and guarantee it with ST model and the renewed hope. Add on the fact that Scottish football was getting more attention and money from TV , CL was richer , possible move to EPL etc and it was a ‘perfect sunny day’ to sell his shares with them riding high.
No way you could make a profit out of Celtic now as we are maxed out on revenue and very successful.
The Newcastle investment will only work if they get CL football but they have been cautious ; can’t see a return
If you bought Falkirk right now, got to SPFL top six and europe with a moderate spend on players; you could flip it and probably retire
R2angers do have potential for a return because they can’t get regular CL money and have no assets to sell for profit. Invest now in a really top manager, the kids at Auchenowie, some clever buys like Celtic do and they could get back on top if we get a cold. Would probably take 5 years but you could then get out with a few million in profit
anyway, mon the hoops and pump St Johnstone – I really really want that perma-boring club relegated
CONEYBHOY on 24TH SEPTEMBER 2024 8:17 PM
I dont get what the Newcastle owners are doing, they must have known what the premiership financial fair play rules mean before they bought the club so I cant see how they thought they would make decent money by breaking into the top 6 clubs. Maybe they thought they could use FFP to their benefit and turn a profit from using the tv money..
But it looks like the Americans still think theres a few quid to be made – only today theres been talk about Friedkin group buying Everton and Leeds US-based owners making a statement about increasing the capacity at Elland road to 53000
I’m still celebrating the Celtic scoring 10 goals in 2 games. You can never have enough good times. 👍
Celtic40me
The Saudis are not in it to make money – they’re sportswashing throwing gazillions at all sports.
Evening all.
————————————
Gene on 24th September 2024 8:43 pm
Celtic40me
The Saudis are not in it to make money – they’re sportswashing throwing gazillions at all sports.
————————————————————————-
Spot on.
Nite y’all
Early rise
HH
Brian