Explain like I'm five: our FFP crisis

[Millsy]

I obviously know all of this, but on behalf of everyone else I shall pose the question.

For a club like us that hasn't really spent much, we don't have massive wage players, haven't splashed out tonnes (apart from donkey Aluko but our net spend can't be that much as we;ve also sold) and have a team of, with all respect, pretty mediocre players (except perhaps Moore), how come we find ourselves in this massive FFP BS?

I could understand it more if we had sold noone in years, had splashed out millions on big name very high wage players and were using no academy players, in a bid to win the PL. But we haven't. We've been little old crap Reading and if anything we've been even more crap than usual lately resorting to using lots of our kids.

If we're screwed by FFP then most of the champ will be too right?

[Oilroyal]

[Maneki Neko]

For a club like us that hasn't really spent much, we don't have massive wage players, haven't splashed out tonnes (apart from donkey Aluko but our net spend can't be that much as we;ve also sold)

how come we find ourselves in this massive FFP BS?

we have spent loads, 17 million in an aborted attempt to push on after the play off loss, and they were all signed on big wages, for a club of our size, position and income.
HTH

[yuomi]

Excellent and detailed summary here:

https://twitter.com/SwissRamble/status/1131465883522654208

[Oilroyal]

I'm not sure how else to explain this: Spreading transfer fees via amortisation reduces the volatility of the cost of transfer fees in a single season and reflects a club’s long-term spending on players

[Millsy]

Great responses thanks guys.

[genome]

For a club like us that hasn't really spent much, we don't have massive wage players, haven't splashed out tonnes (apart from donkey Aluko but our net spend can't be that much as we;ve also sold)

how come we find ourselves in this massive FFP BS?

we have spent loads, 17 million in an aborted attempt to push on after the play off loss, and they were all signed on big wages, for a club of our size, position and income.
HTH

And then we doubled down on that and gave big (and really long) contracts to some players last summer.

Gourlay really was a buffoon wasn't he?

[Greatwesternline]

Its incredibly sad to see our spend compared to Norwich.

It's like when QPR got relegated form the PL with a higher wage than Dortmund who were runners up in the Champions League...

[Winston Biscuit]

For a club like us that hasn't really spent much

lolwut!

[WoodleyRoyal]

Its incredibly sad to see our spend compared to Norwich.

Need to take in perspective here that this graph shows wages against income. Norwich still has parachute payments so their wage bill will be higher than ours, just not compared to their income.

[Ascotexgunner]

Its incredibly sad to see our spend compared to Norwich.

Need to take in perspective here that this graph shows wages against income. Norwich still has parachute payments so their wage bill will be higher than ours, just not compared to their income.

Its bloody sad compared to Leeds then. As much as we laugh at them they were decent to watch.
I wish I hadn't seen those graphs, we look like a financial disaster waiting to happen.

[Hound]

Its incredibly sad to see our spend compared to Norwich.

Need to take in perspective here that this graph shows wages against income. Norwich still has parachute payments so their wage bill will be higher than ours, just not compared to their income.

Its bloody sad compared to Leeds then. As much as we laugh at them they were decent to watch.
I wish I hadn't seen those graphs, we look like a financial disaster waiting to happen.

not waiting to happen, its happened...

[Zip]

I obviously know all of this, but on behalf of everyone else I shall pose the question.

For a club like us that hasn't really spent much, we don't have massive wage players, haven't splashed out tonnes (apart from donkey Aluko but our net spend can't be that much as we;ve also sold) and have a team of, with all respect, pretty mediocre players (except perhaps Moore), how come we find ourselves in this massive FFP BS?

I could understand it more if we had sold noone in years, had splashed out millions on big name very high wage players and were using no academy players, in a bid to win the PL. But we haven't. We've been little old crap Reading and if anything we've been even more crap than usual lately resorting to using lots of our kids.

If we're screwed by FFP then most of the champ will be too right?

Most of the damage was done in 2017. In that year we smashed our transfer record on Aluko and paid big money for the likes of Ilori, Mannone, Bodvarsson etc etc without bringing in any money on player sales. We lost Danny Williams for nothing and AAH for very little. We got a fee for Cooper but it was a pittance compared with our player spend.
We therefore had a huge net transfer spend of something like 17 million. We didn’t make any attempt to balance the books.

Add in the huge squad and wages and gradually declining income and the result is where we are now.
It means next season has to be about further cloth cutting in the hope we can reduce our overall losses and heaven forbid maybe even make a small profit but until season 2017/18 is out of the three year FFP calculations money will be tight.

It goes without saying this happened under Gourlay.

[Snowflake Royal]

I obviously know all of this, but on behalf of everyone else I shall pose the question.

For a club like us that hasn't really spent much, we don't have massive wage players, haven't splashed out tonnes (apart from donkey Aluko but our net spend can't be that much as we;ve also sold) and have a team of, with all respect, pretty mediocre players (except perhaps Moore), how come we find ourselves in this massive FFP BS?

I could understand it more if we had sold noone in years, had splashed out millions on big name very high wage players and were using no academy players, in a bid to win the PL. But we haven't. We've been little old crap Reading and if anything we've been even more crap than usual lately resorting to using lots of our kids.

If we're screwed by FFP then most of the champ will be too right?

Most of the damage was done in 2017. In that year we smashed our transfer record on Aluko and paid big money for the likes of Ilori, Mannone, Bodvarsson etc etc without bringing in any money on player sales. We lost Danny Williams for nothing and AAH for very little. We got a fee for Cooper but it was a pittance compared with our player spend.
We therefore had a huge net transfer spend of something like 17 million. We didn’t make any attempt to balance the books.

Add in the huge squad and wages and gradually declining income and the result is where we are now.
It means next season has to be about further cloth cutting in the hope we can reduce our overall losses and heaven forbid maybe even make a small profit but until season 2017/18 is out of the three year FFP calculations money will be tight.

It goes without saying this happened under Gourlay.

Although the rot dates right back to Zingaravich and McDermott's promotion.

We failed to spend enough to stay up, whilst overcommitting on wage and transfer length to mediocre players. We then made little attempt to cut our cloth on relegation and got into the first big financial issue with Zingaravich bailing leaving us with a huge dodgy Vibrac loan.

The Thai's steadied the ship with investment, but we never really got the wage budget and squad size under control compared to our declining income.

So we were in an already delicately poised position when Gourlay then screwed the pooch by massively over committing on yet more mediocrity and we fell apart.


In a nut shell, don't look at transfer fees as a way of judging spending. Look at wages vs income. We've spent badly and too much for almost 10 years now.

Just fyi 2ww1wc, this is what we all told you for years when you complained about our spending under his madj.

[tmesis]

until season 2017/18 is out of the three year FFP calculations money will be tight.

So, if we somehow survive this season, the situation should ease.

At the moment though, there are signs that we could be 2019/2020s Ipswich.

[Zip]

until season 2017/18 is out of the three year FFP calculations money will be tight.

So, if we somehow survive this season, the situation should ease.

At the moment though, there are signs that we could be 2019/2020s Ipswich.

Yes because 20/21 will only matter alongside 2018/19 and 2019/20. Next season will be a struggle.

[Oilroyal]

Although it seems a pitiful situation, Dai and his sister have not been shy in bank rolling the club since May 2018, rightly or wrongly. And according to Jose they continue to be motivated to plough more money in to help improve our position, although current FFP rules prevent them from doing so.

They have continued to push ahead with Bearwood, as this investment falls outside of FFP rules. Ploughing more money in even with a huge operating loss, shows commitment.

I have a feeling the owners and those now making the decisions will again be creative and get 3 or 4 very decent loan players in for next season, as well as a couple of frees on sustainable contracts. Not being able to do anything until July 1st also gives them time to work on moving players out; McNulty, Popa, Kelly, Mayler and a few others. Get through 19/20 season and we’ll have a clean FFP slate, a new training facility and owners who have proved to be financially supportive, only this time around they will be a lot wiser due to mistakes they and those before them have made.

I’m looking forward to next season and watching an honest group of players playing for the club and fans… It will make a nice bloody change.

[From Despair To Where?]

until season 2017/18 is out of the three year FFP calculations money will be tight.

So, if we somehow survive this season, the situation should ease.

At the moment though, there are signs that we could be 2019/2020s Ipswich.

Yes because 20/21 will only matter alongside 2018/19 and 2019/20. Next season will be a struggle.

And of course, the financial clusterfcuk of 2017/18 is exacerbated this season by the fact we made a profit in 2016/16 which mitigated against it last season but is now off the books for FFP.

[Zip]

Although it seems a pitiful situation, Dai and his sister have not been shy in bank rolling the club since May 2018, rightly or wrongly. And according to Jose they continue to be motivated to plough more money in to help improve our position, although current FFP rules prevent them from doing so.

They have continued to push ahead with Bearwood, as this investment falls outside of FFP rules. Ploughing more money in even with a huge operating loss, shows commitment.

I have a feeling the owners and those now making the decisions will again be creative and get 3 or 4 very decent loan players in for next season, as well as a couple of frees on sustainable contracts. Not being able to do anything until July 1st also gives them time to work on moving players out; McNulty, Popa, Kelly, Mayler and a few others. Get through 19/20 season and we’ll have a clean FFP slate, a new training facility and owners who have proved to be financially supportive, only this time around they will be a lot wiser due to mistakes they and those before them have made.

I’m looking forward to next season and watching an honest group of players playing for the club and fans… It will make a nice bloody change.

Good post. Perhaps our owners were a little naive allowing Gourlay so much control but overall they have backed the club to the hilt and deserve a lot more than they have had back.

[Zip]

So, if we somehow survive this season, the situation should ease.

At the moment though, there are signs that we could be 2019/2020s Ipswich.

Yes because 20/21 will only matter alongside 2018/19 and 2019/20. Next season will be a struggle.

And of course, the financial clusterfcuk of 2017/18 is exacerbated this season by the fact we made a profit in 2016/16 which mitigated against it last season but is now off the books for FFP.

The other issue is that we don’t know what the loss is going to be in 18/19. A bloated squad won’t have helped. Nor will our declining income. Transfer spend was better though with the sales of Bacuna and Ilori.