Is FFP/ PSR finally working?

[Powderfinger]

Not for a very long time, there are still large markets that have been barely touched, South America for instance and to a lesser extent the USA

NBC just recorded their best ever viewing figurse with an average of just over 500K up to 2.9 million on the last day of the season, that's tiny in a country with over 300 million people, that deal is worth $450 million a season currently, imagine what NBC or another broadcaster would pay if the figures went to an average doubled or tripled.

That's also one of the main reasons why PL clubs play pre-season games in the US, they know there is huge potential to make even more money

I wouldn't say the bubble is bursting by any means. But there has clearly been a leveling off of revenue growth. The new domestic PL TV rights deal (going through 2029) is worse than the last one once you factor in the number of matches covered. There is growth potential in the US and other regions but so far the PL has struggled to really monetize Asia very well and in Latin America the revenue potential is limited by the popularity of domestic football, La Liga, and Champions League (PL is clearly 4th in line in terms of mass interest).

Its also not clear that PL clubs can expect commercial revenues to keep rising at high rates. Why do half or most of the clubs in the league now have sponsorships with some shady Asian betting company nobody has heard of? Because legitimate companies are not lining up to pay the amount clubs are hoping for.

I think most PL clubs are expecting revenues to be semi-stable for the rest of the 2020s, maybe small increases but not dramatic ones.

 

[Red in STL]

I wouldn't say the bubble is bursting by any means. But there has clearly been a leveling off of revenue growth. The new domestic PL TV rights deal (going through 2029) is worse than the last one once you factor in the number of matches covered. There is growth potential in the US and other regions but so far the PL has struggled to really monetize Asia very well and in Latin America the revenue potential is limited by the popularity of domestic football, La Liga, and Champions League (PL is clearly 4th in line in terms of mass interest).

Its also not clear that PL clubs can expect commercial revenues to keep rising at high rates. Why do half or most of the clubs in the league now have sponsorships with some shady Asian betting company nobody has heard of? Because legitimate companies are not lining up to pay the amount clubs are hoping for.

I think most PL clubs are expecting revenues to be semi-stable for the rest of the 2020s, maybe small increases but not dramatic ones.

You might not have heard of them but you can bet a large number of Asian folks have, gambling is a huge thing in some Asian countries, even more so than the UK, they sponsor PL clubs because it gives them legitimate asvertising on TV in their home markets

In reality the UK market is tiny, 60-60 million vs 100's of millions in the Americas and billions in Asia, United pioneered the region specific marketing/advertising, there's still a lot of oppootunities out there to expand that

 

[Powderfinger]

You might not have heard of them but you can bet a large number of Asian folks have, gambling is a huge thing in some Asian countries, even more so than the UK, they sponsor PL clubs because it gives them legitimate asvertising on TV in their home markets

In reality the UK market is tiny, 60-60 million vs 100's of millions in the Americas and billions in Asia, United pioneered the region specific marketing/advertising, there's still a lot of oppootunities out there to expand that

These deals with the Asian betting companies are actually relatively small, which is why none of the big six enter them (at least as shirt sponsorships). We're talking about maybe 7-8 million pounds a year for a gambling shirt sponsorship.

What's more notable is that they do this because no other major Western company - Amazon, Apple, Toyota, Siemens, whatever - wants to spend that money to have their name on the short of a club like Wolves, Bournemouth, etc. They wouldn't take these deals with the betting sponsors if they could get the same money elsewhere without the hassle of dealing with the controversy involved in a gambling sponsorship.

Commercial revenue growth for most PL clubs is currently a tough slog. Even for the big clubs, we've seen relatively low growth in recent years compared to the explosive growth of the 2005-2016 type period.

 

[Adisa]

The rules are a joke. You can’t have other teams doing the right thing while other teams are selling hotels and players to themselves.

 

[Changeisgood]

The rules are a joke. You can’t have other teams doing the right thing while other teams are selling hotels and players to themselves.

It's also incompetence to not write in the rules to prevent this sort of thing. Selling to subsidiaries or sister companies should obviously not count in the equation. Certain clubs have made a mission to scam the system. There are always some around and there always will be. At least make it hard for them.

 

[OverratedOpinion]

A forward player with less than 20 professional appearances and 2 professional goals.

For nearly a third of the price that the club was purchased for a year ago.

Bargain.

 

[Mb194dc]

It's working if you want teams to gut their youth academy products, sell all the players from there and then use 5x their value to buy other players. Meanwhile selling assets to themselves and players to clubs they also own.

The sport is becoming a joke, they should just put hard caps that apply equally to all teams. Make the rules really simple, clear and with no easy loopholes. Then you severely punish anyone that is cheating.

 

[caid]

The rules are a joke. You can’t have other teams doing the right thing while other teams are selling hotels and players to themselves.

its whack a mole. You close down one loophole and they exploit 2 more. Chelsea won the appeal to have the hotels included in the calculations so you cant blame the PL for not trying. Being effective is another matter.

 

[Rauður Djöfull]

I agree with Ten Hag that having to have to sell homegrown talent is not the way

and everyone wonders where loyalty went

 

[WeePat]

its whack a mole. You close down one loophole and they exploit 2 more. Chelsea won the appeal to have the hotels included in the calculations so you cant blame the PL for not trying. Being effective is another matter.

The PL investigated and then approved Villa selling Villa Park to themselves a few years ago, so I’m not sure on what basis they would reject Chelsea selling hotels to themselves, unless they have a problem with the valuation of the hotels. It’s a stupid rule to begin with, and I’m not sure why they allowed Villa to do it in 2020, but once they did, it opened up the door for other clubs to do the same.

 

[caid]

The PL investigated and then approved Villa selling Villa Park to themselves a few years ago, so I’m not sure on what basis they would reject Chelsea selling hotels to themselves, unless they have a problem with the valuation of the hotels. It’s a stupid rule to begin with, and I’m not sure why they allowed Villa to do it in 2020, but once they did, it opened up the door for other clubs to do the same.

Thats a pretty stupid decision on their part, I dont think i was aware of it. Yeah they made a rod for their own back with that one. I presume a vote could change the rule?

 

[caid]

I agree with Ten Hag that having to have to sell homegrown talent is not the way

and everyone wonders where loyalty went

Its such a limited, short term advantage vs. selling any other player. I presume it comes back to bite teams in the ass relatively quickly.
Change how their sales are calculated for FFP, spreading it over a longer period to counteract it but Chelsea's accounts being totally fecked seems a sufficient punishment which seems inevitable at this point.

 

[WeePat]

Thats a pretty stupid decision on their part, I dont think i was aware of it. Yeah they made a rod for their own back with that one. I presume a vote could change the rule?

Yep, they had the chance to nip it in the bud then but inexplicably chose to allow it, setting a precedent for this type of dubious financial manipulation.

 

[WeePat]

Thats a pretty stupid decision on their part, I dont think i was aware of it. Yeah they made a rod for their own back with that one. I presume a vote could change the rule?

Rod for their own back is exactly what they’ve done.

 

[duffer]

Justice is done.

 

[golden_blunder]

Might as well let city off the hook too then. Cheating is cheating. Disgusting

 

[NotThatSoph]

Rod for their own back is exactly what they’ve done.

That looks really weird. Surely selling assets like hotels works the same as selling any other asset (like player contracts), but according to that article Chelsea's losses were reduced by the full sale price. If that's true, then the registered net value of the hotels would have to be 0.

 

[WeePat]

Might as well let city off the hook too then. Cheating is cheating. Disgusting

The issue here is the PL for some reason do not consider it against the rules. This is the second time they've had a chance to investigate something like this and write this into the rules if they didn't want clubs doing it.

Villa with Villa Park in 2020, and now Chelsea with the hotels in 2024. They investigated and approved Villa 4 years ago, and already approved this sale months ago, the only thing they were investigating here was the valuation.


https://www.bbc.co.uk/sport/football/49600851
https://www.birminghammail.co.uk/sport/football/football-news/aston-villa-stadium-sale-ffp-17865860

I don't know why the PL insists on this kind of thing being OK in the league, but they want this to be within the rules.

 

[golden_blunder]

The issue here is the PL for some reason do not consider it against the rules. This is the second time they've had a chance to investigate something like this and write this into the rules if they didn't want clubs doing it.

Villa with Villa Park in 2020, and now Chelsea with the hotels in 2024. They investigated and approved Villa 4 years ago, and already approved this sale months ago, the only thing they were investigating here was the valuation.


https://www.bbc.co.uk/sport/football/49600851
https://www.birminghammail.co.uk/sport/football/football-news/aston-villa-stadium-sale-ffp-17865860

I don't know why the PL insists on this kind of thing being OK in the league, but they want this to be within the rules.

I’m glad that you as a Chelsea fan see it that way. Trying to game the system is just cheating in my opinion.

 

[DeLigt]

Might as well let city off the hook too then. Cheating is cheating. Disgusting

For me the concept of PSR is cheating in itself.

The top teams can spend almost without limits while the smaller teams are “cheating “ and must sell their best young player to not face points deduction. I know we are part of the big teams but it doesn’t feel right and this is the reason why I don’t care for Citeh 115 charges, the rules are fecking ridiculous

 

[WeePat]

I’m glad that you as a Chelsea fan see it that way. Trying to game the system is just cheating in my opinion.

It is, but in this case, is it actually gaming the system if the PL have, now repeatedly, said it's OK and perfectly within the rules. It's not even a loophole at this point. It's just straight up part of the rules.

It's really stupid imo but it seems like PL really want clubs to be able to keep doing this.

 

[golden_blunder]

It is, but in this case, is it actually gaming the system if the PL have, now repeatedly, said it's OK and perfectly within the rules. It's not even a loophole at this point. It's just straight up part of the rules.

It's really stupid imo but it seems like PL really want clubs to be able to keep doing this.

I agree with your interpretation but not all PL clubs can afford to build their own hotels etc . It’s unfair

 

[DeLigt]

It is, but in this case, is it actually gaming the system if the PL have, now repeatedly, said it's OK and perfectly within the rules. It's not even a loophole at this point. It's just straight up part of the rules.

It's really stupid imo but it seems like PL really want clubs to be able to keep doing this.

I am not accountant, but I don’t understand Chelseas end game. They have like 40 players in their squad, approx average wage is probably 200k per week so we are talking about 32m pounds every month. I think there is a good chance Chelsea will cease to exist in a few years, with or without PSR

 

[WeePat]

I agree with your interpretation but not all PL clubs can afford to build their own hotels etc . It’s unfair

Chelsea did hotels. Villa did their stadium. Seems to me any physical asset a club owns is fair game. According to the BBC article I linked above Derby County, Sheffield Wednesday and Reading all sold their grounds to themselves to meet the financial rules in their league.

Derby in particular caused huge controversy when they did it, to the point where Boro owner sued the league over it.

 

[simonhch]

It's working to the extent that it's forcing most clubs to be reasonable from an accounting perspective but it's having the negative side-effect of making Academy products massive assets that are more valuable if sold than if offered a path into a team.

Shouldn’t this get resolved with the proposed move to an anchoring system?