Brown Nose
Well-Known Member
There has been a lot of speculation this summer about our plans to spend beyond the levels that we've been doing since we were promoted.
Since 2014, our average net spend each season have been £20-£25m (depending on what valuations you accept). This has all been very manageable with our finances and we've managed to post some healthy profits. Ever since our owners were caught out attempting to bypass rules in order to artificially add income (why we were fined when gaining promotion in 2014), we've been self-sufficient and the owners have been able to reap the rewards of their earlier investment without it costing them a penny.
There are strict Premier League rules preventing significant increases in wages each season as well as limiting liabilities in terms of losses. It is fair to say that even if our owners had wanted to spend their way into the top six, the rules stopped this. Our achievement in 2015/16 is even more remarkable given the financial disadvantages we were up against. When we got promoted, Vichai spoke about spending our way into the top five within three years by investing £180m. We achieved his aim despite the rules stopping him from doing his bit. https://www.bbc.co.uk/sport/football/27387616
Today's Times has an article from Jonathan Northcroft which references some key changes to Premier League FFP rules for the coming season. This has explained to me how it is possible that our spending this summer might enable the owners to finally begin to bridge the financial gap between us and the top six.
https://www.thetimes.co.uk/article/premier-league-clubs-pay-the-price-of-youth-7v2lxtrnm
● From midnight, a tweak to Premier League Financial Fair Play rules takes effect — increasing the scope for clubs to buy players. Since 2013, clubs have been limited by Short Term Cost Control (STCC) regulations that meant any 12-month increase in player wages of above £7m had to be funded by new commercial deals.
● The Premier League’s next three-year financial window begins tomorrow, with STCC removed - leaving clubs having to merely adhere to existing FFP strictures by which they must limit any losses to £105m over three years. A summer transfer splurge is now possible without having to worry about a short-term revenue uplift to cover it.
These two points show that we are no longer inhibited by the size of our infrastructure. Yes, we cannot spend whatever we want to, but we can speculate in the transfer market in the full knowledge that any failure can be recovered by the future sale of assets. It is also worth pointing out that the training ground and stadium developments are not covered by these rules so spending on those are permitted without consequence.
What I think this all means is that we can spend £100m this summer and not be concerned with recovering £75-80m of it through sales as we'd previously had to. We can afford to tell Man Utd and Man City to stick their £65m offers for Maguire. And if we were tempted to sell, the funds from this sale could be added to our £100m spending kitty.
All this might go some way to explaining Rodgers enthusiasm for coming to us in February too.
Since 2014, our average net spend each season have been £20-£25m (depending on what valuations you accept). This has all been very manageable with our finances and we've managed to post some healthy profits. Ever since our owners were caught out attempting to bypass rules in order to artificially add income (why we were fined when gaining promotion in 2014), we've been self-sufficient and the owners have been able to reap the rewards of their earlier investment without it costing them a penny.
There are strict Premier League rules preventing significant increases in wages each season as well as limiting liabilities in terms of losses. It is fair to say that even if our owners had wanted to spend their way into the top six, the rules stopped this. Our achievement in 2015/16 is even more remarkable given the financial disadvantages we were up against. When we got promoted, Vichai spoke about spending our way into the top five within three years by investing £180m. We achieved his aim despite the rules stopping him from doing his bit. https://www.bbc.co.uk/sport/football/27387616
Today's Times has an article from Jonathan Northcroft which references some key changes to Premier League FFP rules for the coming season. This has explained to me how it is possible that our spending this summer might enable the owners to finally begin to bridge the financial gap between us and the top six.
https://www.thetimes.co.uk/article/premier-league-clubs-pay-the-price-of-youth-7v2lxtrnm
● From midnight, a tweak to Premier League Financial Fair Play rules takes effect — increasing the scope for clubs to buy players. Since 2013, clubs have been limited by Short Term Cost Control (STCC) regulations that meant any 12-month increase in player wages of above £7m had to be funded by new commercial deals.
● The Premier League’s next three-year financial window begins tomorrow, with STCC removed - leaving clubs having to merely adhere to existing FFP strictures by which they must limit any losses to £105m over three years. A summer transfer splurge is now possible without having to worry about a short-term revenue uplift to cover it.
These two points show that we are no longer inhibited by the size of our infrastructure. Yes, we cannot spend whatever we want to, but we can speculate in the transfer market in the full knowledge that any failure can be recovered by the future sale of assets. It is also worth pointing out that the training ground and stadium developments are not covered by these rules so spending on those are permitted without consequence.
What I think this all means is that we can spend £100m this summer and not be concerned with recovering £75-80m of it through sales as we'd previously had to. We can afford to tell Man Utd and Man City to stick their £65m offers for Maguire. And if we were tempted to sell, the funds from this sale could be added to our £100m spending kitty.
All this might go some way to explaining Rodgers enthusiasm for coming to us in February too.
