Good idea from Platini

Bad idea, in my opinion. People should be able to go into debt if they want to. Fulham wouldn't be where it is if it couldn't have let Al Fayed spend a small fortune on the club.

Most enlightening interview the BBC has done of a chairman, I think. Smart guy. Only reason he's selling is he took a big hit when the economies tanked. He talks about not regulating football financially, among many other things.

Portsmouth wouldn't have won the FA Cup without being able to go in to debt probably. At least not with the quality of talent they had that year.

http://news.bbc.co.uk/sport2/hi/football/7403878.stm

 

RE: Re: Good idea from Platini

What I find hilarious is that the owners of Chelsea, AC Milan, and Inter Milan are backing the plan. Of course, they've already spent their money and just don't want anyone else to catch them.

I'd prefer a salary cap, a percentage of revenue. Let owners spend what they want on transfer fees, but let the team support the salaries. That's limiting enough, as it is (as only so many top players could fit within the cap of a smaller club).

 

RE: Re: Good idea from Platini

And lets see who the first debt riddled club is that goes Bankrupt?

It wont be too long I know it wont, ask anyone at Lehmans or any other financial Institution thats no longer with us, football clubs will go the same way one day if this is allowed to continue, I welcome Platani's plan. No one will Bail out a Football, on the other hand Obama doesnt have a football club YET!!!

Lyle your talking out your arse, like you there are too many people deep in debt and that's whats wrong with this country, wake up and smell the rose will yer!

P.S If you cant afford it DONT Buy it!!!

 

There's always risk when you leverage debt for future earnings, but it's often very successful. I don't like the proposed idea b/c it limits those future earnings and fails in the stated objective, which is to protect the clubs. If we were only talking about Premier League earnings, that would be one thing. But the gap generated by teams' making the Champions League (and Europa to a lesser extent) is massive. Five years ago, CL earnings on average, made up 14% of a team's revenue and that has only gone up since. The best way to make it up is to go into debt and try and make it into one of those slots. Platini's idea only serves to protect the present heirarchy and restrict other clubs from crashing the party.

I think Andy's more on the right track if you're looking for an idea that helps protect clubs from owners too willing to spend irresponsibly. Something should be done since the big 4 in England are all operating at losses to hold their spots. This guarantees that anyone trying to catch them has to not only make up the shortfall in earnings from UEFA, but also those losses, thus driving up the risk.

Any plan would probably need to require revenue sharing of a % of those UEFA earnings by the participants across their respective leagues or else you might as well just make an actual Champions League/Super League and be done with it. That or increase the number of CL & Europa slots the EPL gets. Based on the annual top 20 lists by Deloitte's, EPL clubs make up a disproportinate percentage of top revenue earners. There's a reason why there's virtually no competition in the EPL for the CL spots, but there is in the other leagues.

 

Re: RE: Re: Good idea from Platini

Talking out my ass? Come again? You have to spend money, to make money and a great way of doing it is to go into debt. I didn't say its not risky, but it is a common business practice... and it is often how people or corporations get ahead of other people and corporations. Fulham is a perfect example of it.

 

Re: RE: Re: Good idea from Platini

Talking out my ass? Come again? You have to spend money, to make money and a great way of doing it is to go into debt. I didn't say its not risky, but it is a common business practice... and it is often how people or corporations get ahead of other people and corporations. Fulham is a perfect example of it.[/quote]

Spending money to make money is a form of gambling and the deeper you spend the deeper you go in to debt, I bet you got maxed out credit cards too!

And I love the word "Great" you must be the next president Lyle

 

RE: Re: RE: Re: Good idea from Platini

????

In the first place, the capitalist model of acquiring debt for growth, then profit, assumes either a demonstrably superior product or an unlimited or unaddressed market.
Consumer debt is a whole different thing, it assumes future compensation and/or inflation to hedge against.

Since the possibilities for higher return in football are quite limited, I see Platini's point. the only way to increase revenue is greatly superior product. Problem is investing in your infrastructure BEFORE MARKET TESTING.
In fact, his scheme would serve to provide an effective salary cap. The problem is competition from other national leagues for the talent available.

I dont think it will work, though. Most clubs which spend a lot of borrowed capital on the idea of greater attendance or high paid tournaments dont get their wish. Sorta like borrowing to buy lottery scratchoffs.

 

If you'd be so kind, could you reference the part in the article you linked that says, It is not "income must meet or exceed expenses" It IS "income must meet or exceed TRANSFER expenses."? And if that is the case, why does it go on to list the net losses of chelsea and ManU? Surely with revenues over 250M euros and over 300M euros respectively, they didn't spend that much on transfers in any year. I don't have Real Madrid's 08/09 revenues, but in 07/08 they were 365.8M euros and they haven't exceeded that in transfers despite the "obscene" amount they've spent this summer.

I never said the article mentioned revenue sharing. I mentioned revenue sharing as a possible factor to lower the amount of risk (debt) a club would need to get into the Champions League. As Fog mentioned, you don't take on that debt w/o a reasonable expectation that there's available revenue to win. Well, if the big 4 are pulling 20% (a conservative estimate today) of their revenues annually from the CL, then that's the single largest amount of known, attainable, future revenue to target. But to break into the big 4, you have to spend initially to bridge the talent gap. While, historically speaking, attaining that revenue has been more elusive than logic would suggest, I disagree with Fog's lottery point. It depends where you are in the pecking order. Tottenham overcoming Liverpool would not be a stretch.

My problem with Platini's plan is twofold. One, it stifles competition. This is more of a problem in the EPL than other leagues, but I'm looking at it from a Fulham perspective. The longer the big 4 maintain a stranglehold on the CL spots, the larger the hurdle every other team has to climb to compete with them. We're talking about a gap of (based on the numbers) at minimum 40M euros annually and growing. A team breaking into the big 4 and causing teams to cycle into and out of the CL spots not only prevents that gap from growing, it shrinks it. Making that harder to do and/or dragging out the prospect of a team making that breakthrough, decreases the chances of it ever happening. Ironically, I don't take that much issue with his overall idea, rather the 2 year part. Extend it to 4 or 5 years and I'd find that a reasonable amount of time to gain a profitable return on the asset.

Two, this does nothing to keep the top clubs from running up player prices as compared to the Fulhams of the world (or even those clubs below them). So what's the point? To make Ronaldo's transfer fee 50M euros instead of 70M? I look at Kaka and Ronaldo like ARod. The market will bear what it will bear. Everyone thought salaries would skyrocket after Texas gave ARod that ludicrous contract but they didn't. Contracts continued at the same rate of growth and Texas overshot the market and it bit them in the end. If the owners of Real Madrid or ManU can't make a profit despite having only 5 clubs within 100M in revenue of them....they deserve whatever fate befalls them, imo.

 

Re: RE: Re: Good idea from Platini

Gambling? No, I don't think so. Risk taking yes, gambling no. Why? Because it is a outlay of capital trying to create more capital or maintain the status quo of some business form.

 

Re: RE: Re: Good idea from Platini