Financial Fair Play Regulations, THFC, Enic & Transfers Explained In Full

This is an extremely well written, informative and relevant piece. It comes from Glory Glory and specifically a poster who goes by the user-name of Intrepid.

The lethargic nature of the transfer market across Europe has little to do with lack of desire or urgency for any Clubs to strengthen their squads. The overriding issues are financial and regulatory.

All Clubs are fully aware that the Financial Fair Play Regulations are going to determine both their wage and transfer budgets – the main sticking point is going to be the wage budget of each and every Club and the vast majority of Clubs are now preparing for the future and the players (and agents) are fully aware of the fact that within the next 2 to 3 years the wages of the majority of players will decrease.

As an example, any player currently on £100k pw on a 5 year contract will struggle to get that type of deal either now or in the future (unless they are in top 20 of world players) so they will stay where they are unless Manchester City come in for them (and Manchester City cannot buy everybody and only have this window and the next to splash the cash as they have been).

The 2 Milan Clubs, Barcelona et al are all cutting their wage budgets substantially – they all have to move players on but the players will not move – why should they? They are still on contracts that were signed pre regulatory times.

Many of you will have seen different articles and interviews (even our very own Manager) stating that loan deals will be the order of the day with some big players moving on but only if the selling Club pays a proportion of the players wages.

This will be the start of the sea change happening in the football world. Players and agents know that the easy money of yesteryear is now going so they will hold onto their precious contracts for as long as they can. Another issue that has always been to the fore is the fact that Spanish and Italian Clubs have been calculating wages on the net sum – coupled with the differing levels of taxation vis a vis the UK then trying to get a player from either of those leagues has always proven to be problematic. As far as THFC is concerned, it is an absolute myth that we do not have the money to enter into the transfer market or that we lack desire to get top players in – we will always strive to get the best players in but the regulations change for everybody and it would be reckless to go and sign 2 or 3 top players on long term contracts (which the players and their agents will demand) if those transactions mean we break the Regulations in 2 years time. What is the point of doing that – sign the Galacticos and then not be able to play in the CL as we make a trading loss? If we could get 2 top players on short term contracts (2 years) and it took £150k pw each to get the players then be assured that Levy would do it. If we were 100% assured of the exact date for the new stadium opening (higher revenues) then we could go for longer term contracts but as we don’t know for certain then how can we jeopardise our future? Another issue is the 25 man squad for both PL and UEFA competitions – Clubs have to sell players before they can buy due to having too big a squad – if the players will not move then what can the Club do? The only chance in that scenario is for the selling Club to pay a proportion of the player’s wages and either sell or loan the player. As a THFC example, if we want to sell players such as Jenas and Bentley, and they have many suitors outside of the so called Top 4, then who can afford their wages with the new regulations? Do they move on to smaller wages or do they sit tight with higher money on long term contacts at THFC? What will their agents tell them to do? As with every other Club, if we want to bring players in then we have to free up a squad place first – that is not easy in this current climate. Everybody is sitting on their hands waiting for the other guy to blink and IMO it will be the Spanish and Italian Clubs that blink first and some big names will come to the PL on seemingly ridiculous low amounts. Milner moving to Manchester City will start some movement but if we are indeed after a so called top player then he would be more likely to come from Spain or Italy. As crazy as it may seem, it is entirely possible to see the likes of Ibranovich or Huntelar move away on loan deals. The agents will revolt of course but market forces, as ever, will win the day. In short, when we hear that THFC (or any other Club) has to sell before they can buy, it is not due to the fact that we are skint or that Levy wants to give out a big Dividend – it is due to the aforementioned points. As has been posted on numerous occasions, ENIC does not make any big money until the Club is sold and their valuation will only be achieved with regular CL football and by our competing for all honours. If we can get 2 top players at a high cost on a short term venture then it will be done – what will not be done is putting the Club in jeopardy by unsustainable spending. Please be assured that although ENIC (TG) holds the majority of shares and voting rights, there are some seriously big hitters as shareholders (e.g. Lord Ashcroft and Mike Sherwood) – both of those guys have invested 6 figure sums into the Club and they know they only get optimum value with on the pitch success so they are pressurising Levy at all times. Sherwood in particular has the financial clout (and backing of his Company) to ensure a suitable buyer for the Club (hence the strong rumours of who is going to have the naming rights for the stadium), so everybody is pushing for “instant on the pitch success” but market forces are unstoppable, even for THFC.

Interesting article. I dont think everything will pan out quite like the above, but for the best interests of football and sanity, lets hope it changes soon.

Cheers for that Max.