The Challenges Ahead
With our FFP submission looming a quick look at the FFP rules and where the club sits in relation to them

Last year, after the play-off defeat to Huddersfield, I was worried about what the next few months would bring, particularly regarding the squad and the gamble we had taken to try to get promoted by buying up older and more expensive players. The second gamble we took was to believe CC’s story that the medical department was responsible for our failure in 16/17 and to give him another season and therefore carte blanche to bring in his own medical team. Those gambles have blown up massively in our faces and we are now left in a very different position than that which we anticipated being in. Jos has come in and despite the limitations he faces has started to try to get the team more stable, disciplined, organised and open up to the possibilities of youth than CC’s regime was.

The Chairman also now faces an equally big challenge too. He has rightly opened up a debate about the financial and FFP position of the club, and what we will do going forward from here – my last piece on WOTMT was about this and I won’t repeat that here. But I will remind Wednesdayites that their views, whatever they are, need to be fed into the Chairman directly by e-mail or letter. So what are the FFP rules and how do they impact on the club? The current rules are that:

  • On 1st March each year the club has to submit to the FL the financial accounts for the previous 2 years (this year that is 15/16 and 16/17) and an honest and fair assessment of the current year (17/18). Non submission of the information is a disciplinary matter. This information is what FFP judgements will be based on.
  • Over the 3 year period the club can only lose £15m and up to £39m if an owner injects the cash difference between £15m and £39m. Clubs relegated from the PL can lose up to £35m per season in respect of any season spent in the top flight.
  • Some expenditure – youth development, women’s football, charity work etc can be excluded from FFP
  •  A rolling programme of 3 year assessments will be undertaken by the FL.
  • The new FL rules have been agreed with the PL and reflect the PL approach to FFP and therefore the PL is far more likely to assist the FL in applying sanctions to promoted clubs from the Championship.
  •  If a club breaches these FFP rules the sanctions open to the FL Fair Play Panel include disciplinary warnings, transfer embargo, point(s) deduction, demotion or financial fines – all sanctions being relative to the scale of the breach. Under the old regime the sanctions were transfer embargo for clubs that remained in the FL and a fine for those promoted to the PL which the PL did not assist that much in enforcing. The world has now changed.

So what’s our current FFP related position? In 15/16 we reported a financial loss of £9.8m. The financial position for 16/17 has not yet been reported but is due in February – the wage bill looks to have increased on the 15/16 position so I am assuming the loss will be greater than 15/16. This assessment looks to be a fair one for 17/18 too. At the recent Fans Forum the Chairman said that he thought the club would be ok with FFP this season but would face challenges next season. The Club 1867 initiative was clearly an approach to try to drive up revenue which would also open up the opportunities for the Chairman to invest more cash. The failure of Club 1867 appears to indicate that we need to reduce the potential losses for 18/19 so that we stay within FFP over the 16/17 to 18/19 period – I suspect this has to primarily be achieved by reducing expenditure as well as more successful attempts to drive up revenue. It is possible that this position has prompted the changes in the running of the club with a new CEO, departure of the COO and the appointment of a team manager who has a track record of achievement in Germany without spending large amounts of cash outside the Bundesliga. For some time now I have been advocating a different model for the club which is based on more long term sustainability and which probably means a lower wage bill, and a team of younger, cheaper and hungrier players. It probably also means progress being made at a slower pace than that which was envisaged by the Chairman 2 years ago.

There isn’t massive opportunity to drive up revenue but there are somethings that could be done, but I suggest upping ticket prices isn’t one of them. That leaves cost reduction. The principal expenditure at any football club is player wages and this is where we will have to cut back, every player on £20k per week means £1m on the wage bill. As we don’t know what the losses are for 16/17 and 17/18 it is hard to be specific about the scale of wage bill reduction that needs to take place but I suspect it might be £5m or more – I have seen one projection that puts it significantly higher than this. All of this means that we may have to countenance losing players that we may not wish to lose, we may also have some players that we will find it hard to move on due to their age, injury record and level of wages. I remember in 2000 after relegation from the PL we had to sell Niclas Alexanderson on the cheap to Everton (a buyer’s market) but we couldn’t give Gilles De Bilde et al away – what were supposed to be assets quickly became costly liabilities. I suspect we could all produce a list of the underperforming, the misfits and the unfit that we need to move on but achieving that will be harder said than done. To me one obvious deal would be to sell Keiron Westwood and focus on the excellence and youth of Joe Wildsmith and Cameron Dawson, and I am sure there are others to do too. It’s going to ensure that Jos and Katrien Miere are going to be very busy!

Meanwhile the JL recovery plan took another step forward with the win over Reading. We did look unsure or ourselves during the first 25 minutes but once we scored we were the better side and deserved the win, even if we had to be grateful to Dawson on occasions. Before a tricky and challenging trip to Boro on Tuesday we will all be tuning in for the FA Cup draw on Tuesday – I fancy a winnable game at home in the round 5th round, hoping we can get through and then looking to one of big boys in the quarter-finals! And then of course the window closes on Wednesday and we will see if we can snap up another Pelupessy style bargain, maybe at left back/wing back? Onwards and upwards – hopefully!

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