by RedRedWine1 » Sun Jan 04, 2009 5:35 pm
Although having the wrists slapped so publically must be embarrassing for the club and the officials, I don't think we are doing that badly. Without knowing the full ins and outs of the 60% cap rule or the financial structure MFC have in place, I'd say that from an outside perspective, we're still living within our means a lot more than a fair few other clubs at this level, and are now being limited in our spending as a result of it.
For some reason I'm under the impression that we have little or no debt (please correct if this is not the case)? How many other sides can say that? Is the cap as basic as it seems? No more than 60% of net revenue (the gross inflow before the deduction of any expenses) to be spent on player's wages? What does that mean for clubs such as our own that possibly don't have massive outlays for harvesting debt that others might have, be that in terms of loan repayments or interest payable on an overdraft facility? Should the club be capped at the same level of spending, as a club that is in the shit (technical term) financially?
Some clubs at this level don't even own their own ground. How can we possibly be capped at the same level as all other clubs, when clearly some have expenses that we don't have? How is that fair? For example, by my reckoning, under the leagues system (assuming it is as basic as it seems), if we sold our ground and a company leased the ground back to us we'd be able to spend the same on player's wages, and may actually be better off. We'd still generate the same level of income which we'd be allowed to spend on wages, but on top of the outgoing for players wages, we'd also have the expense of the lease repayment yet this would not be reflected in what we are allowed to spend. Shouldn't we be allowed to spend what other clubs could possibly spend on a lease, on player's wages? We'd also now have the capital gain from the sale of the ground (not revenue, as it isn't related to the normal business activity of the club) propping up the balance sheet, which I'm sure we could put to use in other areas.
Have I missed something? Hopefully this cap isn't as crude as I've made it out to be. Obviously a football club selling their ground would make a club extremely unstable in the long-term, which is the exact opposite of what I assume the cap is trying to achieve. The only assets (or liabilities in some cases!) a club would have if they sold their ground would be the player's registrations held by the club, with the added liability of the lease, possibly forever. Pretty much another Leeds United waiting to happen with little or no assets to satisfy creditors. Reiterating my main point, how can every club have the same rules to their level of spending when each individual club is run and financed completely differently? I've not even mentioned the donations business, which I imagine is the only reason many other clubs like Accy, Macc, Barnet etc have not fallen foul of this capping business. How can this stabilise clubs in the long-term? Surely if the sugar daddy's walked away each club would vanish, yet under the leagues rules they are a stable club living within its means. Pathetic.