----- Original Message ----- Subject: Re: [LU] Barnsley
I am quite happy with the way things are at present - so much better
than this time last year.Now it is all a case of the latest takeover going
through and seeing what money we have, and spending it wisely.............
I have faith in McDermott and I think if we back him with cash he will do the
business - he is here for the long term.
Agree completely that we are so much better off as a club after the slaying of
the dragon. Hope is everything and Bates was the killer of hope.
The central problem remains though that irrespective of who owns the club, the
financial millstone put around our necks by Bates has not yet been removed - no
matter how much new owners may wish to "immediately" remove it.
The new requirement is for each club to submit 6 monthly business forecasts
(Future Financial Information - FFI) to the FL.
This also has to be done again as a part of the FL approval of any new owners.
I suspect that Leeds have combined the standard 6 monthly submission (due now)
with the new ownership 'transfer' approval application.
Each club needs to show that the business is sustainable or it cannot take free
part in the transfer market nor can it re-sign current players.
I think that it is well established that Bates tore the heart out of the income
side of the equation for this season (by borrowing against or 'discounting' the
income streams).
So, our budgets MUST have had a gaping hole where the normal income streams
should have been.
To repair this you need either new income sources or reduced expenditure to
balance things out.
The alternative is a transfer embargo (without specific case by case
permission).
In the past a new owner could simply inject capital, let's say to fund player
acquisitions. The new rules are specifically intended and framed so that a club
which is not financially sustainable as a business (according to its own
business forecasts) cannot invest into the squad - historically this was to the
potential eventual financial disadvantage of non football creditors and HMRC.
What happens if new owners inject capital anyway ?
Well then you face the FFP regulations which are a retrospective "test",
(that's FFP, not FFI).
If you pump in too much "owners" cash then you get hit by FFP sanctions. Any
such "fine" makes the subsequent budgets that much more difficult to balance
for the next season - and remember that the sanction for failing that is
(effectively) no spending on the squad.
So any new owners have to fit in with both sets of requirements or take on
board the penalties for not meeting the rules.
That means that there is only so much 'headroom' available for new owners
whether that was GFH-C or the new management buy out (for that is what appears
to be the best description).
Having the money available and having the will to spend it is no longer enough.
The business has to demonstrate its capacity to allow that expenditure.
What Leeds needs right now is new sources of income (certainly to permit squad
expenditure this season). Sponsorship deals would appear to be an obvious
target - perhaps stadium naming etc. We also need to be able to justify any
income forecasts which would include attendances, beer and pie sales, shop
sales etc - all of which appear to have been the subject of recent 'marketing
initiatives'. I'd expect some sort of naming rights deal on Elland Road (or
maybe even TA) at least for long enough to get to the replenished income
streams for next season.
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John 'Grampa' Sykes
Rest In Peace old lad
28th Oct 1938 - 12 Nov 2013
MARCHING ON TOGETHER
