Should Financial Fair Play be in existence in Scottish fitba?

[Molotov]

To prevent any further clubs going into administration or liquidation should there be strict financial rules in place to ensure our club remain viable?

Time after time club owners spend money they don’t have chasing top flight status, silverware or European glory. 

We’ve witnessed the rise and fall of many great Scottish clubs throughout history due to poor governance by club owners and invariably staff, fans and creditors within the community ultimately get shafted. 

A few of our top clubs are now foreign owned and many clubs are racking up debts that must surely worry many supporters.

In addition we are seeing partnerships evolve with multi-club ownership. It’s a model that doesn’t sit comfortably with me. 

Other smaller clubs will struggle to keep up with increasing wage demands as these additional “investments” are made which could lead to similar problems that we saw in Scotland following the “Souness revolution”. 

Thoughts please….

[stressball]

In short, yes.

 

Easy for me to say though given the financial success of my club.

[Molotov]

PwC used to perform an annual review: an example below….

https://pwc.blogs.com/files/19th-review-of-scottish-football-finances.pdf

Deloitte recent European here:

https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/sports-business-group/deloitte-uk-annual-review-of-football-finance-2023.pdf

Herriot Watt : Accounting, finance and conflict in football arenas…lots of info about the Jambos

https://pure.hw.ac.uk/ws/portalfiles/portal/94039208/Hearts_AAM_PDF_Proof.PDF

[Molotov]

3 minutes ago, stressball said:

In short, yes.

 

Easy for me to say though given the financial success of my club.

You would think though that the governing bodies would be looking at history and now see what some clubs are racking up in financial losses season after season and start to take some action to stop these catastrophic events which directly impact staff, players, creditors and fans.

My concern is that some boards including my own club are looking at investment opportunities that other top flight clubs are working on with a short term view and not realise the impact down the road.

[LuboMoravcik]

4 minutes ago, Molotov said:

You would think though that the governing bodies would be looking at history and now see what some clubs are racking up in financial losses season after season and start to take some action to stop these catastrophic events which directly impact staff, players, creditors and fans.

My concern is that some boards including my own club are looking at investment opportunities that other top flight clubs are working on with a short term view and not realise the impact down the road.

Do you trust the competence of the governing bodies in Scotland?

 

On an individual club level there should absolutely be responsible financial planning to ensure the club has a future. I'd also agree that the governing bodies having some regulations in place in order to prevent financial mismanagement. How it's regulated and enforced is another story, especially given that people will always look to exploit loopholes.

[coprolite]

Promoting stability is a side effect of FFP that's good for PR. It's been introduced elsewhere to protect the status quo. 

Some of our top flight clubs don't even need to draw up audited accounts, and the authorities are woefully under-resourced to do anything to a decent standard.

I suspect we'd end up penalising the wrong things and still not safeguarding clubs' futures, at a high cost with loads of aggravation. It's our MO. 

[Hoose Rice]

After years of suffering the cheating currants and the Romanov corruption while we were selling our best players to build a stadium and training ground then at this point in time, investment in it by a billionaire US group, my answer is f**k that  boats and hoes all the way down the docks of Leith.

 

Seriously though all it would do would be block any serious investment should it happen and keep the duopoly in place forever, they have the applecart as they have 50,60,000 bigots pumping money into their clubs,  some not singing the songs so the rest have absolutely no chance.  I would love a Motherwell investment to spend millions to see where they could go and see where it takes them as long as they can afford it for example.   Financial fair play would make any chance of that happen be wiped out for good.   Self sustainable clubs, yes if they have the investment. 

Edited April 4 by Hoose Rice

[Molotov]

7 hours ago, LuboMoravcik said:

Do you trust the competence of the governing bodies in Scotland?

Absolutely not. Sadly. 

Please don’t think I’m having a dig at your fans or your club alone but our “governing” bodies actually sell our broadcast rights worldwide on the very nature of the “Old Firm” rivalry which has its roots in religious bigotry and sectarianism. In UEFA competitions these two clubs are regularly in trouble with the authorities for offensive chanting and banners yet both clubs fans are able to get away with abhorrent behaviour under the watch of the SFA and the SPFL every fcuking week. 

The clubs alone could put in steps to resolve this situation but it’s clear due to season ticket demand that there is an appetite for this type of behaviour as it is commercially attractive. 

Another example. 

It is frankly absurd that when St Mirren (or any other Scottish club) play against one of the Old Firm “diddy” have to always use a specific end despite the fact that the geographical differences should mean St Mirren should occupy the West part of the stadium. 

If St Mirren play Hearts or Dundee United at Hampden police advice would be for St Mirren fans to occupy the West area. 

The issues surrounding the demise of Rangers have clearly been discussed elsewhere but those governing bodies would have only tried to catapult two clubs back into the top flight following what happened. 

As it was they still received special treatment to be able to start their journey from the 4th tier to the detriment of other applicants. 

[Molotov]

The concerns we should all have about this is that without any FFP regulations in place we end up repeatedly seeing the same issues with clubs going into administration or liquidation through incompetence by club owners. The supporters can end up with no club left to support.

It’s not fair that a club like Gretna rise up through the leagues and appear at a Scottish cup final with financial “investment” that is essentially financial “doping”. It’s cheating other clubs who live within their means.

It creates an unfair advantage and it’s proven to be unsustainable.

There are clubs in the top flight who have been in administration as a direct result of spending more than they earn chasing honours and prize money. Some clubs have been in administration more than once so clearly lessons are not learned. 

Down south we have seen the glory days of Chelsea with honours based on having an owner with finances that blew all other clubs out of the water. 

I would hate to see our clubs start to follow the multi-club trend of ownership that we see with the Man City group. Already we are seeing that happening with Hibernian. 

My real concern here is that we are starting to see a change of direction within boards at the top level looking to keep up with the other clubs seeking additional “investment”. 

As a supporter/shareholder of a club with fan ownership of 50+1 I personally would not like to see St Mirren follow this current trend as surely any investment would remove any majority shareholding. 

[Molotov]

6 hours ago, coprolite said:

Some of our top flight clubs don't even need to draw up audited accounts. 

 

I agree with what you say in your other comments but I don’t understand why that would be the case?

Apologies if I’m not clued up on accounting law but I’d have thought all the top flight professional clubs with multi million income and expense streams with full time staff on PAYE and pensions, stadiums, creditors, etc would require audited accounts registered at Companies house.

Which top flight clubs don’t actually need to do audited accounts?

Thank you.

[Lex]

I doubt it would make much difference to be honest. I feel the days of clubs grotesquely overspending in Scottish football are over.
We’ve seen Rangers, Hearts, Motherwell and Dundee shamelessly cheat with varying levels of success, but that was all over 10 years ago now.
There’s no pot of gold at the end of the rainbow in Scottish football that would entice financial doping to that extent anymore. If you throw money at any club in Scottish football you’re just throwing it down the drain. See the trouble a really well run club like St Johnstone are having attracting a buyer.  No outsider is interested because there is no prospect of progression for clubs like that so no way they could ever be sold on for a profit. 
it’s different in the lower reaches of English football which is rife with over spending, but that’s because they’re chasing the EPL gold. It works sometimes too, see the likes of Bournemouth and Brighton who have went from financial basket cases to two of the richest clubs in the world in the last 20 years. 
All that financial fair play would do in Scotland would be to consolidate the gap between the old firm and anyone else. It would stop any investor/Euromillions winner coming in and throwing money at a diddy club in order to break their duopoly. But that ain’t happening anyway, so no matter. 

[Monkey Tennis]

To be honest, possibly the most delight Scottish football has ever provided me with, came from a liquidation event.

The unfairness that needs to be addressed has less to do with clubs overspending than with clubs over earning.

[VincentGuerin]

Scottish football has massively improved. Edinburgh and Livingston have issues at the moment, but they are two very specific types of club. Generally speaking, Scottish clubs have been quite good financially for the last decade or so. Certainly compared to England.

However, I don't think we should consider it problem solved and rest on our laurels. I'd be in favour of a rolling FFP model similar to what they have in England. Clubs are community assets and they should be run sustainably. Penalties like points deductions etc will mean short-term pain, but only for clubs that step outside the rules. Long-term, the benefits are obvious.

However, nothing will happen. In every area Scottish football is reactive, not proactive. So, we'll do nothing then greet about it when some idiot turns up and bankrupts a club in the future.

[VictorOnopko]

If we look down south, the FFP rules have so far been unable to pin anything on Man Citeh (who have been facing about a hundred charges for a long time now), while managing to do so quite quickly at Forest and Everton (but changing their minds on points deductions for the latter, so the league table has had an asterisk against it while they decide what to do).  That's probably due to the complexity of the financial dodginess going on, but also maybe because Citeh have the best legal team oil money can buy.  It does seem likely that the main effect up here would be to hammer smaller clubs with oversized investors, but that kind of thing is out of fashion now anyway.

If it did get brought into Scotland I have little doubt it would be botched, and I shudder at the thought of the endless Sportsound discussions on the matter.

[VincentGuerin]

1 minute ago, VictorOnopko said:

If we look down south, the FFP rules have so far been unable to pin anything on Man Citeh (who have been facing about a hundred charges for a long time now), while managing to do so quite quickly at Forest and Everton (but changing their minds on points deductions for the latter, so the league table has had an asterisk against it while they decide what to do).  That's probably due to the complexity of the financial dodginess going on, but also maybe because Citeh have the best legal team oil money can buy.  It does seem likely that the main effect up here would be to hammer smaller clubs with oversized investors, but that kind of thing is out of fashion now anyway.

If it did get brought into Scotland I have little doubt it would be botched, and I shudder at the thought of the endless Sportsound discussions on the matter.

I think if anything it would be easier to police here.

Like you've said, the issue with Man City is the scale of the cheating, the complexity of the cheating, and also the tactics of the exceptionally expensive legal team they have. You'd be unlikely to run into those factors here, for numerous reasons. If we did, then we deal with it.

But I think the overall idea is sound. Clubs should broadly be spending in line with what they can afford. The idea of the sugar daddy investment is one everyone in Scottish football should be hugely suspicious of, as there is basically no gain in it for the investor.

There should be a mechanism for someone to put money into a club. Why not? But only on a gift basis. If I've got £20m and I want to gift that to Albion Rovers with no ability to ever ask them for it back, then that's fair enough. If I am Albion Rovers' owner and I decide to loan them £20m and promise I'll never ask for it back, then they're fucked if I ever do and those fans lose their club.

But none of the clubs want this, as they basically all want the ability to overspend if it suits them. Same as how, despite covid, they've still not got round to agreeing how we deal with any shortened seasons in future. The clubs will never do anything they might tie their hands in a situation where they want to act in self-interest.

Long-term, the losers will be the fans. Hibs fans may have an interesting time ahead, for example.

[RandomGuy.]

Would be more effective at shutting the door to the top flight than the creation of the SPL.

I don't know the best answer to stopping clubs overspending though. 

[VincentGuerin]

Just now, RandomGuy. said:

Would be more effective at shutting the door to the top flight than the creation of the SPL.

I don't know the best answer to stopping clubs overspending though. 

How so?

[RandomGuy.]

Just now, VincentGuerin said:

How so?

Income is still weighted towards the top flight sides, so they'll be able to spend more. Nobody will ever, ever, get near the OF as nobody could come in and close the financial gap.

Things would always be a year behind, so clubs relegated would be able to spend large in the Championship as theyd only accept FFP if it includes bigger parachute payments, as you see down South, and have huge advantages for going straight back up.

All FFP, as is used in England and by UEFA, does is restrict growth really. Overspending isn't always the death of a club or the worst thing for it. 

[pozbaird]

Financial Fair Play in Scotland would see Everton & Forest Diddy Team 1 & Diddy Team 2 docked 10 points each, while at the top of the table, the more creative lawyers employed by Manchester City & Chelsea Bigot Team 1 & Bigot Team 2, would massage the figures to make them disappear into the same drawer that says ‘Tavernier, penalty’ on the front of it. Maybe a new drawer marked ‘nothing to see here, carry on’ would be created.

[VincentGuerin]

Just now, RandomGuy. said:

Income is still weighted towards the top flight sides, so they'll be able to spend more. Nobody will ever, ever, get near the OF as nobody could come in and close the financial gap.

Things would always be a year behind, so clubs relegated would be able to spend large in the Championship as theyd only accept FFP if it includes bigger parachute payments, as you see down South, and have huge advantages for going straight back up.

All FFP, as is used in England and by UEFA, does is restrict growth really. Overspending isn't always the death of a club or the worst thing for it. 

UEFA's FFP rules allow clubs to spend around £5m a year more than they bring in. I don't see how that is unreasonable in a Scottish context. On what planet is it not dangerous for clubs of our level to be spending more than that? That's not preventing growth, it's preventing madness and putting clubs at risk.

Top flight sides should spend more. They have more money and they play against better sides. I don't really see the issue with that. FFP would mean the cubs at the bottom end of the top flight wouldn't be throwing money around like mad, so I don't really see what the problem with that is.

I think parachute payments are something we should be very careful about. They distort the competition quite badly, and I think the sensible thing to do is to use prize money to soften the fall rather than parachute payments. Obviously, it's up to clubs to keep their own house in order with contract conditions as well. But that kind of thing would develop as time passed.

As for challenging the Old Firm; Do we want Dundee to suddenly emerge as the biggest club in Scotland because someone has come in and chucked huge money at them overnight? As much as anything else, such a club would almost certainly fall foul of UEFA FFP rules, so it would be a somewhat phyrric victory.