There are a couple of proviso' s on the BBC article. Firstly they focus on operating loss but that is before profits on player sales are taken into account which in many cases keeps the show on the road. Secondly in the case of the promoted teams there are significant promotion bonuses which inflate the operating loss and wage costs. I think £20m of Wolves losses were promotion bonuses and as such the promoted teams don't offer a true picture of the league's overall financial position.
Even with those caveats the picture is truly horrific. Before anyone types the words "ambition" or "investment" if your football club losing money in excess of £13m a year which is the FFP limit and this does not takes into account various expenditures is a bad thing. Even owners with deep pockets will grow tired of this game and when they stop funding your cost base will put you into administration in less than 6 months.
Bolton seem the basket case of the moment but here is the stark fact across nearly 20 years they have barely had a season where they paid their way. Every year an owner has gone to their pocket to subsidise their existance, why and what for? Yes they had a season in Europe but right now they are virtually relegated to League 1 again which is an outcome that could have been achieved without in excess of £100m being pumped into the club.
FFP is nowhere near tough enough to stop these excesses. But in any event by definintion the rules are reactive they punish clubs after the event. Anyone could see what was happening at Blues and it was not sustainable yet it has taken over 12 months for the hammer toi drop.
There is one solution and one only Championship footballers need to earn about half of what they are currently paid. Until clubs take that message on board or are compelled to do so by the authorities then most clubs will be on a boom and bust cycle with more bust than boom.
As always an informative post, thanks Stan.
It does beg the question though, what is the point of FFP,
keeping clubs financially solvent ? - major fail (many examples)
keeping the playing field level ? - major fail (big 6 , enough said)
stopping exploitation of clubs ? - major fail (Blackpool / Cov .....)
It seems to me that if a club can find a benefactor (or better still a string of benefactors, as per Vile) there will always be a way around FFP as the rules relate to the business (ie, WBA holdings, Phoenix mk2 Ltd) and not the entity (WBA FC).
I know folks will say FFP is geared to the big clubs advantage, but I cannot believe that was the original intent. The whole thing is broken and needs overhauling in my view (including the sanctions). I believe this is a FIFA initiative, if so, how on earth does this get changed ?