by Clyde1998 »
20 May 2023 18:05
tidus_mi2 I think the issue arises that clubs are trying to increase their revenue streams to better compete in an FFP environment, if we charge low prices, other teams just charge higher and get a financial advantage. Really, considering all the costs associated with following your club away, an agreed EFL price cap for each division on solely away tickets would be beneficial I would feel, I would include the Premier League but they already have away tickets capped at £30
Exactly - FFP requires clubs to generate as much revenue as possible and therefore encourages clubs to increase ticket prices to a level that maximises revenue (as owners are limited in how much they can subsidise clubs).
I don't know if anyone's read
Soccernomics (the 2022 edition), but there's a chapter about FFP: how it was pointless to begin with and why it doesn't work. The basic overview is that it was brought in to keep clubs solvent following the 2008 economic collapse, but failed to recognise clubs typically didn't spend money they didn't have (or thought they couldn't reasonably pay back).
Clubs who did run into financial issues usually occurred due to relegation, collapse of sponsors or broadcasters or economic mismanagement. FFP does nothing to prevent these things; it can, however, limit the damage extent a club could be damaged through mismanagement by restricting spending. Clubs who do run into economic issues almost always survive in some form, whether simply by playing in a lower division or by reforming under a new company - ie. there's a punishment for economic mismanagement or overspending without FFP existing. Additionally, the book claims it's not certain whether FFP rules would be upheld by a court (in a major developed country) due to most FFP schemes placing restrictions on the investment an owner can put into a company (I'm no legal expert, so don't know what sort of basis in law there is for FFP). The real reason for FFP was to help entrench the elite clubs - it's no coincidence FFP came in within ten years of the takeovers of Chelsea, Man City and PSG; at the point when the established big clubs were most threatened.
The book also mentioned a
study done of English and Spanish clubs (between 1993 and 2005) to calculate what the ultimate profit maximising position for each club. It found the position to maximise profits (in economics terms: the point where marginal revenue equals marginal cost) for Barcelona and Real Madrid would be 15th and 17th respectively. Incidentally that study suggests our profit maximising position through that period was to average 42nd in England (22nd in the Championship). The win maximising position (the point where average revenue equals average cost or the breakeven point) for us was an average finish of 29th. These are two very different positions; FFP pushes clubs towards the former.
