Wages at 65% of Turnover

[galwayhoop]

How far does this go? If a club has a bar that takes in a million a year with a profit of (say) 50,000 will the 1 million figure be used in the calculations?

the € 1 million is turnover and the €50,000 is profit. therefore the €1m figure is used.
however if a bar is only making a profit margin of 5% the bar manager would be fired well before the year was over ;)


does anybody know if this equirement will be in the next licensing manual or as the fai say it is aspirational

this season (2007) it is only a recommendation. next season (2008) supposidely it will be enforced. therefore any clubs who do not meet it will face sanctions at the end of 2008 or else the beginning of 2009 season - presumably when they look for their license

[passerrby]

looks like it will be hard to police but it needs to be done...

[Stato]

I spoke with St Pats Club Licensing Officer about this. Apparently the wording is "turnover". He said he'd been on to the FAI Licensing people to highlight the potential problems with the wording and he believes they will provide a full definition of what can and can't be included when the 2008 Licensing manual is issued, some time in the next couple of months. His guess is that it will be changed to "net income" i.e. turnover less direct costs (50c in the programme example and €50K in the bar example). He also suggested that directors loans won't be included but issue of shares would.

At the moment there's nothing to stop Garreth Kelleher "sponsoring" St Pats for €10m and then charging €3.5m in "director's fees" if he wanted to spend €6.5m on player wages.

[OneRedArmy]

The principle behind what defines the measure (turnover, income or whatever they decide it to be) is that it should exclude monies which can be taken out of the company by a benefactor/director at short notice, which would have the effect of trigger a breach in the 65% limit.

Detailed definitions are required on this and I have zero confidence in the FAI being able to administer it and the clubs being able to comply with it (either on competence or willingness grounds).

It will take at least 2 years to implement properly.

[passerrby]

Detailed definitions are required on this and I have zero confidence in the FAI being able to administer it and the clubs being able to comply with it (either on competence or willingness grounds).

It will take at least 2 years to implement properly.

have to agree the concept is great the implmentation could become another fiasco

[Mr A]

The principle behind what defines the measure (turnover, income or whatever they decide it to be) is that it should exclude monies which can be taken out of the company by a benefactor/director at short notice, which would have the effect of trigger a breach in the 65% limit.

Detailed definitions are required on this and I have zero confidence in the FAI being able to administer it and the clubs being able to comply with it (either on competence or willingness grounds).

It will take at least 2 years to implement properly.

It's been on the way for that long. There's no excuse bar incompetence (which isn't really an excuse) to get it right.

They won't though, not a hope.

[Bald Student]

I spoke with St Pats Club Licensing Officer about this. Apparently the wording is "turnover". He said he'd been on to the FAI Licensing people to highlight the potential problems with the wording and he believes they will provide a full definition of what can and can't be included when the 2008 Licensing manual is issued, some time in the next couple of months. His guess is that it will be changed to "net income" i.e. turnover less direct costs (50c in the programme example and €50K in the bar example). He also suggested that directors loans won't be included but issue of shares would.That sounds reasonable enough.

I've been following this league for too long to trust the FAI but they seem to be cleaning up their act a bit recently. We'll just have to wait and see if they do this right.

[Macy]

It's been on the way for that long. There's no excuse bar incompetence (which isn't really an excuse) to get it right.

The fact that it's due to be in next year and the FAI still haven't issued what constitutes turnover, and it appears likely it isn't even going to be based on turnover, isn't an issue?

[Pablo]

The fact that it's due to be in next year and the FAI still haven't issued what constitutes turnover, and it appears likely it isn't even going to be based on turnover, isn't an issue?

In all fairness the FAI dont define what turnover is! Dear Oh Dear.

Standard accounting practice does.

[Macy]

In all fairness the FAI dont define what turnover is! Dear Oh Dear.

Standard accounting practice does.
Well the FAI have left enough wriggle room to suggest that it might not be the straight turnover figure, but now they're saying it might be net income rather than turnover anyway!

[Pablo]

Well the FAI have left enough wriggle room to suggest that it might not be the straight turnover figure, but now they're saying it might be net income rather than turnover anyway!

Well thats a different arguement.

Most Clubs are working off the fact that its straight turnover. Which is the way it should be. No more Shelbournes.

[Dodge]

Most Clubs are working off the fact that its straight turnover

What are you basing that statement on Pablo? The only club I know a bit about were seeking clarification on the matter, and clubs who are currently spending more than 65% of turnover on wages (all of them I presume) will not wish to have that curtailed. If they think they'll get away with spending 65% of net income, they will.

All clubs that have asked the FAi for clarification and received no response can quite legitimately claim they are doing nothing wrong by spending 65% of income.

Most of us (fans) agree its a good thing and I'm sure in time the clubs will agree, but as ****ing usual the implemention of this by the FAi has been a shambles

[Stato]

In all fairness the FAI dont define what turnover is! Dear Oh Dear.

Standard accounting practice does.

Actually, standard accounting practice does not provide comprehensive definitions on what constitutes turnover, it just provides genaral guidance, hence some of the major accounting scandals over the years (e.g. Enron).

If it's simply "turnover" what's to stop directors of a club "sponsoring" the club for, say, €100,000 and then have the club "sponsor" them for the same amount? "Turnover" for the club would be €100,000 under standard accounting rules and the club could thereby spend €65,000 on player costs that it doesn't actually have.

It's for that reason that the FAI have to define what they will allow to be included as "turnover" in their 65% formula.

[Pablo]

What are you basing that statement on Pablo? The only club I know a bit about were seeking clarification on the matter, and clubs who are currently spending more than 65% of turnover on wages (all of them I presume) will not wish to have that curtailed. If they think they'll get away with spending 65% of net income, they will.

All clubs that have asked the FAi for clarification and received no response can quite legitimately claim they are doing nothing wrong by spending 65% of income.

Most of us (fans) agree its a good thing and I'm sure in time the clubs will agree, but as ****ing usual the implemention of this by the FAi has been a shambles

According to our chairman in a fans forum last season we are working under 65% of turnover from this year. It wont hit us as hard next year, and it also give time to increase turnover.


I'm not sure why people think its a shambles. Its quite straighforward.

[Dodge]

According to our chairman in a fans forum last season we are working under 65% of turnover from this year. It wont hit us as hard next year, and it also give time to increase turnover.


I'm not sure why people think its a shambles. Its quite straighforward.

:rolleyes: Which is why this thread is so long and the FAI can't answer questions put to them by the club