Wages at 65% of Turnover

[Pablo]

So Wages need to be at 65% of Turnover. Is that this season or next season?


And hand on heart is your Club under that level?


Remember turnover doesnt include a sugar daddy!

[Dyl10]

I would imagine the sentanta Cup wins for Drogheda are the only thing keeping them under. If they are indeed under

[Mr A]

You can probably forget about that whole 65% thing- the FAI won't have the competence or balls to enforce it. Good idea though.

[Steve Bruce]

There's ways round this 65% anyways in the way of Bonus's, appearence fees etc.

In theory though, a great idea.

[Ebmania]

I am sure we St Pats are below it. Yes we brought in 3 high profile players but still we have the Patron fund money and saved on Transfer fees. But with Uefa and cup games coming on board i see are bill getting higher but hopefully more income to balance it.

[galwayhoop]

if a sugar daddy (doesn't apply to us unfortunately) isn't included what are judged as turnover. obviously gate receipts, prize money & sponsorship but what else??

also as turnover is a gross figure is the 65% also gross or net, presumably gross.

[Pablo]

The 65% will be enforced in club licensing.

[monutdfc]

You can probably forget about that whole 65% thing- the FAI won't have the competence or balls to enforce it. Good idea though.
They were advertising a few months ago for an auditor to audit club licensing applications. The 65% cap falls under club licensing, so presumably this auditor will be tasked with checking that the 65% is not being breached. Not an easy job if you ask me, for the FAI, FBI or CIA.

[Dodge]

Remember turnover doesnt include a sugar daddy!

Have the FAI confirmed this?

[galwayhoop]

Remember turnover doesnt include a sugar daddy!

presumably a sugar daddy could contribute funds, by way of a donation each season, and it could be put down as sponsorship

[superfrank]

The 65% will be enforced in club licensing.
It can be very easily avoided. Writing up phoney accounts, only putting down percentages of players wages as wages but the rest down as something else.

[galwayhoop]

It can be very easily avoided. Writing up phoney accounts, only putting down percentages of players wages as wages but the rest down as something else.

EXPENSES ;):D

GAA style!!!

[Stato]

A few points on this.

For a start I'd guess that very few clubs are at or below 65%.

The FAI have not issued guidance on what counts as "turnover". Simple example, if a supporter pays €3 for a programme that costs €2.50 to print, what gets counted as turnover, €3 or 50c?

However there are a few things to note:

1) The FAI have copies of all of the player contracts and those contracts have to include all payments to players (including bonuses, appearance fees, expenses). If clubs make payments outside of the terms of those contracts they are breaching footballing rules (seem to remember Abramovic nearly falling foul of this a few years back by offering players extra money for winning the league). All the payments have to be gross (i.e. before tax is deducted)

2) The FAI get all the teamsheets from every match so it'd be quite easy to set up a spreadsheet that shows how much the wages costs should be for each club based on appearance fees in contracts etc.

3) The FAI get reports of attendances. They also have assessors at every match who make a estimate of the attendance. From that they can easily estimate gate receipt income.

4) The FAI get monthly management accounts from all clubs (except Longford ;) ).

5) The FAI have appointed an accountant to go out and look at the books of every club on a regular basis to see if the figures they're getting tally with those books. If any problems come to light there'll be sanctions imposed.

[noby]

Simple example, if a supporter pays €3 for a programme that costs €2.50 to print, what gets counted as turnover, €3 or 50c?

€3 I'd imagine. Seeing as that is the turnover. You're getting your profits and turnovers mixed up I think.

[Pablo]

[QUOTE=Dodge;696105]Have the FAI confirmed this?[/QUOTE

They dont need to. Turnover is turnover.

[Macy]

AThe FAI have not issued guidance on what counts as "turnover". Simple example, if a supporter pays €3 for a programme that costs €2.50 to print, what gets counted as turnover, €3 or 50c?
€3 is the turnover, 50c is the profit.


They dont need to. Turnover is turnover.
There was at least some debate as whether the FAI are accepting donations from benefactors as part of the turnover figure. I'm of the opinion that's the way they'll handle it, but as Dodge asks, I don't think it's been confirmed either way.

[Dodge]

There was at least some debate as whether the FAI are accepting donations from benefactors as part of the turnover figure. I'm of the opinion that's the way they'll handle it, but as Dodge asks, I don't think it's been confirmed either way.

Thats why I asked Macy, I know Pats asked for confirmation last year and the FAI didn't get back to them (they may have since the meeting I was at)

[Pablo]

Thats why I asked Macy, I know Pats asked for confirmation last year and the FAI didn't get back to them (they may have since the meeting I was at)

But by definition donations are not turnover.

Theres no point in having the rule in the first place if Clubs can do that!

[Dodge]

But by definition donations are not turnover.


But are moneys raised by direct investment not income? You see why I'm asking now?

[garyderry]

So Wages need to be at 65% of Turnover. Is that this season or next season?


And hand on heart is your Club under that level?


Remember turnover doesnt include a sugar daddy!

Wether you like it or not, it is if the money is in the bank and belonging to the club.

[Pablo]

But are moneys raised by direct investment not income? You see why I'm asking now?


i see what you are asking, and donations can be used for stadium upgrades, admin staoff etc etc but AFAIK players wages are directly tied into turnover, which do not include donations, just the amount of business transacted during a given period of time.

[Dodge]

But where did you get that idea? ;)

[Risteard]

I thought it was 65% of expenditure.
City have a big wage i'd say but enough other expenses aswelll.
Rent of Turners Cross. (this is hefty but includes all matchday expenses afaik)
Rent of Bishopstown.
Rent of Patrick Street.
Ridden Rock Solid Tax aka fines for kicking down doors, talking of molesting the football, fans singing etc etc.
We're the first body to be issued with a PRRSI number.:confused::(

[daniel]

Sugar Daddy's trowing money into clubs will count, as someone has said, if the money is in the bank, its the clubs funds...

And any club who has been seen to be above the 65% and aware of it, will probably have a serious fine on their hands from the licence committee.

The rule is here to protect our clubs, any club who doesn't follow it deserve all they get!!

[endabob1]

I haven't read the in depth details of the liscenceing agreement but I would imagine that Turnover will be defined as any income generated from the normal activities of the football club, so Advertising, Gate receipts, program sales etc....
Sugar Daddy cash is cash it is not turnover, generally it will be in the form of a share purchase or a long term loan.
Also in the €3 program example, the €3 is turnoever €2.50 is the direct cost 50c is gross Margin, the profit would really need to include an apportionment of other costs.

[Pablo]

I haven't read the in depth details of the liscenceing agreement but I would imagine that Turnover will be defined as any income generated from the normal activities of the football club, so Advertising, Gate receipts, program sales etc....
Sugar Daddy cash is cash it is not turnover, generally it will be in the form of a share purchase or a long term loan.
Also in the €3 program example, the €3 is turnoever €2.50 is the direct cost 50c is gross Margin, the profit would really need to include an apportionment of other costs.

Spot on.

[paudie]

I haven't read the in depth details of the liscenceing agreement but I would imagine that Turnover will be defined as any income generated from the normal activities of the football club, so Advertising, Gate receipts, program sales etc....
Sugar Daddy cash is cash it is not turnover, generally it will be in the form of a share purchase or a long term loan.Also in the €3 program example, the €3 is turnoever €2.50 is the direct cost 50c is gross Margin, the profit would really need to include an apportionment of other costs.

Correct is nearly all cases I'd say. Investment by directors would almost always be treated in clubs accounts as loans that (theoretically at least) will be repaid by the club at some stage. That is the case in Drogheda's accounts for example.

It's hard to see how these "loans" could be treated as turnover under any circumstances.

The only way would be treated them as non repayable "donations" in the accounts but that way the directors would be saying they will never get the money back.

[paudie]

It can be very easily avoided. Writing up phoney accounts, only putting down percentages of players wages as wages but the rest down as something else.

As far as I know all clubs accounts now have to be audited.

In these days of tight regulation it would be a foolish auditor who would put his name to accounts he had any reason to believe were "phoney" in any material way.

[paudie]

But are moneys raised by direct investment not income? You see why I'm asking now?

If the direct investment involved someone buying shares from existing shareholders, as happened with Pats I believe, this is income of the old shareholder, not the company.

[galwayhoop]

it is only right that the 'sugar daddy' payments are not included. the reasoning behing the 65% is to ensure the longterm viability of clubs and to increase their chances of survival. so we don't get another shels situation.

a sugar daddy is not a constant. he may withdraw funds at any given time and find a new venture. a new shiny toy to play with. imagine if abramovich was to pull out of chelsea tomorrow - the club would be bankrupt as it would not be able to pay all it's bills.

the 65%, while probably not really in -line with the european constitution (is football not viewed as any other business in european law?? so how can wages be capped in relation to turnover?? does this happen in any other 'industry'), is there to protect the long-term interests of the league and should be viewed as a good thing.

it may however add to larger inequalities between the top teams and the lower down teams but thats just life. i mean the difference in the turnover of the likes of bohs and monaghan would be very big i assume.

in reality though i still think that sugar daddy types can put their donations down as sponsorship and then it will add to the turnover. for example mick wallace could sponsor wexfords main stand for € 1,000,000 per annum and have it called 'the wallace construction stand' (or whatever name his company is). theres nothing illegal about this and hard to show it as anything else but sponsorship!

[endabob1]

in reality though i still think that sugar daddy types can put their donations down as sponsorship and then it will add to the turnover. for example mick wallace could sponsor wexfords main stand for € 1,000,000 per annum and have it called 'the wallace construction stand' (or whatever name his company is). theres nothing illegal about this and hard to show it as anything else but sponsorship!

Spot on, but by doing that he is admiting he will never see that €1m again. The reason most investors choose the loan or share option is because they want to in some dreamland imagine themselves doing a Ken Bates and selling their shares for squillions;)

[galwayhoop]

Spot on, but by doing that he is admiting he will never see that €1m again. The reason most investors choose the loan or share option is because they want to in some dreamland imagine themselves doing a Ken Bates and selling their shares for squillions;)

maybe so but anyone who has a large amount of dough - so much that they can afford to invest in the eLoI - must surely have the smarts to realise that they will never see their money again!!

[endabob1]

maybe so but anyone who has a large amount of dough - so much that they can afford to invest in the eLoI - must surely have the smarts to realise that they will never see their money again!!

I agree in the main, someone like Wallace is deffenitely not in it for the financial rewards, I would have my doubts on some of the other investment though, particularly if the club owns a ground which could be sold off for commercial gain.....
It has happened several times in the lower leagues in the UK. By investing cash in exchange for shares you are top of the pile for any rewards should the ground get sold to developers.....

[Bald Student]

I haven't read the in depth details of the liscenceing agreement but I would imagine that Turnover will be defined as any income generated from the normal activities of the football club, so Advertising, Gate receipts, program sales etc....
Sugar Daddy cash is cash it is not turnover, generally it will be in the form of a share purchase or a long term loan.
Also in the €3 program example, the €3 is turnoever €2.50 is the direct cost 50c is gross Margin, the profit would really need to include an apportionment of other costs.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?

[passerrby]

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

[endabob1]

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?

I would assume (again as stated I haven't read the agreement in depth) that as long as the bar was part of club it's turnover would count as part of the clubs turnover...

[Bald Student]

I would assume (again as stated I haven't read the agreement in depth) that as long as the bar was part of club it's turnover would count as part of the clubs turnover...OK cool,
It seems to me then that this system might have loopholes in it. Thinking of my own club, there's probably at least a few hundred thousand worth of stuff that could be added to turnover, if needed, to get within this rule. The same could well be true of a lot of clubs.

[passerrby]

would i be right in saying that if a club spends more that 65% of its overall income this can only be verified when the audited accounts are examined which means that all punishments would be issued after the league has concluded

[Dodge]

If the direct investment involved someone buying shares from existing shareholders, as happened with Pats I believe, this is income of the old shareholder, not the company.

He's already spent on Pats since he bought the shares, so does that count?

[passerrby]

this will not be a problem for the mons as we spend at least 50% of income on other parts of the club ie development, juviniles, community projects etc (hence the position in the table)

[Battery Rover]

We are keeping to the 65% of turnover this season. Plenty of income from advertisements, bar, gear sponsors, monthly draw and income from season tickets etc.

[pete]

I believe "Director Loans" can be included in the Turnover number.

[paudie]

He's already spent on Pats since he bought the shares, so does that count?

It depends on how the money he's put into the club is treated in the accounts. If it's shown as a loan it shouldn't really be treated as turnover as its a loan. A non refundable investment would be treated differently.

I'd be surprised if a successful businessman like Kelleher would treat the money he's put into the club as anything other than a loan, even if he thinks its unlikely to be repaid.

Once it's shown as a loan he can potentially be repaid down the line if the club is ever able to pay it back, say if Pats get a huge transfer fee, get big money from UEFA etc.

[paudie]

I believe "Director Loans" can be included in the Turnover number.

You mean in the FAI regulations?

That will make it a lot easier for clubs to comply with the 65% rule but defeats the purpose really.

[pineapple stu]

The 65% will be enforced in club licensing.
:D


I thought it was 65% of expenditure.
That doesn't make any sense. The more you spend, the more you can spend on wages?


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?
Only one way to find out..


I believe "Director Loans" can be included in the Turnover number.
Have you any basis for that? It's not turnover, therefore it's not turnover. Quite simple really.

Great idea if it happens. Clubs clearly need to be forced to cop on to themselves, by and large (some clubs don't, but most do). Pat's and Drogs are losing a million a year, so it'll be very interesting to see what happens there - seems like the clubs that'll be hit most. I'd imagine it'll get fudged though, either by the turnover loopholes or by re-defining wages.

That said, it's worth remembering that Revenue are keeping a close eye on the league since the craic with Shels, so it mightn't be as easy to hide wages as you'd think.

[pete]

Have you any basis for that? It's not turnover, therefore it's not turnover. Quite simple really.


I thought i read it somewhere but no proof. Its simple if you are not the FAI. :D

[superfrank]

As far as I know all clubs accounts now have to be audited.

In these days of tight regulation it would be a foolish auditor who would put his name to accounts he had any reason to believe were "phoney" in any material way.
I woudln't be surprised by auditors doing that. I know it goes on in other fields of public life so why not football? Yes, it would be a very stupid thing to do.......if you're caught. Any person willing to take that risk would be smart enough to cover themselves. That said I hope no el club does it, I'm merely saying it is possibe to do.

[endabob1]

Any person willing to take that risk would be smart enough to cover themselves..


One word ENRON

[superfrank]

One word ENRON
:D Forgot about that.

[paudie]

I woudln't be surprised by auditors doing that. I know it goes on in other fields of public life so why not football? Yes, it would be a very stupid thing to do.......if you're caught. Any person willing to take that risk would be smart enough to cover themselves. That said I hope no el club does it, I'm merely saying it is possibe to do.


An auditor would have to bear in mind that the EL club accounts he signs off on WILL be examined by an independent body, ie the licencing committee.

With most accounts there is a good chance that they will never be checked by an independent person so an auditor might be prepared to sign when he's not 100% happy with them.