Thought I’d share my knowledge of how football clubs account for certain incomings / outgoings and what rules are in place. Before I do so, my knowledge of this comes from a mate who is responsible for an English Premier League (EPL) team’s FFP adherence.
Currently there are no black and white rules in Scottish football for spending limits vs revenue or profit and losses. Anyone that has seen limits will most likely have seen EPL loss limits etc. SPFL sticks more to punishment for going into administration.
The guidelines Rangers would have to adhere to is UEFA spending limits, if we were in a position to spend on players or wages. Those limits have decreased over 3 years and are now 70% of revenue (much mentioned on this site).
Meaning, if Rangers generate £80m of revenue, then player and staff costs can’t exceed £56m for that season. Player costs will neither, transfer fees or wages. Not sure exactly, but did we generate something like £88m last season?
Transfer fees – the fee you pay for a player, regardless of how you’ve structured the deal in terms of installments. Spread of the player’s contract, but to a maximum of 5 years. If Rangers spend £5m on a player, their profit and loss for each year will be £1m cost. Unless that player signs a new deal. If they sign a new deal after 1 year and it extends the contract, then the remaining £4m will be spread over the new length of the contract. I’d expect UEFA will have some rules to stop people abusing this, but not sure what rule they currently have.
Wages – simple, wage costs hit your profit and loss as always. Seems teams are getting smart with this and structuring contracts which gives players guaranteed earning in certain years’ time.
A common misconception is bringing in players for £2m and flipping for £10m is the way to increase revenue. Although that would give the club more cash and improve the profitability of the club, the income from that sale would not impact revenue, therefore we’d still be limited to spending 70% of the revenue. What it would do is lower wage costs and stop any future amortisation of the player hitting the accounts. That £5m player is sold after 1 year, then you save £4m on future amortisation costs.
I expect the concentration to yes be on quality recruitment to aim for the Champions League revenue but also to be on commercial income. We need to get revenue up.
One concern from fans is any new owner might look at the fans to generate more revenue in the form of season tickets etc. The percentage of total income for Rangers that comes from tickets sales etc. is already exceedingly high. I would hope that they look at the areas that are extremely low first before trying to push season ticket sales etc. up. I’ll try to stay on to respond to any abuse from my wild posts. 🙂
Written by Sollof19 February 21 2025 10:44:37
