Friday, 7 June 2013

Charlton: Financial Fair Play, Transfers and Reality

I had started to write an article entitled "N'Guessan I'm guessing" as my first attempt at speculation as to who would be joining Charlton this season.  Given that Dany N'Guessan has been a Charlton target for over a season now and with him apparently out of favour with Kenny Jackett he looked a certainty to me to be top of Chris Powell's buying list.  However, a week is a long time in football and as we all know Kenny Jackett has moved on and Steve Lomas will undoubtedly want to review the squad before making any decisions.  I believe that N'Gussean also has another year on his contract with Millwall and given that Charlton opted not to take up their free option on extending Danny Haynes' contract, they are unlikely to pay a fee to obtain the Millwall front man.

There are plenty of players out of contract this summer from the Premier League (see here for a complete list )  but Financial Fair Play rules (FFP) in the Championship mean that (with the possible exception of a few clubs with Premier League parachute payments) it's going to take some serious reality to settle in on wages before those players join a lower league club.  Unfortunately I don't think that reality will settle in for a few years from now as former Premier players realise they're not going to be able to command those types of wages in the lower leagues even if a club has a new Sugar Daddy willing to splash a bit of cash.  With Charlton struggling to pay a rumoured top weekly wage of about £13k to Ricardo Fuller, what chance do we and other clubs have of paying £20k plus to the likes of Jermain Pennant and others?

The FFP rules are different between the three divisions of the football league.  For Leagues 1 and 2 it's based on player salaries as a percentage of turnover, while for Championship clubs the aim is to break even on the core element of the club's activities (ie spending on youth development and improving the stadium fall outside its scope).  For more information on FFP see the following link FPP Explained

I believe that Charlton have a deficit of roughly £500k a month to fill before we meet the criteria once they strictly apply.  The FFP rules allow for a certain amount of equity injection and with a £6m annual deficit we are comfortably within those boundaries for the next season but this assumes that Uncle Tony is willing to continue to bank roll us so far but the message is clear that this is not going to continue.

We're not the only team to suffer.  It seems certain to me that Jackett left Millwall as he was frustrated at the club's lack of resources to strengthen the squad.  Even the Premier League is not immune if we are to believe the newspaper stories currently doing the rounds.  It is rumoured that Michael Laudrup is unhappy at the transfer policy at Swansea and Harry Redknapp is on the verge of walking out over the hold up in recruiting out of contract Wayne Bridge from Manchester City who has since gone to Reading.

I did attempt to put Charlton's deficit in perspective using a back of the envelope calculation.  If we imagine that players are on £5k a week (I have no idea if this a realistic figure and have to admit that its a complete stab in the dark)  then £1/2m is equal to culling over 20 players in order to break even. This is quite a stunning figure by any stretch of the imagination and with solidarity payments only rising by 5% and other non Charlton income remaining fairly static I'm not sure how the void can be filled. 

With the the different FPP rules in each of the four divisions I can also certainly see player contracts getting a lot more complicated to allow for potential promotions and demotions each year.  Good luck to the finance department is all I can say.

Talking of fair play, its good to see that the Football League have now about to introduce tighter rules on foreign loan players to stop the ridiculous farce that was the Udinese B team masquerading as Watford FC.  While no self respecting Charlton fan wanted to see Crystal Palace go up, I'm pleased that this type of behaviour while perfectly legal was not rewarded with a place in the Premier League.


  1. Good Post. I used it as the basis of something I've written. I did try not to copy it, but I put a link so as to ensure that no one would think I had.


  2. No problem, thanks for the mention in your excellent article !!