Financial

Why Financial Fair Play Doesn't Add Up

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In April this year before the season had finished Sam Allardyce was briefing the press how new financial fair play rules in the premier league could wreck West Ham’s chances of signing Andy Carroll in the summer transfer window.

I never worked this one out as we were already paying the majority of his wages on loan from Liverpool last season so what was the difference?

This started a media campaign by West ham to mention Financial Fair Play in almost every interview since then. Gold & Sullivan got in on the act explaining how they had one arm tied behind their back because of the new financial fair play rules bought in by the premier league which they voted for.

What has frustrated and puzzled many West ham fans is why no other premier league clubs bothered giving FFP a mention. What makes West ham so special with regards to FFP?

In a recent interview Sullivan was quoted as saying the cost of players wages including national insurance was £847,000 per week. A quick calculation brings the annual total to just over £44M pounds per year way below the £52M limit allowed.

In a West ham statement on WHUFC.com on 26th August they stated that new rules state that “whatever a Club spent on wages last season, they are allowed to do so again, with an allowance for an extra £4m on top. If they did not spend £48m on wages last year, as was the case with West Ham United, they are allowed to go up to a new £52m limit.”

The suggestion from that statement was we spent under £48M last season but we are now very close to £52 million this season.

The last published accounts for WH Holding Ltd year ending 31st May 2012 show a total wage bill of £44.6M which includes non playing staff and was our season in the Championship.

The previous year ending 31st May 2011 we spent £55.7M on wages, the year we got relegated from the Premier league.

In the middle of the Icelandic ownership in the 2007/2008 season our annual wage bill soared to £63.6M from £42.4M the previous 2006/2007 season and just £20.2M in the 2004/2005 season.

At the end of last season:

We released Carlton Cole believed to have been on £30K per week and Gary O’Neil believed to have been on £25K per week.

The loans of Chamakh, Pogatetz and Paulista all ended releasing an estimated extra £1.5M from the wage bill.

If these estimates are correct we managed to trim £4.36M off the players wage bill at the end of the season.

In the summer transfer window we added Andy Carroll permanently to the club on a weekly wage believed to be £80k per week but I understand we were paying him at least £75k per week to loan him from Liverpool so maybe a net increase of £5k per week. Stewart Downing is said to have joined on £60K per week, Razvan Rat is said to be on £25k per week and Adrian is said to be on £17K per week. That makes the total increase just over £100k per week or £5.3M per year.

I know these are just estimates but I only see an overall net increase of just over £1 million to the wage bill.

Personally it does not add up to me. The WHUFC.com statement said under £48 million so the gap could be even larger.

I remain open minded but I also find it amazing our wage bill was under £48 million last season in our first year back in the Premier League. I guess it is all just speculation until the financial accounts are released next year for the year ending 31st May 2013.

Even when the financial accounts are released we will only know the total wage bill of all employees. In the financial year ending 2012 West Ham employed 802 people. The senior players will be the minority of these employee numbers but make up the vast majority of the wage bill. They will be some exceptions such as the manager who is believed to earn between £2M & £3M per year including bonuses and the highest paid director believed to be Karren Brady who was paid £427,000 in the year ending 2012. These salaries will not need to be included in our FFP declaration to the Premier league.

Moving on to Financial Fair Play in general

The words ‘Financial Fair Play’ is a term never used by the Premier league. The premier league handbook which was published last month introduces a couple of new important rules.The Premier league have published a new form that premier league clubs will need to declare the total cost of players wages including any bonuses, image rights, additional payments, employer national insurance contributions and any pension payments.

In published 2012 financial accounts other Premier league wage bills included Man City £202M Chelsea £173M Manchester United £163M Arsenal £143M Liverpool £119M & Spurs £90M. These clubs could also easily generate extra income from sponsorship or commercial activities to get around these restrictions on top of their already massive wage bills. As an example earlier this year AON sponsored Manchester United training ground at a cost of £160m over eight years giving them £20M per year of extra income which could be spent on wages. The chances of West Ham getting a sponsor for Chadwell Heath seems somewhat unlikely although I guess they there is nothing to stop one of chairman’s companies from sponsoring the training ground. The Ann Summers training ground at Chadwell Heath perhaps?

Perhaps the reason the Premier league doesn’t use the term financial fair play because it is not fair. The richest clubs stay rich while keeping the poorer clubs in their place. It means it would be difficult for other premier league clubs to match the wage bills without significant commercial income to make up the difference.

The other rule is about losses over 3 years starting this season.

The maximum permitted loss over 3 seasons starting this season is £105M, However the maximum loss if an owner does not inject equity is just £15M over 3 years so just £5M per year.

Sullivan & Gold have injected equity in the form of £35M of loans in 2011 & 2012 and Sullivan purchased a further 25% in a debt restructuring exercise last month.

West Ham’s loss in 2012 was revealed at £25.4M when revaluation of property is excluded, In 2011 the loss stood at £18.5M and in 2010 £20.6M, so as a comparison the total loss was £64.5M over the last 3 years and well within the £105M limit if we continue or better that trend, However the owners will have to continue to inject equity each year at these levels.

A good explanation about Premier League Cost Control and Sustainability Provisions can be found from Daniel Geey at his website


David Gold on Sky Sports Transfer Centre before the window ended speaking about FFP


Guest Post

Let the Children Play

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Guest Post by ‘Littlefork’

Here’s a piece by Tony Carr on the elephant traps when coaching young people. I witnessed just the approach he speaks about in an Under 8s match last year! Whatever you think it’s a good read and speaks volumes about what is wrong in this country. Nothing much will change whilst “big clubs” continue to coach young kiddies in a way which takes away individual problem solving etc.

Joystick Coaching? NO! (Leave joystick coaching to the control freaks)

Tony Carr

A ‘joystick coach’ is a term coined by Alex Kos to describe coaches who dictate and control their players’ movements on the pitch, as though they were playing a real life video game called ‘My Kids Team 2010!’ Why do they do it?

1/. The unpredictable and fluid nature of football makes it a difficult game to coach compared to, say, American football or hockey. This is especially true for coaches who ask young players to stay in positions that make no sense to them. Because asking players to stay in position doesn’t seem to work – players wandering ‘out of position’ really frustrates coaches who like to see neat patterns on the football field – some coaches decide they must ‘help’ their players by instructing them to stay in position and lo! – another ‘joystick coach’ is born.
2/. Coaches see other coaches control their players and win matches, and they feel compelled to do the same.
3/. Parental pressure for instant results stops some coaches taking a long-term view and makes them strive for quick wins instead.

What are the consequences?

1/. It’s not the kids’ game anymore. It belongs to the coach.
2/. Children gradually lose interest in football because they are not allowed to simply play the game to the best of their ability. Individualism and spontaneity are frowned upon and the fun soon disappears.
3/. Young football players are not encouraged to make their own decisions. While this may stop them from making mistakes when they are learning the game, it also stops them becoming really good players in later life when the ability to make quick, correct decisions marks out the the excellent players from the average.

What can you do about it?

1/. Don’t tell your players what to do. Instead, equip them with the skills they need to do the job and then let them get on with it in their own way.
2/. Encourage risk taking. Is a pass across the penalty area, for example, always a mistake? Discuss the risks with your players, don’t lay down the law.
3/. In training sessions, don’t tell your players to ‘move there’ or ‘go here’. Instead, point out that whatever they are doing could be done better and help them come up with the answers themselves.
4/. On match days stay quiet, and make sure parents/assistants don’t shout instructions. Lead by example. Good behaviour, like bad behaviour, is infectious.
Let’s unplug the joystick and let the children play!

Tony Carr, West Ham Utd FC Academy Director (for a “children in sport publication”)


Talking Point

Have We Taken a Record Breaking Gamble?

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When I was considering what to write for my first post I was torn between a number of topics. I am generally a very positive fan who sticks up for the board and Sam regularly and this is often the nature of my columns and tweets. However, as I was weighing up the ideas in my head, the situation with Andy Carroll started to develop this week and I felt this should naturally be where I start. To say I am gutted about the news that has originated regarding Andy being ruled out for a further period is a complete understatement.

Fortune is always hiding...

At my time of writing it hasn’t been confirmed how long he will be out for. I, for one, was a firm member of the “We want you to stay” brigade. My real eagerness for him to join largely stems from Big Sam’s reluctance to vary tactics and his insistence on one forward, in the mode of a big target man. For me there was no one better available, that we could get, than Andy Carroll. On his day he is a handful for any defensive line and as the season progressed he was really turning in some great displays. Those of you who follow me on twitter will know I said the deal would happen many months before it did because I knew the importance Sam placed on young Andy’s shoulders. He was determined to make him the essential transfer of our window. I really felt with another winger (Downing) on one wing and Jarvis on the other we had a recipe for goals. I supported spending most of our budget on him at the expense of other positions and depth to our squad because I knew of his importance to our system. I was also under the impression from the club that a second forward would be bought/loaned.

I write a weekly column for “IronViews”:http://www,ironviews.com and it was there I questioned how legitimate some of our bids for forwards were and spoke of those that I knew had been submitted. We did bid for Kalou, (he wouldn’t join because he didn’t want to play out of position due to Mr Carroll’s guaranteed selection), Ba, Bendtner, Lukaku and apparently Zapata, Bony and Arnautovic were all firmly on the radar. Of course with one of those players here, as well as Andy, it seemed that we were in for a good season. Therein lies the problem. We didn’t sign any of them and so far have pursued Cole and signed Petric to solve the desperate situation.

The gamble to put all the proverbial eggs in one basket with Andy seems to have had many knock on effects. As previously mentioned players such as Kalou were reluctant to join us due to it being clear Andy was the number one choice. Andy has indirectly been told that no matter who we sign and how he plays he is a guaranteed starter, which I personally don’t think is the right message. I also feel that our over reliance on Andy may have been a trigger for the new heel injury. To me, it seems no coincidence that he has injured the same part of his body as the previous injury, meaning that it probably hadn’t had enough time to heal. Before the injury the club had put out the email and on the website how we could all buy tickets for the Everton game and see Andy Carroll’s return. It seems there was a number of people counting on this happening perhaps quicker than it should have.

I also question how it was possible for Andy to pass a medical with us, when completing his record move, when he was currently out injured at the time. This summer we have seen Cole and the funnily named Roger Rojas be declared unfit to pass, surely the same must have applied to Andy?!? Again, I throw it out there but did we make an exception of the rule to make sure he passed his medical?

I am not going to write off Petric at all and have heard some glowing references about his ability. I have been informed that had it not been for Martin Jol’s over reliance on Berbatov (where have we heard this before!) he would have figured more and had a better record at Fulham as well. He has an impressive CV. Of course there are questions as to why he didn’t have a club sign him before we made our move and how fit is he going to be but I am hoping that he is up to the task. I do worry that he is not overly suited to being the lone forward and pray that Sam may look to alter the tactics to accommodate him but I feel that this is unlikely.

We still have one squad place left and I expect that to be filled by Carlton Cole. It got back to me in late July that Saif Rubie, who is Carlton Cole’s agent, had expressed that Carlton deeply regretted the decision not to sign the contract he was offered by us in January.

Carlton Cole and Saif Rubie

I think Carlton was badly advised and was looking for one last pay deal and was confident he would secure that move. When a move to Crystal Palace fell through it started to become clear this would not happen. As our striker choice started to become fruitless we turned our attention back to Carlton. Had both our situations not been so desperate I am sure Carlton would not have returned. I would welcome him back as I think he has served us well and suits our system. Again, I question why and how a professional footballer looking to earn himself a contract at a club ended up being not fit enough to pass a medical but when he is back and hopefully scoring some goals, this will be forgotten. I don’t wish to bring doom and gloom for my first post but I just had some questions about our transfer activity. I am hoping that Petric will score enough for us not to be so dependent on Andy being fit, if he does, he could prove to be one of our most important signings in recent years.


Nostalgia

Supporting WHU in Oz Over Three Decades

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My decision to emigrate from England to Australia in 1981 was the hardest in my life. To leave friends and family was hard to do but I knew that my opportunities in life would be greater if I made the move. The other heartache for me was discarding the fortnightly visit to my beloved Hammers. I had been going to Upton Park for 13 years but I did not realise just how much I would miss the place three decades later. In the final two years of my life in England the Hammers had won the FA Cup final against Arsenal, made the League Cup final against Liverpool and had won promotion back to the top flight by winning the old second division. It was so hard to leave all this behind.

The first decade living in Australia was like living on a different planet football wise. Pay TV and the internet were a long way from their inception here and in fact the only chance to see English football was a half hour goal highlights show at 11.30pm on a Monday night. Australia was so far behind in the pre-communication World that even number one single tracks in the UK would only get into the charts here some 9 months later. In the first few years the only chance I had of following West Ham was the newspaper cuttings from the games that my mum would send me by post. These used to arrive about 3 weeks after the games but it was the best we could manage. Some years later the local TV station extended the football show to an hour, showing the highlights of one game and the goals from the rest of the division. However, the station was so biased to showing just one team that we renamed the show, “The Liverpool show”. Worse was to come though as the Hammers got relegated in the late eighties and again in the early nineties meaning that all TV coverage of West Ham disappeared. Back again to the wait for mum’s newspaper clippings.

From the mid eighties through to the mid nineties I had bought myself a short wave radio. At last I could tune into the BBC World Service as they gave a commentary of the second half of one game on a Saturday afternoon and also updated latest scores. That meant getting out of bed at 2am on a Sunday morning and trying to tune the radio station in, as the reception was at best fuzzy and more often very crackly! Constant retuning meant that you often got West Ham 1 Arsenal zszszszszsz. My wife was really doubting my sanity by now as I would climb back into bed at 4am, often only learning what the final score was for my nocturnal efforts.

Finally in the late nineties we had the introduction of Pay TV and EPL games were shown on a regular basis, although watching all West Ham games was still not guaranteed. Only selected games were chosen for viewing but that was to change in recent years. Providing you pay for the Pay TV subscription we can watch any game we desire in the EPL, just by pressing a select red button on the control. The 21st century also provides the internet where we can catch up with all the latest news and also blog on sites like these. The fear of relegation hangs high still each season as the drop would also mean a blackout of West Ham coverage over here again. The 32 years here have not dented my love for our club and I have managed to get back quite a few times over the past 20 years to get my Upton Park “fix”. Like the prolonged wait for Pay TV and internet, I am now waiting for the “beam me up Scotty” technology, that will mean getting to the Olympic Stadium and back before the missus gets out of bed on a Sunday morning.


Statistics

New Signing: Mladen Petric Statistics

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Mladen Petric Stats

DOB: 01/01/1981
Age: 32
Position: Striker

Previous Club: Fulham
Previous Division: Premier League

Transfer Date: 10/09/2013
Reported Fee: Free Transfer

All it took was a series of underwhelming displays from our one fit senior striker, a transfer request from our makeshift backup option, a succession of failed loan bids for top quality Premier League talent, a failed medical by a supposedly sure fire fall back option, and another mid to long term injury to our record signing for West Ham to finally conclude a frustrating summer transfer window by signing former Fulham striker Mladen Petric on a one year contract.

Yes, the summer window has been a bit of a saga. Many have been left frustrated by the way the club have handled the very public pursuit of a centre forward, but let’s put that behind us. We finally have one! And a pretty good one at that.

Croatia international Petric comes with an impressive career haul of 166 goals in 441 club games, and another 13 in 45 for his country. During his five years in the German Bundesliga, Petric managed 79 goals in 172 appearances, including a number of goalscoring performances in European competition.

He may be entering the twilight of his career, but this could prove to be a very shrewd signing by Sam Allardyce and our pair of Davids.

Can Petric still cut it at the highest level? His goalscoring record has never been poor, but it has shrunk in the past few seasons, as has his assist contribution.

Head to West Ham United Stats for my full analysis of Mladen Petric – including a look at the goals he scored last season, and way to get the best out of him

hammerstats
COYI


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