By David Gold at the Dolder Grand in Zurich
November 7 – FC Lorient President Loic Fery has reiterated his desire to see a salary cap based on each league’s income from television revenues to prevent football from financial disaster, as revealed first on insideworldfootball last week.
Speaking at the International Football Arena conference here today, he said: “I am in favour of a base salary cap that is a function of the fixed revenue of the club (primarily television revenues).
“The stability of the league [needs] to have a fixed salary cap, to have what is fixed no more than what you are guaranteed to make.
“[Clubs] have to make bets on the future results by investing in players.
“They don’t know if they will be 15th or 5th.
“I started investing in Lorient because I loved the game and what struck me is that these are companies, and you invest because you love the game but at the end of the day (it is a) company.
“It has revenues and charges.
“If you don’t know what your revenues are and you end up with 70 or 80 million of losses you are no longer a company but you are a dead body.
“If I want the club who is 85 years old to be there tomorrow, there is one solution – that I don’t have uncertainty about the cost of players to my revenues.
“Where the bulk of the revenue is the television rights, and these are dependent on where you end up this season.
“If you end up 1st or 20th your television right money is different.
“If you throw a coin in the air (to decide what you spend) then I say no.”
Fery last week told insideworldfootball that he felt certain teams were “playing with fire.”
“A football club is a company…the big issue is about the misalignment between revenues and charges,” Fery, also the managing partner of an asset management group specialising in the income credit and debit markets, said.
“I think the move and existence of a club can only be justified if you balance or if you de-risk the business model.
“We need stability, we all want the league to last, and…I don’t think UEFA’s Financial Fair Play is concrete enough.”
The financial fair play initiative has been introduced by UEFA from this season, and will see teams having to balance their books over three year rolling periods in the long run.
Fery’s salary cap would be set at a different level for each league, and as it would be based on television rights it would change in time, so clubs in one league would not permanently be at a disadvantage from those in another.
It also means that smaller clubs in one country can challenge the status quo, whereas Fery believes that the UEFA initiative could restrict smaller teams in their ability to invest large sums in trying to climb the league pyramid.
Fery also reiterated his praise for the Direction National de Controle du Gestion (DNCG), who he said had been a major factor in ensuring that French teams, in his view, are the best run financially in Europe.
They examine the books of French teams and if their finances are deemed not to be viable, they can be punished with a variety of reprimands, including potential relegation.
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November 2011: Fery calls for salary cap to prevent financial disaster in football