Former Crystal Palace chairman Simon Jordan believes Bristol City should not be let go of a Financial Fair Play punishment as there is no common sense in their previous business model.
On Wednesday, chairman Jon Lansdown estimated that up to seven Championship clubs could fall under FFP restrictions which require clubs not to suffer a loss of more than £39million over a three-year period.
City are one of those clubs at risk of breaching EFL profit and sustainability rules for next season after posting £38.4m losses following the collapse of the transfer market .
Lansdown spoke about City’s model for balancing the books and highlighted the importance of the transfer window to help generate funds in a sustainable way. A process that saw them make a profit of £10.9million in 2018/19, helping to meet the P&S criteria for that season.
He said: “We all have slightly different models in how we do it, but you can see our track record, we’ve used the transfer market to have a slightly higher wage bill than a club our size would have. normally, and that’s been a perfectly valid way to operate over a number of years, and we’ve done it pretty well.”
“Some of that is completely gone, through no foreseeable fault on our part and if you want to classify that as a mistake, it’s definitely an honest mistake.”
Jordan, who was Palace chairman for 10 years and admitted to once throwing a cup of coffee at owner Steve Lansdown, had little sympathy and claimed the club would reap what it had sown following reports that the club’s losses would amount to £412,000 a week for the last 10 years.
Asked by TalkSPORT host Jim White if City should be released due to the financial impact of the pandemic, he replied: “No, not really, as they continue to discuss the model on which they run. their business, is based on keep going and buying and selling players to underpin their adherence to Financial Fair Play.
“You can’t support your business with things that may not happen, you can’t create a cup race in your cash flow to suggest you’re going to make the cup quarter-finals or be eliminated in the third round because that’s all you can always budget for – common sense prevails.
“You have to maintain a degree of control. Bristol City are one of those clubs that manage their salary-to-turnover ratio in a very precarious position.
“Look at Reading, where they have 120% salary to turnover, which means if their turnover is £20m, they pay their players £24m. essential is that you must have durability.
“At the start of the season you might want to put in your budget for yourself as a backer, which you might want to sell players, but you can’t balance your FFP regulatory obligations on your profit and loss and profit and sustainability – these are the reasons why clubs like Bristol City have a bit of a headache meeting FFP obligations.”
Derby and Reading have faced points deductions this season for managing their finances and White raised the question of whether the EFL would feel embarrassed if they were to offer a points deduction to seven clubs.
Jordan fired back: “Hard luck, those are the rules if you want this game to be sustainable make it fair and just. Make sure the landscape isn’t too detrimental and enforce it.”
The EFL have announced amendments to the P&S, as voted on by clubs, which include clubs can claim £5m in lost revenue for the 2019/20 and 2020/21 campaigns impacted by Covid.
Manager Nigel Pearson shared his thoughts on City’s former business model at Thursday’s press conference in which he branded ‘bonkers’ as he faces the financial fallout trying to shape his team.
He said: “We’ve gotten ourselves into a mess, as a football club, by having a previous strategy to build a squad, and it spends too much money and then has to sell to stay viable, which is crazy. Who does this?
“Now hopefully we get to a point where our wage bill is manageable and we still create players who will be great for us and we will at some point have (have to sell), and I never intend to stop a player’s long-term ambitions of playing in the Premier League, but our aim is always to make it happen.
“It may take longer than we hope, but what’s really important is that you have the right foundation, because the foundation hasn’t been right.”
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