One of the things for the future that needs to be looked at imo is the financial model

[davbloo]

I think in theory with FFP it’s right but if I take my team for example Ipswich our owner is putting in 6 or 7million pounds a season into the club for costs. Not transfer fees, this isn’t reflected in the game at all, it feels reasonably easy to spend money in the game because of the financial model. Mick McCarthy spent around 3 million in his 5 and a half years with us yet in the game, I regularly get 3 or 4 million in the 2nd season.

 

most clubs are running losses every year, and while they don’t have tycoons they have owners who are helping the clubs keep afloat it feels to me that this level of investment is ignored in the game and financially it’s not reflective of what happens in real life. 

 

maybe I’m being overly simplistic in my view but I’ve recently got Wycombe into the championship, 2nd season in the league and I have a budget of about 5 million, no sales, it just seems off to me and makes it makes the game that bit easier certainly with building clubs up.

[Guest]

The finance module in FM has needed a rewrite for years & considering SI employ Dr Tom who is a football economist they have the right person to assist the dev team with coding such a new system but each year the same inadequate model is reused.

[Svenc]

In the past the game has also never modeled how top clubs such as Valencia are/were pressured to sell their best assets or anything. Likewise, even in the Bundesliga, even the small clubs make gazillions over the long run. Would be an interesting research how much this influences the transfer markets in the long run also, en detail. Thinking about AI managers and their selling decisions also. The difficulty naturally seems not merely getting the English home model "right" -- it's that economically leagues can be hugely different, in parts to national regulations which are some more and less strict, depending on the country and competition. But yeah, in general, the actual struggle that lots of clubs have to go through, that's never been modeled by the game -- arguably recent releases have made this even worse due to the ever growing TV money. Whilst that is a detail that's always considered, country by country, it's completely unbalanced the financial side of things. You basically can't not not make lotsa money. And if you can spend millions as a club just being promoted to the Bundesliga, it's pretty far off what's actually happening.

[themadsheep2001]

5 hours ago, Barside said:

The finance module in FM has needed a rewrite for years & considering SI employ Dr Tom who is a football economist they have the right person to assist the dev team with coding such a new system but each year the same inadequate model is reused.

The real issue is making a complex economy that's easy for players to understand, and easy for the AI to use. 

[Guest]

All the manager needs to know is their budget, why is there a requirement to understand the fine detail of how & why your board arrived at the budget they have set?

[santy001]

The biggest challenge FM would have on its hand is implementing the way in which clubs value players on their accounts. 

As a Stoke fan I've only ever seen the club write-down player values over time, but in official accounts a players transfer fee is never put on the accounts as one block even if they pay for a player upfront, its spread over the duration of the contract. It gets messy when you sign a player for £10m on a 5 year contract for £10m upfront, but on the accounts its only £2m per year. But at the start of the fourth year he signs a contract that takes him back up to 5 years remaining so you've got the last £4m spread over another 5 years.

It would be extremely convoluted to implement that, but furthermore there's clever accounting done by clubs at different points. Just before the premier league brought in FFP Stoke posted a £30m loss, seemingly to prevent any FFP issues over the next few years it was realised the club could take advantage at this final stage and write-down the squad value substantially. I expect in the next set of accounts from last season the club will have done the same because with relegation, if the club loads on that side to accounts that the football league doesn't review, it means the next couple of years could avoid a Villa-like scenario.

It's such a huge undertaking though because there would also need to be the implementation of a large degree of external factors. I can only speak for the arrangement at Stoke, but the way the club is set up it means that there's some very clever shenanigans. If Stoke lose money, Bet365 (who own the club) pay less tax because part of the business is making a loss. The club also pays out a hefty amount (around £4m-£5m per season) in rent for its stadium and ground (to a sister company called Stoke holdings which is also owned by Bet365), but this seems more like its a way to again get a bit of a hand up in removing certain overheads from Stoke's accounts for FFP reasons which can then be put back into the club from Bet365. 

When you start to realise just how nuanced each and every club probably is with how its run, and how situations can transpire of a club making a loss of £5m but having £15m more cash in the bank. It seems difficult to reflect this happening in FM without an enormous support structure around it. It probably should be hidden from players (because the figures can't ever be truly accurate with club finances anyway, because the FM world is always going to be at least 1+ year behind depending on when clubs publish accounts - or if they even have to) but I don't really see how this level of nuance can be brought to a game without adding an entire module to the game that is somewhat loosely emulating real world finances outside of football to influence it - which possibly goes down the wrong route for the game.

- - -

That being said, and I don't know if this is for legal reasons, or technical limitations, but the prospect of financial mismanagement in FM is not really a factor in the game right now. Clubs cannot agree overdraft facilities, so there's no situations in which clubs are being in some way hampered by a poor financial decision made 4/5+ years ago. There's no short-term loans for liquidity that clubs go for in order to make signings, and these are the things that ultimately lead to clubs having more problems. An awful lot of clubs operate with external financing away from the director, some have a mixture of director support and external support and some are like Stoke where the club just has the owning director/entity that underwrites it all. 

There's no problem in FM of running the club with a £10m+ deficit until you get to the end of the season, but in reality the club would at least need an overdraft if it were in this situation and I don't know the going rate on a £10m overdraft, but I imagine its pretty pricey and could/should factor more into clubs budgeting to avoid it. Hell in FM you can drop down to negatives in the £50m+ range and not be too worried. If this were to happen administration would've come long before then. Without provisions at the start of the season in fact, the moment your club was approaching 0 cash in the bank then people aren't getting paid. I'd be really happy if FM could implement this side of the game. Did an overly-ambitious chairman take out a loan to sign players and its since backfired? Did season ticket/merchandising revenues fall short of projections and so the club needs a loan? Has the club been stuck with high earners it couldn't shift on but has needed to still bring in more?  Did the club get into a bit of a squeeze similar to Everton and an ever-growing overdraft is becoming a lead weight around the clubs neck so the owner is seeking investment.

Again I'm not sure if this is a legal limitation or not, but administration is a bit of a cakewalk in FM. Because new owners come in no problem really once a club does go into administration, and there's little legacy issues of the debt clubs can recover quickly. Some clubs can spend a long time looking for new owners in reality, again coming back to Everton, pretty much since he took over Kenwright was looking for extra finance to come in and that took over 10 years to materialise. Once more coming back to Stoke, Peter Coates wanted to sell up and it took a while until eventually an Icelandic Consortium came out of nowhere. Then a couple years in the major financier of the consortium pulled the plug over disagreements with the other members. This meant they were looking to offload the club and that process itself took some time, before Peter Coates saw no one was coming in to buy the club and had the urge to come back and "right the wrongs" of his previous tenure. Something like this could be a dramatic addition to the game that would certainly increase the gravity of enormous spending and constantly pushing higher when the club isn't getting the money in until further down the line.