Subject: Dev Diary 71 - Finance reform

Hmm, litt usikker på hvordan dette kommer til å slå ut. Uansett blir det noe høyere utgifter til lønn, noe lavere inntekt på stadion og de økte salgsavgiftene vil gjøre det mindre attaktivt å trene spillere helt til topps. Vi får se hvordan det blir :)


Dev Diary 71 - Finance reform - the first step

Today I wanted to return to an issue that was already announced at DD#69, i.e. the reform of club finances.
At that time we were already seeing a noticeable process of steady wealth increase for clubs at every league level.
To a large extent, this is the result of a lack of cost balancing for significantly increased ticket revenues. We announced at the time that we were considering various scenarios but we want to make a final decision after a thorough analysis of the financial data - to ensure that no group of users is either harmed or privileged.

What did the analysis of club finances reveal?
- After the competition reform, at each league level average revenues significantly exceeded average costs.
- Before the competition reform, the average weekly "financial result" was better in the higher leagues - but this was a minor difference.
- After the competition reform, the gap increased significantly, which meant that clubs in the high leagues made very high profits, while those in the lower leagues also gained, but not as spectacularly.

That's why our efforts are focused on rebuilding the correct balance on two levels:
- On a club scale - to balance costs and revenues.
- On a global scale - to eliminate significant differences in profits between teams playing at different league levels.

It is easy to conclude from this that the reform will affect strong teams to a greater degree.

As you are probably used to prosperity and have forgotten that you need to keep an eye on costs, making all the changes suddenly could be painful for some of you, so we decided to divide it into two parts.

Part one, introduced with the upcoming season will be about COSTS.

Increase in salaries of all field players:.
- We have made a simple assumption that fits in with the results of our analysis, which pointed to the need to increase the running costs of all teams, but to the greatest extent of the top ones.
- Therefore, all field players, with the age update, will have their salaries increased, but the better the player, the higher the increase will be.

Decrease in goalkeeper salaries:.
- The salaries of these players have always been ruled by slightly different rules and this will remain the case. Goalkeepers' salaries will still be relatively high, but will be slightly reduced.
- After the changes, the best field players will be able to earn more than the top goalkeepers.

You may notice that the increase in players' salaries, depending on the league level, is in the range of 15% to 33% which should translate into an increase in overall running costs of a few to a dozen percent.

Change in player sales tax:.
- The existing player sales tax will increase from a marginal 5% to a more reasonable 10%.
- The tax on listing a player remains unchanged.

Part two, scheduled for further season will refer to REVENUE.

Over the coming season, we will evaluate the effects of the implemented cost changes and only after a thorough analysis will we introduce a second adjustment - relating to revenue.
At this point, we anticipate that the increase in costs related to players' salaries will still not offset the increase in revenue after the competition reform.
Therefore, the most likely scenario will be a reduction in match revenues.
We plan to change the behaviour of fans, who will, as a result, become more responsive to ticket prices.
Therefore, in order to maintain the current attendance, price reductions will be necessary.
How much? This we will know after the upcoming season.