The Championship FFP Thread (Merged)

Okay apologies for the source but well well.

CFRP??

https://www.thesun.co.uk/sport/26331802/leicester-points-deduction-loophole-financial-promotion/

My own view is that they are and were fine to LAST season but THIS season could see a major question mark.

In actual fact EFL and PL rules imply that they DID have to submit as a newly relegated club in late December.

However this would be one hell of a problem if they went up in clear breach of one let alone 2 Periods. I had a strong view since the Autumn btw.

The PL rules actually state that this should be more live..will look for the EFL equivalent later.

E.50.2 suggests that this should be all in hand in terms of submissions to the EFL.

If Leicester have breached to last year, bang goes their compensation claim.

I believe that there is alignment so the article I dunno..

Aston Villa have reportedly suggested that the UEFA Report on their losses is wrong.

Reportedly Aston Villa lost £119.8m last season!? Presumably the Accounts published on the site or similar.

Albeit the link isn't working. Can access via the below.

https://www.avfc.co.uk/news/

11 hours ago, Mr Popodopolous said:

It helps to explain their activity summer. They also needed to fall in line with FFP/P&S. £83m plus Allowables.

Which brings me onto Leicester wh9 the media have barely mentioned. like them their loss limit will be some £83m plus Allowables. Already before Allowables lost £92.4m  pre tax in 2021-22. (Season in which they finished 8th, turned over £214m and reached a Europa Conference League semi final).

Leicester will have the sale of Fofana to Chelsea to help with the accounts due out shortly. 

11 minutes ago, SimonD said:

Leicester will have the sale of Fofana to Chelsea to help with the accounts due out shortly. 

Yep albeit their income will very much be down year on year. Obviously this year especially but last year too somewhat.

They didn't hit the top 30 in the Deloitte Money League..remember 10 places lower and no Europan revenue.

Fofana was £70m, less Book Value and Sell-on. Maddison £40m, less Book Value and Sell-on.

My prediction is fine to 2022-23, huge question mark to 2023-24.

32 minutes ago, Mr Popodopolous said:

Yep albeit their income will very much be down year on year. Obviously this year especially but last year too somewhat.

They didn't hit the top 30 in the Deloitte Money League..remember 10 places lower and no Europan revenue.

Fofana was £70m, less Book Value and Sell-on. Maddison £40m, less Book Value and Sell-on.

My prediction is fine to 2022-23, huge question mark to 2023-24.

This season they sold Barnes and Castagne I think, but bought a few too

36 minutes ago, SimonD said:

This season they sold Barnes and Castagne I think, but bought a few too

Barnes pure profit, think Hirst was too.

Castagne Fee Minus Book Value.

Some loan fees.

@Hxj

What is your take? The Leicester story, surely with the rules being harmonised the idea that they could slip through the cracks is somewhat crazy? You know about the CFRP.

I outlined the areas in which these rules have been harmonised and aligned. Notably rule E.50.2, whixh seems to indicate that relegated clubs who have lost X have to submit to the EFL by 31st December.

Aston Villa fans proclaiming well run..is an interesting debate.

In some ways yeah, but a £119.8m loss (pre/post tax, remains to be seen, likewise Allowables). The Group Accounts usually are instructive.

Leicester seem based on a Fan Podcast with a journo appear to be leaning on the mitigation argument..

The big one to me seems to be their position to 2024. ie the present season. The £83m Upper Loss limit, the EFL/CFRP should have the numbers and Projections by now.

If they have breached in successive years they should get deducted in successive years or maybe worse still 2 in the same year.

Aston Villa- Headline Numbers

Income

£39.4m

Wage Bill

£57.2m

Amortisation

£10m

Profit on Disposal

Listed as £22m+, listed as down from £97.445m.  £70-75m?

Until their Accounts out rather than the Headline Numbers it is still tricky to say.

NSWE UK has now appeared at CH but tomorrow at the earliest I expect.

We are now waiting for Cardiff and in particular Cardiff City Holdings.

12 hours ago, Mr Popodopolous said:

What is your take? The Leicester story

Usual 'journalistic' nonsense.

If Leicester are in breach in 2022/23 they will get punished by the EFL in 2023/24 or by the EPL in 2024/25, assuming they are promoted.

If Leicester breach in 2023/24 they will get punished by the EPL in 2024/25, on the same basis.

So there is the possibility that Leicester will get an irrelevant punishment in 2023/24 (not sufficient to stop promotion) or two punishments in 2024/25.

That is how the rules are currently designed to work.

Just now, Hxj said:

Usual 'journalistic' nonsense.

If Leicester are in breach in 2022/23 they will get punished by the EFL in 2023/24 or by the EPL in 2024/25.

If Leicester breach in 2023/24 they will get punished by the EPL in 2024/25.

So there is the possibility that Leicester will get an irrelevant punishment in 2023/24 (not sufficient to stop promotion) or two punishments in 2024/25.

That is how the rules are currently designed to work.

 

Ah right thanks as always, they are harmonised in certain areas though so why e.g. Leicester or even Leeds were mentioned as possibly being in breach well to get promoted off the back of a breach, that's just not right.

The EFL receive accounts and P&S 1st March but surely if the prior Accounts came in on 31st December as PL rules suggested they should thst gives time to punish in-season.

No team has yet been promoted in breach of the 3 year rule AFAIK albeit I wonder with some..that could now be severely tested.

15 minutes ago, Mr Popodopolous said:

that's just not right

Morally maybe, but entirely within the regulations.

17 minutes ago, Mr Popodopolous said:

The EFL receive accounts and P&S 1st March but surely if the prior Accounts came in on 31st December as PL rules suggested they should thst gives time to punish in-season.

That would not stop a club being promoted in a year of breach.

One solution is forcing clubs to have an accounting date of 31 May, with audited accounts submitted by 7 June.  Anyone suggesting that is not possible needs to spend a little more time on their accounts. 

7 minutes ago, Hxj said:

Morally maybe, but entirely within the regulations.

It isn't just the cachet of Promotion pre PL it would be a monetary boost sure but nothing enormous. 10's of millions of pounds, perhaps even £100m and more depending on if a club are bouncing back or more like Luton say.

Surely a combo of the CFRP and CFRU being in action, FFI, In-season etc should give scope to refer Real Time. Leicester and their potential issue would've been known abour for months, surely the EFL should have, would have received Future Financial Info.

7 minutes ago, Hxj said:

That would not stop a club being promoted in a year of breach 

 

One solution is forcing clubs to have an accounting date of 31 May, with audited accounts submitted by 7 June.  Anyone suggesting that is not possible needs to spend a little more time on their accounts. 

Could make Transfer of the Golden Share ie Ratification of Promotion contingent on a Pass as the final piece of the jigsaw...I do wonder if Gibson and his wishes in Spring 2019 had been voted for would've made a tangible difference to that season in particular.

Will go through as and when the full Group Accounts appear @phantom but you find a few headline numbers contained in their report of interest. 

3 hours ago, Mr Popodopolous said:

Aston Villa- Headline Numbers

Income

£39.4m

Wage Bill

£57.2m

Amortisation

£10m

Profit on Disposal

Listed as £22m+, listed as down from £97.445m.  £70-75m?

Until their Accounts out rather than the Headline Numbers it is still tricky to say.

NSWE UK has now appeared at CH but tomorrow at the earliest I expect.

46 minutes ago, Mr Popodopolous said:

Will go through as and when the full Group Accounts appear @phantom but you find a few headline numbers contained in their report of interest. 

 

The headline number I've just read is that Villa posted a £120m loss for 22-23!

They made a £300k profit the year before, but that was only after the sale of Grealish for £100m.

Anyone else get the feeling that football at the top end ( I'm including the championship) is financial madness and becoming ( if it's not already) unsustainable, unless a club is owned by a nation state, and that we are not far away from a pretty big club going bust?

5 minutes ago, downendcity said:

The headline number I've just read is that Villa posted a £120m loss for 22-23!

They made a £300k profit the year before, but that was only after the sale of Grealish for £100m.

Anyone else get the feeling that football at the top end ( I'm including the championship) is financial madness and becoming ( if it's not already) unsustainable, unless a club is owned by a nation state, and that we are not far away from a pretty big club going bust?

It's bonkers. Something has got to give surely.

Key difference obviously between Cash and Profit and Loss, former is key to solvency but it is crazy. Owner largesse, sovereign states, private equity, Hedge Funds, Commercial Loans, Leveraged buyouts etc..

Had a bit more of a read on Wolves.

Surely they aren't going to lose £39m this season. Albeit that is their forecast Accounts..nut then it also said that was a 17th place finish and no particular Cup run.

After all those sales and all restraint though  and other clubs, it does make wonder as I did before, how Bournemouth seem to cruise through with no issues. Especially with Lower Allowables than more, lower non TV income, and a £72m Upper Limit to 2022, 2023 and £83m to this year.

I never knew Bournemouth were so fiscally prudent or such great sellers as their gliding clear makes little sense.

Cardiff accounts but not Cardiff City Holdings have now arrived at CH but nothing yet, perhaps tomorrow they and NSWE UK will be available.

First time poster and Boro fan here though I went to comprehensive school in Yeovil in the 70s/80s and saw the odd game at Ashton Gate. Just want to say thanks for this thread as it has been a great education for me.  I do the bookkeeping for my wife's businesses so I have a basic understanding of accounting principles.

Wolves accounts have just been published on Swiss Ramble. What strikes me is just how dominant player amortisation is in profit and loss. I'm probably slow on the uptake here but I suddenly realised that if you have a squad book value of say £300m (pretty modest by Premier league standards) and you have players on 4-5 year contracts then you're losing £60m-£80m a year just through a bookkeeping convention that has very little to do with the actual financial health of the club.

It means that FFP/PSR turns into an accounting board game of player trading rather than it's supposed aim of ensuring that clubs don't get involved in needlessly risky spending. 

Does seem to point towards player wages vs turnover being a much better guide. At 84% last year, that is way too high for Wolves but obviously healthier than the basket case that is the Championship.

1 hour ago, Bruce said:

First time poster and Boro fan here though I went to comprehensive school in Yeovil in the 70s/80s and saw the odd game at Ashton Gate. Just want to say thanks for this thread as it has been a great education for me.  I do the bookkeeping for my wife's businesses so I have a basic understanding of accounting principles.

Wolves accounts have just been published on Swiss Ramble. What strikes me is just how dominant player amortisation is in profit and loss. I'm probably slow on the uptake here but I suddenly realised that if you have a squad book value of say £300m (pretty modest by Premier league standards) and you have players on 4-5 year contracts then you're losing £60m-£80m a year just through a bookkeeping convention that has very little to do with the actual financial health of the club.

It means that FFP/PSR turns into an accounting board game of player trading rather than it's supposed aim of ensuring that clubs don't get involved in needlessly risky spending. 

Does seem to point towards player wages vs turnover being a much better guide. At 84% last year, that is way too high for Wolves but obviously healthier than the basket case that is the Championship.

 

 

I think you could even give players new contracts to re-amortise the remaining value on the books too. I bet some clubs have done this to juggle their ffp, you just won't see or hear about it framed in a FFP point of view.

It does have some value towards the financial health of the club, as technically they should be able to sell the players for the remaining value left as assets on the books if they needed too. Although there is always a risk that may not be realised in a fire sale, but at the same time you may be able to get a lot more than the value left on the books for these players too.

I'd prefer owners to be able to donate money to the clubs like they can in league one, where the donation counts as revenue you can spend, but you can't get shares or anything out the club for the donation. 

I'd prefer to let clubs benefit from that, but at the same time of doing any deals/new contracts/sales have to show a FFP position before and after and the league then approves the deal as long as they are still within FFP.

it would allow outside investment bringing in extra money to the sport from owners who want to throw their money away and also mean the clubs were not saddled with additional debt due to overspending, and also mean people can sign players if they do not have the budget in FFP to do so, so technically clubs that fail FFP have either lied (which you could have harsh punishments for) or those that have actually had something other than transfers push them over the edge.

Wages to turn over will ruin the championship, relegated clubs will be able to spend money (they are even proposing they should be able to spend 85% vs 75% for non parachute payment clubs) given they have 55% of their premier league money in year 1 of going down and have the ability to maintain a profit, everyone else is going to find the wage bill does not fit ffp any more and not many places other than abroad to move these players onto as the other clubs wanting to buy many of these players will be in the same boat having a bigger wage bill than they are allowed.

everyone else are going to see the best players goto the parachute clubs, and then abroad if they are not good enough for a premier league team once they are in a position to get paid the wage their talent deserves. Will take a long time I think before it evens out (probs never will be the same unless the league gets way more tv money) and think will make the league far less competitive as well as make all teams coming down dead certs for promotion unless they went down because the club is being run into the ground by their owners. 

1 hour ago, Rob26 said:

Wages to turn over will ruin the championship, relegated clubs will be able to spend money

Agreed though I don't know what the answer is. The current use of player amortization is not just inaccurate when it comes to estimating the financial viability of a club it is actively misleading more often than not. 

The big problem between the Premier and Championship is the gap in income so that when a relegated club comes down it either goes bankrupt if you don't support it financially or it gets a massive financial advantage over the other clubs from being supported. Smaller gap and the problem goes away.

There is an argument that you should just let people spend what they want and if a club goes bust, it goes bust.

In the US, you have a closed shop model which, ironically given the country, acts more like a socialised model of sporting finance. They solved the issue of relegation by not having it. It also makes for reliably good profits for the owners so it's hardly any surprise that various owners here would like to recreate that model.

I don't think you can solve a problem that is caused by a huge gulf in income disparity between the Premier league and the Championship without reducing the gulf.

If you go with wages to turnover, it's fine in the Premier because most clubs will be able to hold the line around 70%. In the Championship, as it is, we struggle to hold the line at 100%. Maybe you could do something like 70% wages to turnover but an owner is allowed to donate up to a certain amount, say £10m per year to count towards turnover. I think they may do something like this in Spain. Anyway, I won't pretend I have an answer but I do think that FFP/PSR is simply not fit for purpose and I strongly suspect that there is no way to tweak it to make it fit for purpose.

Looks like Chansiri is running Sheffield Wednesday alright, Kieran Maguire with the numbers...

That was their Promotion season last time out.

Worth noting that he also appears to be clawing back some of his debt..fully legally entitled of course. Last 4 seasons..

Cardiff. Now then.

They seem to have seen their income surge which is odd but maybe normal given the Post Covid Year 1 to full normality.

Anyway they appear to be clear of P&S concerns and that goes for this year too. How one category of their income surged during a relegation battle is..unusual.

The last one is a bit odd, they transferred the unpaid portion of the Provision for the fee for (RIP) Sala to Creditors??

Commercial Income rising by almost £6m in a year that saw on pitch stagnation and regression. They did have some Wales games at Cardiff, that perhaps played a part?

Perhaps the Cardiff City Holdings Accounts will show something else but I struggle to see how that wage bill stacks given the player churn. Yes high earners went but even a lot in at a few grand a week can soon build up.

Just checked, they hosted 5 Internationals there last season, so it could play a part revenue growth wise.