Jump to content

Coppello

Members
  • Posts

    2610
  • Joined

  • Last visited

  • Days Won

    2

Posts posted by Coppello

  1. 3 hours ago, Mr Popodopolous said:

    I think if enforced by UEFA (or us on here :laughcont: )instead of EFL, we would have seen harsher and swifter punishments- the fact they i.e. UEFA are pushing for a Man City ban from CL is belated but finally- they have been trying to reopen the PSG investigation too, post Football Leaks.

    Same could go for EPL, but then the limit is set at such a level that combined with TV money and allowable write offs it is almost impossible to fail (STCC a different matter)- funny that! ?

    One thing that you might find slightly interesting is that the UEFA have their FFP rules which are different to the Premier League (as you're aware). UEFA sets the rules and each nation has a licensing body, which is the Premier League in England. Any team that wishes to compete in a European competition has to submit a number of reports through the UEFA portal to show that they are in compliance with these rules. All clubs are encouraged to submit these documents to UEFA regardless of their league position but in reality it would only be beneficial for any clubs with a shot of getting into CL/EL in April. 

    These documents are submitted through the portal but are actually detail reviewed and audited by the Premier League (or whoever the local licensing body is). If the test is passed, the club are then issued with the UEFA license. If there are any issues, such as Man City/PSG, UEFA will then step in.  

    • Thanks 1
  2. 17 hours ago, Davefevs said:

    That has been my point on this for a good while.  I really hoped the projected accounts would make a difference to previous wrongdoings.  Of course perhaps Villa included the forecast sale of Grealish?  I don’t know.  @Coppello - would that be allowed?

    I'm not 100% clear on the EFL rules for this but it would be allowed in the Premier League. I've also been a bit nervous about Villa forecasting this as it will allow them to write off a substantial amount of any loss. 

    • Thanks 2
  3. 14 hours ago, Mr Popodopolous said:

    Very interesting stuff, this insight you are providing. Sounds like the promise of future transfers to make up shortfalls needs real oversight...my solution and it's purely theoretical would therefore be an embargo for any club that 'stretches the truth' on it, until such a time as the deficit is cleared or the obligation is fulfilled.

    One question I would have, as the rules stand, in your opinion is it possible to strike from the record  the profit on transactions to related parties, or is that stable door and horses bolting? E.g. Derby FFP submissions would show £40m instead of £80m on 'sale' of Pride Park.

    Applying accounting rules, profit on transactions with related parties should be at an arms length. Given that they’ve had an independent valuation, who have determined that the fair value of Pride Park is £80m (which is farcical), they’ve technically worked within the rules. 

    The problem is that transactions with related parties can be genuine and it can’t always be genuine. For example, we can the rugby club rent for the use of Ashton Gate in the accounts of the stadium. We’ve actually charged rent at an arms length and it’s fair for them to pay for the use of the stadium. 

    What they’ve done is the financial equivalent of scoring a goal when a player is down injured; there’s no rules against it but it’s unethical. Unless the EFL enforce a change in rules, the same thing will continue to happen. Legally, I don’t think the EFL can ask them to strike it off this years accounts. 

    What I think they can do is scrutinise the accounts and appoint a surveyor to conduct another valuation. I have absolutely no idea how they can reach £80m for a 20 year old stadium built on a converted rubbish tip in Derbyshire. 

    • Thanks 1
  4. 1 hour ago, Mr Popodopolous said:

    Have to say, reading the Sheffield Wednesday forum many- not all, some are saying it'd lead to more problems down the line, some are saying profit won't be counted, but many are predictably moaning and predictably declaring "It's not our fault it's the regulations- blame the regulations".

    Now the regulations are not perfect, but they are (by which I mean the posters) dead wong It's your- by which I mean obviously their- fault for good, but over time it became average recruitment, little thought about sell on value and wanting to buy your way out of issues. Your- or rather your owners fault- take responsibility!! I'd like to see a summer embargo at the least on them in order to ensure they cannot benefit immediately from any upturn brought about by this- with pressure still to comply so they'd have little choice but to sell one or 2 decent players as well.

    I know they are popular on here but they've drifted right down in my estimation recent months.

    @downendcity I'd like to think a professional body would have professional experts even if only a few to scrutinise these types of cases especially- the worst cases-  but with this bunch...

    Coppello would probably be best placed to answer this one.

    @Downend City The EFL have their own accountants which monitor and scrutinise the FFP submissions of clubs.

    Part of it is based on the financial statements which are audited by an external accounting firm and should provide assurance that they meet the relevant accounting standards. However, there are several deductions made to the accounts to make them more in line with the FFP requirements and the auditors will not look at this as they’re looking at them from a completely legal view. 

    The figures reported in the accounts, less the deductions, will then be scrutinised by the EFL’s accountants. They will have limited information on how the deducted items have been made up, for example they have limited oversight over the total academy spend, the deductions for women’s football, community spend etc. which makes their job a little harder.

    However, the most contentious piece of the reporting is the forecasts submitted for the upcoming year(s). The auditors will not review these and therefore the whole review is performed by the EFL and this is where the scope for creative accounting increases significantly. In the Premier League, the forecasts are heavily scrutinised and if you report significant profits from player trading, they threaten to hold your hand through the transfer window.

     

    • Thanks 1
  5. 17 minutes ago, Mr Popodopolous said:

    Haha, knew it! Knew it- incompetent and in some ways reluctant to be too pernickety- but incompetent absolutely!!

    Thank you though, that is very interesting stuff- and the difference between EFL and PL is evident. Mind you in terms of the base FFP in the PL- not talking the STCC thing- for that is slightly different but the £35m + allowable losses- with their TV money and commercial revenue- and marketing on a global level, it's almost impossible to fail! £105m over 3 years...makes sense in some ways but in others, forgetting parachute payments for a minute they also have £44m + any profit accrued in the prior 2 years to play with- should be £13m per year and allowable losses in PL IMO but that'll never happen.

    @RoystonFoote'snephew Ah, did it? Thanks. Read on here at some point that it was June 9th- I'll go with what you say though, small window for Aston Villa if they lose that playoff final before it rolls over to 2019/20 financial reporting period. :dunno:

    Yeah, it wasn't exactly groundbreaking stuff but he did say quite a few things which did make me think. I agree with your point in terms of failing the PL FFP requirements, it is bloody hard to do. At the same time, they're marking you pretty tightly and query many of the numbers that go into your forecast. At the club I work at, the PL contact us with queries each week despite there being significant headroom. With a culture as poor as it seems with the EFL, I can't imagine that they can oversee the activities of 72 clubs that closely. 

    • Thanks 1
  6. I had an interesting conversation with a former Finance Director of a Championship club last regarding the state of the EFL at the moment. He described the FFP reporting as farcical and indicated that the finance department of the EFL were pretty incompetent.

    Often he would phone the EFL's office, who are based in Preston, and ask Tad Detko (FD of EFL) queries regarding the reporting requirements. In a thick Lancashire accent, Tad would often respond with, "If it doesn't take the piss, I'm happy". It sums up the league's culture towards financial fair play and clubs have pushed their luck more and more. It is quite a contrast to the Premier League who are in constant communication with clubs and drive the reporting requirements. It sounds like those in charge of FFP at the EFL are simply not competent and perhaps do not have the capacity to monitor all 72 clubs. 

     

    • Like 1
    • Sad 1
  7. 1 hour ago, TomF said:

    Special talent is Banton

    Another one from the King's College Taunton cricket factory. They've developed a fantastic cricket Centre of Excellence in the past few years and its output has done a lot for Somerset CCC.

    • Like 1
  8. 3 hours ago, Grey Fox said:

    So if Derby are reporting a profit, will they pay tax on that figure? 

    You've asked a short but bloody difficult question @Grey Fox. The answer is most probably but there's a difference between taxable profit and accounting profit. The taxable profit doesn't get published and is hard to work out. But it is very likely they'd pay quite a lot of tax on the sale of the stadium. 

  9. 2 hours ago, Mr Popodopolous said:

    Very interesting stuff that.

    A loose interpretation, without having looked into it 100% is that the value of the ground is just that...the profit of £39-40m whatever it was? That's the illegitimate bit.

    Agree fully, EFL should have engaged own surveyors- could it be too late to do that now and refuse to count income from it towards FFP calculations if they come to the conclusion that we all suspect?

    FWIW, the profit- or more likely the "profit" listed in the accounts on the sale was £39,940,387. Sale £81.1m. Therefore the value pre profit was £41,596,113. More realistic/viable?

    I think we're agreeing with the same point haha. I understand Derby (or more likely the owner) used a surveyor to value the stadium and obtain a report. This would prove to the auditors that the transaction was conducted at the market price. However, the value of the stadium on the accounts would've been kept at the historical cost i.e. the cost of construction (and capital expenditure since then) less depreciation charged over the last twenty years or so.

    In their defence, using an historical cost to calculate the profit is not something that I have a problem with as it's completely legitimate from an accounting perspective. The issue I have is that the surveyors valuation of £81.1m and the consideration that this what the stadium is valued at. As others have discussed on here previously, this should be adjusted to a market value or an arms-length transaction. I'd be surprised if another surveyor valued the stadium at 50% of the £81.1m used as the sales price. 

    • Like 1
    • Thanks 1
  10. This morning I had a meeting with an independent surveyor who were conducting a stadium valuation. The consultants who I spoke to had worked on the valuations of a number of Premier League and Championship grounds, none of which were Pride Park. I discussed the valuation of £80m with them and they could not fathom how they reached that figure.

    The ground valuations are commonly made through the depreciated replacement cost method i.e. what would it cost to build a replica stadium and then depreciate over the number of years the stadium has been in existence to account for wear and tear. The stadium is built on an industrial estate away from the City centre and therefore the land value is pretty low. A stadium such as Craven Cottage would have a decent valuation given the location and property prices in the area. 

    They estimated that the valuation should be lower than this and I believe that the independent valuers report should be scrutinised. The Football League should engaged their own surveyors to conduct a valuation. This would then help to determine whether the transaction occurred at an 'arm's length'. 

     

    • Like 2
    • Thanks 3
  11. 4 minutes ago, Davefevs said:

    ⬇️

    ⬆️ I agree.

    I suspect too that we submit accounts to the EFL based on BCH level accounts.  I was unsure initially, but the more I’ve read, the more I suspect it to be true.  However for pure FFP, I do wonder whether certain things have to be excluded, e.g. non-football related stuff.  It is complicated though.  I do know that BCFC Ltd, receive nothing from Take That, Rod, Spice Girls, Muse gigs.  The other thing is that overall BCH made a loss in 17/18, so as per DownendCity’s post, Lansdown is not trying to hide stuff...he is doing it all above board.  He fully understands regulation.

    We will see next week whether Mel Morris is quite so transparent.  As above I suspect Steve Gibson suspects not.

    I'm certain we report under Bristol City Holdings Ltd in order to capture every element of the football club. We are allowed to report the non-match day income as part of our FFP as it shows that a club can generate income without relying on handouts from the EFL. I don't doubt for a second that we are reporting things honestly and being transparent. That what makes the Derby debacle so infuriating. 

    • Like 2
  12. 36 minutes ago, Davefevs said:

    @RIP (rams in peace)

     that is not strictly true Coppello.  I’ve done a fair bit of looking into the accounts.  Ultimately all under Steve Lansdown / Pula in some shape or form though.

    Bristol City Football Club Ltd and Ashton Gate Limited are two separate companies, brought together under Bristol City Holdings. BCH is purely a holding company, undertaking no trading itself.  AGL own the Ground, and City (and Bears) pay AGL rent to use it.  AGL have an operating profit, but ultimately made a loss last year because of depreciation of the asset and payment of interest on the loan for the ground to SL / Pula.

    It’s complicated.

    What SL / Pula / AGL have done is properly value the ground based on the “arms length’” agreement between companies with mutual ownership, e.g. must be done at market value and charge an appropriate rate of interest on the loan.

    Therein lies the difference between Bristol City / SL and Derby / Mel Morris....who has (allegedly) over-valued Pride Park to create a false profit figure to then offset significant losses on the football side, both companies he is interested in....

    ....and Steve Gibson bloody knows it....and next Wednesday he will attempt to convince the other Championship owners of this.  I very much suspect he has gained support from SL.  I sense this is all about to come to a head....but no idea which side will end up winning.

    In all honesty, I've not actually read into the accounts as much as I should have but this is my interpretation of the group which I am pretty confident about. From a football club, I imagine we report at a consolidated level to the Football League. I've knocked together what I perceive the football section of the group looks like (although I am aware of there being other companies sitting above BCHL):

    image.png.5f66fb5d490aa72b8e069c0121b2d1eb.png

    As you can see the stadium sits below the holding company which is common practice for many football clubs. Regarding the rental income, as the Bristol City Holdings Ltd report as a consolidated set of accounts, ie the results of Ashton Gate Stadium Ltd and Bristol City Football Club Ltd. When preparing consolidated accounts, intra-group transactions are eliminated and therefore any rental transactions between Ashton Gate Stadium Ltd and Bristol City Football Club Ltd will net off. The group accounts are, in its simplest form, the results of the companies added together. If my quick scan of the accounts is correct, we will actually benefit from the rental income from the rugby club.

     

  13. 2 hours ago, RIP (rams in peace) said:

    Do you own your ground or is owned by your ultimate owner who has borrowed £50m to do 'improvements'.  Does your club pay rent to the true owner to play games there?  I have read this online but you can't  believe much from that source

    No, the stadium is owned by Bristol City Holdings Ltd which is the football club. 

  14. On 12/04/2019 at 05:23, billywedlock said:

    I think the Derbyt situation is interesting, not least the valuation (but it won't impact the . AG has an asset value of £65M when fittings etc taken into account, obviously being depreciated in line with normal practice. The stadium company is separated but held under one parent Bristol City Holdings. (ultimately held by Pula ) SL continues to recapitalise the holding company to cover the losses and keep the business viable, last season £25.1M was lost (with football wage bill now £23M up from 17.9M 16/17 season)) . Hence why we needed to sell players to not fail ourselves the FFP. SL has put , what was it £120M into BCFC, his main asset is  the ground.  AG was taken out of the football club and there was a transfer of asset to the stadium company . There were loans with the banks for £50m to pay for the stadium development and further loans from Pula of £20m due for repayment in 2021. (Secured against the stadium or guaranteed by SL/Pula. ) Generally SL increases his capital (share issue) to keep the business alive. Back to Derby, the inflated figure is also needed against the book value of previous accounts to be used as a profit on sale of asset to have impact on the P/L, something I have not noted in BCFC accounts, SL was clear he wanted accountability of both of the businesses, and that appears to be what he has done, not a fancy trick to alter the P/L result , more so as the holding company is the same. Very different if he had moved it out of the holding, then it would be a sale and leaseback agreement, which is what I suspect is happening at Derby, and in that case just think Coventry City, though many clubs around the world do not own their stadium,. Nothing to stop Sl selling the stadium one day though if he wanted a return on his investment (partial ) but he knows greater value will be created if he can get the club in the Premiership and sell as a complete club. Derby can only sell their stadium once, and the details of payment , the quality of guarantees of that payment, where is the money,  will require close scrutiny for sure to make sure it is not financial engineering at its best. Something football clubs seem to suffer from readily, more so Prem players contracts for clubs that are likely to be in relegation battles. Until they start containing massive changes upon relegation this cycle will continue, and too many have gambled and lost on getting out of our league and failed. Derby the latest. There is plenty of money in football but financial regulation and lack of rigid player contracting by clubs makes it farcical. Our next accounts will be interesting , staff costs for sure just to debunk a few myths . 

    They say that they have had the stadium independently valued by experts which is interesting. I'd struggle to see how the stadium valuation of £80m has been ascertained using the depreciated replacement cost method given that it's not brand new and it's in Derby, not the most expensive area of the country. I'm currently working on a stadium valuation at the moment in a more affluent area of the country and I'd be amazed if it comes out at 75% of the fee. I do wonder if we will see a wave of Championship and Premier League clubs following this method which would be absolutely ridiculous. It throws FFP rules into complete disrepute. The fact that it has been audited is a bit of an embarrassment to Smith Cooper (their audit firm) who has signed this off.

    As a side note, it is commonly stated that the football club do not own the stadium which is a little misleading. Yes, it's not held in the same legal entity as the footballing activity but it is held in a company that Bristol City Holdings Ltd own 100% of. It doesn't really change things in the grand scheme of things because if it was held in Bristol City Football Club Ltd, Lansdown could still asset strip the football club and sell off Ashton Gate. It's just slightly easier now it's in a separate entity as he could effectively sell shares in it but the Bristol City group still 100% own the stadium. 

    • Like 1
    • Thanks 3
  15. On 27/03/2019 at 09:51, Mr Popodopolous said:

    This is interesting.

    Saw this graphic after Bournemouth's results announced- these presumably are operating results before player trading etc. PL the gravytrain? Not quite always...Graphic provided by Kieran Maguire. Yet the wage control on a number of those is fine and more than fine...presumably Player Cost comprises Wages + Amortisation as a % of Turnover.

    D2pec2iX0AE-lHk.png

    This comes in a time of record TV deals plus with 2 of those clubs who made operating losses having benefits of CL football- Chelsea and Man City. Now the latter will be in the CL for a long time to come, but the former- they posted a record profit, yet underlying numbers may not be so great. Arsenal too- of late a posterboy for FFP- could actually be heading towards tricky waters if they don't reach CL again this season.

    When the most recent TV deal was announced, the Premier League introduced a short-term cost control element to the FFP reporting. This basically meant that, if a club had wage costs of over £67m, these costs could only be increased by £7m year-on-year. This doesn't sound a lot when you consider it works out as £135k per week but this threshold can be supplemented by the Company's Own Revenue Uplift (CORU).

    This can be calculated as the average player trading profit from the past three years OR uplift in commercial revenues. This was put in place to dissuade clubs from splashing all of the additional TV money on wages. In reality, the rules are very easy to get around and is one of the reasons why you're seeing clubs have an official tractor sponsor or the signing of other odd commercial deals. Since this was introduced, no Premier League club has failed this test and it is being removed next year. 

    In addition, if a Premier League club wanted to obtain a UEFA license to enter a European competition, it can only make a loss of £105m over the past three seasons. Again, this is quite a difficult threshold to breach and does not necessarily put off many clubs. 

    With Premier League TV revenues stalling, I think we've hit the ceiling and we will not continue to see wage and transfer records broken year after year. When the broadcasting rights are put up for auction in a few years, the market may be shook up again but I think international TV companies are becoming less interested.. Current FFP rules are very far from penalising a lot of clubs and therefore we will not see a huge change in the figures seen above over the next few years. 

     

    • Thanks 1
  16. 15 minutes ago, BobBobSuperBob said:

    All emerging now

    Whatsapp messages publicised showing 

    The flight was arranged by Willie McKay the agent via his son Jack who is a player at Cardiff as a (free) favour

    USed a contact/ Company he’s used many times but doesn’t own the plane and didn’t choose the plane or pilot....people starting to duck.....

    So ....hmmmmm.....who paid the pilot .....for the plane.....as the Pilot not licensed for payed passengers....

    Where did you see this? 

  17. 3 minutes ago, Negan said:

    Don't they have a month to find the plane before the black box becomes unsalvageable? 

    I don't know anything about aviation so this may be a stupid question - would a plane of this size have a black box? 

  18. 7 minutes ago, Davefevs said:

    In which case, can you answer a Q re amortisation, topical as if yesterday’s contract announcements.

    Would O’Dowda’s 3+1 contract have been amortised over 3 or 4 years?

    Iscthere any subtlety in a contract “extension” versus “new deal”....terms we hear banded around.  What would happen if COD signed a “new contract” in the summer?  Answer may defend on above answer.

    You'd amortise it over 3 years initially as there's no obligation to extend the contract and therefore the initial life is just 3 years. I actually don't know the answer to the second question as I've never really thought about it. I thought it was simply different wording calling something a new deal - obviously exercising an option to extend what happened yesterday is a little different. 

    Regarding the amortisation you'd rebase the remaining "cost" of the transfer fee over the new period. For example, let's just take the COD example, using £3m as a transfer price (as dividing £2m over 3 years is horrible!): 

    - We purchased him in 16/17 for £3m on a 3 year deal.

    - We'd amortise that £3m over three years (£1m per year). However, let's say we exercised the option two years into the contract, you'd rebase the amortisation charge. So there's £1m left on the balance but now two years left of the contract. Therefore the charge would then change to £500k per year.  

    That's a very high level summary and it obviously gets a little more complex than that. One of the good things about the sales of Bobby Reid and Joe Bryan in the summer is that they're academy graduates and would therefore not have any value on the balance sheet before their sale. Therefore, the transaction value will be pretty much pure profit which will help with things from an FFP perspective. 

    • Thanks 2
  19. 8 minutes ago, Mr Popodopolous said:

     

    @Coppello That sounds an interesting job- inside track if you like! PL? Pretty well impossible to fail the £35m a season max loss at that level surely, but the STCC provides a few possible headaches I suspect.

    Exactly right - you'd do well to make a loss that large with the TV money floating around. Yeah, the STCC can cause a headache but it's a bit of a crap rule in all fairness as there's a few loopholes, particularly for the larger clubs. The purpose of it was to stop teams splashing all of the new tv money on the new players and therefore you can only increase your wages by £7m a year. However, if you can prove you're not solely reliant on the TV money and have large commercial revenues, you can get past that rule. So it doesn't really affect the big 6 clubs but puts a massive stranglehold on the middle tier of clubs such as Watford, Palace, Southampton etc. I can see this rule being amended in the near future to be honest. 

    • Like 1
    • Thanks 1
  20. 2 minutes ago, Mr Popodopolous said:

    That's roughly what I thought- thanks. No easy get out for Villa then as it stands?

    Of all the transgressors, they and QPR are the ones I have the biggest issue with. Others should be punished absolutely.

    Good thread by the way @Mr Popodopolous, I started developing a website analysing FFP but had to give it up due to work. The growing importance of it is quite interesting. I'm actually an accountant a football club and part of my role is analysing their FFP position. It's a Premier League club though so they're subject to slightly different rules. 

    Yeah, I can't see a get out unless they get promoted this season. They really have gone gung-ho and show no signs in slowing down in terms of spending. 

    • Like 3
    • Thanks 2
  21. On ‎11‎/‎01‎/‎2019 at 15:20, Mr Popodopolous said:

    Oh yeah, when I said payment terms I meant which year it would be in the books. As you say payment terms however they want- would hope though given Villa's accounts are (as it stands) to the day before the window opens that any transfer would have to be to before that date- so this January. I suppose there is a remote chance of him going abroad when the transfer windows differ e.g. if a Chinese club put in £30m bid in mid February their window is different to ours and that may count. You'd hope a move in Summer 2019 but with the cash flowing in the season before wouldn't fly though, but who knows.

    @downendcity Fully agree.

    To follow on from this debate (albeit a week later!), you would have to recognise them in the period in which the window opens. If they sold Grealish, the transaction wouldn't be able to happen until next year's accounts, i.e. after the 1st June 2019. That is because the risk and rewards of owning the player wouldn't transfer until the window was open. Obviously this differs if he went to a country without the window restrictions. 

    Never thought I'd be having an accounting debate on OTIB!

    • Thanks 1
×
×
  • Create New...