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Mr Popodopolous

The Championship FFP Thread (Merged)

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None will get in serious trouble as can you seriously see the EFL penalising Villa, Derby etc as the big boys?

Pointless rules being set with FFP as EFL dont seem to have the bottle to follow through with punishments. 

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You rightly  say, the question is whether ffp will be enforced correctly, but the real question is after being enforced correctly, will the EFL apply the appropriate penalty?

If, say, a club like Villa are found in breach, secure promotion but are only hit with a fine, then it will make a mockery of the whole ffp excercise, because the reward for "cheating" far outweighs the penalty. It is cheating if a few clubs think they can ignore the rules that the rest of the clubs are following.

Until now, most fas feel that clubs like QPR and Bournemouth "got away" with it by securing promotion but only getting a fine, albeit in QPR's case the fine would have crippled the club when they were relegated back to the championship and on that basis wriggled out of the real penalty with a much reduced fine. The only way to avoid this feeling remaining is to make sure offending clubs are hit hard. If that means pints penalties that prevent a club being promoted, then I'm all for it, as it will exorcise clubs to manage their finances with in ffp - the way the majority are trying so to do.

6 minutes ago, nickolas said:

None will get in serious trouble as can you seriously see the EFL penalising Villa, Derby etc as the big boys?

Pointless rules being set with FFP as EFL dont seem to have the bottle to follow through with punishments. 

That's why I posted the above!

Not only can I seriously see them punishing a club like Villa or Derby, but think they have no option if their ffp rules are to have any credibility going forward.

I've commented a number of times previously that in the past the EFL's hands were tied when it came to ffp breaches ( e.g.  QPR and Bournemouth) as the breach was only confirmed once the season had ended , by which time said clubs were promoted and the EFL could then not apply a penalty to what was then a premier league club.

The new rules mean that they will know of a breach in March of this year so they now have the means - including points penalty - to penalise offending cubs before the end of the season an, if appropriate, prevent them being promoted. 

 

Edited by downendcity
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That's the crux of the issue- not only must they punish but the appropriate punishment must be applied.

Personal take is the harshest punishments should be reserved for those most blatantly disregarding- QPR and Aston Villa. Genuinely Birmingham and Sheffield Wednesday for all their gambling, have at least made some efforts- albeit too little too late. They both have made certain adjustments e.g. certain players unavailable for selection, presumably higher waged to try and get to leave. Aston Villa though seem to be sticking their fingers in their ears singing to the EFL and the other 23 clubs singing 'La La La, I can't hear you.' Birmingham and Sheffield Wednesday seem to be incompetence as much as recklessness and should undoubtedly be punished- Villa though seem to have a dislikeable dose of arrogance and entitlement thrown in for good measure. I'd piss myself if all their claims of Purslow found a loophole are for the wrong FFP i.e. PL and CL and leaves them up high and dry. If enforced rightly, then Villa need to pay a visit here...

image.16505496.6439.u2.jpg

Edited by Mr Popodopolous

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Sheffield Wednesday announced that they were under an embargo 20minutes before the season started and Birmingham were unable to register one of the players they signed, until certain criteria had been met - they’ve both been punished but was that as a result of FFP?

Does anyone know who is currently under embargo? These would be prime candidates to have their accounts poured over in the spring.

Also, I appreciate the point about Bolton, they have seen the kinds of problems these rules were set up to avoid! Could they be in even more trouble if they went down? ie. Are league one’s SCMP rules still set so that salaries cannot be greater than 60% of turnover?

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5 minutes ago, solihull cider red said:

Sheffield Wednesday announced that they were under an embargo 20minutes before the season started and Birmingham were unable to register one of the players they signed, until certain criteria had been met - they’ve both been punished but was that as a result of FFP?

Does anyone know who is currently under embargo? These would be prime candidates to have their accounts poured over in the spring.

Also, I appreciate the point about Bolton, they have seen the kinds of problems these rules were set up to avoid! Could they be in even more trouble if they went down? ie. Are league one’s SCMP rules still set so that salaries cannot be greater than 60% of turnover?

QPR are as part of their settlement, but that maybe a one window thing- it wasn't clear. Definitely shouldn't be however! Birmingham were but can now sign players under very strict conditions, think Sheffield Wednesday were but won't sign anyone anyway and Aston Villa aren't but probably should be- probably will be in the summer! Don't think anyone else is.

Possible that one or all of the last 3 are under a business plan where they work with the EFL. 

The other interesting thing that makes it a bit harder for public analysis is that so few clubs have released their accounts for last season! Only 7 thusfar (plus we can have approximations based on Blackburn Venky's London e.g., probably not a huge difference)  the EFL will have the financial info for last season and projected accounts for this season by March/end of March I think.

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7 minutes ago, Mr Popodopolous said:

QPR are as part of their settlement, but that maybe a one window thing- it wasn't clear. Definitely shouldn't be however! Birmingham were but can now sign players under very strict conditions, think Sheffield Wednesday were but won't sign anyone anyway and Aston Villa aren't but probably should be- probably will be in the summer! Don't think anyone else is.

Possible that one or all of the last 3 are under a business plan where they work with the EFL. 

The other interesting thing that makes it a bit harder for public analysis is that so few clubs have released their accounts for last season! Only 7 thusfar (plus we can have approximations based on Blackburn Venky's London e.g., probably not a huge difference)  the EFL will have the financial info for last season and projected accounts for this season by March/end of March I think.

Think Villa are fine until they submit their predicted accounts in a couple of months.

By that time Birmingham will have had their hearing, and if the EFL think they want to come down hard on Villa, they need to set a precedent with Brum to leave Villa’s lawyers with no wriggle room.

Great 1st post MP.

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3 hours ago, Mr Popodopolous said:

That's the crux of the issue- not only must they punish but the appropriate punishment must be applied.

Personal take is the harshest punishments should be reserved for those most blatantly disregarding- QPR and Aston Villa. Genuinely Birmingham and Sheffield Wednesday for all their gambling, have at least made some efforts- albeit too little too late. They both have made certain adjustments e.g. certain players unavailable for selection, presumably higher waged to try and get to leave. Aston Villa though seem to be sticking their fingers in their ears singing to the EFL and the other 23 clubs singing 'La La La, I can't hear you.' Birmingham and Sheffield Wednesday seem to be incompetence as much as recklessness and should undoubtedly be punished- Villa though seem to have a dislikeable dose of arrogance and entitlement thrown in for good measure. I'd piss myself if all their claims of Purslow found a loophole are for the wrong FFP i.e. PL and CL and leaves them up high and dry. If enforced rightly, then Villa need to pay a visit here...

image.16505496.6439.u2.jpg

While I can understand the sentiment i.e. punishing most harshly those that have breached most flagrantly, I would disagree for one simple reason.

The minute  an "exception" is made, for whatever reason, you can bet your bottom dollar that further down the line other clubs caught out, will use every legal device possible to use previous examples as justification for a more lenient punishment.

At the start of each season, each club knows the ffp rules and especially now that a 3 year financial cycle is being applied, it's not as if they can't see it coming ! All clubs are in the same position so why should one club benefit, no matter how hard they tried, if they gain an advantage by breaking a rule to which other clubs have adhered?

For a club like Villa, they have enjoyed parachute payments for 3 seasons, and we all know they have splashed the cash in an ( so far unsuccessful) attempt to gain immediate promotion back. If they fail ffp, and do so because they have been unable to shift high earners off the wage bill this season, then it is a problem they should have thought about, and addressed. far sooner, especially if other, more prudent clubs, have prejudiced their own promotion chances by keeping their financial house in order?

 

 

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6 minutes ago, downendcity said:

While I can understand the sentiment i.e. punishing most harshly those that have breached most flagrantly, I would disagree for one simple reason.

The minute  an "exception" is made, for whatever reason, you can bet your bottom dollar that further down the line other clubs caught out, will use every legal device possible to use previous examples as justification for a more lenient punishment.

At the start of each season, each club knows the ffp rules and especially now that a 3 year financial cycle is being applied, it's not as if they can't see it coming ! All clubs are in the same position so why should one club benefit, no matter how hard they tried, if they gain an advantage by breaking a rule to which other clubs have adhered?

For a club like Villa, they have enjoyed parachute payments for 3 seasons, and we all know they have splashed the cash in an ( so far unsuccessful) attempt to gain immediate promotion back. If they fail ffp, and do so because they have been unable to shift high earners off the wage bill this season, then it is a problem they should have thought about, and addressed. far sooner, especially if other, more prudent clubs, have prejudiced their own promotion chances by keeping their financial house in order?

 

 

Yeah, hadn't thought of it like that.

In no way should clubs who have breached get off scot free- a) Out of fairness and consistency b) Because other clubs have made big, sometimes huge sacrifices to comply. All breaches should be punished but I believe the EFL have a bit of a sliding scale as to the severity of the breach, the intent behind it and the severity of punishment gets decided on these factors. Aston Villa are a particularly flagrant case, they barely seem to acknowledge its existence. I suppose I worded my post a bit poorly but what I was trying to say is that Aston Villa are undoubtedly the worst, the most blatant- their losses for this season especially must be huge. They won't officially be in breach until March 2019 most likely- if they miss the playoffs this year any potential points penalty should be applied next season.  Same goes for Birmingham, same goes for Sheffield Wednesday. Those are the big 3 atm IMO.

Edited by Mr Popodopolous

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9 minutes ago, Mr Popodopolous said:

Yeah, hadn't thought of it like that.

In no way should clubs who have breached get off scot free- a) Out of fairness and consistency b) Because other clubs have made big, sometimes huge sacrifices to comply. All breaches should be punished but I believe the EFL have a bit of a sliding scale as to the severity of the breach, the intent behind it and the severity of punishment gets decided on these factors. Aston Villa are a particularly flagrant case, they barely seem to acknowledge its existence. I suppose I worded my post a bit poorly but what I was trying to say is that Aston Villa are undoubtedly the worst, the most blatant- their losses for this season especially must be huge. They won't officially be in breach until March 2019 most likely- if they miss the playoffs this year any potential points penalty should be applied next season.  Same goes for Birmingham, same goes for Sheffield Wednesday. Those are the big 3 atm IMO.

It's potentially complicated, but I tend to see it in terms of what a club has gained.

If, say, Millwall were in breach in mid table,  and with a small overspend then a fine would probably be completely suitable.

Picking on Villa! If Villa were in breach and at the time were riding high, in say 3rd/4th place, the danger is that a fine would represent little punishment if they went on to secure promotion. Iy would also effectively be a kick in the teeth for the other play off teams who have kept within ffp limits. Accordingly, that's when I think a points penalty should be applied sufficient to take the club out of the promotion race.

I know there will be many who say that if that happened the club penalised would take legal action , and that the EFL would not apply such a punishment in order to side step the problems such legal action could entail. Back to the point I made in my earlier post, unless the EFL take such action then they might as well discontinue ffp as it can have no credibility or teeth unless it is seen to be working as designed. As a post script, I would like to think that if the EFL ducked out of punishing an offending club, then other clubs would take their own legal action demanding ffp penalties be applied or the offending club be thrown out of the football league for breach of rules!

 

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12 minutes ago, downendcity said:

It's potentially complicated, but I tend to see it in terms of what a club has gained.

If, say, Millwall were in breach in mid table,  and with a small overspend then a fine would probably be completely suitable.

Picking on Villa! If Villa were in breach and at the time were riding high, in say 3rd/4th place, the danger is that a fine would represent little punishment if they went on to secure promotion. Iy would also effectively be a kick in the teeth for the other play off teams who have kept within ffp limits. Accordingly, that's when I think a points penalty should be applied sufficient to take the club out of the promotion race.

I know there will be many who say that if that happened the club penalised would take legal action , and that the EFL would not apply such a punishment in order to side step the problems such legal action could entail. Back to the point I made in my earlier post, unless the EFL take such action then they might as well discontinue ffp as it can have no credibility or teeth unless it is seen to be working as designed. As a post script, I would like to think that if the EFL ducked out of punishing an offending club, then other clubs would take their own legal action demanding ffp penalties be applied or the offending club be thrown out of the football league for breach of rules!

 

That's broadly speaking how I tend to see it too. A fine has its place if a side has gained little and breached little. Points penalty at the top end and maybe the bottom end if there are sides below at the bottom who are in breach and a side below compliant I dunno say Rotherham 22nd and Birmingham 20th something like that. If Birmingham get the mooted 15 point deduction next season say, then that's not an impossible scenario in fact!

Wholly agree on your last point too. Clubs who have complied should take legal action if the EFL try to dodge punishing an offending side- as you say if when it comes to it the correct and appropriate punishments are not applied then basically there's no point in having it anymore. For to name a few, plenty of bottom half clubs run within realistic means. More significantly, ourselves, Sheffield United, Middlesbrough arguably, Norwich and Leeds to name 4 or 5 in the top half run correctly, taken moderate to big hits to stay compliant so it has to be enforced. There's probably a few more in a similar boat.

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I take it the OP is an accountant and, if so (and don't take this the wrong way,) would take everything they say with a pinch of salt (for that's how accountants operate.)

We were discussing City's position the other day post SL's informative talk to the Senior Reds.

If we're only allowed to lose £39m over 3 years (we claim the larger amount as SL has personally increased his equity in the football club to cover its unsustainable losses,) I don't see how it is the football club lost £39.9m during the last 3 year period without being punished ( the £23.4 would also have breached the single year limit?) Perhaps there's some indexation discounting involved that drops the overall number just under the limit?

I also don't fully understand how FFP relates to wider activity other than football and whether or not (as in our case) allowances are able to be made? The football club doesn't own beneficial control in Bristol Sport, The Stadium Company or the Holding Company, so presume ffp relates wholly to its accounts and nothing more?

I believe the football club at present has net liabilities of £60m. And though SL may be happy to write that off as and when it's his time, it has to be worrying for the future.

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4 minutes ago, BTRFTG said:

I take it the OP is an accountant and, if so (and don't take this the wrong way,) would take everything they say with a pinch of salt (for that's how accountants operate.)

We were discussing City's position the other day post SL's informative talk to the Senior Reds.

If we're only allowed to lose £39m over 3 years (we claim the larger amount as SL has personally increased his equity in the football club to cover its unsustainable losses,) I don't see how it is the football club lost £39.9m during the last 3 year period without being punished ( the £23.4 would also have breached the single year limit?) Perhaps there's some indexation discounting involved that drops the overall number just under the limit?

I also don't fully understand how FFP relates to wider activity other than football and whether or not (as in our case) allowances are able to be made? The football club doesn't own beneficial control in Bristol Sport, The Stadium Company or the Holding Company, so presume ffp relates wholly to its accounts and nothing more?

I believe the football club at present has net liabilities of £60m. And though SL may be happy to write that off as and when it's his time, it has to be worrying for the future.

There are allowances, such as Academy costs.  MrP will give you a fuller answer.

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Really interesting topic and even with allowances for the uncertainty of recent accounts, it backs up the feeling that teams like Villa are in a perilous place without promotion this season.

One of the problems that I see is that without comprehensive penalties being applied to the FFP flouting clubs, the Championship will continue to be a 'death zone'. Clubs cannot exist sustainably at this level. If Preston and Rotherham can't do it, none of us can with the level of footballing talent that exists in this division.

If FFP is applied properly and parachute payments cease to be the enormous incentive that they have been to date then clubs will have to bring their overall squad value down in line with the money that is actually available to them without year on year multimillion pound losses.

In reality, that's never going to happen because enough club owners will continue to flout the rules or gamble on coping with FFP penalties.

So, for a club like City there's a choice. Push for promotion and then exist within our means in the Premiership. Or be the big fish in a small League 1 pond.

Talk of sustainability in the Championship is a non-starter.

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On 04/01/2019 at 20:14, Xiled said:

Really interesting topic and even with allowances for the uncertainty of recent accounts, it backs up the feeling that teams like Villa are in a perilous place without promotion this season.

One of the problems that I see is that without comprehensive penalties being applied to the FFP flouting clubs, the Championship will continue to be a 'death zone'. Clubs cannot exist sustainably at this level. If Preston and Rotherham can't do it, none of us can with the level of footballing talent that exists in this division.

If FFP is applied properly and parachute payments cease to be the enormous incentive that they have been to date then clubs will have to bring their overall squad value down in line with the money that is actually available to them without year on year multimillion pound losses.

In reality, that's never going to happen because enough club owners will continue to flout the rules or gamble on coping with FFP penalties.

So, for a club like City there's a choice. Push for promotion and then exist within our means in the Premiership. Or be the big fish in a small League 1 pond.

Talk of sustainability in the Championship is a non-starter.

Spot on, excellent post.

It's possible for example Leeds someone like this could turn a small profit every so often (and be within FFP) or the lower clubs if they sell sell sell- but if they do that they go down. Overall I agree fully- sustainability at this level a non-starter, PL we can exist within our means or a top end League One side with Cup runs, a strong youth policy, regular sales and yeah some times but not too much in the Championship could see sustainability. Don't think anyone would want the latter however- I know I wouldn't!

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On 04/01/2019 at 18:59, BTRFTG said:

I take it the OP is an accountant and, if so (and don't take this the wrong way,) would take everything they say with a pinch of salt (for that's how accountants operate.)

We were discussing City's position the other day post SL's informative talk to the Senior Reds.

If we're only allowed to lose £39m over 3 years (we claim the larger amount as SL has personally increased his equity in the football club to cover its unsustainable losses,) I don't see how it is the football club lost £39.9m during the last 3 year period without being punished ( the £23.4 would also have breached the single year limit?) Perhaps there's some indexation discounting involved that drops the overall number just under the limit?

I also don't fully understand how FFP relates to wider activity other than football and whether or not (as in our case) allowances are able to be made? The football club doesn't own beneficial control in Bristol Sport, The Stadium Company or the Holding Company, so presume ffp relates wholly to its accounts and nothing more?

I believe the football club at present has net liabilities of £60m. And though SL may be happy to write that off as and when it's his time, it has to be worrying for the future.

I can get into it more properly tomorrow but tbh an accountant? I wish :laughcont: good money they're on...I digress.

Allowances. Academy expenditure is one, Community is one, Women's football is one and there are some more I cannot recall off the top of my head. It takes us below £39m over 3 years but not by much, but enough. The one year loss thing doesn't apply as it used to as it is a 3 year rolling loss limit. £39m + allowable costs. Say for arguments sake £20m lost in year 1- if your previous 2 years are £19m or less then you comply. Then if for example the year preceding the £20m loss is £6m then you can lose £13m the following season. Then that £6m gets wiped out and you start on £20m and can lose about that (£19m) over the following 2 seasons- so about £9.5m per season.

Say allowable costs £4m per year- you add £4m to your accounting loss so in short FFP Loss + Allowable/Deductible Costs=Accounting Loss. Is my broad understanding of it. It's the FFP loss that has to be £39m over 3 years but if it's say £45m and then you knock off £4m per year then your FFP loss is £37m even if total loss that appears in accounts when added up is £49m over 3 years say.

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6 hours ago, Mr Popodopolous said:

I can get into it more properly tomorrow but tbh an accountant? I wish :laughcont: good money they're on...I digress.

Allowances. Academy expenditure is one, Community is one, Women's football is one and there are some more I cannot recall off the top of my head. It takes us below £39m over 3 years but not by much, but enough. The one year loss thing doesn't apply as it used to as it is a 3 year rolling loss limit. £39m + allowable costs. Say for arguments sake £20m lost in year 1- if your previous 2 years are £19m or less then you comply. Then if for example the year preceding the £20m loss is £6m then you can lose £13m the following season. Then that £6m gets wiped out and you start on £20m and can lose about that (£19m) over the following 2 seasons- so about £9.5m per season.

Say allowable costs £4m per year- you add £4m to your accounting loss so in short FFP Loss + Allowable/Deductible Costs=Accounting Loss. Is my broad understanding of it. It's the FFP loss that has to be £39m over 3 years but if it's say £45m and then you knock off £4m per year then your FFP loss is £37m even if total loss that appears in accounts when added up is £49m over 3 years say.

Good News!

EFL have appointed Dianne Abbott as their head of ffp compliance.

 

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On 04/01/2019 at 20:14, Xiled said:

Really interesting topic and even with allowances for the uncertainty of recent accounts, it backs up the feeling that teams like Villa are in a perilous place without promotion this season.

One of the problems that I see is that without comprehensive penalties being applied to the FFP flouting clubs, the Championship will continue to be a 'death zone'. Clubs cannot exist sustainably at this level. If Preston and Rotherham can't do it, none of us can with the level of footballing talent that exists in this division.

If FFP is applied properly and parachute payments cease to be the enormous incentive that they have been to date then clubs will have to bring their overall squad value down in line with the money that is actually available to them without year on year multimillion pound losses.

In reality, that's never going to happen because enough club owners will continue to flout the rules or gamble on coping with FFP penalties.

So, for a club like City there's a choice. Push for promotion and then exist within our means in the Premiership. Or be the big fish in a small League 1 pond.

Talk of sustainability in the Championship is a non-starter.

Until club owners/chairmen/chief execs pay players only what a club can afford, and not what the agents demand or say their player is worth, we will see the current position continue. 

How many businesses have employees wages running in excess of the income the business generates and expect to stay in business?

It's madness and needs owners/chairmen/chief execs to grow a pair and start saying no to agents demands. 

 

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16 minutes ago, downendcity said:

Until club owners/chairmen/chief execs pay players only what a club can afford, and not what the agents demand or say their player is worth, we will see the current position continue. 

How many businesses have employees wages running in excess of the income the business generates and expect to stay in business?

It's madness and needs owners/chairmen/chief execs to grow a pair and start saying no to agents demands. 

 

Fully agree, though it's the kind of thing that multiple clubs need to do at the same time, otherwise the one doing it could see themselves drop rapidly as players leave to join the clubs continuing to pay over the odds.

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Good news

Think the estimate in the Autumn was 12 + 3 for the aggravated breach. Seems fairly consistent with the Autumn reports though and as such if it still holds, should be between 12-15 anyway- if there was a way to make it have the biggest impact that would be great i.e. this season if playoffs was likely or next season if not.

@solihull cider red Bolton just seems to be a mess, as the Dale Vince thread shows. Yet in FFP terms aok- they're a weird and possibly unique example because it is far more common for a club to be cash fine through a rich owner but in FFP trouble but so random for it to be in reverse- yet Bolton seem to be such a club!

The SCMP rules of 60% of turnover seem complex- perhaps they are being enforced more readily now but it's hard to say. Fairly sure our wage bill was >60% in League One in the 2 years under SO'D and Cotterill. Maybe there is some kind of exemption for existing contracts, don't really know though. Sunderland most definitely will be over and above 60%!

Edited by Mr Popodopolous

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Some interesting financial reading and figures from twitter.....go to SwissRamble's feed for lots of charts

 

 

Edited by RedRaw
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£40m bank loan??

Should we be worried...would SL/Pula Sports or whoever (i.e. in reality SL) be a guarantor of this loan or would it fall on the club...?

Edited by Mr Popodopolous

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2 hours ago, Mr Popodopolous said:

Good news

Think the estimate in the Autumn was 12 + 3 for the aggravated breach. Seems fairly consistent with the Autumn reports though and as such if it still holds, should be between 12-15 anyway- if there was a way to make it have the biggest impact that would be great i.e. this season if playoffs was likely or next season if not.

@solihull cider red Bolton just seems to be a mess, as the Dale Vince thread shows. Yet in FFP terms aok- they're a weird and possibly unique example because it is far more common for a club to be cash fine through a rich owner but in FFP trouble but so random for it to be in reverse- yet Bolton seem to be such a club!

The SCMP rules of 60% of turnover seem complex- perhaps they are being enforced more readily now but it's hard to say. Fairly sure our wage bill was >60% in League One in the 2 years under SO'D and Cotterill. Maybe there is some kind of exemption for existing contracts, don't really know though. Sunderland most definitely will be over and above 60%!

I was chatting to a Birmingham fan at the weekend - admittedly he doesn't pay a great deal of attention to the finances but assumed they were in some pretty dire straights - the Brum/Villa debate up here is; is an aggravated breach worse than blatantly flouting the rules? Without getting into the realms of valuing players as assets (which I don't think you can do) there isn't much difference. Previous reports suggested a possible 21 points could be docked but 12 + 3 makes sense because it makes an example without limiting the EFL's options for future cases.

I was trying to navigate the SCMP rules before posting - it looks like, any contract signed before September of the season a team was relegated can be excluded. Sunderland would be fine I assume, City had an exemption based on the ground being developed I think? But we did also have a remarkably small (but perfectly formed) squad for that season. 

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Agree that the Football League need to make an example of someone, with punishment now rather than years down the line (a la QPR).

As Villa had 20 seasons in the Prem before they came down, I'm assuming they would have started with a blank sheet of paper and 0 losses.  I'm guessing the temptation was to put all those losses into the first 2 seasons and gamble on going straight back up.  They really should be able to get back up without having to break the rules as they are the biggest club in the division.

I read a prediction on Sky the other day that Man City could be banned from next season's Champions League over FFP.

It's worth remembering the reason it came in was to stop more situations like Portsmouth/Leeds/Luton (where often the local businesses who were creditors suffered more than the football club)

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34 minutes ago, Loderingo said:

Agree that the Football League need to make an example of someone, with punishment now rather than years down the line (a la QPR).

As Villa had 20 seasons in the Prem before they came down, I'm assuming they would have started with a blank sheet of paper and 0 losses.  I'm guessing the temptation was to put all those losses into the first 2 seasons and gamble on going straight back up.  They really should be able to get back up without having to break the rules as they are the biggest club in the division.

I read a prediction on Sky the other day that Man City could be banned from next season's Champions League over FFP.

It's worth remembering the reason it came in was to stop more situations like Portsmouth/Leeds/Luton (where often the local businesses who were creditors suffered more than the football club)

Yes and no, not exactly.

In practice yes. However the reality, not so much. When Villa came down, they would have had the PL loss limits- which are much higher than Championship- as their starting point. Therefore in 14/15 and 15/16 they could lose a max of £35m per season and £13m in Championship. Put in FFP deductions and they easily satisfied it.

Last season, gets trickier- 14/15 results wiped out, ignored and 15/16, 16/17 and 17/18. Now we don't know 17/18 results yet but when deductions etc factored in, yes it's likely they passed it- albeit max loss plus deductions now £61m (£3m+£13m+£13m rather than £35m+£35m+£13m). Now they are in the Championship and it's their third season here that £35m gets changed into a £13m and their total losses allowed falls to £39m over 3 years. In theory they could have failed it in 16/17 or last season but definitely didn't in the first and probably didn't in the 2nd. This however is highly likely the season they will fail it- and it could well be a big fail! Struggle to see how they won't tbh.

Edited by Mr Popodopolous

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20 minutes ago, Mr Popodopolous said:

Yes and no, not exactly.

In practice yes. However the reality, not so much. When Villa came down, they would have had the PL loss limits- which are much higher than Championship- as their starting point. Therefore in 14/15 and 15/16 they could lose a max of £35m per season and £13m in Championship. Put in FFP deductions and they easily satisfied it.

Last season, gets trickier- 14/15 results wiped out, ignored and 15/16, 16/17 and 17/18. Now we don't know 17/18 results yet but when deductions etc factored in, yes it's likely they passed it- albeit max loss plus deductions now £61m (£3m+£13m+£13m rather than £35m+£35m+£13m). Now they are in the Championship and it's their third season here that £35m gets changed into a £13m and their total losses allowed falls to £39m over 3 years. In theory they could have failed it in 16/17 or last season but definitely didn't in the first and probably didn't in the 2nd. This however is highly likely the season they will fail it- and it could well be a big fail! Struggle to see how they won't tbh.

This touches (sort of) on a point made in an earlier post i.e. aggravated breach vs flagrantly flouting the rules.

Although Villa would have had premier league loss limits, relegation would have given them 3 years of parachute payments which I presume these are classed as income. If so, then prudent management would have seen the parachute payments used to offset/cover the more stringent EFL ffp limits. However, Villa's owner chose to throw their financial resources into the playing squad in an attempt to secure a quick return to the prem and financial salvation.

As already pointed out in this thread, ffp was introduced to avoid the Pompey/QPR situation when, in particular, a club drops out of the prem and cannot meet commitments because of overstretched budgets etc. etc. Unless there is a section in the ffp rulebook that gives special dispensation to relegated clubs,  so that they can throw financial caution to the wind in order to gain a quick return to the prem, then they deserve no different consideration from any other club.

When lots of clubs, like us, are trying to progress towards promotion, but are doing so as prudently as possible and while keeping within ffp lists, why should other clubs be viewed as though they have special circumstances,  just because they were previously  in the prem, but are no longer? £100m "prize" money for finishing in the relegation spots, plus huge parachute payments should enable any club should mean relegated clubs are given less leeway, not more ( I know that Villa didn't get £100m and the current levels of parachute payment when they were relegated, but what they did receive put them well ahead of much of the championship from a financial point of view).

 

 

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12 minutes ago, downendcity said:

This touches (sort of) on a point made in an earlier post i.e. aggravated breach vs flagrantly flouting the rules.

Although Villa would have had premier league loss limits, relegation would have given them 3 years of parachute payments which I presume these are classed as income. If so, then prudent management would have seen the parachute payments used to offset/cover the more stringent EFL ffp limits. However, Villa's owner chose to throw their financial resources into the playing squad in an attempt to secure a quick return to the prem and financial salvation.

As already pointed out in this thread, ffp was introduced to avoid the Pompey/QPR situation when, in particular, a club drops out of the prem and cannot meet commitments because of overstretched budgets etc. etc. Unless there is a section in the ffp rulebook that gives special dispensation to relegated clubs,  so that they can throw financial caution to the wind in order to gain a quick return to the prem, then they deserve no different consideration from any other club.

When lots of clubs, like us, are trying to progress towards promotion, but are doing so as prudently as possible and while keeping within ffp lists, why should other clubs be viewed as though they have special circumstances,  just because they were previously  in the prem, but are no longer? £100m "prize" money for finishing in the relegation spots, plus huge parachute payments should enable any club should mean relegated clubs are given less leeway, not more ( I know that Villa didn't get £100m and the current levels of parachute payment when they were relegated, but what they did receive put them well ahead of much of the championship from a financial point of view).

 

 

Fully agree with this post. No special dispensation for relegated clubs, was just explaining how the loss limit changed over time.

It's their challenge to meet and they seem to have failed to do so! Fully agree, no leeway- I'd further harmonise the rules too by scrapping in due course the £35m loss limit for PL clubs relegated, though I don't know how realistic it would be. However, they are already at an advantage with huge parachute payments (albeit a much higher cost base too), why should they have an extra £44m in Year 1 and though it drops, an extra £22m in Year 3?

Doing some rough calculations before factoring in wages admittedly, their profit on transfers lower than 16/17 for last season and so far this. Combined with parachute payments dropping by £8m last year from £41m-£33m then this year £15m. Wages will undoubtedly (surely)? have dropped...just a question of how much they failed by IMO and as such should be punished with a big points deduction plus embargo.

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12 minutes ago, Vincent Vega said:

Great point by Nixon....Screenshot_20190107-194234_Twitter.thumb.jpg.5a269fc7e2b5659f005ca969ac496c10.jpg

Are Man A and Man B both Lee Tomlin?

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25 minutes ago, Vincent Vega said:

Great point by Nixon....Screenshot_20190107-194234_Twitter.thumb.jpg.5a269fc7e2b5659f005ca969ac496c10.jpg

If I go to a restaurant and buy a huge meal could I get the price reduced by offering them a buy back clause or a sell on fee?

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10 hours ago, Mr Popodopolous said:

Good news

Think the estimate in the Autumn was 12 + 3 for the aggravated breach. Seems fairly consistent with the Autumn reports though and as such if it still holds, should be between 12-15 anyway- if there was a way to make it have the biggest impact that would be great i.e. this season if playoffs was likely or next season if not.

@solihull cider red Bolton just seems to be a mess, as the Dale Vince thread shows. Yet in FFP terms aok- they're a weird and possibly unique example because it is far more common for a club to be cash fine through a rich owner but in FFP trouble but so random for it to be in reverse- yet Bolton seem to be such a club!

The SCMP rules of 60% of turnover seem complex- perhaps they are being enforced more readily now but it's hard to say. Fairly sure our wage bill was >60% in League One in the 2 years under SO'D and Cotterill. Maybe there is some kind of exemption for existing contracts, don't really know though. Sunderland most definitely will be over and above 60%!

http://www.financialfairplay.co.uk/scmp.php

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4 minutes ago, Mr Popodopolous said:

I do see what he's saying, but really both A) and B) should be punished by the EFL- but for different reasons.

In fairness to him , I think that's the point he's making. At least that's how I took it.

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7 minutes ago, Mr Popodopolous said:

I do see what he's saying, but really both A) and B) should be punished by the EFL- but for different reasons.

Surely Man A should only be punished if the calories of the meal are more than he's allowed on his diet?

(Have I taken the analogy too far?)

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13 minutes ago, JamesBCFC said:

Surely Man A should only be punished if the calories of the meal are more than he's allowed on his diet?

(Have I taken the analogy too far?)

Only if Man A is a celiac vegan with a nut allergy 

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With Tammy unbelievably staying at Villa and them adding Kalinic and Hause to their already highly expensive squad, they need denying promotion if they go up. 15-20 points and a transfer embargo, if as expected they charge through FFP.

If it looks like they won't stick it onto next season.

Edited by Mr Popodopolous

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Mr P -  a couple of question for you if I may:

- Could some of the clubs who may be in trouble with FFP avoid punishment by having a January firesale (I can see that Villa are not planning to do that but maybe Brum)?

- If a club was to get punished under FFP would they then start with a blank sheet of paper or could they risk being punished next season as well?

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Good questions @Loderingo

  1. They could. I mean it's debatable as to whether they would be able to raise enough in the case of Birmingham with cost of transfer, amortisation but they could reduce their punishment I am sure. Birmingham would probably need to sell Adams, Jota, Dean to name 3- but if they could raise sums to the right level then yes punishment could be avoided. Or if it was a bit above, punishment could be mitigated significantly as they would be showing big steps towards compliance, by having said fire sale within the required timeframe.
  2. This second bit is one area that is unclear to me. It's hard to say- I would say that if punished but still in breach then maybe a lesser punishment would be applied e.g. a fine or embargo if the club is showing concrete steps. For example if Birmingham had that firesale and were compliant for the 3 years to this season, they would still have the problem of the £37m loss last season (minus deducted costs) as the starting point and if there was anyone left worth selling, they may well need another to comply.

Aston Villa have been so flagrant in their approach that I would hope they would really get made an example of, even more than Birmingham. Lengthy embargo and insistence on compliance even after punishment or risk rolling points deductions. Whether that would stand up though, I don't fully know.

Edited by Mr Popodopolous

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Read earlier Derby maybe in trouble with FFP. Unsurprising in some ways, and yet given their cutbacks may not be entirely accurate.

This Tweet could be very revealing though- unsure how to interpret it but if they don't go up this year, could they have a big problem?

I haven't seen them as one of the worst offenders yet I maybe wrong, but if a load of contracts expire say and they have all been brought for fees...that could be a huge hit? Any accountants able to confirm?

Edited by Mr Popodopolous

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On 08/01/2019 at 12:15, Mr Popodopolous said:

With Tammy unbelievably staying at Villa and them adding Kalinic and Hause to their already highly expensive squad, they need denying promotion if they go up. 15-20 points and a transfer embargo, if as expected they charge through FFP.

If it looks like they won't stick it onto next season.

 

On 08/01/2019 at 12:58, Mr Popodopolous said:

Good questions @Loderingo

  1. They could. I mean it's debatable as to whether they would be able to raise enough in the case of Birmingham with cost of transfer, amortisation but they could reduce their punishment I am sure. Birmingham would probably need to sell Adams, Jota, Dean to name 3- but if they could raise sums to the right level then yes punishment could be avoided. Or if it was a bit above, punishment could be mitigated significantly as they would be showing big steps towards compliance, by having said fire sale within the required timeframe.
  2. This second bit is one area that is unclear to me. It's hard to say- I would say that if punished but still in breach then maybe a lesser punishment would be applied e.g. a fine or embargo if the club is showing concrete steps. For example if Birmingham had that firesale and were compliant for the 3 years to this season, they would still have the problem of the £37m loss last season (minus deducted costs) as the starting point and if there was anyone left worth selling, they may well need another to comply.

Aston Villa have been so flagrant in their approach that I would hope they would really get made an example of, even more than Birmingham. Lengthy embargo and insistence on compliance even after punishment or risk rolling points deductions. Whether that would stand up though, I don't fully know.

This is the problem with the season finishing before the financial year.  Villa could easily argue / include the sale of Grealish for £30m in early summer in their projected accounts to bring them within FFP for example.

Edited by Davefevs

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10 minutes ago, Davefevs said:

 

This is the problem with the season finishing before the financial year.  Villa could easily argue / include the sale of Grealish for £30m in early summer in their projected accounts to bring them within FFP for example.

Hmm, you're right- it's such a grey area. Their accounts run to May 31 2018 and I assume for 2018/19, it would be May 31 of this year.

Could they arrange a transfer for example and sell on seasons end- on the other hand thereby it being registered in this season for FFP purposes, even if the cash comes in next it would be in this years books.

 Summer window opens 1st June 2019, May 31st is when Aston Villa's accounts run to- as with my answer to question 2 by @Loderingo it's another area that's fairly unknown. Would probably have to be determined as to whether acceptable via lawyers or arbitration- some sort of test case.

Edited by Mr Popodopolous

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14 minutes ago, Mr Popodopolous said:

Hmm, you're right- it's such a grey area. Their accounts run to May 31 2018 and I assume for 2018/19, it would be May 31 of this year.

Could they arrange a transfer for example and sell on seasons end- on the other hand thereby it being registered in this season for FFP purposes, even if the cash comes in next it would be in this years books.

 Summer window opens 1st June 2019, May 31st is when Aston Villa's accounts run to- as with my answer to question 2 by @Loderingo it's another area that's fairly unknown. Would probably have to be determined as to whether acceptable via lawyers or arbitration- some sort of test case.

Payment terms could be whatever they want.  £1.00 on 31/5, £29,999,999.00 sometime after....they would include the £30,000,000.00 in this year’s player sales.

Edited by Davefevs

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8 minutes ago, Mr Popodopolous said:

Hmm, you're right- it's such a grey area. Their accounts run to May 31 2018 and I assume for 2018/19, it would be May 31 of this year.

Could they arrange a transfer for example and sell on seasons end- on the other hand thereby it being registered in this season for FFP purposes, even if the cash comes in next it would be in this years books.

 Summer window opens 1st June 2019, May 31st is when Aston Villa's accounts run to- as with my answer to question 2 by @Loderingo it's another area that's fairly unknown. Would probably have to be determined as to whether acceptable via lawyers or arbitration- some sort of test case.

I would hope ( perhaps over optimistically given football administrators track records)  that the onus is on a club, knowing how it's accounting period relates to ffp rules and requirements, to manage it's affairs accordingly and to avoid breaching ffp.

After the first 2 years of the 3 year cycle any club will or should  know pretty well where it stands with regard to ffp limits. Most of it's costs will already be known for the year ahead - wages, transfer fees already paid and amortised - and they can make a pretty accurate estimate of anticipated income . If those projected figures show they will be close to , or breaching, ffp limits then they have the summer and the following January window in which to make  transfers to bring costs down and to raise income, if that is to be their way of avoiding the problem. 

To use the argument in March ( when the projected accounts have to be produced) that they will be selling Grealish when the next summer window opens, and that the likely fee of £35m will bring them in line with ffp requirements, would be laughable.

The truth is they gambled in the previous 2 years on gaining promotion back to the prem and in so doing knew that they would be risking n ffp problem in the 3rd season. That failed, so they then had a choice to either go all out in the third season, and in so doing risk the consequences of ffp, or take action in order to stay within ffp. It looks like they chose the former, so they should not be given any wriggle room by fancy accounting arguments.

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11 minutes ago, Davefevs said:

Payment terms could be whatever they want.  £1.00 on 31/5, £29,999,999.00 sometime after....they would include the £30,000,000.00 in this year’s player sales.

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.

Edited by Mr Popodopolous

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8 minutes ago, 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.

You can probably transfer a player whenever you like in theory....it is only being the registration that that passes in the window.  Whoever buys Grealish in this example, could make a downpayment?

@downendcity 100%

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Interesting thoughts today by Andy Holt the Accrington chairman- his Twitter account worth a look. I mean it'll never happen but if it did, it would solve the FFP bother at a stroke. Quite a long thread...

 

Edited by Mr Popodopolous
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On the FFP issue a specific case.

https://www.swfc.co.uk/news/2019/january/dejphon-chansiri-statement

Essentially Sheffield Wednesday could face a 2nd transfer embargo if they don't resolve by March.

Adam Reach is their most saleable asset IMO. Then you have Bannan though age may play a part and he's not been that productive this season and Forestieri with his off the field stuff- on paper a saleable asset, but that reduces that!

Edited by Mr Popodopolous

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On 11/01/2019 at 14:50, Davefevs said:

 

This is the problem with the season finishing before the financial year.  Villa could easily argue / include the sale of Grealish for £30m in early summer in their projected accounts to bring them within FFP for example.

Derby are in big trouble before FFP imo. Their squad is old for the most part and their best players are loanees. 

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9 minutes ago, JoeAman08 said:

Derby are in big trouble before FFP imo. Their squad is old for the most part and their best players are loanees. 

Do you mean independent of FFP or for FFP? Unclear.

Their squad is aging, they have sold a lot of good players and as you say mainly they are loanees in terms of their best. However those sales may have kept them from failing FFP- gambling on promotion this year?

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