Popular Post Mr Popodopolous Posted January 4, 2019 Popular Post Report Share Posted January 4, 2019 Was pondering doing this over Christmas but decided to wait a bit. Birmingham's financial results though and their losses inspired me to make this thread and wonder how clubs are placed and whether we may have an advantage over them in the future i.e. next season. Aston Villa- Surely failed it over the 3 years to this season. However we only have their results for 16/17 at this time, technically compliant between 15/16 and last season but not by much. So far, out of FFP total of £13m, they lost £6.5m in 16/17 after allowable costs removed. Can lose post said costs another £32.5m over the 2 seasons to the end of this season with parachute payments decreasing...In trouble surely. No results for last season yet. Birmingham- Failed! Missed it by varying calculations, £11.4m, primarily through their big loss last season of £37.5m!! (FFP allowances take it down to 'only' £34.3m). Surely require a points deduction this season or next- the double whammy comes that after this season, their starting point will be that £34.3m loss which means they can lose £2.35m per season after costs to 2020/21- huge challenge...oh and wages last season apparently 200% or so of turnover. Blackburn- Hard to say as Venkys London results differ a bit to their accounts, the latter of which hasn't been published for last season. However should be compliant this year due to relatively low loss in 16/17 plus an excellent saleable asset in Dack if they need. Probably will be alright but won't be able to push the boat out without sales etc .No results for last season yet though Venky's London a good estimate and should be fine for this year, after unsure. Bolton- FFP no problems at all. Their problems seem to be cash based as opposed to FFP but nowhere near the loss limit of £39m I think thanks to a small loss in 2016/17 of £4.4m, or if we're taking the 3 years into account to last season, they lost only £6.1m in 2015/16 and that's before deducting any costs. Transfer embargo and wage limits surely helped them quite big in this respect. However since the lack of investment form owners, they probably won't roll the dice even though they most definitely could. No results for last season yet. Brentford- No accounts for last season but before any deductions, lost around £13.7m over 2 seasons i.e. 15/16 and 16/17 and if the starting point last season, their position even better. Player sales still probably necessary most years but with Benham and his wealth, combined with the excellent results for 16/17 they can pick and choose a bit- perhaps even roll the dice one year. Similarities to us model wise? However we have the better facilities, higher gates so our model is like a Brentford Plus IMO. No results for last season yet. Derby- In a bit of a tight spot for the 3 years to last season but probably compliant. Also been making some big sales in recent years which helps to offset a bit, £22.5m over 15/16 and 16/17. No results for last season yet. Hull- The Allams don't like spending money and want out. Their FFP position is fine but could face a cash crunch with the reduction in parachute payments- very unexpected revival for them also. Seem to be placed okay but it may change and can depend on the owners too. Parachute payments end after this season- £41m, £33m then...£0. Ipswich- Absolutely no issues with FFP, problem for them looks like being relegation- departures of McCarthy, Waghorn, McGoldrick and Garner in one summer the final straw. Leeds- I'd have thought fine FFP wise, may change a bit if Bielsa is on a big whack. Spent a bit last 2 seasons, however made a small profit in 16/17 plus made sales each summer too. No results for last season yet. Middlesbrough- Should be fine FFP wise, but spent a lot last season- big sales too though. This and last season saw Parachute Payments of £41m and £33m- but they run out from next season. No results for last season but big sales this summer surely helps? Millwall- Released results. Not a big spending club but could give it a go if owners wanted. Roughly lost £18m before exclusions in the 3 years to last season, if we include the 2 years before this then it's about £10.85m over 2. Nowhere near. Norwich- Parachute Payments gone this season, but a low loss in 16/17 and a good profit- lot of wriggle room and may even be fine for next season too given the 3 year cycle starting in 17/18 to next saw a good profit and writedown of players also removes future costs. Usually fairly prudent aren't they? Nottingham Forest- Fine for this season probably, owing to a relatively low loss in 16/17, player sales and Brereton sale for £7m- academy sees it as pure profit. Next season though if they don't go up could see a different picture. Maybe like another Birmingham but not quite as bad- hamstrung though most definitely, but not necessarily a total disaster. No results for last season yet. Preston- Should be fine FFP wise. Not exactly big spenders, could give it a go if they wanted. Lost about £4m in the 2 years to 16/17, which is exceptional for Championship IMO. No results for last season yet. QPR- The most punished so far and yet it wasn't enough. Should due to Parachute Payments be compliant for the 3 years to last season and even the 3 years to this season. Thereafter? A huge challenge- their income will plunge by between 40-50% next season. Lost about £17.4m in the 2 years to 2016/17. No results for last season yet. Reading- Lost after excluding their loan write off about £19.62m to the years of 15/16 and 16/17. Should be fine for the 3 years to last season and low losses in 16/17 mean fine for this- next season is where their problems should begin, that is if they stay up. No results for last season yet. Rotherham- No bother at all. Lost £2.6-£2.7m in total pre exclusions the 2 seasons to 16/17. Could probably give it a go if the chairman wanted but they probably are fairly happy with their lot. No results for last season yet. Sheffield United- Lost about £14.2m before exclusions in the 2 seasons to 16/17. No bother surely? About £5.7 in 16/17, can't see them being in trouble though expenditure has increased. Brooks sale a big profit. No results for last season yet. Sheffield Wednesday- FFP trouble surely? Especially given how the losses more than doubled in 16/17, surprised they haven't had to flog Reach, Bannan and Forestieri- at least not including certain players in the squad gave a message they were trying to do something albeit a bit too late. No results for last season yet. Stoke- Bit of a surprise but they might be in trouble. Certainly next season ones to watch for that- they lost £31.9m or thereabouts and though it included write-downs of around £29m and the PL has a higher loss limit, when that cash plunges...surely if they are midtable in January 2020 say, they start some big sales, if not sooner. However they also made that loss despite all that TV money and a profit on player sales of £22m that season...could the firesale be sooner?? Relegation wage clauses. Swansea- Profit of almost £13m in 2016/17. That stands them in very decent stead for FFP this season, made big player sales too this season though not necessarily always big profits with amortisation etc. Think absolutely fine FFP wise and probably next season too. Possibly even started cutting a bit too much too soon, but then again if their owners don't invest much it maybe quite needed. No results for last season yet. Relegation wage clauses. West Brom- Posted a profit of £32,147,000 in 2016/17. Should be absolutely fine FFP wise for this season, but last season that huge profit apparently transformed into requiring a bank overdraft. No results for last season yet. Relegation wage clauses. Wigan- Should be absolutely fine for the 3 years to this season- final year of Parachute Payments saw a profit of £4.3m in fact. After that, it gets tougher- can't see them troubling the top of the League in any case. No results for last season yet. Therefore as we can see- and I really should present it on a spreadsheet or something- while there are still quite a few financial positions to be finalised, we actually are in not too bad a position and definitely if we only add steadily next season too, then summer 2020 we can really splash the cash. Or we could roll the dice a little next season, knowing that it would be restricted the following season- though a big sale of Kelly would change the equation significantly. The question I guess is whether it will be enforced correctly but clubs in big trouble at this stage include: Birmingham, Aston Villa and Sheffield Wednesday. Those with a decent challenge ahead of them may include Derby, Middlesbrough, Nottingham Forest, QPR and Reading. Blackburn and Wigan will see money tight. The unknowns include the PL relegated sides but Stoke seem in trouble. Teams like Bolton, Millwall, Preston and Rotherham actually could have a go but can't see their owners doing this. Brentford also maybe able to have a go and I can see their owner trying it. 6 of these sides will leave the division at the end of the season- hopefully one is us upwards (though unsure that's so likely). Of those looking like coming up, Sunderland may well be a danger next season as naturally big club, Portsmouth seem to have momentum but beyond that not too much to worry about. As to those likely to enter from PL. Huddersfield will be able to splash the cash if they want, sure their accounts absolutely fine and you throw in the higher loss limits PL, parachute payments, their likely profit last and this season...Southampton of course a big club at this level so maybe a danger but unsure of their finances, seem a fairly sensibly run club though financially speaking. Fulham haven't clicked but should barring a firesale have enough to be up the higher end. Seem to be quite a few clubs who will be in trouble or hamstrung however over next season and the season after...opportunity for us maybe? Has to be enforced correctly though or we may as well scrap it! 8 13 Quote Link to comment Share on other sites More sharing options...
nickolas Posted January 4, 2019 Report Share Posted January 4, 2019 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. 1 1 Quote Link to comment Share on other sites More sharing options...
downendcity Posted January 4, 2019 Report Share Posted January 4, 2019 (edited) 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 January 4, 2019 by downendcity 3 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 4, 2019 Author Report Share Posted January 4, 2019 (edited) 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... Edited January 4, 2019 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Always Believesham Posted January 4, 2019 Report Share Posted January 4, 2019 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? Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 4, 2019 Author Report Share Posted January 4, 2019 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. Quote Link to comment Share on other sites More sharing options...
Davefevs Posted January 4, 2019 Report Share Posted January 4, 2019 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. 1 Quote Link to comment Share on other sites More sharing options...
downendcity Posted January 4, 2019 Report Share Posted January 4, 2019 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... 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? 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 4, 2019 Author Report Share Posted January 4, 2019 (edited) 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 January 4, 2019 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
downendcity Posted January 4, 2019 Report Share Posted January 4, 2019 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! 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 4, 2019 Author Report Share Posted January 4, 2019 (edited) 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. Edited January 4, 2019 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
BTRFTG Posted January 4, 2019 Report Share Posted January 4, 2019 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. Quote Link to comment Share on other sites More sharing options...
Davefevs Posted January 4, 2019 Report Share Posted January 4, 2019 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. Quote Link to comment Share on other sites More sharing options...
Xiled Posted January 4, 2019 Report Share Posted January 4, 2019 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. 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 6, 2019 Author Report Share Posted January 6, 2019 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! 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 6, 2019 Author Report Share Posted January 6, 2019 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 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. 1 Quote Link to comment Share on other sites More sharing options...
downendcity Posted January 6, 2019 Report Share Posted January 6, 2019 6 hours ago, Mr Popodopolous said: I can get into it more properly tomorrow but tbh an accountant? I wish 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. 1 5 Quote Link to comment Share on other sites More sharing options...
downendcity Posted January 6, 2019 Report Share Posted January 6, 2019 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. 1 Quote Link to comment Share on other sites More sharing options...
JamesBCFC Posted January 6, 2019 Report Share Posted January 6, 2019 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. 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 7, 2019 Author Report Share Posted January 7, 2019 (edited) 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 January 7, 2019 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
RedRaw Posted January 7, 2019 Report Share Posted January 7, 2019 (edited) Some interesting financial reading and figures from twitter.....go to SwissRamble's feed for lots of charts Edited January 7, 2019 by RedRaw 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 7, 2019 Author Report Share Posted January 7, 2019 (edited) £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 January 7, 2019 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Always Believesham Posted January 7, 2019 Report Share Posted January 7, 2019 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. 1 Quote Link to comment Share on other sites More sharing options...
Loderingo Posted January 7, 2019 Report Share Posted January 7, 2019 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) Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 7, 2019 Author Report Share Posted January 7, 2019 (edited) 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 January 7, 2019 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
downendcity Posted January 7, 2019 Report Share Posted January 7, 2019 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). Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted January 7, 2019 Author Report Share Posted January 7, 2019 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. Quote Link to comment Share on other sites More sharing options...
Vincent Vega Posted January 7, 2019 Report Share Posted January 7, 2019 Great point by Nixon.... 1 Quote Link to comment Share on other sites More sharing options...
downendcity Posted January 7, 2019 Report Share Posted January 7, 2019 12 minutes ago, Vincent Vega said: Great point by Nixon.... Are Man A and Man B both Lee Tomlin? 1 Quote Link to comment Share on other sites More sharing options...
JamesBCFC Posted January 7, 2019 Report Share Posted January 7, 2019 25 minutes ago, Vincent Vega said: Great point by Nixon.... 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? 1 Quote Link to comment Share on other sites More sharing options...
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