The Championship FFP Thread (Merged)

[Davefevs]

Think Wolves we’re fine with allowances for promotion bonuses and the usual Academy, etc stuff.

[downendcity]

1 hour ago, Davefevs said:

Interesting. 

Gibson very respected.  This is gonna get interesting.

Up till now I think many have thought that the EFL's problem might be a club taking them to court over a "harsh" points penalty and the EFL ducking out to avoid any such problems.

If SL's group builds up a head of steam, the EFL's bigger worry could come from the rest of the clubs taking action if they feel an offending club has been treated too leniently!

If it does come to legal action perhaps Sl could employ a different solicitor from the one he used to fight the Ashton Vale case!

Edited March 25, 2019 by downendcity

[Mr Popodopolous]

Dunno how well this comes out but here are some estimates for Aston Villa- based on calculations of transfer profit, parachute payments and yes some guesswork- e.g. how much their FFP exclusions maybe, based on a mix of averages combined with what their accounts do indicate.

Transfermarkt is used for Contract lengths and fees- possibly a bit of rounding involved but if you can get it in £ then it's a useful enough source.

Edited March 26, 2019 by Mr Popodopolous

[1960maaan]

Projected accounts , can anyone tell me how it works .

Say Villa's projected accounts include player sales, maybe £35m , and they then predict they will be within FFP. What if they get promoted, they could then do the exact opposite. What I'm trying to say, is what is stopping a club from putting in optimistic ( call them that to be kind) projected accounts, then after promotion they turn out to be way off ? 

[Rapax]

14 hours ago, Mr Popodopolous said:

I believe it to only be the limits for 15/16-last season, which is roughly where I thought they maybe.

The limits to this season- these pose the huge challenge. Think after FFP deductions, they have smashed it- lost somewhere between 60-77% of their 3 limit this season alone!

Still going to do my calculations but if they have breached it, and them especially given their arrogance, I hope they get points removed this season. Can't get away with it.

Villa's allowable losses are £61m as the three year period still includes a part of the season in the Premier League. Price of Football confirms the loss for FFP purposes is £58.6m, so they've not breached FFP. 

 

Neither have Sheffield Wednesday or Derby, only Birmingham have, as the EFL confirmed. They'll all have to fo something different if they dont get promoted.

Why anybody would believe garbage in the Mail or the S*n I don't know.

 

Edited March 26, 2019 by Rapax

[Major Isewater]

On 08/03/2019 at 14:12, downendcity said:

One thing that appears obvious when looking at Villa's situation is how parachute payments enable a relegated club to "fund" attempts to gain promotion straight back to the prem thereby gaining a massive advantage over many championship clubs.. I know this probably sounds like teaching granny to suck eggs, as you will all know that already.

However, the reason I mention this now, is that there has been an understandable concern that when it comes to a "big" club, like Villa, the EFL will duck out of hitting them really hard, especially when it comes to points deduction. 

My thinking is that any club relegated from the prem knows the implications of ffp in the football league, and even though it means some major re-adjustment ( wages in particular),  parachute payments give them additional money over 3 years to help manage that readjustment, so they don't have to hold a fire sale in the summer following relegation. With parachute payments I cannot see how any club cannot, in a 3 year period, bring their finances in line with the requirements of ffp, as every other club in the championship has to do.

If they choose to use parachute payments to maintain an expensive playing staff, but without the same level of income they enjoyed in the prem, then they know the potential consequences should they fail to gain promotion and then fall foul of ffp assessment, as looks to be the case with Villa.

The danger of letting Villa off lightly ( assuming they breach ffp of course) is that it creates a precedent for every other relegated club to use parachute payments to fund a 3 years assault on promotion on the basis that relegation and the ultimate loss of parachute payments will somehow be looked upon as a reason for the financial problems.

 

Parachute payments are all that is wrong with football today . 

There is little incentive to balance the books when you reach the summit because trying to stay in the Prem is everything.

Going down with the ‘ safety net ‘ of three years payments  just encourages those clubs to keep throwing more money at a promotion tilt in the hope that they go back up before they hit the skids.

Great for those who do but very bad news for the unsuccessful clubs .

Then there is the ‘ knock on ‘ effect where clubs are going broke just trying  to compete with these former Prem clubs in the Championship.

If the EFL and the Prem are really interested in the game as a whole , which I doubt , then they would find a more balanced solution . FFP  is like trying to put out a volcano with a bucket of water.

30 minutes ago, Rapax said:

Villa's allowable losses are £61m as the three year period still includes a part of the season in the Premier League. Price of Football confirms the loss for FFP purposes is £58.6m, so they've not breached FFP. 

 

Neither have Sheffield Wednesday or Derby, only Birmingham have, as the EFL confirmed. They'll all have to fo something different if they dont get promoted.

Why anybody would believe garbage in the Mail or the S*n I don't know.

 

I won’t believe it until I’ve read it in the Post. 

[Davefevs]

47 minutes ago, Rapax said:

Villa's allowable losses are £61m as the three year period still includes a part of the season in the Premier League. Price of Football confirms the loss for FFP purposes is £58.6m, so they've not breached FFP. 

 

Neither have Sheffield Wednesday or Derby, only Birmingham have, as the EFL confirmed. They'll all have to fo something different if they dont get promoted.

Why anybody would believe garbage in the Mail or the S*n I don't know.

 

But for Villa that is for the 3 seasons 15/16-17/18, not the current 3 season rolling period 16/17-18/19, where 18/19 will be based on projected accounts. 

[Mr Popodopolous]

3 hours ago, 1960maaan said:

Projected accounts , can anyone tell me how it works .

Say Villa's projected accounts include player sales, maybe £35m , and they then predict they will be within FFP. What if they get promoted, they could then do the exact opposite. What I'm trying to say, is what is stopping a club from putting in optimistic ( call them that to be kind) projected accounts, then after promotion they turn out to be way off ? 

They submit them in the existing season- maybe March- and looking at Aston Villa they haven't even made £35m in incoming fees, reduced amortisation and probably wage reduction combined- let alone transfer profit! The two transfer periods will have already been accounted for by the time the projected accounts submitted I believe.

1 hour ago, Rapax said:

Villa's allowable losses are £61m as the three year period still includes a part of the season in the Premier League. Price of Football confirms the loss for FFP purposes is £58.6m, so they've not breached FFP. 

 

Neither have Sheffield Wednesday or Derby, only Birmingham have, as the EFL confirmed. They'll all have to fo something different if they dont get promoted.

Why anybody would believe garbage in the Mail or the S*n I don't know.

 

Dave beat me to the punch but that's the 3 years to last season- reckon Aston Villa and Sheffield Wednesday at the minimum will be in breach for this season, that is the 3 years from 2016/17-2018/19 and maybe Derby but that is a bit less clear.

 

50 minutes ago, Major Isewater said:

Parachute payments are all that is wrong with football today . 

There is little incentive to balance the books when you reach the summit because trying to stay in the Prem is everything.

Going down with the ‘ safety net ‘ of three years payments  just encourages those clubs to keep throwing more money at a promotion tilt in the hope that they go back up before they hit the skids.

Great for those who do but very bad news for the unsuccessful clubs .

Then there is the ‘ knock on ‘ effect where clubs are going broke just trying  to compete with these former Prem clubs in the Championship.

If the EFL and the Prem are really interested in the game as a whole , which I doubt , then they would find a more balanced solution . FFP  is like trying to put out a volcano with a bucket of water.

I won’t believe it until I’ve read it in the Post. 

Don't agree- reluctantly would class them as a necessary evil and all that crap.

They do two things- if you don't have parachute payments then what incentive is there for a newly promoted side to even try? None because falls of £100m-£7-8m in TV income puts most clubs into admin. Secondly, well the first and the second cross over- I'd reform parachute payments but I don't know if there is a strong case for scrapping them in full. The other thing is they used to be pretty modest perhaps 10 20 years ago- now they're huge especially in years 1 and 2- which I agree creates a big distortion.

31 minutes ago, Davefevs said:

But for Villa that is for the 3 seasons 15/16-17/18, not the current 3 season rolling period 16/17-18/19, where 18/19 will be based on projected accounts. 

You beat me to it but yes! This will be the big test especially if Aston Villa finish in the top 6.

Edited March 26, 2019 by Mr Popodopolous

[Grey Fox]

A'm starting to like this fair play rule.

Should the FA have the balls to manage it properly surely this must lead , in the Championship at least, to pressure for clubs over a period to cut the rediculous level of player wages and associated costs such as agents fees, encourage the use of youngsters from the academies, and basically make the clubs more secure, avoiding future Bolton's?

 

And if they can get rid of all our play off rivals............

[Mr Popodopolous]

15 minutes ago, Grey Fox said:

A'm starting to like this fair play rule.

Should the FA have the balls to manage it properly surely this must lead , in the Championship at least, to pressure for clubs over a period to cut the rediculous level of player wages and associated costs such as agents fees, encourage the use of youngsters from the academies, and basically make the clubs more secure, avoiding future Bolton's?

 

And if they can get rid of all our play off rivals............

Ironically, Bolton probably aren't in 3 year breach, yet their issue is cash flow- or skint basically, whereas the 2 Birmingham clubs, and possibly Derby and Sheffield Wednesday the issue is the reverse.

However, that unusual case aside? I fully concur!

Edited March 26, 2019 by Mr Popodopolous

[Rapax]

54 minutes ago, Davefevs said:

But for Villa that is for the 3 seasons 15/16-17/18, not the current 3 season rolling period 16/17-18/19, where 18/19 will be based on projected accounts. 

Accounts are up to February each year. This season will fall into next year accounts and so on.

[downendcity]

14 minutes ago, Grey Fox said:

A'm starting to like this fair play rule.

Should the FA have the balls to manage it properly surely this must lead , in the Championship at least, to pressure for clubs over a period to cut the rediculous level of player wages and associated costs such as agents fees, encourage the use of youngsters from the academies, and basically make the clubs more secure, avoiding future Bolton's?

 

And if they can get rid of all our play off rivals............

You would hope that would be the case.

However, the danger is that it would skew even more the disparity between the relegated clubs enjoying huge parachute payments and the rest that do not.

[Rapax]

The EFL have stated that only Birmingham breached the rules. Their Judgment mentions their conduct as they're also the only ones stupid enough to ignore the EFL too.

Nobody else has breached. They'll all have to cut costs if none of them go up, likely wages I expect given what POF has for their average player pay.

Edited March 26, 2019 by Rapax

[Mr Popodopolous]

21 minutes ago, Rapax said:

Accounts are up to February each year. This season will fall into next year accounts and so on.

Where do you get that timescale from?

Clubs have to submit projected accounts to the EFL in order to enable the possibility of punishment in the existing season...

By March, clubs will roughly know their incomings and outgoings over the course of a season.

Pay particular attention to the bits in bold.

Quote

 

16.17

The Future Financial Information shall:

16.17.1

be prepared in accordance with the accounting principles adopted in the preparation of the Championship Club’s annual accounts (except where the accounting principles and policies are to be changed in the subsequent annual accounts, in which case the new accounting principles and policies should be followed);

16.17.2

be approved in writing by the board of directors of the company to which they relate;

16.17.3

include in the explanatory notes thereto principal assumptions and risks; and

16.17.4

include for comparison profit and loss accounts for the period covered by the Annual Accounts and interim accounts submitted pursuant to Regulation 16.2 and 16.11, a forecast for the current financial year and a balance sheet as at the date of the interim accounts submitted pursuant to Regulation 16.11.

 

 

 

Quote

2.8.1       the Club shall provide, by 31^st March in the relevant Season, Future Financial Information to cover the period commencing from its last accounting reference date (as defined in section 391 of the 2006 Act) until the end of T+2 and a calculation of estimated aggregated Adjusted Earnings Before Tax until the end of T+2 based on that Future Financial Information;

 

Quote

 

Clubs’ Financial Records

16.1

All Clubs shall keep their financial records in accordance with the provisions of The Football Association Rules and The League may arrange for an inspection of all such books.

16.2

Each Club shall submit a copy of its Annual Accounts (as defined in Regulation 16.3 below) to The League, but in any event:

16.2.1

by no later than 1st March following the end of the financial year to which those Annual Accounts relate (in the case of a Championship Club); or

16.2.2

by no later than the date on which the Club is required to file its accounts at Companies House (in case of League One and League Two Clubs).

16.3

For the purposes of this Regulation 16, Annual Accounts means the annual accounts in respect of the Club’s most recent financial year (such accounts to be prepared and audited in accordance with applicable legal and regulatory requirements) together with a copy of the directors’ report for that year and a copy of the auditor’s report (if any) on those accounts.

16.4

If the Club considers it appropriate, or The League so requests, the Annual Accounts required to be submitted in accordance with Regulation 16.2 shall relate to the Group of which the Club is a member.

 

 

Edited March 26, 2019 by Mr Popodopolous

[Davefevs]

29 minutes ago, Rapax said:

Accounts are up to February each year. This season will fall into next year accounts and so on.

@Mr Popodopolous has beaten me to it this time!!!

Each club must report on either a May, June or July year-end. The third years accounts are on a projected basis, submitted early (by 31/3) than financial year end to allow sanctionin the season. 

Having sorted out Brum for the 3 year period to 17/18, they (the EFL) now have their biggest test....how to apply sanction if a breach has occurred during the current season.

They made a pigs ear of the process with Brum because they took too long. 

Now we know the sanctions for the value of breach, it really ought to simple to view to 2 years accounts plus the projection and enforce sanction soon after the deadline of 31/3. 

If I were SL I’d be telling LJ to keep fighting til the end of the season even if it looks a lost cause. Three of our rivals may get points deductions late on...whether fair or not so late in the season. 

I really don’t think any club gave grounds to complain over blatant overspending. 

[Major Isewater]

42 minutes ago, Davefevs said:

@Mr Popodopolous has beaten me to it this time!!!

Each club must report on either a May, June or July year-end. The third years accounts are on a projected basis, submitted early (by 31/3) than financial year end to allow sanctionin the season. 

Having sorted out Brum for the 3 year period to 17/18, they (the EFL) now have their biggest test....how to apply sanction if a breach has occurred during the current season.

They made a pigs ear of the process with Brum because they took too long. 

Now we know the sanctions for the value of breach, it really ought to simple to view to 2 years accounts plus the projection and enforce sanction soon after the deadline of 31/3. 

If I were SL I’d be telling LJ to keep fighting til the end of the season even if it looks a lost cause. Three of our rivals may get points deductions late on...whether fair or not so late in the season. 

I really don’t think any club gave grounds to complain over blatant overspending. 

Would be a miracle if the EFL actually did something that might help little old Bristol City , more likely they will hold off until it becomes clear that a more fashionable club will benefit.

Chip on my shoulder ?

Damn straight .

Think Diedhiou’s ‘ spitting ‘ incident, Bailey Wright being sent off after having been fouled, you get the picture.

 

[Busterrimes]

12 minutes ago, Major Isewater said:

Would be a miracle if the EFL actually did something that might help little old Bristol City , more likely they will hold off until it becomes clear that a more fashionable club will benefit.

Chip on my shoulder ?

Damn straight .

Think Diedhiou’s ‘ spitting ‘ incident, Bailey Wright being sent off after having been fouled, you get the picture.

 

Major, you are confusing EFL and FA there. The two incidents you mention were dealt with by the FA not the EFL

[Major Isewater]

2 hours ago, Busterrimes said:

Major, you are confusing EFL and FA there. The two incidents you mention were dealt with by the FA not the EFL

Thank you for your clarification but we all know that the end result is the same.

[JamesBCFC]

"Indeed, in Birmingham's case, although they have now completely fallen out of the Championship play-off picture from 13th to 18th they are still 14 points above the relegation places and should be capable enough to stay in the division."

 

 

erm.

41 (Brum points) - 36 (Rovrum points) = 5.

The Post really doesn't help itself.

[Mr Popodopolous]

This is interesting.

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

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

Edited March 27, 2019 by Mr Popodopolous

[Davefevs]

Not quite Championship FFP, but Burnley’s successful model

 

[Mr Popodopolous]

Burnley showing the way for those outside the elite! I reckon (subject to wealth of owners) If they wished they could really push the boat out next season if they survive, if they really wanted to try and have a crack at getting close to Wolves then they could- bravo to them!

Huddersfield made about £25-30m in profit last season too. It either hasn't been invested well or much on the pitch though but they are all about trying to be as sustainable as possible.

2 good models- think the latter (Huddersfield) spent a decent amount on helping add infrastructure etc, something like £20m on a training ground announced this season- they remind me in terms of the benefits of an unexpected promotion to Blackpool, but the difference is they have a superb owner who is a fan and should be in a good place for years to come. Plus they have a better and bigger ground with facilities than Blackpool already in place.

Edited March 29, 2019 by Mr Popodopolous

[SinéadB]

[Mr Popodopolous]

Bear in mind promotion bonuses don't count...that will surely have been factored into the wages.

Plus Infrastructure Investment etc don't count towards FFP- it looks bad but wouldn't surprise if they were just the right side of the line. They've been or have started building a new training ground- again doesn't count towards FFP losses. 

Also, Fulham Leisure and Fulham FC accounts while broadly similar aren't identical- the real one to look out for according to Kieran Maguire is what appears to be their holding company- Cougar Holdco London Limited. When they release and Fulham FC release, the full picture will (well should hopefully) become apparent!

Edited March 29, 2019 by Mr Popodopolous

[Mr Popodopolous]

Results for Bolton, Brentford, Derby, Leeds and WBA due today.

Or maybe more likely submitted today and filtering out in the next day or 2.

Sheffield Wednesday's were due the end of February but they got a 2 month extension of their accounting year so the end of April the new due date- mustn't be good news...

Edited April 1, 2019 by Mr Popodopolous

[Mr Popodopolous]

WBA lost £7.5m last season according to news slipping out, but their accounts not yet published in full.

Now they shouldn't be in trouble until next season at the earliest due to a load of factors- all depends how much the owners are willing to put in. That loss though was a huge downturn though from a profit of £39.7m in 2016/17.

[downendcity]

On 01/04/2019 at 09:08, Mr Popodopolous said:

Results for Bolton, Brentford, Derby, Leeds and WBA due today.

Or maybe more likely submitted today and filtering out in the next day or 2.

Sheffield Wednesday's were due the end of February but they got a 2 month extension of their accounting year so the end of April the new due date- mustn't be good news...

I thought that all clubs are required to provide projected accounts for the 3rd year for ffp by 31st March.

If they are projected accounts it doesn't matter when the club's accounting year end is and the EFL should by now have received all clubs accounts. If a club has not submitted the required financial information by the deadline should that not incur some sort of penalty ( as would be the case if you or I don;t submit tax returns by the HMRC deadline) and if a club breaches ffp, and is late submitting accounts, could the EFL apply additional penalty e.g. a fine?

 

[Mr Popodopolous]

18 minutes ago, downendcity said:

I thought that all clubs are required to provide projected accounts for the 3rd year for ffp by 31st March.

If they are projected accounts it doesn't matter when the club's accounting year end is and the EFL should by now have received all clubs accounts. If a club has not submitted the required financial information by the deadline should that not incur some sort of penalty ( as would be the case if you or I don;t submit tax returns by the HMRC deadline) and if a club breaches ffp, and is late submitting accounts, could the EFL apply additional penalty e.g. a fine?

 

Yeah true- I just meant from our perspective it'd be difficult to find out. 

Likely they have to submit projected accounts to the EFL and actual financial info ahead of Companies House stuff- it's quite confusing IMO but either way even if the EFL have it, it's not good for transparency. Probably get fined by Companies House.

[Coppello]

On 27/03/2019 at 09:51, Mr Popodopolous said:

This is interesting.

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

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

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

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

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

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

 

[Mr Popodopolous]

Smoke and mirrors time...

Derby posted a £14.6m profit for last season despite only £3m in profit on player sales...staff costs up by £5.9m and whereas turnover rose only £600,000.

I'm not saying they breached FFP as such- what I am suggesting is that their profit is totally bogus. Estimates online suggest that their 'true' loss was more like £24.4m- again not suggesting they breached FFP over the 3 years just to be clear, maybe just the right side of the line but maybe £40m of 'income' should be stripped out.

Essentially Mel Morris purchased Pride Park through a separate company owned by him- and leased it back- if this counts as income under FFP or legit under FFP, then the whole system is ******. They haven't yet released their full accounts- still waiting on Bolton, Leeds too- WBA have submitted and they are being processed. Derby have not yet released their full accounts.

Brentford released theirs, made a loss of about £3.86m though if it wasn't for profit on player sales, that'd have been not far off £19m.

Edited April 2, 2019 by Mr Popodopolous