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The Championship FFP Thread (Merged)


Mr Popodopolous

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Should be 3 stages to this set of investigations IMO.

Stage One- Test the value and whatever comes out is the value. If correct or broadly so then fair enough, if not. we escalate to the next stage...

Stage Two- If the values are deemed to be vastly overinflated- and I don't think the Madejski is, £26.5m for a modern ground built in late 1990s seems reasonable, capacity 24,161. The others are less clear. Anyway Stage Two should then be deduction of the surplus between sale price and independent valuation from the FFP calculations- with current, and past FFP results recalculated on this revised basis. Has to pass the duck test /reasonableness test to avoid this stage!

Stage Three- If applicable by which I mean if the readjustment pushes a club over the limits then it's an EFL independent Disciplinary Commission Birmingham style. Even if it doesn't push them to this stage, the "profit" still must be readjusted accordingly with the readjusted FFP results the new starting point.

With an additional possibility of deliberate/aggravated breaches coming into the equation if applicable. Attempts to deceive, distort the competition etc.

Edited by Mr Popodopolous
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1 hour ago, Mr Popodopolous said:

Should be 3 stages to this set of investigations IMO.

Stage One- Test the value and whatever comes out is the value. If correct or broadly so then fair enough, if not. we escalate to the next stage...

Stage Two- If the values are deemed to be vastly overinflated- and I don't think the Madejski is, £26.5m for a modern ground built in late 1990s seems reasonable, capacity 24,161. The others are less clear. Anyway Stage Two should then be deduction of the surplus between sale price and independent valuation from the FFP calculations- with current, and past FFP results recalculated on this revised basis. Has to pass the duck test /reasonableness test to avoid this stage!

Stage Three- If applicable by which I mean if the readjustment pushes a club over the limits then it's an EFL independent Disciplinary Commission Birmingham style. Even if it doesn't push them to this stage, the "profit" still must be readjusted accordingly with the readjusted FFP results the new starting point.

With an additional possibility of deliberate/aggravated breaches coming into the equation if applicable. Attempts to deceive, distort the competition etc.

From the EFL's point of view that's probably how they will look at it, but from the clubs point of view (those that got valuations anyway) they will likely look at it a very different way.

Stage One - Why would the clubs just accept the EFL's independent valuations if they vary from the independent ones they obtained? You can't just argue that the EFL obtained one is the correct one simply because they are the ones that obtained it. If the clubs have also obtained their own independent valuations then they will argue that theirs are the correct ones too, no? Is that not the whole point of getting them in the first place?

Stage Two - Again, if the EFL's were lower they could argue that the clubs were overinflated, but the clubs could counter argue that the EFL's were undervalued.

After all are any of the people involved in a club actually qualified to know their stadiums valuations? Presumably this is why they get in companies to provide them with it. They will surely have taken that valuation in good faith?

With ours particularly, given the £55m valuation in 2007 (presumably it was similar in 2013? Given the wording in the accounts mentioned previously), with them knowing all the work they've done since (pretty sure most if not all was also after the 2013 revaluation) and how much that has cost etc, I can't imagine that anyone would think anything wrong of a valuation of £81m around 11 (or 5 if that one was similar) years later?

You actually have no idea whether Reading's was at the correct value either, but as it was lower you're making it the benchmark??

The book value of an asset actually doesn't necessarily mean a lot does it, unless it was very recently revalued?

I notice from looking through Reading's accounts that they didn't appear to have ever revalued their stadium from the time it was built to the time it was sold, doesn't this mean the book value means very little to the actual valuation of the stadium? Don't forget when we revalued Pride Park it (the net book value) went from around £21m to around £60m, nothing had changed bar the stadiums valuation. The depreciation also went down, so the revaluation had obviously taken this into account, as the link I posted yesterday seems to suggest happens.

If this is the case you cannot judge Reading's stadium value on the book value given that was only relevant to its construction cost (and any additions made). The only reason their value changed (upwards) through any of the accounts was because of those additions, which were every year from the year their stadium value was reclassified from 'Assets in the course of construction', the largest of which was around £4.7m.

I notice it appears they disposed of another asset in 2015, on the books for around £5.6m, I think profit on disposal was listed as £11m, but this was before the FFP regulations changed to allow the profit in 2016. They actually made more profit on the disposal of this asset (I'm not actually sure what it was) compared to their stadium.

Stage Two and Three - If the EFL's valuations were to come back different to (ie. lower than) the clubs, the scenario you mention above assumes that the clubs knew that the valuations were too high and they have knowingly gone over FFP limits.

If you adjust the allowed spending in line with a potentially lower EFL valuation which subsequently means the clubs have gone over the allowed limit and would then be punished, then they will surely argue they would not have done this if they knew at the start that the valuation would need to be queried as they took it in good faith?

I'm not sure how you could punish a club based on a further valuation providing they have all the evidence of the valuation they obtained themselves at the time?

I'm sure if the above happened there would be a legal challenge from the clubs involved, and it would be a very long and drawn out process.

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1 hour ago, DerbyFan said:

From the EFL's point of view that's probably how they will look at it, but from the clubs point of view (those that got valuations anyway) they will likely look at it a very different way.

Stage One - Why would the clubs just accept the EFL's independent valuations if they vary from the independent ones they obtained? You can't just argue that the EFL obtained one is the correct one simply because they are the ones that obtained it. If the clubs have also obtained their own independent valuations then they will argue that theirs are the correct ones too, no? Is that not the whole point of getting them in the first place?

Stage Two - Again, if the EFL's were lower they could argue that the clubs were overinflated, but the clubs could counter argue that the EFL's were undervalued.

After all are any of the people involved in a club actually qualified to know their stadiums valuations? Presumably this is why they get in companies to provide them with it. They will surely have taken that valuation in good faith?

With ours particularly, given the £55m valuation in 2007 (presumably it was similar in 2013? Given the wording in the accounts mentioned previously), with them knowing all the work they've done since (pretty sure most if not all was also after the 2013 revaluation) and how much that has cost etc, I can't imagine that anyone would think anything wrong of a valuation of £81m around 11 (or 5 if that one was similar) years later?

You actually have no idea whether Reading's was at the correct value either, but as it was lower you're making it the benchmark??

The book value of an asset actually doesn't necessarily mean a lot does it, unless it was very recently revalued?

I notice from looking through Reading's accounts that they didn't appear to have ever revalued their stadium from the time it was built to the time it was sold, doesn't this mean the book value means very little to the actual valuation of the stadium? Don't forget when we revalued Pride Park it (the net book value) went from around £21m to around £60m, nothing had changed bar the stadiums valuation. The depreciation also went down, so the revaluation had obviously taken this into account, as the link I posted yesterday seems to suggest happens.

If this is the case you cannot judge Reading's stadium value on the book value given that was only relevant to its construction cost (and any additions made). The only reason their value changed (upwards) through any of the accounts was because of those additions, which were every year from the year their stadium value was reclassified from 'Assets in the course of construction', the largest of which was around £4.7m.

I notice it appears they disposed of another asset in 2015, on the books for around £5.6m, I think profit on disposal was listed as £11m, but this was before the FFP regulations changed to allow the profit in 2016. They actually made more profit on the disposal of this asset (I'm not actually sure what it was) compared to their stadium.

Stage Two and Three - If the EFL's valuations were to come back different to (ie. lower than) the clubs, the scenario you mention above assumes that the clubs knew that the valuations were too high and they have knowingly gone over FFP limits.

If you adjust the allowed spending in line with a potentially lower EFL valuation which subsequently means the clubs have gone over the allowed limit and would then be punished, then they will surely argue they would not have done this if they knew at the start that the valuation would need to be queried as they took it in good faith?

I'm not sure how you could punish a club based on a further valuation providing they have all the evidence of the valuation they obtained themselves at the time?

I'm sure if the above happened there would be a legal challenge from the clubs involved, and it would be a very long and drawn out process.

Stage One- More reliable from a neutral Governing body than a club- it just is. EFL should have been involved in the valuation process from the start IMO. Well I say more reliable, it's actually 2 valuers who may have a different view but justice must be seen to be done as well as being done- principles applicable here.

Stage Two- Yes, this aspect is true. The two separate valuations, unclear how you would go about settling that part of it. Taken in good faith, yes- but it is awfully interesting that clubs who have done it were largely near or over the line with FFP without it. Why don't other fully compliant clubs do it for example as a revenue boost? Suggests a slight vested interest here...agree that an outside company is necessary.

Yeah, additions cover work done do they not? Additions under Tangible Fixed Assets- certainly the cost involved. On the other hand, we have depreciation. All needs to be factored in.

£55m in 2007- what has enhanced the value other than work on the ground? Is it to the tune of nearly 50% even factoring in depreciation since this time?

Reading's looks more realistic but yes without checking their accounts for the last 15-20 years it'll be hard to tell- not done that yet, could have been revalued, written down, written up in that time- had a load of additions.

Book value means little agreed- read some of that link, will do so in full. Where was the £60m, was this the 2013 revaluation?

Assets in the course of construction- that could mean training ground, infrastructure or whatever else would be classed as a Tangible Fixed Asset though unless specifically stated as such. The interesting but doubtless perfectly legit thing is that I see no reference to the amount that the 2013 revaluation came to, unlike the 2007 one. Been looking at assets under construction and still doesn't explain the uplift.

Probably an old training ground or something, the Reading disposal. In all honesty, part of me isn't 100% against disposal of fixed assets even stadia regarding FFP if it is to a verifiable 3rd party, open and transparent and full market rent is paid though it is simpler and probably best to just disallow it from the calculations end of. Maybe the old Elm Park site?

Found it from 2016:

Quote

Yes, the club's accounts also include an £11m gain in disposal of fixed assets which in this case is the value of the land around the Stadium to the 'RFC Prop Co' who will be developing Royal Elm Park. While that's all well and good on the balance sheet, Dave points out that it can't be factored into FFP rules. Fortunately we didn't break FFP rules overall as with other factors such as youth development and depreciation meant that we came in above the £6m loss threshold.

Stage Two and Three- Not inconceivable that a club knowingly exceed FFP limits- look at Birmingham and their idiotic purchase of Pedersen when under a soft embargo! Admittedly, none of you, Aston Villa, Reading or Sheffield Wednesday have acted like this! Pure idiocy that act...but they surely knew they were over but did it anyway!

I can see that argument but there are not a huge number of loopholes to exploit that aside.

Because a further valuation from the EFL is more neutral and therefore justice is more easily seen to have been done than if commissioned by a club!

I would suspend the clubs who take legal action if I had my way. It can be done- these arbitration panels are pretty binding- QPR nearly got refused re-entry to the FL in 2015 when threatening court etc, and that was a real risk until they decided to go in and fight their case internally within the arbitration process. Vote of the 24 Championship clubs to suspend membership of legal action- maybe something within the regs or small print, articles of association? Would be interesting to see how clubs would vote in this scenario even if it had no effect! EFL commission on this matter can issue anything from a warning to expulsion from the Football League, it's an independent Commission and they have a very wide remit of powers! Pretty sure in 2014/15 there was a risk that the EFL would allocate QPR no fixtures if it came to it with regards that FFP scenario on their return.

You talk about legal action, I'm convinced there would be plenty of clubs lined up on the other side. Wouldn't surprise me if the many compliant clubs have looked at legal action and that this has helped to bring this about!

Oh yeah the EFL Independent Disciplinary Commission. Provide a warning, expel a club- and pretty well anything in between. Full list on the EFL site!

Different club by club too- Aston Villa were too far gone before Villa Park, save for the sale of Grealish. You I'm not wholly convinced were in breach, Reading's £6.5m- margins must've been tight! Sheffield Wednesday well their transaction was very, very questionable for multiple reasons.

Edited by Mr Popodopolous
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I pretty out of my depth. With some of the discussion here (although it makes a fascinating read). But with regard to the valuation I would have thought you would need a chartered surveyor valuation to ensure no foul play if part of Derby County's valuation process used an a accredited chartered surveyor valuation it would be hard to disbute the valuation. It regularly used when parties may have and interest in inflating or deflating value - eg. Obtaining a value of property to pay off loans  in tge gov help to buy scheme. 

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1 hour ago, Mr Popodopolous said:

Stage One- More reliable from a neutral Governing body than a club- it just is. EFL should have been involved in the valuation process from the start IMO. Well I say more reliable, it's actually 2 valuers who may have a different view but justice must be seen to be done as well as being done- principles applicable here.

Stage Two- Yes, this aspect is true. The two separate valuations, unclear how you would go about settling that part of it. Taken in good faith, yes- but it is awfully interesting that clubs who have done it were largely near or over the line with FFP without it. Why don't other fully compliant clubs do it for example as a revenue boost? Suggests a slight vested interest here...agree that an outside company is necessary.

Yeah, additions cover work done do they not? Additions under Tangible Fixed Assets- certainly the cost involved. On the other hand, we have depreciation. All needs to be factored in.

£55m in 2007- what has enhanced the value other than work on the ground? Is it to the tune of nearly 50% even factoring in depreciation since this time?

Reading's looks more realistic but yes without checking their accounts for the last 15-20 years it'll be hard to tell- not done that yet, could have been revalued, written down, written up in that time- had a load of additions.

Book value means little agreed- read some of that link, will do so in full. Where was the £60m, was this the 2013 revaluation?

Assets in the course of construction- that could mean training ground, infrastructure or whatever else would be classed as a Tangible Fixed Asset though unless specifically stated as such. The interesting but doubtless perfectly legit thing is that I see no reference to the amount that the 2013 revaluation came to, unlike the 2007 one. Been looking at assets under construction and still doesn't explain the uplift.

Probably an old training ground or something, the Reading disposal. In all honesty, part of me isn't 100% against disposal of fixed assets even stadia regarding FFP if it is to a verifiable 3rd party, open and transparent and full market rent is paid though it is simpler and probably best to just disallow it from the calculations end of. Maybe the old Elm Park site?

Found it from 2016:

Stage Two and Three- Not inconceivable that a club knowingly exceed FFP limits- look at Birmingham and their idiotic purchase of Pedersen when under a soft embargo! Admittedly, none of you, Aston Villa, Reading or Sheffield Wednesday have acted like this! Pure idiocy that act...but they surely knew they were over but did it anyway!

I can see that argument but there are not a huge number of loopholes to exploit that aside.

Because a further valuation from the EFL is more neutral and therefore justice is more easily seen to have been done than if commissioned by a club!

I would suspend the clubs who take legal action if I had my way. It can be done- these arbitration panels are pretty binding- QPR nearly got refused re-entry to the FL in 2015 when threatening court etc, and that was a real risk until they decided to go in and fight within the arbitration process. Vote of the 24 Championship clubs to suspend membership of legal action- maybe something within the regs or small print, articles of association? Would be interesting to see how clubs would vote in this scenario even if it had no effect! EFL commission on this matter can issue anything from a warning to expulsion from the Football League, it's an independent Commission and they have a very wide remit of powers! Pretty sure in 2014/15 there was a risk that the EFL would allocate QPR no fixtures if it came to it with regards that FFP scenario on their return.

That's my point though, it's a different person giving their valuation, nothing about it makes it more likely to be right than the one from the club. Just as an aside, what would happen if the valuation actually found it to be worth more?

Well yes, to help FFP compliance would likely be why they've been sold, but that doesn't mean they were overvalued. Clubs with no need (or no wish) to sell aren't likely to do it as a revenue boost so they don't need to get a valuation.

Yes, it does need to be factored in, which is what the accounts do.

What enhanced the value on the books from £21m to £60m the first time it was revalued? I can only assume that market changes have affected the valuation as well as the work done to it. As I mentioned, the depreciation seemed to be included in the original revaluation as it changed from £5.6m to £1.3m with that, so any further revaluation would I assume also take into account the depreciation.

Reading's doesn't appear to have been revalued (there was no revaluation reserve listed after the stadium appeared), written down or written up during that time, there were however additions each year. I made a note of the figures from the 'Freehold land and buildings' section, and checked for the other bits like revaluation reserve elsewhere, hope this helps as a starting point (and I'm really, really hoping this shows up ok when I post! ?)

            COST/VALUATION  DEPRECIATION    NET BOOK VALUE    ADDITIONS    RECLASSIFICATION    DISPOSALS    PROFIT ON DISPOSAL    REVALUATION RESERVE

1996    2,424,539                173,917                  2,250,622                   -                       -                                       -                        -                                          1,750,000
1997    3,492,355                192,355                  3,300,000                   -                       -                                       -                        -                                          2,727,566
1998    3,492,355                199,986                  3,292,369                   -                       -                                       -                        -                                          2,727,566
1999    30,284,529              403,790                 29,880.739                 -                      30,284,529^                   (3,492,355)     674,343                              -
2000    30,285,513              1,009,015              29,276,498                 984                  -                                      -                        4,250,000+                         -
2001    30,195,564              1,610,528              28,585,306                (89,949)           -                                      -                         -                                          -
2002    30,756,172              2,217,179              28,538,993                 560,608           -                                     -                         -                                          -
2003    32,108,199              2,880,227              29,227,972                1,352,028         -                                     -                         -                                          -
2004    32,657,449              3,597,711              29,059,738                549,250            -                                     -                         -                                          -
2005    33,517,935              4,315,204              29,202,731                860,486            -                                     -                         -                                          -
2006    33,676,456              5,195,931              28,480,525                173,725            -                                    (15,204)            -                                          -
2007    36,604,151              6,061,510              30,542,641                2,927,695         -                                    -                          -                                          -
2008    41,309,673              6,936,345              34,373,328                4,705,522         -                                    -                          -                                          -
2009    41,514,968              8,409,454              33,105,514                264,523            -                                    (59,228)             -                                         -
2010    41,574,629              9,947,932              31,626,697                59,661               -                                    -                          -                                         -
2011    41,566,830             11,494,789             30,072,041                27,944               -                                   (35,743)            -                                          -
2012    42,786,641             13,044,124             29,742,517                1,219,811          -                                   -                          -                                          -
2013    45,899,086             14,717,695             31,181,391                3,112,445         -                                    -                          -                                          -
2014    45,749,698             16,159,042             29,590,656                870,920             -                                   (1,020,308)       -                                          -
2015    42,434,216             17,670,997             24,763,219                2,330,873          -                                   (5,646,355)      11,000,000                        -
2016    43,336,478             19,036,759             24,299,719                902,262              -                                   -                          -                                         -
2017*   38,689,077            17,516,376             21,172,701                246,399              -                                   -                          -                                          -
2018~  2,864,247               2,216,071              648,176                      551,237              -                                  (36,376,068)     6,518,222                         -

^ From 'Assets in the course of construction'
+ During the year, the company granted a 125 year lease for part of its land to Madejski Stadium Hotel Limited for £4,250,000
* 'Training ground improvements' split off from 'Freehold land and buildings'
~ Sale not listed under 'Related party transactions', sale was to their immediate parent company Renhe Sports Management Co Limited, so presumably they used FRS 102 not to disclose it.

The £60m I was referring to was when the net book value in the accounts jumped up from £21.6m to £60.1m with the revaluation in the 2008 accounts.

The 'Assets in the course of construction' I was referring to was Reading's stadium, not to do with our accounts, see above. I assumed the 2013 valuation of our stadium was similar to the 2007 one due to the wording I quoted yesterday, where it said about 'material change'?

Ahh thanks, that explains that, I didn't make a note, so obviously didn't see that mentioned. That's quite high? £11m profit just on the land?

Yes, I know Birmingham ignored it, but we have said all along that we will abide by it, there has never been a time when we've said anything other than that, I assume the others are the same.

What I meant about the valuation and not having gone over otherwise was because it's perfectly allowed to use the profit from a stadium sale (that is clear in the rules and doesn't seem to be disputed) the issue being mentioned at the moment is the valuation. The clubs will have worked out their figures on the valuation they were given. Had this valuation been lower, they would have adjusted their future spending to counteract that, in our case, I don't believe we needed to post a £14.6m profit? In which case, say the stadium was valued at £61m for example, the £5.4m loss posted instead should still have seen us under FFP for that period as I don't believe we were over from the 2 years before, but we would adjust future spending to account for that. Surely as it is we will have worked our future seasons planning on the valuation we were given, so if the valuation is lowered it might see us over, where we wouldn't have been if we had known that was the case in the first place.

It's still entirely possible that the EFL's valuation is the same/very similar as the clubs anyway, given that they have both commissioned independent valuations.

They'd be perfectly entitled to take legal action (and that's also why there's an appeals process). It would be a very different situation for a club that knows they've not kept to the rules and have made no attempt not to, to a club that knows they have and have the proof of that, ie. an independent valuation stating the value they worked to.

Edited by DerbyFan
Showing up not too bad thankfully! Shame 'reserve' is on the next line down though!
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2 hours ago, Mr Popodopolous said:

(Potentially) very interesting Tweet by Andy Holt here- or is it that only Championship clubs would've voted on the regulation about asset sales counting towards FFP?

Certainly makes you wonder...

It's a Championship only rule so I can't imagine he'd have had a vote on it.

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16 minutes ago, DerbyFan said:

It's a Championship only rule so I can't imagine he'd have had a vote on it.

Makes sense.

Still, and especially under Harvey, I wouldn't put much past the EFL. This subtle yet important rule change certainly was slipped through, usually there is something on the website or some kind of publicity.

Was notable that the Telegraph article said when this rule was changed, they didn't expect clubs to utilise it. Big failings in Governance!

Reading your forum is interesting, a few cite Leeds doing sale and leaseback. It's not quite the same- initially it was when they were screwed in the mid 2000s.

That was to a third party I believe and rent was paid. Unsure how much they profited but was surely not double NBV at that time (I know NBV misleading, not sale price etc). £8m!! 2004 money granted but £8m!!

They now lease it from the owner but he brought it back from a 3rd party- Leeds certainly didn't profit in anything like the same way.

I don't have such a problem with it if it's a true 3rd party, unrelated arms length transaction as a club is taking a real risk in that scenario!

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6 minutes ago, Mr Popodopolous said:

Makes sense.

Still, and especially under Harvey, I wouldn't put much past the EFL. This subtle yet important rule change certainly was slipped through, usually there is something on the website or some kind of publicity.

Was notable that the Telegraph article said when this rule was changed, they didn't expect clubs to utilise it. Big failings in Governance!

The thing I don't get is, if Championship clubs were given a vote on the rules, then surely they must have known it said this?

Even if it was unintentionally removed during the change of rules, wouldn't all of the Championship clubs have been given a copy of the rules to go over before any vote? Surely that's what would've happened?

If that's the case then I don't see it as only the EFL's problem, because if so many clubs are against the rules saying that then surely one of them would have noticed and pointed it out at the time?

I can't help but wonder if they knew full well it said it and it's only now become an issue because of how it's been used?

?‍♀️

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30 minutes ago, DerbyFan said:

The thing I don't get is, if Championship clubs were given a vote on the rules, then surely they must have known it said this?

Even if it was unintentionally removed during the change of rules, wouldn't all of the Championship clubs have been given a copy of the rules to go over before any vote? Surely that's what would've happened?

If that's the case then I don't see it as only the EFL's problem, because if so many clubs are against the rules saying that then surely one of them would have noticed and pointed it out at the time?

I can't help but wonder if they knew full well it said it and it's only now become an issue because of how it's been used?

?‍♀️

Agreed, seems pretty odd...

Certainly you'd think so- hope so too!

Yes, agreed. Surprised that a lot of clubs seemed not to raise this as an issue, certainly not in public, before the fact.

I wonder too. Have to say all seems quite odd. Part of me thinks it's EFL looking to limit damage/flak post Bolton and Bury.

I don't like the practice with related parties but I do wonder what exactly the EFL expected, how they believed clubs would use the rule! Don't think Harvey was all that bothered in general IMO.

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2 hours ago, Mr Popodopolous said:

(Potentially) very interesting Tweet by Andy Holt here- or is it that only Championship clubs would've voted on the regulation about asset sales counting towards FFP?

Certainly makes you wonder...

Mmmmmmm!!!!

2 hours ago, Mr Popodopolous said:

(Potentially) very interesting Tweet by Andy Holt here- or is it that only Championship clubs would've voted on the regulation about asset sales counting towards FFP?

Certainly makes you wonder...

Mmmmmmm!!!!

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2 minutes ago, Mr Popodopolous said:

Agreed, seems pretty odd...

Certainly you'd think so- hope so too!

Yes, agreed. Surprised that a lot of clubs seemed not to raise this as an issue, certainly not in public.

I wonder too. Have to say all seems quite odd. Part of me thinks it's EFL looking to limit damage/flak post Bolton and Bury.

I don't like the practice with related parties but I do wonder what exactly the EFL expected, how they believed clubs would use the rule! Don't think Harvey was all that bothered in general IMO.

I agree, there was surely only one way it was going to be used, unless they felt that maybe clubs who were selling old stadiums/training grounds or extra pockets of land should have the profits included?

Obviously if clubs weren't aware of it at the time of vote then it's a very different situation, I just can't see that being the case if they are the ones who have to ok the rules.

I think the EFL are trying to repair their reputation after Bury, Bolton, Blackpool and others.

However, I don't think they should be making a point of looking into clubs that have followed the rules as they are written, even if it wasn't as intended, if the intention was different it should have explicitly said it.

All they're doing by doing this rather than nipping it in the bud is causing more resentment between clubs, their owners and fans which will cause more issues in the long run that they'll then have to deal with.

The Leeds owner is clearly still bitter with us after last season due to both Spygate and the play offs, but as Mel Morris said somewhere, it might have been one of his Talksport interviews, I can't remember, as soon as Bielsa did his press conference telling everyone that he'd done it to all teams it was out of our control. I guess we reported it at the time as we probably felt we had to as it had gotten out via the Police tweet on the day, but we didn't know it would blow up into what it did.

I don't know if you follow Andy Holt's tweets in general? It's quite obvious he knows and likes Mel Morris, I also notice a few people have tried to draw him into saying bad things but he's brushed them off, most of it is from Forest and Leeds fans for obvious reasons, some examples of both below

The one below is after we played them in the FA Cup last season

Even Kieran Maguire himself is trying to stir things up, I've noticed before that he does this a lot, but I guess it gets him more work if he does!

The below is a thread of comments from Andy Holt about the EFL, he mentions Mel

 

 

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3 hours ago, DerbyFan said:

I agree, there was surely only one way it was going to be used, unless they felt that maybe clubs who were selling old stadiums/training grounds or extra pockets of land should have the profits included?

Obviously if clubs weren't aware of it at the time of vote then it's a very different situation, I just can't see that being the case if they are the ones who have to ok the rules.

I think the EFL are trying to repair their reputation after Bury, Bolton, Blackpool and others.

However, I don't think they should be making a point of looking into clubs that have followed the rules as they are written, even if it wasn't as intended, if the intention was different it should have explicitly said it.

All they're doing by doing this rather than nipping it in the bud is causing more resentment between clubs, their owners and fans which will cause more issues in the long run that they'll then have to deal with.

The Leeds owner is clearly still bitter with us after last season due to both Spygate and the play offs, but as Mel Morris said somewhere, it might have been one of his Talksport interviews, I can't remember, as soon as Bielsa did his press conference telling everyone that he'd done it to all teams it was out of our control. I guess we reported it at the time as we probably felt we had to as it had gotten out via the Police tweet on the day, but we didn't know it would blow up into what it did.

I don't know if you follow Andy Holt's tweets in general? It's quite obvious he knows and likes Mel Morris, I also notice a few people have tried to draw him into saying bad things but he's brushed them off, most of it is from Forest and Leeds fans for obvious reasons, some examples of both below

The one below is after we played them in the FA Cup last season

Even Kieran Maguire himself is trying to stir things up, I've noticed before that he does this a lot, but I guess it gets him more work if he does!

The below is a thread of comments from Andy Holt about the EFL, he mentions Mel

 

 

Agreed. Sale of old land and old ground seems fair enough I guess, but then again given infrastructure investment doesn't count under FFP there could be a case for harmonization there.

We'll see what comes out in the wash I guess. Pretty unlikely to say the least though, as you say!

Yes, think that is part of it- trying to pre-empt the possibility of outside regulation too, after some bad years (largely under Shaun Harvey).

Agree that the rules should've been explicit, you need fully clear rules but at the same time, I think that to leave it unchecked won't go well- a lot of owners and hierarchy, albeit privately, are pretty resentful about it IMO. The Hillsborough sale and leaseback has a feeling of the final straw, given the context around that particular transaction! How the hell that was signed off as okay...

Oh they need to change the rules pdq. However I agree with the investigations- as I touched upon above, I cannot see this issue being left alone without it, all those clubs who have sold quite big, made sacrifices, restraint in the window. If the valuations broadly correct then fair enough, we change the rules and we move forward- but if not...for the sake of the integrity of the competition I believe this is very necessary.

Police Tweet and Lampard's (Derby's?) version of events didn't quite overlap entirely IIRC. Bielsa's press conference though pretty honest, was pretty ill-judged! I remember the discrepancies though.

See the odd Tweet, unsure if I follow him on Twitter- if I don't I will now! Definitely a good read.

Mel Morris- I'm conflicted on him! He does this FFP related stuff, notably the sale and leaseback, Rooney stuff and maybe the variance in amortisation model, yet clearly he is a local owner- read he went to watch Derby in the 1970s? He seems to have a good connection with your fans- seen him leading the bounce at Accrington on YouTube eg, in the stand itself! If it wasn't for the FFP stuff, he'd be up there in the mould of Coates, Gibson and Lansdown- in that category, yet he shares a number of characteristics, FFP notwithstanding! I have respect for him being a true fan but I don't like some of the FFP practices is how I'd sum it up.

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Overall I think the Inquiry is necessary to stem some of the ill feeling and to assure that nobody has done anything they shouldn't.

Consider- the many questions over Sheffield Wednesday- but let's take a look at valuations and prices paid here in 2 cases.

Sheffield Wednesday- and tbh they are worthy of a separate investigation dedicated to a scrutiny of their conduct IMO!

£60m.

Revalued at depreciated replacement cost on 1st February 2014 at £22.25m! No huge evidence of significant upgrades since then- that's £60m, kerching?? Where is the add back on of value, where is the Reversal of Impairment etc? Certainly nothing listed in the accounts about a revaluation  and a significant one such as that can seriously offset losses (dunno if it counts for FFP though).

Aston Villa.

£56.7m.

Which sounds realistic but consider that in 2015/16 season, there was a write-down on the value of Villa Park or it will be largely Villa Park- the write-down as per the Recon Sports accounts was £44,593,000 on freehold buildings, under Tangible Fixed Assets. Will have to look in depth but don't recall any write up, add back on of value in their subsequent 2 seasons of accounts. Maybe their 2018/19 accounts will show it? That write down took it to under £30m, once historic total depreciation etc factored in! No Reversal of Impairment appears to be listed either!

The others?

Derby, I cannot make my mind up on- overvalued or fair? It's the highest and is eyecatchingly high considering the other sale and leaseback prices but then again local and specific factors...we'll see I guess.

Reading- can't have many complaints about £26.5m surely. Lack of revaluation over the 20 years or sp could change the equation possibly.

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9 hours ago, Mr Popodopolous said:

Agreed. Sale of old land and old ground seems fair enough I guess, but then again given infrastructure investment doesn't count under FFP there could be a case for harmonization there.

We'll see what comes out in the wash I guess. Pretty unlikely to say the least though, as you say!

Yes, think that is part of it- trying to pre-empt the possibility of outside regulation too, after some bad years (largely under Shaun Harvey).

Agree that the rules should've been explicit, you need fully clear rules but at the same time, I think that to leave it unchecked won't go well- a lot of owners and hierarchy, albeit privately, are pretty resentful about it IMO. The Hillsborough sale and leaseback has a feeling of the final straw, given the context around that particular transaction! How the hell that was signed off as okay...

Oh they need to change the rules pdq. However I agree with the investigations- as I touched upon above, I cannot see this issue being left alone without it, all those clubs who have sold quite big, made sacrifices, restraint in the window. If the valuations broadly correct then fair enough, we change the rules and we move forward- but if not...for the sake of the integrity of the competition I believe this is very necessary.

Police Tweet and Lampard's (Derby's?) version of events didn't quite overlap entirely IIRC. Bielsa's press conference though pretty honest, was pretty ill-judged! I remember the discrepancies though.

See the odd Tweet, unsure if I follow him on Twitter- if I don't I will now! Definitely a good read.

Mel Morris- I'm conflicted on him! He does this FFP related stuff, notably the sale and leaseback, Rooney stuff and maybe the variance in amortisation model, yet clearly he is a local owner- read he went to watch Derby in the 1970s? He seems to have a good connection with your fans- seen him leading the bounce at Accrington on YouTube eg, in the stand itself! If it wasn't for the FFP stuff, he'd be up there in the mould of Coates, Gibson and Lansdown- in that category, yet he shares a number of characteristics, FFP notwithstanding! I have respect for him being a true fan but I don't like some of the FFP practices is how I'd sum it up.

True, I understand why they like to allow spending on infrastructure because it's better for fans experience if it keeps improving. The only problem is, by having the FFP rules in the way they are, so that owners can't put money in even if they want to, clubs end up pricing out fans with sky high ticket prices. I assume it is because of FFP as it seemed to be when that was implemented that prices started going crazy, as clubs now need their income to be as high as possible to compete at the top end and, for Championship and lower clubs, tickets are likely their highest source of income outside of player transfers (which you cannot always guarantee will happen).

I should have been clear, I have no issue with investigations, they're always needed so things remain in check, the problem for me is letting it get out in the press with no official comment on what you're actually doing. Either do it quietly and if theres a problem publicise it then when you can put some meat on the bones, or make regular statements about the situation and actually keep people informed (and their comments in check) by stating what was ok and stating what you're actually checking to make sure it is ok.

What I mean is when it was first reported it was we are all 'cheats' because of the actual sales (not the values of the sales), the clubs involved are having to defend themselves for doing something that is within the rules (and even now some people don't seem to realise that the rules allow this!) did anyone from the EFL come out and say anything? I can't remember anyone saying look the rules allow profit from sales but we're going to check the valuations to make sure they're ok. They let it blow up into something big, they let some club owners openly say other clubs were cheating and threaten legal action, is that a healthy situation?

And then by letting this about the valuations get out in the way it has everyone jumps on it, again, people (fans so far this time, not sure I've seen further comments from anyone else yet) calls the clubs involved 'cheats', and seemingly expects there to be punishment because of the way they've let the press whip everyone up into a frenzy again. At this point no one even knows if the Times are right do they? I've not seen an official statement from someone at the EFL unless I've missed it, in which case it's not been very well reported. If the Times are right then when are the valuations going to be done? What happens if they come back and the values are ok? (I'm not saying that all will do because I only know us and Villa said we got valuations, I'm not sure about the other two clubs involved) Do they hope it just quietly goes away? Or do they actually make a statement clearing the clubs of blame? What then happens to the club owners that called the clubs out for cheating, do they just get to say that and have no comeback for it?

It's a massive mess!

Re Spygate: I was actually on about the initial Police tweet - the tweet below is the one that first put Spygate into the public domain and it all blew up from there.

I didn't want to go into it detail because it's over and done with, I only mentioned it above because I think it's helped influence the Leeds owners attitude to us over everything else, but as you've mentioned about the discrepancies I will.

The day of the game (the day after the tweet above) the club made a statement on the official site, but it was being reported openly by then because of the above tweet, so I assume they felt they needed to say something as they didn't want to let it run and run without comment.

The Police said it wasn't them who told the club who the man was or any information, so I don't know what happened and who exactly confirmed the mans identity or who confirmed what he was carrying, but Lampard said he heard from the Police about the wire cutters. Lampard also said he spoke to Bielsa the day before the game (the day it happened) and he admitted to sending him, but he would have known who he was before that I assume(??).

Lampard and some of our players (CarsonKeogh, there may be others, I can't remember, it's very difficult to find things due to the sheer amount of articles on Spygate) said the Police came into/onto the training ground but the Police said they didn't, the whole thing is very, very confusing!!

I do believe the club have a lot of cameras at the training ground, at least covering the pitches for recording training/games to analyse, so I assume there would've been video of the events at the time that might have cleared things up for the EFL/FA? ?‍♀️

In one of those links above (I think I put that one in!) Lampard said that our kitman had seen the same man before the first game with Leeds last season, our second game of the season I think it was (depending on when the cup game was), and he had been told to move on. There's another article here (which may or may not be correct or relevant) where a member of the public said they'd seen a man 'in the hedgerow' several times during the season.

There were a lot of people that assumed it was the club who contacted the Police, but Mel Morris confirmed on Talksport that it was a neighbour (there are houses directly across the road). The comment's I mentioned in my previous post, about once he admitted doing it to everyone, are also on this link, I thought it was on Talksport.

I remember Bielsa's press conference, the Leeds fans thought it was hilarious that he'd told the world our tactics, it was a few hours before we played at Southampton in our FA Cup replay (which we won on penalties) and then we went on to get 2 more points than Leeds in the remainder of the season! On the 16th Jan (day of the press conference) we were 11 points behind them (43-54), we finished 9 points behind them (74-83).

Re: Rooney, did you see the article about this on Friday? There are some comments in there from 32red's general manager. He makes it very clear that the deal is as I said it was before (as was always going to be the case, it was the only way we could have done it!) yes they are paying us more because we are signing Rooney, but it is us they are paying and not Rooney himself, it is us that will pay Rooney via the increased sponsorship, that's just very good business sense from us.

I'm not sure why how we deal with amortisation is at all relevant, we still have to account for their full value at some point whilst they're under contract, or take less of a profit (or a loss) if we sell them. In fact a lot of our high value players (from the time they were high value compared to most other clubs signings, rather than now where every club seems to be signing high value players) are now off the books due to their contracts ending or being released (Johnson, Butterfield, Blackman) so we will have had to account for it now anyway, whilst we're still in the Championship, so I don't see the problem, it's not like we've got away with not having to take the hit is it?

I think this is where Mel Morris gets unfair criticism, he mentioned before about Boro selling their tax loss to their parent company to make it revenue. Seemingly perfectly allowed within the rules of the time (as he consistently asserts we have been now) gave them a presumably unfair advantage, but no one says anything negative or holds it against Gibson as something that he's done morally wrong! Why is Mel Morris being held to different standards? It is obvious to see his frustration in his comments in the article above, and I think it's completely understandable.

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11 hours ago, DerbyFan said:

True, I understand why they like to allow spending on infrastructure because it's better for fans experience if it keeps improving. The only problem is, by having the FFP rules in the way they are, so that owners can't put money in even if they want to, clubs end up pricing out fans with sky high ticket prices. I assume it is because of FFP as it seemed to be when that was implemented that prices started going crazy, as clubs now need their income to be as high as possible to compete at the top end and, for Championship and lower clubs, tickets are likely their highest source of income outside of player transfers (which you cannot always guarantee will happen).

I should have been clear, I have no issue with investigations, they're always needed so things remain in check, the problem for me is letting it get out in the press with no official comment on what you're actually doing. Either do it quietly and if theres a problem publicise it then when you can put some meat on the bones, or make regular statements about the situation and actually keep people informed (and their comments in check) by stating what was ok and stating what you're actually checking to make sure it is ok.

What I mean is when it was first reported it was we are all 'cheats' because of the actual sales (not the values of the sales), the clubs involved are having to defend themselves for doing something that is within the rules (and even now some people don't seem to realise that the rules allow this!) did anyone from the EFL come out and say anything? I can't remember anyone saying look the rules allow profit from sales but we're going to check the valuations to make sure they're ok. They let it blow up into something big, they let some club owners openly say other clubs were cheating and threaten legal action, is that a healthy situation?

And then by letting this about the valuations get out in the way it has everyone jumps on it, again, people (fans so far this time, not sure I've seen further comments from anyone else yet) calls the clubs involved 'cheats', and seemingly expects there to be punishment because of the way they've let the press whip everyone up into a frenzy again. At this point no one even knows if the Times are right do they? I've not seen an official statement from someone at the EFL unless I've missed it, in which case it's not been very well reported. If the Times are right then when are the valuations going to be done? What happens if they come back and the values are ok? (I'm not saying that all will do because I only know us and Villa said we got valuations, I'm not sure about the other two clubs involved) Do they hope it just quietly goes away? Or do they actually make a statement clearing the clubs of blame? What then happens to the club owners that called the clubs out for cheating, do they just get to say that and have no comeback for it?

It's a massive mess!

Re Spygate: I was actually on about the initial Police tweet - the tweet below is the one that first put Spygate into the public domain and it all blew up from there.

I didn't want to go into it detail because it's over and done with, I only mentioned it above because I think it's helped influence the Leeds owners attitude to us over everything else, but as you've mentioned about the discrepancies I will.

The day of the game (the day after the tweet above) the club made a statement on the official site, but it was being reported openly by then because of the above tweet, so I assume they felt they needed to say something as they didn't want to let it run and run without comment.

The Police said it wasn't them who told the club who the man was or any information, so I don't know what happened and who exactly confirmed the mans identity or who confirmed what he was carrying, but Lampard said he heard from the Police about the wire cutters. Lampard also said he spoke to Bielsa the day before the game (the day it happened) and he admitted to sending him, but he would have known who he was before that I assume(??).

Lampard and some of our players (CarsonKeogh, there may be others, I can't remember, it's very difficult to find things due to the sheer amount of articles on Spygate) said the Police came into/onto the training ground but the Police said they didn't, the whole thing is very, very confusing!!

I do believe the club have a lot of cameras at the training ground, at least covering the pitches for recording training/games to analyse, so I assume there would've been video of the events at the time that might have cleared things up for the EFL/FA? ?‍♀️

In one of those links above (I think I put that one in!) Lampard said that our kitman had seen the same man before the first game with Leeds last season, our second game of the season I think it was (depending on when the cup game was), and he had been told to move on. There's another article here (which may or may not be correct or relevant) where a member of the public said they'd seen a man 'in the hedgerow' several times during the season.

There were a lot of people that assumed it was the club who contacted the Police, but Mel Morris confirmed on Talksport that it was a neighbour (there are houses directly across the road). The comment's I mentioned in my previous post, about once he admitted doing it to everyone, are also on this link, I thought it was on Talksport.

I remember Bielsa's press conference, the Leeds fans thought it was hilarious that he'd told the world our tactics, it was a few hours before we played at Southampton in our FA Cup replay (which we won on penalties) and then we went on to get 2 more points than Leeds in the remainder of the season! On the 16th Jan (day of the press conference) we were 11 points behind them (43-54), we finished 9 points behind them (74-83).

Re: Rooney, did you see the article about this on Friday? There are some comments in there from 32red's general manager. He makes it very clear that the deal is as I said it was before (as was always going to be the case, it was the only way we could have done it!) yes they are paying us more because we are signing Rooney, but it is us they are paying and not Rooney himself, it is us that will pay Rooney via the increased sponsorship, that's just very good business sense from us.

I'm not sure why how we deal with amortisation is at all relevant, we still have to account for their full value at some point whilst they're under contract, or take less of a profit (or a loss) if we sell them. In fact a lot of our high value players (from the time they were high value compared to most other clubs signings, rather than now where every club seems to be signing high value players) are now off the books due to their contracts ending or being released (Johnson, Butterfield, Blackman) so we will have had to account for it now anyway, whilst we're still in the Championship, so I don't see the problem, it's not like we've got away with not having to take the hit is it?

I think this is where Mel Morris gets unfair criticism, he mentioned before about Boro selling their tax loss to their parent company to make it revenue. Seemingly perfectly allowed within the rules of the time (as he consistently asserts we have been now) gave them a presumably unfair advantage, but no one says anything negative or holds it against Gibson as something that he's done morally wrong! Why is Mel Morris being held to different standards? It is obvious to see his frustration in his comments in the article above, and I think it's completely understandable.

Certainly agree on Infrastructure expenditure- it should be excluded, ie not count towards FFP. Build up the club, improve it for the fans, in due course extract further revenue streams from it- clearly right to class it as "good" investment. The thing is, at least on the fees front it is interesting to note that the summer expenditure in the Championship was roughly the same as summer 2018 and less than some prior ones- FFP could at this level at least be dampening down things a bit, lower net spend too ie more brought in when it comes to sales, clubs loaning with obligation to buy etc- presumably banking on promotion in some if not all cases! Believe if tightened and tweaked a bit more and of course enforced to the letter it could have a further deflationary effect in time on the Championship transfer market. High ticket prices are an issue, but just seems to be the English game these days unfortunately. Not ideal for the fans though of course!

Agreed! EFL have a number of shortcomings in this regard- I remember Birmingham around this time when that situation started to develop, there were all manner of leaks, often to the Times, but also to the Telegraph and Daily Mail. It was either the EFL leaking to selected outlets, off the record or it was individuals within perhaps who were unhappy with it or who wanted to make an example of Birmingham? Of course they deserved the sanctions and the inquiry etc, but the EFL, the way info got out, intentionally or otherwise, was less than impressive! That process is not good enough though at least it kept fans in the loop in snippets- overall though feels like it needs significant improvement.

That's a very good point. I remember at first jumping on that particular bandwagon a bit for a while, fuming I was- but the way the rules were changed was seemingly quite quietly done? Not very well publicised in any case! You're right though, they should have made that distinction quite clear from the start- the bit about the rules permitting it but question marks over the valuations- Gibson is usually pretty sensible so if it was a change voted on by all? Then again, dunno when that vote took place or if it was EFL board making the decision and clubs just learning of it- unanswered questions there, that again falls on the EFL somewhat!

A massive mess indeed it is- a lot of loose ends to tie up. I do believe there is an inquiry of some description, I doubt that would be incorrectly reported but you never know! Many of the issues you refer to ie owners, we'll have to see. EFL should if the clubs are cleared make a definitive statement I certainly agree! By the same token, if there is a significant discrepancy found they should make this public (subject to commercial confidentiality) too and publicise next steps- subject to if for example the clubs were found to be in the wrong, not prejudicing an EFL independent Disciplinary Commission. In terms of valuations, Reading's seems alright I guess but you posted something I believe- will read this properly tomorrow, was it about Reading? Looked pretty comprehensive! Sheffield Wednesday's is very curious, given that in 2014 there was an independent valuation at DRC of £22.25m!

Looking at their accounts since there seems to be nothing that would justify £60m! Let alone the fact the transaction was dated June 2019, yet it appeared in 2017/18 accounts- accounts which were meant to be at CH on February 28th 2019, made up to May 31st 2019, extended by 2 months so that'd be April 30th 2019 from July 31st 2018 respectively, yet these accounts were not dated until 21st June 2019, and further to this the transaction itself went through on 28th June 2019. Oh and Chansiri said 5-6 months before at a Fans Forum that no promotion meant a failure by 8 figures,  plus it was Sheffield 3 Limited who purchased the property, yet this company was not incorporated until 21st June 2019. I have serious, serious problems with their one! Aston Villa and yourselves- independently valued yes, but an impairment cost, also maybe labelled as a writedown of £44.8m in 2015/16 for Villa Park- unless they wrote it back up in 2018/19, I struggle to see how that fits so well. Derby? Can't make up my mind! I know there was investment on the stadium, but there also would have been depreciation- plus how much of that investment was current, how much was ongoing and how much was planned? Could make a difference..

Thanks, that clears up Spygate then! Bit of a media circus that in general- saw the initial tweet by DCFC Response police and that seemed unprofessional on their part, when I dug it out earlier. Was a major story too!

Yes, their slippage in the League was noticeable- yet their baseline performance levels didn't necessarily drop off in a lot of respects, going on data etc. Their results did somewhat however!

Good business certainly, can see other clubs sponsored by 32Red not being terribly happy about it though- and there are a few! Plus given Huddersfield got fined £50,000 for their shirt thing, there's a definite slight- it's a breach of FA Kit and Advertising regs. Yet Rooney wearing '32' thereby putting '32Red' into the public domain somewhat given the publicity that surrounds him and surrounded the deal, is alright? I certainly won't gamble with them.

I hope so. Doesn't matter when it is accounted for, just so long as it is. I wondered in part if the stadium sale and leaseback was in part to cover the large number of contracts that expired this summer, owing to the amortisation policy. Read different things online though, weren't some of the contracts extended for FFP purposes then the players released- if that reduces the hit taken fair enough I guess, but if it eliminates it...oh yeah the reason I wondered about the Pride Park deal and contracts expiring with the amortisation policy was because in 2015/16 there was a rather large charge of nearly £21.2m, think it was £21,198,000 or something, Impairment of Goodwill- I did wonder if that might have been linked to taking the hit on free transfers? Then again it didn't appear on the Derby accounts so probably not! Wonder how it'll be accounted for though, in the Accounts.

True, I wonder what sort of profit Middlesbrough gained from it though? Could that be one differential, will have to look at their 2015/16 Accounts (Middlesbrough's) and see what arises. I certainly remember no particular media coverage of it at the time. I think it cut their losses by about £6-6.1m. Will have to look into it further tomorrow or so. Gibson has spent quite big in the past though, can't forget that!

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Taken an even deeper look at the accounts for Sheffield Wednesday.

Revalued at DRC in 2014, £22.25m.

Revaluiation Reserve is around £6-6.5m.

Additions and Depreciation?

I estimate based on all that, Hillsborough to be in the bracket of £25-30m. Really struggling to see how they came to £60m!

With regards to Derby, £81.1m may well be more realistic than I thought given the Revaluation Reserve- but then again the below muddies the waters a bit in that respect:

I note that in 2015/16 when acquired and possibly when the accounts were written, ie by end of financial year, the:

Vendor's Book Value- £55,601,000.

Fair Value Adjustment- £0.

Fair Value to the Group- £55,601,000.

Note 26, Sevco 5112 Limited accounts. I take Tangible Fixed Assets to be Pride Park- unsure how the Training Ground would be accounted for in these? Actually thinking about it, some of it isn't Pride Park!

Pride Park value.png

OTOH, maybe that £81.1m as of 2018 was the revaluation reserve added to the depreciated fair value to the group by this stage, not fully sure I think so but it is possible. No way was Hillsborough £60m though!!

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A part that was unclear in terms of that "Fair Value to the Group", was whether that was inclusive or exclusive of Revaluation Reverse and potential changes to Valuation through the Fair Value adjustments.

If it's a case of adding that Revaluation Reserve to the Fair Value to the group of £55.601m minus the depreciation, non stadia based assets etc then it could well be spot on, the £81.1m. If it's included within though...then I think £50-55m bracket, £60m at a push.

That Revaluation Reserve for the record was £30,295,929 in the 2016/17 accounts.

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The one curiosity regarding the Revaluation Reserve though.

This Revaluation Reserve at the time Pride Park was purchased back in 2007/08 time, with the subsequent revaluation was £39,554,000.

Yet on getting the ground back and revaluing it, there was an upward revaluation listed in the accounts for that season of £34,147,000- listed as a Revaluation Readjustment.

Revaluation on 11th December 2007 by King Sturge LLP to £55,000,000.

In terms of the Depreciation, there was the re-purchase of Pride Park- cost or valuation of £27,264,000 on 1st July 2007.

So then, was the revaluation reserve separate to, part of or in addition to that upward revaluation- ie how much of it, if any, was already accounted for in terms of the Revaluation Adjustment?

Or is it that regardless of that upward adjustment, you readd the RR in any case?

Double entry maybe?

Revaluation Surplus- similar but different to a Revaluation Reserve?

Edited by Mr Popodopolous
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7 hours ago, Mr Popodopolous said:

The one curiosity regarding the Revaluation Reserve though.

This Revaluation Reserve at the time Pride Park was purchased back in 2007/08 time, with the subsequent revaluation was £39,554,000.

Yet on getting the ground back and revaluing it, there was an upward revaluation listed in the accounts for that season of £34,147,000- listed as a Revaluation Readjustment.

Revaluation on 11th December 2007 by King Sturge LLP to £55,000,000.

In terms of the Depreciation, there was the re-purchase of Pride Park- cost or valuation of £27,264,000 on 1st July 2007.

So then, was the revaluation reserve separate to, part of or in addition to that upward revaluation- ie how much of it, if any, was already accounted for in terms of the Revaluation Adjustment?

Or is it that regardless of that upward adjustment, you readd the RR in any case?

Double entry maybe?

Revaluation Surplus- similar but different to a Revaluation Reserve?

Just a quick reply to this, haven't had time to reply to your other posts yet, but was there a repurchase? Until the sale in 2018 I thought the club had ownership of it since it was built, is that not the case?

Edit: Just double checked the notes I made about the accounts (so I didn't have to keep going back into them) the only thing I can see is in the 1999 accounts where I've got it down as transfer from subsidiary company. I haven't looked at the Sevco ones though, are you looking at those or the club ones?

Edited by DerbyFan
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13 hours ago, DerbyFan said:

Just a quick reply to this, haven't had time to reply to your other posts yet, but was there a repurchase? Until the sale in 2018 I thought the club had ownership of it since it was built, is that not the case?

Edit: Just double checked the notes I made about the accounts (so I didn't have to keep going back into them) the only thing I can see is in the 1999 accounts where I've got it down as transfer from subsidiary company. I haven't looked at the Sevco ones though, are you looking at those or the club ones?

Aaah, my fault- probably.

Could well be getting mortgage/remortgage/sale and leaseback mixed up- did a bit of historical research and saw something about ABC Corporation, and assumed it was out of club ownership for that period? Or was it that ABC took over the club and ground alike. Will look again at the accounts for the early to late 2000's.

https://www.independent.co.uk/sport/football/news-and-comment/david-conn-pride-park-mortgaged-to-panamanian-company-77225.html

Will look further back in the accounts, to the late 1990s in due course.

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On 18/08/2019 at 11:47, Mr Popodopolous said:

8. Any sign of it at Land Registry yet? Last time I heard there was not.

To update on this one, if I haven't already covered it in another part of this thread.

Transaction was listed at Land Registry as having gone through on June 28th 2019.

ECfVXdPWkAAViUL.jpg

Puzzles me given when the accounts were due, dated, signed, the accounting period even when extended- let alone £60m on a ground valued at £22.25m in 2014 and with a £6.4m revaluation reserve in the 2016/17 accounts.

Yeah and the company who purchased it was Sheffield 3 Limited, listed as having been incorporated on 21st June 2019. Owned initially by Sheffield 4 Limited but that in turn was dissolved on 18th July 2019, having been incorporated at CH on 20th June 2019.

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3 hours ago, Mr Popodopolous said:

Aaah, my fault- probably.

Could well be getting mortgage/remortgage/sale and leaseback mixed up- did a bit of historical research and saw something about ABC Corporation, and assumed it was out of club ownership for that period? Or was it that ABC took over the club and ground alike. Will look again at the accounts for the early to late 2000's.

https://www.independent.co.uk/sport/football/news-and-comment/david-conn-pride-park-mortgaged-to-panamanian-company-77225.html

Will look further back in the accounts, to the late 1990s in due course.

I'm a bit confused about the whole thing. I didn't really pay much attention to the ins and outs at the time as I was a little too young to know/care/understand about that kind of thing! Having read through I can't figure out if it was sold or mortgaged.

I was just going on the figures in the accounts, and since 1999 it doesn't appear to have ever left the assets. Can you do that if you've sold and only paid rent? I wouldn't have thought you could as it's not your asset?

If you want a bit of light reading (ha!) from around that time just have a Google of 'the three amigos'.

Edited by DerbyFan
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Just wondering whether Mr P and DerbyFan should have their own sub forum ( or get a room :) ) ?

They are discussing ffp at at the level of Einstein while my understanding is the equivalent of my times tables!

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On 11/09/2019 at 13:45, DerbyFan said:

I'm a bit confused about the whole thing. I didn't really pay much attention to the ins and outs at the time as I was a little too young to know/care/understand about that kind of thing! Having read through I can't figure out if it was sold or mortgaged.

I was just going on the figures in the accounts, and since 1999 it doesn't appear to have ever left the assets. Can you do that if you've sold and only paid rent? I wouldn't have thought you could as it's not your asset?

If you want a bit of light reading (ha!) from around that time just have a Google of 'the three amigos'.

Fair- tbh you probably have known about football finance etc longer than me, only the last couple of years I've really started to look in depth! 

Makes 2 of us, mortgaged or sold- could there have been a charge on it, perhaps they sold part of it in exchange for cash and rent but less than 50% so it still stayed in the clubs hands?

Ha I will thanks- sounds interesting to say the least.

Looked again at the accounts earlier and my revised interpretation is that- and it's only an interpretation, maybe completely wrong:

Valuation at cost at that time- £20.9m whatever it was, the revaluation took it to £34m or so- anyway the two figures were £20. something million and £34. something million and added together it took it to £55m in 2007 I believe.

Still confuses me though the fact there was a revaluation reserve of £39m in addition- was the true value therefore in 2007 £94-95m? Not entirely sure.

Would it the £20.9m +£34.1m (for simplicity sake let's round it to that) to take it to £55m exclusive of the £39m whatever the exact figure there was in the Revaluation Reserve or would the Revaluiation Reserve in 2007/08 accounts form part of it?

That Note 26 in the 2015/16 Sevco 5112 I also find interesting, but maybe it isn't- seems at that time Fair Value added was £0, therefore the Fair Value to the Group was £55.6m- but maybe once RR added, depreciation factored in and work £81.1m is a lot more credible than it sounds.

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Other key reason I came on tonight was saw this on Twitter.

EESyL4bX4AEzmF-.jpg:large

It'll be in the Times so I'll make sure I type it tomorrow, the continued on Page 67, if anything significant. :thumbsup:

I believe them to have jumped the gun at this time. It's a drastic step at any time though! Certainly not an advisable move on their part and definitely not at this time IMO. If it ever is.

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