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The Championship FFP Thread (Merged)


Mr Popodopolous

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6 minutes ago, Mr Popodopolous said:

They might have it reasonably under control, with the parachute payments and if they keep costs fairly low. If they're fairly prudent.

It could well be the case that this payment will not fall under the parameters of FFP (see Villa's payment to Xia).

You would assume that the new owner was aware that this money would have to be paid.  With that in mind, you'd think a contingency is in place - Either parachute money or a cash injection directly from the new owner.

PS - How much would the McAlpine stadium be worth (dons tin hat).

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9 minutes ago, Delta said:

It could well be the case that this payment will not fall under the parameters of FFP (see Villa's payment to Xia).

You would assume that the new owner was aware that this money would have to be paid.  With that in mind, you'd think a contingency is in place - Either parachute money or a cash injection directly from the new owner.

PS - How much would the McAlpine stadium be worth (dons tin hat).

Could well be, I'm thinking of solvency they should be fine from that perspective too of course.

New owner isn't all that rich so Parachute Payments it'd be.

Think clubs doing that will be forbidden sooner or later...at least in terms of revenue for FFP purposes. ;)

Value? Who knows- dunno if it's ever been valued, seems to be or have been carried at cost...

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23 minutes ago, View from the Dolman said:

Worth remembering the club only own a 40% stake and the local council and rugby league team have stakes in the stadium company. 

It is. Also means that selling and leasing back the ground as it stands surely a non starter?

Looked up a number of years of what I assume to the stadium company- Kirklees Stadium Development Limited- and so far there's no valuation at all! Seems to have always been carried at cost, that said there are 25 years worth of accounts to look through...fun times!

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And back to Derby ?

Their poorly vailed attempt at pulling the wool over the eyes of the EFL money men may have come back to bite them. Be an interesting conversation when Derby ask for a loan....... but Mr Morris, didn't you recently get £80m cash injection from the sale of your ground?1964239123_Screenshot2020-03-30at08_35_03.png.a599d0dfa3a1e14047cedcab0f4eb789.png 

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As far as I can tell, loans don't or shouldn't be classed as income for FFP- but that's a side issue for now!

They could always impose a wage cut/deferral. For a start. Wonder what the terms of this loan would be, could be a slippery slope they're getting on. 

That £81.1m appeared in the cash flow as if it'd been paid though so their losses over this and last season...wow!! Unless of course that was a fudge too. :think:

Definitely appears in statement of cash flows for 2017/18 though.

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3 hours ago, 1960maaan said:

And back to Derby ?

Their poorly vailed attempt at pulling the wool over the eyes of the EFL money men may have come back to bite them. Be an interesting conversation when Derby ask for a loan....... but Mr Morris, didn't you recently get £80m cash injection from the sale of your ground?1964239123_Screenshot2020-03-30at08_35_03.png.a599d0dfa3a1e14047cedcab0f4eb789.png 

That's a very good point.

Hadn't considered the ground transaction when read the story.

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3 hours ago, 1960maaan said:

And back to Derby ?

Their poorly vailed attempt at pulling the wool over the eyes of the EFL money men may have come back to bite them. Be an interesting conversation when Derby ask for a loan....... but Mr Morris, didn't you recently get £80m cash injection from the sale of your ground?1964239123_Screenshot2020-03-30at08_35_03.png.a599d0dfa3a1e14047cedcab0f4eb789.png 

 

59 minutes ago, Mr Popodopolous said:

As far as I can tell, loans don't or shouldn't be classed as income for FFP- but that's a side issue for now!

They could always impose a wage cut/deferral. For a start. Wonder what the terms of this loan would be, could be a slippery slope they're getting on. 

That £81.1m appeared in the cash flow as if it'd been paid though so their losses over this and last season...wow!! Unless of course that was a fudge too. :think:

Definitely appears in statement of cash flows for 2017/18 though.

I’d be very worried if I was a Derby supporter.  I’m not sure now is the time to be taking loans out.  Suggests that the ground sell got them sorted for the period up to 18/19....perhaps this covers the next period (and beyond) and maybe a change in amortisation model??

Only speculating.

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5 hours ago, Davefevs said:

 

I’d be very worried if I was a Derby supporter.  I’m not sure now is the time to be taking loans out.  Suggests that the ground sell got them sorted for the period up to 18/19....perhaps this covers the next period (and beyond) and maybe a change in amortisation model??

Only speculating.

Dave, do you mean in FFP terms or do you mean solvency/admininistration risk?

You could well be right- incidentally, their accounts due out at end of March though Covid 19 may have put all that on hold.

A quick search at CH suggests that:

  • Derby County is now controlled by Gellaw Newco 203 Limited.
  • Their first set of accounts were due by March 18th 2020- showing as overdue.
  • The ones who brought the ground were Gellaw Newco 202 Limited.
  • Their first set of accounts were due by March 19th 2020- showing as overdue.
  • Gellaw Newco 204 Limited own/are the controlling party for Gellaw Newco 202 Limited.
  • Their first set of accounts were due by March 18th 2020- yes, you might have guessed it. Showing as overdue!!

Like I say, could all be due to Coronavirus but other clubs have got their accounts in- see Fulham, Huddersfield and though I've not yet had a proper look, Sheffield United.

Sevco 5112 is no longer the controlling party of Derby County therefore.

Edited by Mr Popodopolous
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Oh yeah, to further muddy the waters the following are still presumably revenues that flow to the club, while potentially FFP costs relevant to these offset against:

  1. Club DCFC Limited
  2. Stadia DCFC Limited
  3. The Derby County FC Academy Limited

These 3, from which the club surely will benefit from revenue, are all still listed at CH as being controlled by Sevco 5112 Limited.

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5 hours ago, Mr Popodopolous said:

Dave, do you mean in FFP terms or do you mean solvency/admininistration risk?

You could well be right- incidentally, their accounts due out at end of March though Covid 19 may have put all that on hold.

A quick search at CH suggests that:

  • Derby County is now controlled by Gellaw Newco 203 Limited.
  • Their first set of accounts were due by March 18th 2020- showing as overdue.
  • The ones who brought the ground were Gellaw Newco 202 Limited.
  • Their first set of accounts were due by March 19th 2020- showing as overdue.
  • Gellaw Newco 204 Limited own/are the controlling party for Gellaw Newco 202 Limited.
  • Their first set of accounts were due by March 18th 2020- yes, you might have guessed it. Showing as overdue!!

Like I say, could all be due to Coronavirus but other clubs have got their accounts in- see Fulham, Huddersfield and though I've not yet had a proper look, Sheffield United.

Sevco 5112 is no longer the controlling party of Derby County therefore.

Either / Both ??‍♂️

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Couple of lines. 

Sheffield United lost £21m last season. However they only lost £1m year before and maybe £6m in 2016/17 in League One. 

A model for many. Bear in mind too that loss last season will surely include promotion bonuses which aren't included in FFP calcs, and rightly so.

The Depreciation of fixed assets, the academy/youth expenditure, community expenditure and I guess infrastructure expenditure once amortised. Oh yeah and women's football.

Surely they're absolutely fine- it's also possible that their 2016/17 League One title included promotion bonuses too.

Anyway their headline losses are £10-11m below £39m even before allowables, promotion bonuses. An example to all!!

Edited by Mr Popodopolous
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Another couple of lines.

Wigan lost £9.2m but that was despite and inclusive of a £7m profit on disposals. Quite big losses without but still not in FFP hot water just yet...They maybe 13 month accounts, not had a proper look yet. 

Fulham appear to be fine for FFP. Selling Sessegnon for £30m was it has probably meant they're fine for one more year after this. Worth a look however.

Brentford have taken advantage and extended their date to get accounts to CH to June 30th 2020. This 3 month extension to deadlines due to Covid 19.

West Brom appear not to have taken advantage, they've submitted accounts and will be there at CH in the next few days I expect.

I say submitted accounts. On closer inspection, West Bromwich Albion Holdings and West Bromwich Albion Group have, so presumably that'd be the overall Group accounts but West Bromwich Albion FC have not yet.

Which is a bit strange, I'd expect a club followed by consolidated given the club is included within the latter. Consolidated accounts will surely give a good indication anyway.

Derby...who knows. Who knows. Their choppy structure makes it hard to be sure.

Birmingham City Stadium Ltd. St Andrews appears to be classed as an Investment Property. Paid in receivables possibly, just skimread it.

Reading have taken advantage like Brentford of the 3 month extension to the deadline.

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One more line.

https://www.cityam.com/football-clubs-fear-efl-sanctions-unless-they-sack-staff-or-make-pay-cuts/

Looks like FFP isn't being scrapped or majorly watered down. One bit of good news!

I think you can simply add lost revenue in this period to allowable costs so simply £39m + standard allowable costs + revenue lost in this time=FFP loss. No need to relax it beyond this IMO.

Either this or use projected accounts as the real ones as a starting point. Then go from there.

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West Brom had operating losses of around £17m last season, but profit on player disposal took this down to around £7m.

I think that for FFP in the 3 years to May 2019, they're aok not even a doubt and likely to May 2020 as well, but as with all clubs, have their owners stuck equity in? That is a factor that has potential to change things significantly.

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Hi @Delta interested in your take on one issue.

FFP. Seems not to be getting suspended as it stands in the Championship- not if that City AM article anything to go by.

In the event you end up back at this level in the next season, it could be interesting? Mind you, for the bulk of if not all the division too!

My personal view is that I hope they don't suspend it, but merely tweak it as necessary in the circs.

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19 minutes ago, Mr Popodopolous said:

Hi @Delta interested in your take on one issue.

FFP. Seems not to be getting suspended as it stands in the Championship- not if that City AM article anything to go by.

In the event you end up back at this level in the next season, it could be interesting? Mind you, for the bulk of if not all the division too!

My personal view is that I hope they don't suspend it, but merely tweak it as necessary in the circs.

Personally, I'm still of the opinion that FFP will be relaxed in some form or other.

However, if we find ourselves back down, we will most likely receive £100m + in transfer sales.  Whilst this will probably be spread over a 4 year period, it will still see over £25m come in for the relevant year.

From our previous experience, I sense that relegated teams have 2 seasons in which to get back up - The 3rd year of parachute payments falling substantially.  If we went down, with Leeds & WBA out of the way, I'd be fairly confident of us going back up within 2 years.

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4 minutes ago, Delta said:

Personally, I'm still of the opinion that FFP will be relaxed in some form or other.

However, if we find ourselves back down, we will most likely receive £100m + in transfer sales.  Whilst this will probably be spread over a 4 year period, it will still see over £25m come in for the relevant year.

From our previous experience, I sense that relegated teams have 2 seasons in which to get back up - The 3rd year of parachute payments falling substantially.  If we went down, with Leeds & WBA out of the way, I'd be fairly confident of us going back up within 2 years.

I think the onyl relaxation of FFP should be the deficit in gate receipts and other associated revenue basically- just my view.

e.g. £39m (or £61m in your case) + allowable costs + the deficit caused by 5 or 6 home games off or behind closed doors  (I'd have to check exact numbers) but there should in my view for any club be no relaxation beyond that level. Or we could take the projected accounts that clubs submit as the actual data given the exceptional circs.

Doubtless there will be relegation clauses written into contracts- the £100m would all depend on their current book value. If Grealish as he's an academy product goes for £60m, that is £60m profit e.g. Mings and McGinn two other big saleable assets.

3rd year is interesting- think WBA e.g. are fine now not least due to their large profit in 2016/17, unsure how they fit in terms of equity but if they somehow blow promotion...

Oh yeah, on Parachute Payments the 3 year rule thing- if a side is in the League for one season now ie ujp then straight bacvk down, then it's Year 1 (as usual) Year 2 (as usual) then Year 3? Zero. Didn't hurt Norwich, but Middlesbrough OTOH...might hurt Fuham if they don't go up by May 2021. Whereas if a club are up more than 1 season then it's Years 1 and 2 as usual, then the significant fall in Year 3. As Stoke will find out in 2020/21.

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Derby and Leeds accounts still not at CH but Blackburn's are- that said Venkys London Limited maybe the relevant one there- will be there tomorrow or so probably in Blackburn's case.

Interesting snippet from Kieran Maguire's feed last season, in terms of Derby's structure etc.

D3oDkz2WAAAGVnH?format=png&name=900x900

"Disposed of the subsidaries'- FFP relevant? Profit on disposal?

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One bit of news.

It was stated that Reading and what I assume to be the parent company at least in the UK, Renhe Sports had applied to get it in by 30th June 2020.

Well seems they've submitted their accounts- probably in tomorrow, Saturday, Monday- dunno when but within the next few days.

They are one of those clubs who have a bit of an FFP question mark so these will be quite interesting...

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Apologies wrong link.

https://www.bavarianfootballworks.com/2020/4/3/21199926/bayern-munich-financial-fair-play-covid-coronavirus-crisis-bundesliga-premier-league-championship

Meanwhile, elsewhere...

https://www.thestar.co.uk/sport/football/sheffield-united/process-decide-value-sheffield-uniteds-stadium-and-other-properties-has-begun-2527742

NOT strictly Championship related but given that Hillsborough sold for £60m and Pride Park £81.1m (though the EFL beg to differ, and it's £49-50m in their eyes) and even Villa Park for £56.7m, it'll be interesting to see what this throws up- and if it sheds light on the process.

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Derby have (unsurprisingly) taken advantage of the option of the chance to extend their deadline to submit to CH by 3 months Covid 19 means that companies can.

Reading's results are out. Must say their compliance is doubtful indeed -  you might be interested @Davefevs

Lost £30m- that's Thirty million last season. Given they did the sale and leaseback albeit seemingly at fair value (£26.5m) they're surely in a tricky position, whereas had it been say £36m, they'd have more leeway and it probably would still have been seen as an okay price given the location etc.

One other interesting note. Their rent on the Madjeski in 2017/18 was £750k per year. Now it seems to be £1.5m!! 

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Ohh and one thing I never noticed until I saw Kieran Maguire's analysis.

Reading sold the training ground as well last year. Despite the profit on this, they still lost £30m!!

Paid for in the form of shares apparently though I'd have to re-read. How does that fit with FFP, equity limits etc?

They're now a villain of the piece.

Successive seasons they've done a fixed asset transaction with a related party.

Further to that, there was a £3m loan fee for Aluko too with Beijing Renhe...another related party.

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Yeah, football clubs are by no means immune to this- in fact no or little income vs biggest cost- tough times for a fair few I'd have thought.

On Reading, took a look at the parent/group/controlling company Renhe Sports.

Interestingly, and unsure how it fits with FFP, they lost 'only' £11,753,640.  Made a profit on sale of Fixed Assets of £29,929,818- unsure which one is relevant for FFP though.

From early investigation:

  • Renhe Sports appear to have sold the Madejski Stadium to Prestige Fortune Asia Limited- a commonly owned company.
  • Says something about £37.5m- unsure what % of that is profit and what % is price paid, book value etc as there have been a number of transactions in terms of fixed assets with related parties.
  • The Training facilities (Bearwood) were sold in 2018/19 for £13m. Sun Elegant Group.
  • Paid for in the form of loans- again, owned by the owner of Reading. Think the profit was £7-8m.

Anyway, in the BEST case scenario, they've lost a total of £40-41m (before allowable costs) over the last two seasons despite £29m in fixed asset sale profits!? :o Plus a £3m loan fee for Aluko to China.

Edited by Mr Popodopolous
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It's almost an irrelevabnce with all that's going on outside of football, in the country and the world in general.

However there have to be serious questions over Reading and their FFP compliance- possibly to June 2019 but certainly to June 2020. From last season, Swiss Ramble showed a list of their losses minus allowable costs but add backs of excluded revenues.

D7PIq-XW0AAIAD4?format=jpg&name=large

Even if they use Renhe Sports and even if fine to June 2019 which seems uncertain, I'm not at all convinced that they even without Covid 19 would be fine to June 2020.

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