Lrrr Posted July 10, 2020 Report Share Posted July 10, 2020 Mel Morris in a scandal nooooo surely not.... 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 10, 2020 Author Report Share Posted July 10, 2020 I remember mentioning this a little while ago. I wonder what the payment terms and timings are. Any short or medium term pressure to reach PL? Seems not the smartest move to remortgage or mortgage a clubs stadium! Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 10, 2020 Author Report Share Posted July 10, 2020 Well this is interesting, appears that such a large loan will be cleared soon. Which begs the question, why take it out in the first place? Wonder if anything will appear on CH. Of more interest (and relevance!) to this thread... Does beg the question as to why the EFL seemingly unable to run more than one concurrently! Quote Link to comment Share on other sites More sharing options...
AnotherDerbyFan Posted July 10, 2020 Report Share Posted July 10, 2020 18 minutes ago, Mr Popodopolous said: Well this is interesting, appears that such a large loan will be cleared soon. Which begs the question, why take it out in the first place? Wonder if anything will appear on CH. Of more interest (and relevance!) to this thread... Does beg the question as to why the EFL seemingly unable to run more than one concurrently! I believe it was somewhat related to a cash flow issue, with a large chunk of Mel's 'worth' being tied up in assets. It could also explain the late payment of wages at the end of December. I don't think Ryan's story is quite correct either... https://twitter.com/GabayHenry/status/1281607594776432640?s=20 Quote Link to comment Share on other sites More sharing options...
Hxj Posted July 10, 2020 Report Share Posted July 10, 2020 I am sure that Conway has added 2 and 2 and got something odd. The facts from Companies House show that a company, that Gabay has ‘significant influence’ over has a charge over the assets of the company that owns Pride Park and that company’s holding company. The charge was registered in November 2019, so any funds lent would have been around that date. There is no mention of the amount involved. That may come out when the 2020 accounts are published. I have a conspiracy theory, particularly given the dates. Derby knew they had a valuation issue. So they found a willing lender to lend say £40 million at an absolute maximum loan to value of 50%. Immediately Derby have an independent valuation. So neat. A ‘Willing Lender’ in this sense means ‘How big is my fee?’ 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 10, 2020 Author Report Share Posted July 10, 2020 (edited) I saw something on Twitter alluding to that @Hxj and it did cross my mind a bit too- interesting post for sure! That would make it quite a bit harder for the EFL to unpick, potentially (their independently hired valuation came in at £49-50m IIRC). They used different criteria but the involvement of Gabay certainly muddies the waters in this respect I'd say! The amount involved- that's a good point. Could be half as you say, could be £81.1m, but the accounts for Gellaw Newco 202 and Gellaw Newco 204 do state: The issue is that the stadium was sold, probably in the planning before it, but at the Land Registry, the official as far as Land Registry is concerned date of sale was 28th June 2018. Which significantly predated the Gabay involvement at Companies House... It is of course possible, but we have no idea- but given how it was linked earlier in the year, it is of course possible that Mel Morris might have borrowed the money/got fresh investment from elsewhere to pay down this charge? They were linked with Michael Dell earlier this year. My print screen doesn't seem to work these days so I'll have to stick the figures up manually- pulling out some selected, possibly key bits: Gellaw Newco 202 Limited- (Company who purchased Pride Park) Quote Balance Sheet 2019 £ Creditors: amounts falling within due within one year (81,112,031) The above would appear to be the value of Pride Park in the opinion of Mel Morris/his independently hired valuer (Listed as £81,109,332)+ £2,700 loss for the year minus £1 of called up share capital. Quote Creditors: amounts falling due within one year 2019 £ Amounts owed to group undertakings 73,399,999 Other creditors 7,712,032 81,112,031 "Group undertakings" makes up the bulk basically, could be the club, could be Gellaw Newco 204, could be the midco or parent company of Derby, so that's Sevco 5112 and Gellaw Newco 203 respectively- might the remainder ie "Other Creditors" constitute Gabay's company- Rams Investment Limited? Gellaw Newco 204 Limited- the company that is listed as controlling Gellaw Newco 202 Limited. Quote Balance Sheet 2019 £ Debtors 73,399,999 Creditors: amounts falling within due within one year (73,399,997) Net Current Assets 2 Capital and Reserves Called up Share Capital 2 This is for the company who is listed as controlling Pride Park at CH. Gellaw Newco 204 (controlled by Mel Morris) are due to be paid within 1 year, are due the £73,399,999 by Gellaw Newco 202 Limited. To break it down a little more...a bit more granular? Quote 2 Debtors 2019 Amounts falling due within one year: £ Amounts owed by group undertakings 73,399,999 3 Creditors: amounts falling within due within one year Other creditors 73,399.997 Plus of course, the obligatory £2 share capital- issued and fully paid. Two ordinary of £1 each. Edited July 11, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Hxj Posted July 11, 2020 Report Share Posted July 11, 2020 There is one point that I think has been missed regarding the charge. In order to be valid the charge has to be registered at Companies House within 21 days of being created otherwise it is of no effect. So I would bet a lot that the transaction with Rams Investment Limited took place in October or November 2019. The accounts for GN202 PP show an amount owed to a group company. That can only be GN204 PPHC. The Group in this instance includes only these two companies. I suspect that Pride Park was transferred to GN204 PPHC and then dropped into the subsidiary GN202 PP. That would create the accounting transactions resulting in the balance sheet values. There is nothing unusual or dodgy in the second transaction. 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 13, 2020 Author Report Share Posted July 13, 2020 (edited) I read on OwlsOnline, which unless I missed it elsewhere or in the article, the EFL will apparently announce both hearing results at the same time. This could be interesting- I should stress the article was apparently in Friday's Telegraph and pre-dated anything regarding Man City today. Edited July 13, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 13, 2020 Author Report Share Posted July 13, 2020 (edited) On 11/07/2020 at 07:36, Hxj said: There is one point that I think has been missed regarding the charge. In order to be valid the charge has to be registered at Companies House within 21 days of being created otherwise it is of no effect. So I would bet a lot that the transaction with Rams Investment Limited took place in October or November 2019. The accounts for GN202 PP show an amount owed to a group company. That can only be GN204 PPHC. The Group in this instance includes only these two companies. I suspect that Pride Park was transferred to GN204 PPHC and then dropped into the subsidiary GN202 PP. That would create the accounting transactions resulting in the balance sheet values. There is nothing unusual or dodgy in the second transaction. Thanks, that's interesting stuff. It seemed to yep- had a look at the accounts, briefly and it states- for Gellaw Newco 202. Limited Created 6th November 2019, Delivered a week later. Same timeframe for the one on Gellaw Newco 204 Limited. So transferred to Gellaw Newco 204 Limited and then dropped into the subsidary? Land Registry (last time I checked) suggested Gellaw Newco 202 Limited owns Pride Park but who knows! Quote 1 charge registered 1 outstanding, 0 satisfied, 0 part satisfied Charge code 1142 2836 0001 Satisfy charge1142 2836 0001 on the Companies House WebFiling service Created 6 November 2019 Delivered 13 November 2019 Status Outstanding Persons entitled Rams Investment Limited Brief description Land known as derby county stadium, pride park, derby, DE24… On a more mundane note, fortnight into July, approaching halfway in and despite taking the 3 month extension- still nothing for those 6 Derby related companies! Edited July 13, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 14, 2020 Author Report Share Posted July 14, 2020 (edited) Been reading the EFL Procedural rules etc, from EFL v Birmingham last season which led to the points deduction. Pulled out some key points- one or two may explain why Gibson was so angry! One or two are a bit surprising though. Quote 24.It is clear from Mr Ren’s evidence and the documents that the Club knew that in entering into the transfer contracts it was running the risk that registration would be refused for the reason which had been given in the email of 2 May. It had been unable to make the forecasted player sales profits of £8.3 million, although it continued to assure the EFL that it would do so. Those profits were highly material to the P&S calculation which had been submitted on 29 March. It was on 10 July that the Club submitted a revised forecast from which it became clear that the aggregated loss would exceed the aggregate threshold in 2017/18 by at least £7 million. Quote Objectives of the P&S Rules 25. The Financial Fair Play Rules introduced by the EFL in 2012 were modelled on the Financial Fair Play Regulations of UEFA. Although there are some differences between those rules their objectives are broadly similar. Those objectives include the introduction of more discipline and rationality in club football finances, the encouragement of clubs to operate on the basis of their own revenues, and protecting the long-term viability and sustainability of club football. Those objectives continue to apply to the P&S Rules which came into effect from 2014. The 2014/15 season was the first season to be reported under those rules, but they only came into effect from 2016/17 Interesting! Wasn't fully sure on that bit or had forgotten that bit- but yep, the 2015/16 and 2014/15 season essentially combined both the old and the new model, ie loss of more than £13m in 2014/15 and even 2015/16 after allowable costs meant fine/transfer embargo! The first and truest full 3 year period of it was the 3 years to 2018/19 of course. Quote 27.Under that approach financial fair play rules operate by reference to the failure to comply with financial restrictions, not by any analysis of the degree to which any overspending by clubs has had the effect of improving the performance of an offending club in competition. Excessive spending on players is clearly designed to achieve an enhancement of sporting performance, but whether in practice it does enable a particular club at a particular point in time to achieve better results than it would have achieved if it had complied with the rules is practically impossible to assess. Even more difficult to assess would be the other counter-factual, namely whether competitor clubs would have performed better if they too had been permitted to overspend to the same degree. The principle of fairness and equal treatment can only be applied in this context by measuring the degree of overspending, recognising that any substantial breach may directly affect the competitive position of the offending club, to the detriment of other clubs in the same competition. Given that the UEFA and EFL financial fair play rules have the same objectives these principles must apply equally to the P&S Rules. Can the objectives and attempts to circumvent these with respect to what would otherwise have been a major breach be a basis for charge then? You'd hope so! Quote 28.For those reasons the Commission cannot accept the Club’s argument that for the EFL to justify a sporting sanction it is necessary to prove a “measurable sporting advantage” caused by the overspending. That argument does not meet the point that any substantial overspending is in principle detrimental to the interests of other clubs which comply with the rules, because it gives the overspending club a direct advantage in bidding for players during the transfer window. Any such advantage gained from breach of the rules, in the acquisition of players or in the fielding of a stronger team in competition, is in principle unfair. As I recall, Middlesbrough bid for Waghorn in 2018 but Derby got him...one downsized, one sold their stadium and pulled other loopholes- could that have been one of the factors that rriled Gibson in particular? Middlesbrough according to a quick search had a bid accepted- then a week later he signed for Derby! Quote Sanctioning Guidelines 29.On 17 September 2018 the board of the EFL approved sanctioning guidelines for P&S cases. It is clear from the accompanying paper and the guidelines that these constitute instructions given by the board to the executive as to sanctions to be sought in proceedings before the Commission. They do not have any legal force and are not binding on the Commission, which retains its general power to impose any sanction falling within Regulation 91.2. It also needs to be noted that these guidelines were agreed and promulgated after the charge had been brought against the Club. 30.However in the course of argument each party invited the Commission to have regard to these guidelines, although for different reasons. The EFL argues that the guidelines are at least an indication that the EFL and clubs regard a sporting sanction as the most appropriate response. But the Club accepts that a sporting sanction by way of a points deduction is appropriate. The Club also accepts that the guidelines properly reflect the policy of the P&S Rules. Its argument is that the sanction should not exceed that required under the guidelines. The Commission accepts that it would clearly be unfair for a points deduction to be imposed which exceeded the deductions specified in the guidelines, but the corollary is that the guidelines are a relevant indication of the appropriate deduction. So in effect each party invites the Commission to have regard to these guidelines in deciding what sanction should be applied under Regulation 91.2. 31.There is considerable merit for both the EFL and all the clubs in the Championship in having clear guidelines which provide some measure of predictability as to the severity of sanction which may be imposed in the event of breach of the P&S Rules. Under the guidelines the points deduction to be imposed is 12 points, which is to be reduced by reference to the amount of overspending above the upper loss threshold. The applicable reduction is by reference to bands of excess expenditure, from less than £2 million, where there is a reduction of 9 points, to £15 million or more, where there is no reduction. The band applicable to this case is £8 – 10 million, giving a reduction of 5 points, so that the net points deduction starts at 7 points. The trend in spending, if diminishing, is then taken into account, as showing an intent to comply. The guidelines then provide for an additional points deduction of up to 9 points for “any aggravating factors”, which are not defined. It is clear from the Championship Clubs meeting on 20 September 2019 that it was understood that mitigating factors could also be taken into account. 32.The points deduction is to be applied in the season following the conclusion of the relevant 3 year monitoring period. It is only at the end of that period that any loss in excess of the aggregated threshold can be finally determined, so that the following season is the earliest point at which a points deduction can be applied. However it is clearly desirable that any points deduction should be decided and imposed as early as possible in the relevant season, so that all clubs participating in the Championship understand where they stand in the league. For relegation or promotion outcomes potentially to be affected by a points deduction only announced in the last few weeks of the season is far from ideal. That requires a Disciplinary Commission to be appointed early and a hearing date fixed promptly. Under the procedural rules the chairman does have a power, and a duty, to secure an expeditious hearing, but it is regrettable that in this case, for a number of different reasons, it was not possible for the hearing to be held until 7 months after the charge was brought. 33.The Commission is satisfied that a sporting sanction by points deduction is required. The sanctioning guidelines properly reflect the objectives of the P&S Rules, and should be taken into account as guidance in deciding what points deduction should be applied in the current season. Under the guidelines the level of excess expenditure by the Club falls within the bracket £8 – 10 million, which would indicate a deduction of 7 points, subject to any mitigation or aggravating factors. Surely given point 24, why did it take about two years to put Sanctioning Guidelines into force?? Or would that have been part of the transitional arrangements. Still they should have looked to put these together as a matter of urgency in March 2018 when it showed a number of clubs heading towards the rocks on FFP and one in particular- certainly to have had them in place by end of June 2018! That's poor! Point 32 is interesting, given that the regulations themselves state about Projected Accounts and T, T-1 and T-2...'T' of course being the existing season and based on that, 'T' if over the threshold should result in an Independent Disciplinary Commission in that existing season. I have a feeling that this was fudged/messed up somewhat by the old regime. https://www.efl.com/contentassets/c79763f8e2174f4fb87200a371abf5fa/190322---efl-v-bcfc---decision---final.pdf Because regulations 2.9, 2.9.1 and 2.9.2 of the P&S regs quite clearly state the following to be the case: Quote 2.9 If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss that exceeds the Upper Loss Threshold (calculated in accordance with Rule 3) then: 2.9.1 the Executive may exercise its powers set out in Regulation 16.20; 2.9.2 the Club shall be treated as being in breach of these Rules and accordingly The League shall refer the breach to the Disciplinary Commission in accordance with section 8 of the Regulations. I'm no lawyer but if you're keeping up with this/still engaged with the post- then thank you and well done! Not properly looked at those other regulations for a while! Section 8, or Regulation 16.20. Mentioned the Implementation and the Transitional elements above. Bit more on that! Quote 8 Implementation and Transition 8.1 For the purposes of Rule 2, the first ‘T’ Season will be 2016/17, and as a consequence these Rules are effective (in so far as they relate to T-1 and T-2) for the 2014/15 and 2015/16 Seasons. 8.2 If: 8.2.1 a Club’s Adjusted Earnings Before Tax resulted in losses of £13 million (or greater) in Season 2014/15 and/or Season 2015/16; and 8.2.2 that Club was sanctioned in accordance with the Championship FFP Rules in respect of the applicable Season, then, but not otherwise, the Adjusted Earnings Before Tax loss for that Club for that Season (for the purposes of these Rules) will be capped at £13m. 8.3 The Championship FFP Rules remain in force for Seasons 2014/15 and 2015/16. https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/ Think Reading possibly could've been sanctioned in the latter- with a fine if promoted or an embargo if not- but had a "profit on disposal of investments" or similar. Under the old rules of course. 16.20 basically puts a bit of meat on the bones of the EFL Business Plan. Definitely questions for how the EFL implemented these- I hope Shaun Harvey somehow gets dragged into this mess, two hearings from two seasons ago ongoing/still unknown as he failed to implement rules correctly- fit and proper (not in a legal sense I must say, but a competence sense certainly) he utterly was not! However there was a blog by Al Majir back in summer 2018, a Birmingham blogger of some credibility, which stated the following: Quote The sheer number of clubs who have apparently breached FFP limits will have forced the EFL to think carefully with respect to the punishments handed out. This website understands that transfer embargoes have not been automatically enforced on clubs breaching FFP due to the issues it would create within the transfer system. With so many clubs in breach it is understood the EFL are being lenient with the majority of clubs with the aim to get as many back within limits with as little fuss as possible. https://almajir.net/2018/05/18/ffp-clubs-in-breach/ Edited July 15, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 15, 2020 Author Report Share Posted July 15, 2020 Interesting development in Scotland too. Now English and Scottish law have some divergences but I wonder if there are commonalities here? Thinking with respect to FFP if Derby, Sheffield Wednesday or whoever else take it outside the system. The below Tweet in the thread was quite interesting...I'd assume part if not all of it would be applicable across Europe. UEFA directive as a starting point, that would apply here as up there. Only difference I guess is that SFA leads directly to European competition etc, whereas EFL does not! Could a golden share issue be possible for clubs doing that in the EFL? I'd like to think it is/would be explored! Quote Link to comment Share on other sites More sharing options...
Port Said Red Posted July 15, 2020 Report Share Posted July 15, 2020 Jose Mourinho discussing VAR and FFP yesterday made some good points. I have to say, reading through this thread, I have some sympathy with this view....... "And Financial Fair Play is the same thing. When I say it should finish, it is not because I do not agree with the basic principle. It's because I don't agree with the circus." Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 17, 2020 Author Report Share Posted July 17, 2020 I see what he's getting at but it needs some proper and timely enforcement. Talking of the circus...mostly paywalled alas. https://www.telegraph.co.uk/football/2020/07/17/efl-pressure-resolve-legal-disputes-championship-clubs-relegation/ Quote Link to comment Share on other sites More sharing options...
visitingholte Posted July 19, 2020 Report Share Posted July 19, 2020 My first post on here. I have been visiting this thread for almost 6 months now, as it has been pretty insightful for me into parts of the world of championship clubs finances and financial health. Just curious (since we, Villa) seem to be heading back for relegation. What is the deal with the proposed £18 mil salary cap? For me, it seems like it would be extremely hard to actually put in place considering about half the teams already spend way over that amount. What are y'all's thoughts on this? Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 21, 2020 Author Report Share Posted July 21, 2020 (edited) Hi @Coppello Hope you're well. Quick q on FFP you might know the answer to. Relates to Amortisation and FFP with respect to accounting. As we remember, Derby did the amortisation like many things- well they 'did it their way' basically. Residual value for Player Registrations aka Intangible assets instead of straight line amortisation. I guess my question is, would it be possible for them to Impair/have Impiared the residual values down to zero over say 2018/19 and 2019/20 in order to release them for £0 as they should? Those Impairments of course still being counted against FFP...except somewhat covered by the profit on disposal of Pride Park? Then come 2020/21, quite a lot of wages off and the big hit on release/Impairment off the books and ready to go again somewhat...because of course that Pride Park disposal of fixed assets helps them not only in 2017/18 itself- and the same for Hillsborough and others, but also in the period to 2018/19 and 2019/20. 5 seasons in effect, even if only 3 periods. This may yet be foiled by the fact that Pride Park was as per the EFL's valuation £49-50m, as opposed to £81.1m so if this was a part of their plans, it could be scuppered! I digress though, but could profit on disposal of Pride Park have possibly helped to cover Impairment of residual values to zero, in your opinion? Of course we can only speculate a bit as their accounts for last season until 30th June 2019 for those 6 companies (but notably in this instance, their football club and Gellaw Newco 203) still are not out or at CH yet! Edited July 21, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Davefevs Posted July 21, 2020 Report Share Posted July 21, 2020 On 19/07/2020 at 02:01, visitingholte said: My first post on here. I have been visiting this thread for almost 6 months now, as it has been pretty insightful for me into parts of the world of championship clubs finances and financial health. Just curious (since we, Villa) seem to be heading back for relegation. What is the deal with the proposed £18 mil salary cap? For me, it seems like it would be extremely hard to actually put in place considering about half the teams already spend way over that amount. What are y'all's thoughts on this? Hi VH. Welcome to OTIB. As you’ve been reading you’ll find we are a strange bunch! But we like opposition posters on here in the main. The £18m salary cap is still a bit of an unknown. The new proposals appear to centre around The salary cap - 25 man max squad, £720k per annum salary, thus 25 x £720k = £18m. diminishing the impact of Parachute payments and financial penalties accordingly. For a relegated club, you can register (that’s financially register in the ffp submission) any players earning over £720k as £720k. So if Mings is on £1.3m (£25k pw), then he only counts as £720k. So Villa’s starting point would be “compliant”. However you then decide to sell Mings, Grealish and McGinn for £100m. Normally you would use that slug of money, plus PPs to go and raid other clubs and perhaps go the best Champ players. Lets say Brentford fail in the playoffs. Dean Smith says we’ll have Pinnock for £15m and we’ll pay him £1m per annum, Ollie Watkins for £25m and £1.5m, and whilst we’re at it we’ll have Eze from QPR for £20m for £1.5m per annum too. From a fees point of view, you’re £40m up....but against your salary cap you’re now over. You had an allowance of £2.16m (3 x £0.72m), but spent £4m, this overspending by £1.84m. The penalty is £3 for every £1. So that costs you £5.5m. Any contract renegotiations for your relegated players aren’t covered by £720k cap either. So Wesley (forget his injury) who signed a £3m (£60k per week) deal last summer with a 50% relegation clause starts kicking off at only being on £30k per week now. Prem clubs have been alerted by his agent, but you want to keep him. You renegotiate a £10k increase, so he’s now on £40k (£2m). That’s £1.28m over the allowance, so you get fined £3.8m. Suddenly this starts to get very expensive, because all the other players are knocking on your door. Now that might be a gamble Villa are prepared to accept, but it may start to stop clubs coming down just buying up who they want. 2 Quote Link to comment Share on other sites More sharing options...
wayne allisons tongues Posted July 21, 2020 Report Share Posted July 21, 2020 https://www.bbc.co.uk/sport/football/53484188 Who knows when this seasons final table will be confirmed? Could get very messy 1 Quote Link to comment Share on other sites More sharing options...
Davefevs Posted July 21, 2020 Report Share Posted July 21, 2020 Back to FFP/Salary Cap stuff.... ...if 25 man squads follow PL rules, then u21s don’t have to be registered in the 25. Assuming Smith, Maenpaa and Williams don’t get extended, then we have 32 players 21 and over. That would mean we have to leave 7 players out / get rid of. Quite sobering really. 1 Quote Link to comment Share on other sites More sharing options...
Hxj Posted July 21, 2020 Report Share Posted July 21, 2020 4 hours ago, Davefevs said: It won't work as it is full of holes. Nothing to stop Saracen style arrangements with loans or housing. You could pay the squad £1 million each if they win a single FA Cup or League Cup match a year and that is outside the cap, ok the players are taking a gamble but probably worth it. Or you could set up a nice little partnership or company to extract some of the income as non-salary income, or maybe you could even get them a marketing role in a local company for 50k a month. And that is without any real thought. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 21, 2020 Author Report Share Posted July 21, 2020 (edited) 11 minutes ago, Hxj said: It won't work as it is full of holes. Nothing to stop Saracen style arrangements with loans or housing. You could pay the squad £1 million each if they win a single FA Cup or League Cup match a year and that is outside the cap, ok the players are taking a gamble but probably worth it. Or you could set up a nice little partnership or company to extract some of the income as non-salary income, or maybe you could even get them a marketing role in a local company for 50k a month. And that is without any real thought. What happened to Saracens when discovered though? They got 35 pts and a £5.6m fine. The former is 35/110 obtainable points, the latter was about 30% of their turnover from the most recent set of accounts. What then happened when they didn't want to open up their books to further inspection in January? They had to accept a further 70 points, and after much wrangling their trophies were kept hidden. The 70 points on top was to make sure they'd finish bottom and that it would align with the confirmed relegation. The powers that be, the other clubs, have to be extremely punitive to clubs found to be in breach but with coverups too. Such as Saracens. Any found out cover up or even any non-cooperation gets an automatic points deduction, this is one aspect that is mooted. Fixed penalty if you like. Further, there is the fining system. Automatic sliding scale based on overspend. Plus the plan of an Independent Disciplinary Commission for those found in breach. Bonuses payable in event of a Cup win are nonetheless conditional in that. You could draw Man City first up.. I'd quite like clubs found to have covered up significant breaches of the cap to be suspended from the Football League for a season, be it the following season or on return from the PL. THAT would send home a message. Breach the cap through complex methods, if notably egregious then you sit out a League season as a club. Edited July 21, 2020 by Mr Popodopolous Quote Link to comment Share on other sites More sharing options...
Davefevs Posted July 21, 2020 Report Share Posted July 21, 2020 39 minutes ago, Hxj said: It won't work as it is full of holes. it’s a five bullet summary of an EFL proposal, it’s not the whole thing. It’s a starting point for EFL discussion. Nothing to stop Saracen style arrangements with loans or housing. You could pay the squad £1 million each if they win a single FA Cup or League Cup match a year and that is outside the cap, ok the players are taking a gamble but probably worth it. football bonus schemes are based on set guidelines. Or you could set up a nice little partnership or company to extract some of the income as non-salary income, or maybe you could even get them a marketing role in a local company for 50k a month. And that is without any real thought. and I’m sure the likes of SL via MA will have input to close the loopholes that you suggest. 1 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 21, 2020 Author Report Share Posted July 21, 2020 I'll go a bit further than my last post actually and say you really need a club effectively automatically relegated through a points deduction, automatically relegated verbatim, or possibly even suspended or in extremis expelled from the Football League. A strong offence deserves a strong response, punishment. Quote Link to comment Share on other sites More sharing options...
Hxj Posted July 21, 2020 Report Share Posted July 21, 2020 The problem is that the Championship doesn't work like Premiership Rugby. Top flight rugby in England consists of somewhere between 8 and 14 clubs (depending on your definition), with no exchange upwards and little exchange downwards, effectively you have a closed shop. The salary cap works best in such circumstances, see the NFL and NHL in the USA. The whole point of the Championship is to be promoted into the Premier League, the land of riches, and so at any cost that you can afford. Of the 24 Championship teams 6 will be different next year. There is not the same commonality of interest. Look at the deafening silence in support when owners try to stand up fir what us undoubtedly right. Quote Link to comment Share on other sites More sharing options...
downendcity Posted July 21, 2020 Report Share Posted July 21, 2020 1 hour ago, Hxj said: It won't work as it is full of holes. Nothing to stop Saracen style arrangements with loans or housing. You could pay the squad £1 million each if they win a single FA Cup or League Cup match a year and that is outside the cap, ok the players are taking a gamble but probably worth it. Or you could set up a nice little partnership or company to extract some of the income as non-salary income, or maybe you could even get them a marketing role in a local company for 50k a month. And that is without any real thought. If a salary cap had been introduced under Harvey's stewardship, then it is highly likely that clubs would have been able to drive such a coach and horses ( in the ways you indicate) through the rules his team would have concocted. Under Parry, however, I suspect it would be a lot different, so would expect the rules to be as airtight as possible, but also that the penalties for breaking those rules would be swingeing. 2 Quote Link to comment Share on other sites More sharing options...
bcfc01 Posted July 21, 2020 Report Share Posted July 21, 2020 1 hour ago, Hxj said: It won't work as it is full of holes. Nothing to stop Saracen style arrangements with loans or housing. You could pay the squad £1 million each if they win a single FA Cup or League Cup match a year and that is outside the cap, ok the players are taking a gamble but probably worth it. Or you could set up a nice little partnership or company to extract some of the income as non-salary income, or maybe you could even get them a marketing role in a local company for 50k a month. And that is without any real thought. Players I know at Bath RFC seem to have a few company perks - I'm sure its all perfectly legal. I used to work for a merchant bank - 2% mortgage interest free for the first 4 years, 2.5% car loans, cheap insurance with no penalties for claims (write off the car and get full value plus £500), cheap holidays (they owned Thomas Cook at the time), company yacht, company loans, etc etc. It certainly added a load to the salary. I'm sure BCFC could come up with perks that add a lot of value to the salary. Quote Link to comment Share on other sites More sharing options...
Davefevs Posted July 21, 2020 Report Share Posted July 21, 2020 Yep. When you worked for your bank all your employee perks and the business benefits were controlled around tax, NI, Beneficial Loan rules, so that compliance is maintained as is transparency. @Hxjmentions Saracens then states Rugby very different to EFL Champ. It is up to the EFL and it’s members to build the rules appropriately. If you build rules and processes that state things clearly, and request that a club approach you before they try to interpret it you don’t run into retrospective action. You’d hope the likes of MA etc on the EFL board have enough business experience to define rules well. 1 Quote Link to comment Share on other sites More sharing options...
downendcity Posted July 21, 2020 Report Share Posted July 21, 2020 On 07/07/2020 at 20:15, AnAstonVillafan said: I'm fairly sure there will be no reopening of old cases. Otherwise you'd have to get Bournemouth looked at again. And I just can't see why, especially as the EFL and Aston Villa have already said there was compliance. And you seem admant there was wrongdoing. You feel like a rigorous second look should happen. Does anyone else feel this way ? Was £56.7m too high or too low ? Do you think we made too much profit from the sale ? How much should that be ? I'll be staggered if that case was ever reopened if i'm honest. I'm very certain that we would never be subject to a points deduction or any other sanction. I'm racking my brains to think of what we could be collared for at the moment. We've had this point raised before by Villa fans. Bournemouth were dealt with and punished under the ffp rules that applied at the time. The only penalty available under those rules was a fine, which they duly received. There is no way you can now go back and punish them for the same ffp breach, but applying penalties available under the new ffp rules, which only came into being after Bournemouth's promotion. The crucial issue seems to be around the stadium sale ( although I know our resident financial sleuth, Mr Popodopolous, has mentioned there might be questions over H2S income), as without the "sale" of Villa Park I think I'm right in saying that Villa would have breached ffp by some margin. All the clubs that took this route were told there was compliance as, at the time, the biggest question was concerning the sale of fixed assets to a related third party. When it then transpired that the EFL cocked up the new rules it was clear that merely selling the stadia did not in itself breach ffp rules. You ask if the profit was to high or too low. The EFL now seem to be questioning whether the stadium valuations they have investigated were conveniently at the right level to ensure the clubs in question managed to avoid an ffp breach, despite their profit and loss accounts otherwise showing losses that would have breached. It's not a question of to high or too low, but what whether the sales were at the correct fair market value. In this respect there is form, as both Derby and Wednesday, although originally "passing" ffp" at the same time as Villa and following their own stadium sales, have been further investigated over the valuation of their stadia. While you've been in the prem, you fell outside the jurisdiction of the EFL, otherwise, based on the Derby and Wednesday cases, it is likely that your stadium sale would have been subject to similar ongoing investigation. If relegated, and if the EFL decided their were grounds for investigation, it would not be opening an old case, but merely carrying on an investigation that came to halt only because of promotion to the premier league. Given the circumstances in which all the clubs involved entered into a stadium sale, there is bound to be a high degree of scepticism as to the voracity of the valuations. In in fairness there has been such scepticism on this forum as regards all the clubs involved, not just Villa. 2 Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 21, 2020 Author Report Share Posted July 21, 2020 (edited) 1 hour ago, bcfc01 said: Players I know at Bath RFC seem to have a few company perks - I'm sure its all perfectly legal. I used to work for a merchant bank - 2% mortgage interest free for the first 4 years, 2.5% car loans, cheap insurance with no penalties for claims (write off the car and get full value plus £500), cheap holidays (they owned Thomas Cook at the time), company yacht, company loans, etc etc. It certainly added a load to the salary. I'm sure BCFC could come up with perks that add a lot of value to the salary. Football has some certain rules on it, I'd have thought. It's a stupid example but see: https://www.bbc.co.uk/sport/football/43617974 Now no further action but it shows that the EFL occasionally are on the ball. Not often of course! Andy Holt the Accrington owner wanted to purchase McDonalds for his squad, after a victory- and he did- but he was hauled in to explain his actions. Benefits of the type you list would surely be subject to stringent analysis/regulations- especially under Parry! A starting point for a solution might be a mix of the wage bill including total benefits- ie inclusive of benefits in kind- plus anti-avoidance mechanisms, which would give the EFL broad scope to punish clubs more swiftly. Automatic points deductions for misleading the EFL would be a strong starting point. Edited July 21, 2020 by Mr Popodopolous 1 Quote Link to comment Share on other sites More sharing options...
visitingholte Posted July 22, 2020 Report Share Posted July 22, 2020 On 21/07/2020 at 04:51, Davefevs said: Hi VH. Welcome to OTIB. As you’ve been reading you’ll find we are a strange bunch! But we like opposition posters on here in the main. The £18m salary cap is still a bit of an unknown. The new proposals appear to centre around The salary cap - 25 man max squad, £720k per annum salary, thus 25 x £720k = £18m. diminishing the impact of Parachute payments and financial penalties accordingly. For a relegated club, you can register (that’s financially register in the ffp submission) any players earning over £720k as £720k. So if Mings is on £1.3m (£25k pw), then he only counts as £720k. So Villa’s starting point would be “compliant”. However you then decide to sell Mings, Grealish and McGinn for £100m. Normally you would use that slug of money, plus PPs to go and raid other clubs and perhaps go the best Champ players. Lets say Brentford fail in the playoffs. Dean Smith says we’ll have Pinnock for £15m and we’ll pay him £1m per annum, Ollie Watkins for £25m and £1.5m, and whilst we’re at it we’ll have Eze from QPR for £20m for £1.5m per annum too. From a fees point of view, you’re £40m up....but against your salary cap you’re now over. You had an allowance of £2.16m (3 x £0.72m), but spent £4m, this overspending by £1.84m. The penalty is £3 for every £1. So that costs you £5.5m. Any contract renegotiations for your relegated players aren’t covered by £720k cap either. So Wesley (forget his injury) who signed a £3m (£60k per week) deal last summer with a 50% relegation clause starts kicking off at only being on £30k per week now. Prem clubs have been alerted by his agent, but you want to keep him. You renegotiate a £10k increase, so he’s now on £40k (£2m). That’s £1.28m over the allowance, so you get fined £3.8m. Suddenly this starts to get very expensive, because all the other players are knocking on your door. Now that might be a gamble Villa are prepared to accept, but it may start to stop clubs coming down just buying up who they want. Thank you! It definitely is a very good topic & there is a pretty good discussion for ffp & finances in general. I didn't realize it would include a 25 player squad limit. Not sure I would be in favor of that either. I find it interesting that they settled on the £18million limit. Why not £20mil? How many current championship teams would immediately comply with that? Feels like many of them would have to significantly trim the wage bill for that. I know that Stoke aren't likely to get relegated now, but I thought I read that at least one of their players would be on a wage that is bigger than the entire League 1 wage cap. And it also seems like the huge financial gap between the PL & EFL would just begin to grow and grow (which is a bad thing). The examples are pretty helpful/insightful, thanks! Don't get me wrong, I think finances in football have become unsustainable and definitely agree with some type of cap. I just don't know how implementing that would be beneficial for everyone. There's obviously never going to be a PL wage cap, and the enticement of the PL TV revenue (~ £100mil) will always be there for championship teams and that will cause overspending from Championship clubs in an attempt to reach that prize. Quote Link to comment Share on other sites More sharing options...
Mr Popodopolous Posted July 22, 2020 Author Report Share Posted July 22, 2020 Got a bad feeling that Derby and Sheffield Wednesday are getting off the hook here... https://www.footballlaw.co.uk/articles/the-owls-and-the-rams Some good legal reading, or football Legal reading in any case. Quote Link to comment Share on other sites More sharing options...
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