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The Championship FFP Thread (Merged)


Mr Popodopolous

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4 hours ago, Mr Popodopolous said:

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.

In my view the analysis stops too early.  As mentioned earlier the real issue will be DCFC and SWFC showing that they lost out as a result of the ‘agreement/promise’.  That means establishing that they abandoned another solution that would have solved their FFP issues.

For SWFC that of course ignores the selling of the stadium to a company that hadn’t been incorporated.

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5 hours ago, visitingholte said:

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. 

No probs.  I think £18m and 25 man squad are separate proposals....but are based on a Championship Average salary of £720k, hence the two together would be the ideal proposal for the EFL.

I think teams like Stoke with contracts commitments from previous Prem years would fall into similar rules as newly relegated teams.  You are right, you just can’t impose this when there are existing contractual commitments.

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1 hour ago, Hxj said:

In my view the analysis stops too early.  As mentioned earlier the real issue will be DCFC and SWFC showing that they lost out as a result of the ‘agreement/promise’.  That means establishing that they abandoned another solution that would have solved their FFP issues.

For SWFC that of course ignores the selling of the stadium to a company that hadn’t been incorporated.

Interesting stuff.

They IIRC claim they were relying on 'legitimate expectation'. Sheffield Wednesday especially, Derby intimated sign-off. 

Would've been very difficult indeed for both clubs to have come up with another solution.

Sheffield Wednesday apparently approached as per The Athletic, Shaun Harvey/the EFL executive in summer 2018 and told him that they intended to solve their issues by selling Hillsborough. That's their version anyway!

The article also suggests that the price of £60m was eventually settled on after a number of weeks of talk (if true how does an objective analysis of fair value by an independent surveyor kick in)??

From December 2019.

Now I've read about this one too. I've had debates on social media arguing this point but some Sheffield Wednesday fans seem to suggest something called 'novation'. 

Not sure what it is myself but apparently a company can exist in principle before a transaction occurs.

The longer it goes on without a verdict, to me it either means a crushing loss for the EFL or a landmark punishment for one or both of these clubs! Feels like there is little in-between. 

Edited by Mr Popodopolous
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Rubbish end to a rubbish season.

Part of me hopes we get our points deduction now as I don't see us surviving if we start on minus points next season and there's not much point in delaying the inevitable relegation to League One. We've not got much of a squad left (Rhodes is the only striker now at the club) and you'd think whatever happens points wise we'll be under some sort of embargo or a further points deduction will be suspended, meaning we won't be putting much of a squad together that could battle its way to survival.

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8 hours ago, Mr Popodopolous said:

Interesting stuff.

They IIRC claim they were relying on 'legitimate expectation'. Sheffield Wednesday especially, Derby intimated sign-off. 

Would've been very difficult indeed for both clubs to have come up with another solution.

Sheffield Wednesday apparently approached as per The Athletic, Shaun Harvey/the EFL executive in summer 2018 and told him that they intended to solve their issues by selling Hillsborough. That's their version anyway!

The article also suggests that the price of £60m was eventually settled on after a number of weeks of talk (if true how does an objective analysis of fair value by an independent surveyor kick in)??

From December 2019.

Now I've read about this one too. I've had debates on social media arguing this point but some Sheffield Wednesday fans seem to suggest something called 'novation'. 

Not sure what it is myself but apparently a company can exist in principle before a transaction occurs.

The longer it goes on without a verdict, to me it either means a crushing loss for the EFL or a landmark punishment for one or both of these clubs! Feels like there is little in-between. 

 

The contract could have been 'novated'.  Company A agrees to sell Asset to Company B.  Companies A, B and C can agree that the contract for the sale of Asset becomes one between A and C.

Trouble is you can't alter the facts.  If Asset has already been sold to B (to comply with FFP) then A can't sell it again.  If Asset is still held by A that is fine, except that FFP is failed because the contract can't be assigned to C before C exists.

Edited by Hxj
punctuation edits to clarify meaning,.
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As this thread is now sixty pages long, I've not read all posts,, so apologies if this has already been posted.

SSN team stated that SW may be deducted up to 21 points which if applied, would relegate them. However if that is the punishment and an appeal is then lodged, it will  possibly  next season when the final  verdict is announced. The Derby  case is still under investigation and that won't be decided until next season.

Are punishments actually listed anywhere? I remember Leeds docked 19 points one season whilst Luton started on minus thirty! Many years ago P'boro' were sentenced to be relegated to Div 4 the following season regardless of where they finished. They were 9th in Div 3. Spurs were deducted 24 points so Alan Sugar appealed and this was reduced to 12 points. He appealed again and all points were restored.

Perhaps the punishment reflect the "size & importance" of the club?

 

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On 23/07/2020 at 00:42, Owl Visiting said:

Rubbish end to a rubbish season.

Part of me hopes we get our points deduction now as I don't see us surviving if we start on minus points next season and there's not much point in delaying the inevitable relegation to League One. We've not got much of a squad left (Rhodes is the only striker now at the club) and you'd think whatever happens points wise we'll be under some sort of embargo or a further points deduction will be suspended, meaning we won't be putting much of a squad together that could battle its way to survival.

I'm wondering increasingly if you or Derby are in for a points deduction at all- the way the Hearing has dragged, didn't it as per @JPercyTelegraph on Twitter officially begin on Monday 22nd June 2020?

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On 24/07/2020 at 19:40, Mr Popodopolous said:

I'm wondering increasingly if you or Derby are in for a points deduction at all- the way the Hearing has dragged, didn't it as per @JPercyTelegraph on Twitter officially begin on Monday 22nd June 2020?

Apparently so, nobody seems to have a clue what's going on. The hearing apparently ended a couple of weeks ago and they've been deliberating ever since, I wonder if they all meet once a week for an hour or something like some sort of badminton club, it's pathetic isn't it. 

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21 minutes ago, Owl Visiting said:

Apparently so, nobody seems to have a clue what's going on. The hearing apparently ended a couple of weeks ago and they've been deliberating ever since, I wonder if they all meet once a week for an hour or something like some sort of badminton club, it's pathetic isn't it. 

It's ridiculous for sure. Could have some merit to the reasons though- read a fair few theories. 

1) Case could've been heard with one or both sides appealing as of now all still behind closed doors. I say case, more like cases!

2) One or both of you and Derby won with rules needing to be rewritten. 

3) Case lost but Chansiri threatening administration if punished. I find  that hard to believe BTW! 

4) Some kind of negotiated punishment to reflect guilt or incorrect conduct (by which I mean incompetent as opposed to corrupt)on both sides.

Shaun Harvey has a lot to answer for but this case. You get more  info out of Fort Knox! ?

Well I say Shaun Harvey, might Shaun Halfwit be fairer. :)

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42 minutes ago, Mr Popodopolous said:

It's ridiculous for sure. Could have some merit to the reasons though- read a fair few theories. 

1) Case could've been heard with one or both sides appealing as of now all still behind closed doors. I say case, more like cases!

2) One or both of you and Derby won with rules needing to be rewritten. 

3) Case lost but Chansiri threatening administration if punished. I find  that hard to believe BTW! 

4) Some kind of negotiated punishment to reflect guilt or incorrect conduct (by which I mean incompetent as opposed to corrupt)on both sides.

Shaun Harvey has a lot to answer for but this case. You get more  info out of Fort Knox! ?

Well I say Shaun Harvey, might Shaun Halfwit be fairer. :)

I think number 4 is the most likely, unless I'm remembering it wrong I seem to remember QPR negotiating their punishment when they fell foul of the rules a few years ago. 

One thought that has crossed my mind, whilst lots of people have been accusing the the EFL/independent panel of being useless etc is that the delay in any sort of decision might be coming from the other side, as it would be in Wednesday's interest to drag this out as long as possible wouldn't it? 

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10 minutes ago, Owl Visiting said:

I think number 4 is the most likely, unless I'm remembering it wrong I seem to remember QPR negotiating their punishment when they fell foul of the rules a few years ago. 

One thought that has crossed my mind, whilst lots of people have been accusing the the EFL/independent panel of being useless etc is that the delay in any sort of decision might be coming from the other side, as it would be in Wednesday's interest to drag this out as long as possible wouldn't it? 

That's possible, the negotiated punishment angle but I don't think it necessarily should be the case.

Wasn't with Birmingham and the legal ruling there seems to offer some kind of precedent/guideline for future cases. Independent panel should be arbiter for better or worse IMO. 

Complex cases can take a while in terms of deliberation. Man City's hearing at CAS was IIRC 8th-10th June and yet verdict only came out on 13th July! 

It would, think Covid may have helped in that respect too, stalling for time. Should add as well, I think the EFL made a mistake pursuing both club and individual charges at the same time.

Think those individual charges took a good 2-3 months. I'm not interested in personal blame in first phase, club charges were more important. If EFL won case then they should've considered personal charges but going with both at once didn't seem like the best move.

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2 hours ago, Mr Popodopolous said:

Worth noting that Parry and Harvey have a different approach. To say the least- a lot would have depended on how these EFL cases v Derby and Sheffield Wednesday go. Precedent set and all that!

Maybe that initial (even if flawed) authorisation trumps all regardless. However these were seemingly approved or not objected to by Harvey but Parry with his credentials has a different view- we'll see! 

I don't know what the regs say with respect to such issues tbh, certainly never seen anything with respect to it. It's a fair point that.

I suppose my problem is that in a sense some expenditure did continue, the way the plan seemed to go was to escape the issue (to an extent in any case) via promotion as opposed to making more cutbacks during the season itself. The ground sale and HS2 may well have been looked at in some depth.

It was notable that despite Parachute Payments dropping as they did, as they always do  in Year 3, both wages and despite the use of loans so shockingly did amortisation.

Even if not hitting the exact figures, pushing on with further expansion as parachute payments fall and then settling it with a stadium sale and leaseback is very different in intent to showing some austerity

You had rather a lot out of contract going into summer 2019 but at the same time was final season of parachute payments so the two may negate. 

Further discussions on this should be on the FFP thread, agreed.

I just wanted to follow this on from the Premier League last day thread.

I'm not sure what you expected us as a club to do here. We did sell players. We also released Samba, Terry and Agbonlahor. Took a big fee for Jordan Amavi among others. At the same time John McGinn arrived for £2.5m

You said on another thread that you hope my club leverages itself big with fees and wages and comes down next year, but we only spent what we earned in TV income last summer and we currently have the 3rd lowest wage bill in the top flight at £23.8m.

In comparison Brighton's – £36m, Bournemouth's is £40m, and Watford's £45m.

Most of our new players except Heaton, are young and can be sold to balance accounts should the worst happen.

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16 minutes ago, AnAstonVillafan said:

I just wanted to follow this on from the Premier League last day thread.

I'm not sure what you expected us as a club to do here. We did sell players. We also released Samba, Terry and Agbonlahor. Took a big fee for Jordan Amavi among others. At the same time John McGinn arrived for £2.5m

You said on another thread that you hope my club leverages itself big with fees and wages and comes down next year, but we only spent what we earned in TV income last summer and we currently have the 3rd lowest wage bill in the top flight at £23.8m.

In comparison Brighton's – £36m, Bournemouth's is £40m, and Watford's £45m.

Most of our new players except Heaton, are young and can be sold to balance accounts should the worst happen.

Those figures for all those clubs sound really low. Brighton £36m wage bill, Bournemouth £40m and Watford £45m?? Happy to look further but where are those from. Norwich higher wage bill, really?

Well the leverage point was a certain degree of anger but worth noting it's been done before.

Well I'm not in atm but if I was I'd do a bit of a deeper dive. 

Parachute Payments as happens in Year 3 down. Was it by between £15-20m?

Loss limit down by £22m. It's £35m in PL of course and £13m at this level- another problem I have with the system but that's another debate. 

Nonetheless you're talking of a crunch of between £35-45m when combining the fall in loss limit with the fall in parachute payments. 

So for a wage bill AND amortisation to increase during that season is stunning really. Gobsmacked somewhat. 

In fairness some will have included the Bruce severance pay and the Smith compensation to Brentford.

I'm also disregarding the promotion bonuses. Despite and net of these the wage bill rose in a context with a squeeze containing falling parachute and loss limits. 

Swiss Ramble succinctly summarises some key points.

From his March review of the accounts, as we can see £10m rise in wages net of promotion bonuses (which are rightly excluded) and £2m rise of amortisation in a season of falling income. Good grief!

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6 hours ago, Mr Popodopolous said:

Those figures for all those clubs sound really low. Brighton £36m wage bill, Bournemouth £40m and Watford £45m?? Happy to look further but where are those from. Norwich higher wage bill, really?

Well the leverage point was a certain degree of anger but worth noting it's been done before.

Well I'm not in atm but if I was I'd do a bit of a deeper dive. 

Parachute Payments as happens in Year 3 down. Was it by between £15-20m?

Loss limit down by £22m. It's £35m in PL of course and £13m at this level- another problem I have with the system but that's another debate. 

Nonetheless you're talking of a crunch of between £35-45m when combining the fall in loss limit with the fall in parachute payments. 

So for a wage bill AND amortisation to increase during that season is stunning really. Gobsmacked somewhat. 

In fairness some will have included the Bruce severance pay and the Smith compensation to Brentford.

I'm also disregarding the promotion bonuses. Despite and net of these the wage bill rose in a context with a squeeze containing falling parachute and loss limits. 

Swiss Ramble succinctly summarises some key points.

From his March review of the accounts, as we can see £10m rise in wages net of promotion bonuses (which are rightly excluded) and £2m rise of amortisation in a season of falling income. Good grief!

The Swiss Ramble must use an alternative method of working these figures out.

I got my figures from here and they were repeated in the The Mirror

https://www.sportekz.com/football/premier-league-clubs-wage-bills/

 

Consider also that Villa's wage bill fell from £90m to £73m before relegation. And that as I told you before Aston Villa usually try to hide

the exact player wage total by including it in total staff costs. Something I've noticed us doing for about ten years.

 

 

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On 23/07/2020 at 00:34, Mr Popodopolous said:

Interesting stuff.

They IIRC claim they were relying on 'legitimate expectation'. Sheffield Wednesday especially, Derby intimated sign-off. 

Would've been very difficult indeed for both clubs to have come up with another solution.

 

Derby would have been looking at a sub £10m overspend for the period ending June 2018 (without the stadium sale). This could have been covered by player sales, such as selling Vydra earlier in the summer window.
This would have likely meant a very touch and go 2019 period, but we wouldn't have signed the players we did if it looked like we'd fail. We also wouldn't have gone out to spend as much as we did on Bielik this season, probably wouldn't have signed Rooney, and could have sold more of our youth players.

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4 hours ago, AnotherDerbyFan said:

Derby would have been looking at a sub £10m overspend for the period ending June 2018 (without the stadium sale). This could have been covered by player sales, such as selling Vydra earlier in the summer window.
This would have likely meant a very touch and go 2019 period, but we wouldn't have signed the players we did if it looked like we'd fail. We also wouldn't have gone out to spend as much as we did on Bielik this season, probably wouldn't have signed Rooney, and could have sold more of our youth players.

Sub £10m for the 3 years to June 2018? I can agree with that- is worth noting top that based on the Birmingham precedent clubs found guilty seemed to get a business plan and reset £13m targets.

Could be owing to the way in which Birmingham's expenditure was increasing at that time but the Judgement did seem to reset losses with individual £13m targets.

You do seem to have a thriving academy, something that can count in your favour with respect to FFP.

An issue would be the profit on disposal. When did it switch to residual value? That if applied correctly and consistently can markedly reduce a profit on disposal.

Straight line seems alright with profit but would have affected the amortisation in prior years.

Also are you using Sevco 5112 or the club? For FFP it should be the latter. 

I am increasingly coming round to the view of zero punishment for both clubs. The reason for the verdict could be diverse:

One of innocent, not guilty, case not proven or blame/error on both sides.

All of which would lead to no deduction, I blame the EFL (aka Harvey) for not acting more expeditiously back in 2018 with all but Birmingham.

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To add as well, I meant it should be Sevco 5112 not necessarily the club figures in isolation used. Certainly for a fuller picture even if a fair chunk is excluded.

Onto the here and now, clubs seem to want verdicts by the end of the week.

https://www.telegraph.co.uk/football/2020/07/27/efl-urged-resolve-legal-charges-hanging-derby-county-sheffield/

Barnsley cited in the article- tbh the majority who DO seem to want stronger regulations need to band together here, for reform and further reform.

Is behind a paywall but I managed to 'find' a couple of quotes, key sections.

Quote

Paul Conway, Barnsley’s co-chairman, told Telegraph Sport on Monday: “We at Barnsley want a stronger and more strict English Football League. We want to empower the EFL to make quicker and stricter decisions. 

“[But] Much of the blame needs to be put on the clubs themselves.  Some clubs may be scared of retribution for speaking out but I also believe some of these clubs want to reserve their rights to create their own sketchy deals to attempt to skirt EFL regulations and limit enforcement.”

Interesting take- he thinks that some of the quiet clubs are looking for an opportunity to circumvent the regulations themselves.

The general theme, I strongly agree with him as it goes- a simpler systyem of points penalties that are fixed which are less vague but more iron-cast would be a good start.

One idea might simply be £1m overspend=1 point and £2m overspend=2 points. Then follow that formula- with no upper limit. Ideally with projected accounts forming the third part of the equation and doing so correcrlty with continued and stepped up in-season monitoring- the big aim of the punishment IMO should be to stop a side getting promotion through excessive spending- this is a big aim but certainly shouldn't preclude punishment and enforcement in a wider sense.

Quote

One senior Championship official, who did not want to be named, said: “It’s a disgrace, and Barnsley are spot on when they accuse the EFL of not maintaining integrity.

“I can understand the Wigan situation because of the timing and the rules permitting an appeal within a timeframe, but the fact Sheffield Wednesday is unresolved is amazing and brings the EFL into disrepute.”

Wonder which club? 

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On 28/07/2020 at 13:17, Mr Popodopolous said:

Sub £10m for the 3 years to June 2018? I can agree with that- is worth noting top that based on the Birmingham precedent clubs found guilty seemed to get a business plan and reset £13m targets. Could be owing to the way in which Birmingham's expenditure was increasing at that time but the Judgement did seem to reset losses with individual £13m targets.

Yes, the 3 years to 2018. Normally, a club should be punished the season following that 3 year period, with the business plan part of that. If found guilty, that should have been in the 18/19 season. The earliest our potential penalty can be imposed is almost certainly the 20/21 season. It just so happens that our actual business plan has tied in nicely with what the EFL's business plan probably would have been anyway - the higher wage earners have left, and we've promoted youth. With a couple more expected to leave, we're currently looking at going into next season with only 15 over 20's in the squad, with only 3 or 4 expected to come in. One of those 15 hasn't even played a professional game yet.

I don't think we're far off the £13m annual target anyway.

On 28/07/2020 at 13:17, Mr Popodopolous said:

You do seem to have a thriving academy, something that can count in your favour with respect to FFP.

An issue would be the profit on disposal. When did it switch to residual value? That if applied correctly and consistently can markedly reduce a profit on disposal.

Straight line seems alright with profit but would have affected the amortisation in prior years.

Without checking, I think it was introduced in the 15/16 season. It's been long enough for the 'advantage' gained from reduced amortisation and profit on disposal to have balanced out. A historical correction would result in us gaining an advantage in the immediate present - I think this is going to be a bit of a sticking point with the verdict. I'll be very surprised if we aren't forced to change our amortisation policy in line with others, but it needs to be done in such a way that we don't gain any advantage.

On 28/07/2020 at 13:17, Mr Popodopolous said:

Also are you using Sevco 5112 or the club? For FFP it should be the latter. 

Club. For the 3 years to 2018 there isn't much between the two (once you account for our c£6m annual academy spend), although it would result in us being a lot closer to the limit in the following periods.

On 28/07/2020 at 13:17, Mr Popodopolous said:

I am increasingly coming round to the view of zero punishment for both clubs. The reason for the verdict could be diverse:

One of innocent, not guilty, case not proven or blame/error on both sides.

All of which would lead to no deduction, I blame the EFL (aka Harvey) for not acting more expeditiously back in 2018 with all but Birmingham.

It may be my own bias, but I could see SWFC getting punished whereas we do not. Them including the stadium sale in the 17/18 accounts seems wrong. Whereas us having a stadium valued roughly in line with inflation and accounting for stadium improvements looks fine. The amortisation policy being approved every year since 15/16 also looks difficult to penalise. I think the EFL executive(s) part in this will see at most a slap on the wrist for both clubs though.

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On 29/07/2020 at 14:18, AnotherDerbyFan said:

Yes, the 3 years to 2018. Normally, a club should be punished the season following that 3 year period, with the business plan part of that. If found guilty, that should have been in the 18/19 season. The earliest our potential penalty can be imposed is almost certainly the 20/21 season. It just so happens that our actual business plan has tied in nicely with what the EFL's business plan probably would have been anyway - the higher wage earners have left, and we've promoted youth. With a couple more expected to leave, we're currently looking at going into next season with only 15 over 20's in the squad, with only 3 or 4 expected to come in. One of those 15 hasn't even played a professional game yet.

I don't think we're far off the £13m annual target anyway.

Test foq quote format.

1 hour ago, AnotherDerbyFan said:
Quote

Yes, the 3 years to 2018. Normally, a club should be punished the season following that 3 year period, with the business plan part of that. If found guilty, that should have been in the 18/19 season. The earliest our potential penalty can be imposed is almost certainly the 20/21 season. It just so happens that our actual business plan has tied in nicely with what the EFL's business plan probably would have been anyway - the higher wage earners have left, and we've promoted youth. With a couple more expected to leave, we're currently looking at going into next season with only 15 over 20's in the squad, with only 3 or 4 expected to come in. One of those 15 hasn't even played a professional game yet.

Quote

I don't think we're far off the £13m annual target anyway.

Without checking, I think it was introduced in the 15/16 season. It's been long enough for the 'advantage' gained from reduced amortisation and profit on disposal to have balanced out. A historical correction would result in us gaining an advantage in the immediate present - I think this is going to be a bit of a sticking point with the verdict. I'll be very surprised if we aren't forced to change our amortisation policy in line with others, but it needs to be done in such a way that we don't gain any advantage.

Club. For the 3 years to 2018 there isn't much between the two (once you account for our c£6m annual academy spend), although it would result in us being a lot closer to the limit in the following periods.

Quote

It may be my own bias, but I could see SWFC getting punished whereas we do not. Them including the stadium sale in the 17/18 accounts seems wrong. Whereas us having a stadium valued roughly in line with inflation and accounting for stadium improvements looks fine. The amortisation policy being approved every year since 15/16 also looks difficult to penalise. I think the EFL executive(s) part in this will see at most a slap on the wrist for both clubs though.

 

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1 hour ago, AnotherDerbyFan said:

Without checking, I think it was introduced in the 15/16 season. It's been long enough for the 'advantage' gained from reduced amortisation and profit on disposal to have balanced out. A historical correction would result in us gaining an advantage in the immediate present - I think this is going to be a bit of a sticking point with the verdict. I'll be very surprised if we aren't forced to change our amortisation policy in line with others, but it needs to be done in such a way that we don't gain any advantage.

The balance of non-written off transfer fees and related costs at 30 June 2017 was about £50 million, about £15 million of additions and £5 million of disposals.  Total amortisation of the £65 million excluding disposals was £6.5 million.  If you look at the disposals in the total costs removed on disposal were £5.3 million of this £4.7 million was written off in the year. 

Both these figures indicate that there is a long way to go before the figures balance out.

If you assume that the net balance at 31 June 2018 has to be written off over the next four years that amounts to £12.5 million a year, so you will treading FFP failure simply on that depreciation figure, let alone your wages costs running at 130%+ of income.

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3 hours ago, AnotherDerbyFan said:

Yes, the 3 years to 2018. Normally, a club should be punished the season following that 3 year period, with the business plan part of that. If found guilty, that should have been in the 18/19 season. The earliest our potential penalty can be imposed is almost certainly the 20/21 season. It just so happens that our actual business plan has tied in nicely with what the EFL's business plan probably would have been anyway - the higher wage earners have left, and we've promoted youth. With a couple more expected to leave, we're currently looking at going into next season with only 15 over 20's in the squad, with only 3 or 4 expected to come in. One of those 15 hasn't even played a professional game yet.

I don't think we're far off the £13m annual target anyway.

Without checking, I think it was introduced in the 15/16 season. It's been long enough for the 'advantage' gained from reduced amortisation and profit on disposal to have balanced out. A historical correction would result in us gaining an advantage in the immediate present - I think this is going to be a bit of a sticking point with the verdict. I'll be very surprised if we aren't forced to change our amortisation policy in line with others, but it needs to be done in such a way that we don't gain any advantage.

Club. For the 3 years to 2018 there isn't much between the two (once you account for our c£6m annual academy spend), although it would result in us being a lot closer to the limit in the following periods.

It may be my own bias, but I could see SWFC getting punished whereas we do not. Them including the stadium sale in the 17/18 accounts seems wrong. Whereas us having a stadium valued roughly in line with inflation and accounting for stadium improvements looks fine. The amortisation policy being approved every year since 15/16 also looks difficult to penalise. I think the EFL executive(s) part in this will see at most a slap on the wrist for both clubs though.

The rules suggest this is arguable, ie the following 3 year period- the 'T' is a Projected Account based rule and therefore punishable in that the same season- I've read them in depth and my reading is that the EFL have not been enforcing this correctly, under Harvey in particular! Parry time will tell.

I'm far from convinced that the £13m loss thing anyway- once the stadium adjustment if it comes in factored in, let's not forget a loan cancellation of around £12m classed as revenue in 2015/16- FFP rules suggest that this, with the exception of the interest incurred, should be excluded! You take out the stadium sale, before we even get onto debate over amortisation and it's a £25m operating loss in 2017/18- a £25m operating loss that was inclusive of the playoffs- though admittedly not the final, a profit on transfers and Rowett compensation! Sevco 5112 accounts look even worse!

Will post some stuff later about the respective regulations. 'T' indicates in-season assessment and if necessary referral to a Disciplinary Commission however!

The fees still have to be amortised though, don't they- whether short or over time, they have to be amortised in full- the question is how much did the stadium sale offset this and how big will the hit for 2018/19 and I guess possibly 2019/20 be- they have to be amortised in full- whether it's straight line or whatever- Impairment would be one way out but no because Impairment of Player Registrations also counts against FFP. Has to be accounted for one way or another!

Depends what % has been amortised doesn't it? If it's changed from one to the other, then that adjusts figures even if it's the 3 years to last season for 2016/17 and 2017/18 as well for the worse- and also if it's the 3 years to 2019/20, it changes them for the better a bit. OTOH is there an argument that disposal of player registrations may have yielded a higher profit?

I don't agree- because the club is quite clearly gaining revenue from Club DCFC, Stadia DCFC, Derby County Academy but offloading at least some of the costs-- have I missed any- think the EFL should be looking at the group figures too- in addition I looked at your club summary of FFP in 2015/16- as in website statement- the Loan cancellation is another interesting angle that could change things materially. Loan cancellations and FFP, my reading of the regulations is that they don't count with respect to revenue or as a method to offset losses- save for an interest waiver. Perhaps a wage and some cost adjustments added back into the club accounts? Revenue for Sevco 5112 oddly is even slightly lower than the club one season! The Sevco shows the academy expenditure for a couple of seasons- and some other allowable costs. Think you need some combination of club and Sevco 5112 to get a full FFP picture personally- then again Sevco 5112 accounts for 2016/17 accounts were 10 months so may require a bit of adjustment again!

There is also the question of how Infrastructure expenditure should be accounted for. Should it simply be "Purchase of Tangible Assets"- that was how your club statement for 2015/16 and 2016/17 accounts seemed to present it- or should it be when it's hit the balance sheet? For FFP it's profit and loss so certainly that feels incorrect too. Said your loss for 2015/16 FFP was around £9m- unsure how that fits tbh, what are the included and excluded items?

I'd also add, Sheffield Wednesday's feels overvalued! Absolutely overvalued- gone through it before on a spreadsheet, their accounts back to 1990 and cannot fathom how the hell it goes for £60m- based on precedent, valuation- their work on it in 1990s and for Euro 96 certainly enhanced it but £60m- not one set of prior accounts suggests anything like! I question a number of valuations but theirs is somehow the most expensive of all- or at best second most- come on!

As for Derby. Doesn't account for Pride Park being seemingly valued at £50m or £49m or whatever the exact number was by the EFL hired independent valuer though does it. Possibly different valuation methods will throw up different outcomes. I note that the difference pretty much between the sale price/valuation by your hired valuer and the EFL's is the revaluation reserve. Factor in a grant as well and it's right in that range. Sure when looking at the two Birmingham clubs the grant seemed to be a factor with respect to the profit on disposal.

I fear both will get nothing though because of the actions of the EFL Executive in 2018- and in the case of amortisation, possibly before! Big suspended penalty for each maybe, in conjunction with a slap on the wrist- as in do it again and the clubs will get a major whack.

EDIT: I also note that there was no Fair Value Adjustment to Pride Park- or any of the assets- on acquisition in 2015/16. Does this suggest that valuations were broadly in line at purchase date?

In the first set of Sevco 5112 accounts for Assets acquired it basically says:

Quote

26   Acquisitions and disposals

         Acquisitions

                                                                                  Vendors' book value £000              Fair value adjustments £000        Fair value to the group £000

       Assets and liabilities acquired

        Tangible Fixed Assets                                             55,601                                                                -                                                              55,601   

This is the relevant section anyway. It suggests to me that the Vendors' book value for the Tangible Fixed Assets on acquisition is equal to Fair Value. That's all Fixed Assets, not just the ground btw.

Edited by Mr Popodopolous
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Got bored with the home working IT system failing completely today.

So looked at the 2019 accounts for Bournemouth and Watford.  Both are a complete mess and unless they bounce back quickly or make wide ranging disposals both are going to have major FFP problems.

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2 hours ago, Hxj said:

Got bored with the home working IT system failing completely today.

So looked at the 2019 accounts for Bournemouth and Watford.  Both are a complete mess and unless they bounce back quickly or make wide ranging disposals both are going to have major FFP problems.

I thought Watford made a profit unless that was 2018.

Wasn't aware they were that badly off, Bournemouth yeah- their problems are well documented.

Ake already off for £40m or so- bear in mind too that the higher loss limits in the PL, so that'd be £83m losses allowable for them both and £61m for Norwich in the 3 year period to 2021- subject to equity too I guess.

EDIT: Just had a quick look on Twitter and wow. Amortisation costs alone for Bournemouth in 2018/19, were £36,195,000. £32,424,000 loss in the PL with their gates coming down looks catastrophic for sure.

Not looked in great depth but assuming their owners will put in the equity to top them- Bournemouth and Watford- up to or near their loss limits at the upper level as opposed to the lower one.

I wonder how Aston Villa might have looked had they come straight back down. I note that their fans appear to think it's cancelled this year- at least from quick Twitter searches which may or may not be representative. :dunno:

Edited by Mr Popodopolous
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Good thread with respect to the relegated clubs.

Wonder what Bournemouth's allowable and therefore excludable costs might be? I'll hazard a guess at £5-7m per season.

Further, from another Swiss Ramble Tweet, it appears that their TV reliance for most recent accounts- so 2018/19- was high indeed.

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88%- Kinnell! A number of clubs had it high but Huddersfield and Cardiff didn't run at a significant loss, Watford had a profit but a loss surely likely in 2019/20.

It did though surprise me a bit, to read that Bournemouth don't plan to sell anyone else aside from Ake.

Edited by Mr Popodopolous
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That's good!!

Matt Hughes was right, about punishments next season. Despite the fact he writes for Daily Mail, he's a good journo!

Wonder if other clubs will be happy with this- probably the least they deserve tbh, Sheffield Wednesday.

EFL should appeal it to try and get it into 2019/20 maybe.

Edited by Mr Popodopolous
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