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The Championship FFP Thread (Merged)


Mr Popodopolous

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Apologies for the source.

The paper is terrible, but in some areas and notably this one Nixon can at times be quite good.

According to the publication in question, the EFL bungled the Sheffield Wednesday thing- this will not come as a great surprise to those who frequent this thread!

They should've received deduction in 2018/19 apparently- as with Birmingham. I'd also argue that it should've been 2017/18 for multiple clubs ie Projected Accounts but the brilliant leader of the EFL, Mr. Harvey only had a points tariff in place from September 2018- after the event! :doh: What he was doing for 2 seasons I'll never know! The rules themselves began in 2016/17, but the first full 3 year period with said rules was between 2016/17-2018/19.

The big and interesting claim- which I've been calling for a while :whistle2:

⬇️⬇️⬇️

Quote

Instead the IDC panel let off the Owls because the EFL took too long to bring charges — as well as pursuing the wrong case first.

The governing body initially wanted Wednesday officials to be sanctioned for their part in owner Dejphon Chansiri buying the Hillsborough stadium.

That case was dismissed and by the time their focus turned to the FFP offence, it was too late for them to handle it quickly.

Said it multiple times I am sure- win the case vs the CLUB first and then go after the individuals, potentially. The club in 99.99% of cases is the most important factor- whether it was fully dismissed or the EFL dropped it to expedite the process as it was stuck in arbitration with legal wrangling, potentially the report itself will make crystal clear.

Apparently the report is due to be published Sunday- why not Monday or Saturday?? Anyway it shall make very interesting reading. Maybe the interesting reading is the reason to sneak it out on the Sunday?

@Davefevs @Hxj @Coppello @downendcity @chinapig @CyderInACan

I give them credit for winning the case and am sure it may not have happened had it not been for a mix of Bury, Gibson's righteous anger and Harvey's ineptitude but still!

I suppose consistency of punishment makes sense because if Derby are guilty, then it's only right the points are docked in 2020-21, otherwise they would either get relegated a few days before fixtures out or they would receive a points penalty season just gone with no tangible effect- though it would put them into scope for some sort of loss reset/EFL business plan/individual targets.

Much more significantly however, had they been charged at that time and found guilty, then Middlesbrough definitely and possibly even we would have taken a bit more heart and overtaken Middlesbrough and them- would likely have made top 6!! Gibson would undoubtedly have had grounds to believe in top six had Derby been docked points.

IF these two get docked, I'd suggest the EFL have the right to re-examine Aston Villa for sure. It's a big if and purely a hypothetical but I am sure that Sheffield Wednesday, and if found guilty Derby County, and maybe Birmingham, would all be demanding it.

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Reading Owlstalk and the thread. 

'All fair-minded clubs will support us'. A few posts say similar.

No they ducking won't. Far from it actually, you did try and fiddle the system, and more amusingly you did it in ridiculous fashion. 

Maybe the stuff in The Times in May 2019 about accounts not being submitted was true. 

Some of the posts are for want of a better word, deluded but nonetheless this case doesn't paint the EFL in a great light either.

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7 minutes ago, Mr Popodopolous said:

Reading Owlstalk and the thread. 

'All fair-minded clubs will support us'. A few posts say similar.

No they ducking won't. Far from it actually, you did try and fiddle the system, and more amusingly you did it in ridiculous fashion. 

Maybe the stuff in The Times in May 2019 about accounts not being submitted was true. 

Some of the posts are for want of a better word, deluded but nonetheless this case doesn't paint the EFL in a great light either.

Correct.

Fair minded clubs are those that organised their finances so that they could stay within ffp limits notwithstanding the impact it had on the on field competitiveness, Why would those clubs support any club that, in essence, ignored the rules thinking that the end would justify the means?

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1 hour ago, downendcity said:

Correct.

Fair minded clubs are those that organised their finances so that they could stay within ffp limits notwithstanding the impact it had on the on field competitiveness, Why would those clubs support any club that, in essence, ignored the rules thinking that the end would justify the means?

Yeah, you're not wrong- don't understand their line of thinking in this area really.

I don't see them getting any required majority for change for a start- the bulk of the clubs complied with and intended to genuinely comply with and therefore likely support the regulations after all.

Still wonder why the EFL took so long to get a points tariff based on sliding losses in place though! Mind you, I've read the PL don't even have one but it's unclear.

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39 minutes ago, Mr Popodopolous said:

Still wonder why the EFL took so long to get a points tariff based on sliding losses in place though! Mind you, I've read the PL don't even have one but it's unclear.

My understanding is that as all the clubs voted for it it was assumed that they would all abide by it so sanctions were unnecessary.

As to the Premier League, as no one has breached the rules yet there isn't considered to be a need for sanctions.

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3 minutes ago, Hxj said:

My understanding is that as all the clubs voted for it it was assumed that they would all abide by it so sanctions were unnecessary.

As to the Premier League, as no one has breached the rules yet there isn't considered to be a need for sanctions.

Thanks- there was still potential for embargoes but I assume you mean points penalties and the like.

Out of interest, many sites I read are quiet on this but do you think that Aston Villa in particular are somebody the EFL would look at in terms of their 3 years to 2019 as and when they return? I've certainly read in some places that the EFL were furious that they didn't get the chance for a proper good long look while under their jurisdiction- Martin Samuel suggested as much anyway,

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We don't know yet, EFL likely know more than we do.

Precedent does suggest that losses should be reset to £13m individual targets for FFP but we're in the dark for 2 reasons. Firstly, that the report hasn't yet been released though I've read Monday.

Secondly, we do not know what is in their 2018/19 accounts as they are still showing as overdue at Companies House. I would hope the EFL have more detail than us!

Thirdly, we do not know whether they will be allowed to stick it in 2018/19 accounts- hopefully the full judgement will shed some light.

Fourthly, we do not know (but I think we can get a fair guess in what should happen) whether the EFL will challenge the £60m valuation with £38m profit if the plan is to stick it in 2018/19 accounts- given they believe Pride Park worth £49-50m when it was sold for £81.1m, I don't see how Hillsborough being sold for £60m and the full profit being included in the accounts moved forward should stand.

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An embargo isn't really an issue for most clubs, it simply stopped them from spending money they didn't have on players that weren't good enough ???

As to any promoted club, I'd like to see a decision made as soon as possible and any penalty suspended until return, unless of course the PL can be convinced that enacting the sanction is the right thing to do.

I don't like revisiting things in later years.

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Agreed- though Birmingham seem to have been struggling under the EFL monitoring/guidance/business plan. It can help a club however as you say, stopping them from overspending on rubbish!

Yep, tried in absentia if you like, if the PL won't enforce the sanction. There is a feeling that PL would enforce fines but not much else- but again only the PL and EFL truly know!

It's unclear if there is a statute of limitations with respect to these rules- I read somebody who asked about it on The Athletic and it genuinely seems unclear- in principle things should be done as swiftly as possible, actually the regulations allow for same season referrals. Whole point of this aspect of them was to stop teams overspending and escaping out of EFL jurisdiction.

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Interesting piece just published by The Guardian, covering Wigan and Wednesday:

https://www.theguardian.com/football/2020/aug/16/wigans-former-owner-kay-asked-about-administration-before-his-takeover

We already know about Wigan's former owner but quite how Wednesday officials backdating signatures on legal documents doesn't merit more severe punishment is beyond me.

The EFL remains incompetent and weak it seems.

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You beat me to it @chinapig saw it elsewhere, or a snippet of it!

Ask the Independent Panel! Maybe it has some grounds somewhere in legality/accounting but is very much against FFP regulations? Should have pushed for the 12 points first and then gone after the club/individuals for backdating- about to read the article now.

How does the law/accounting allow of otherwise for backdating of such documents? ? 

Wonder what the role of a certain ex EFL CEO could be- in the general mess I mean- not backdating!

Backdating would 100% make sense given the huge gap between Reporting Period ending- even taking into account 2 month extension, the significant overshoot to get the accounts in- see dated June 20th 2019, Sheffield 3 Limited at CH on June 21st 2019- finally at Land Registry on June 28th 2019, accounts up on Sheffield Wednesday site on July 11th 2019 and finally at CH on July 16th 2019!!

What I find interesting is that I called it on here some weeks before it actually made The Times in late September 2019, the significant discrepancy. Granted they probably had far more red tape to go through than me to reach that point. ;) Me, I just looked at the key dates and did some research- and reached the same conclusion!

Serious note, I had read in various places that maybe there was novation or whatever- some Sheffield Wednesday fans had been claiming this to be the case. However I think it more likely, backdating or otherwise, that the club saw what Morris did at Derby and just copied it.

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I should also add, that surely the profit on disposal shouldn't just be bumped forward a year. 

I understand the accounting argument but this is claimed to have been a backdated transaction?

Surely if it goes forward AND counts against FFP, that benefits them for another year even though it was backdated. 

Because if you think about it:

2015/16 and 2016/17 were overspent and significantly 2017/18 when the breach was hit. 

There's more. The overspend in the rolling 3 years into 2018/19 and indeed 2019/20 though some cutbacks.

It has ALREADY benefited them for half a decade indirectly, it must not roll forward onto 2018/19 to give them a cushion for 2020/21.

I might add, Birmingham had 2 seasons which contained varied aspects of business plan, monitoring, oversight etc.

I'd be very keen on Sheffield Wednesday getting something similar. 

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On another note, I read that Sheffield Wednesday received the written reasons (as did the EFL) on August 4th I think. 

Local journo up there on Twitter seems to think Sheffield Wednesday will appeal.

Think they have until Tuesday. Truth is, there are only two grounds on which they appeal unless I'm getting the wrong type of appeal or Hearing etc, would be Sections 67 and 68 of the Arbitration Act.

https://www.efl.com/-more/governance/efl-rules--regulations/section-9--arbitration/

Would be interested in any legal knowledge as to which is which and applicable here, etc.

This seems to be the 2nd part of the jigsaw?

https://www.efl.com/-more/governance/efl-rules--regulations/section-8---offences-inquiries-commissions-disputes-and-appeals/

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A quick scan of the SWFC ones add a lot of clarity to the background and decision making progress.  Clearly learning points for the EFL, but they secured the sanction.  

All of the club’s defences robustly dealt with but the timing point on the sanction is interesting.  The club would not have been relegated if the sanction had been applied in 2018/19, plus inconsistencies with arguments in the Derby case.

 With luck the appeals will be heard quickly and be put out of their own misery.

 

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Had a bit of a read of the Birmingham appeal as well- feels quite interesting- the fact that there was a reprimand is not intended and is stated not to be intended as a precedent but is linked to Covid.

Mind you at time the charges were brought, it felt relatively pointless on one level- the penalty was intended to be a 2-3 point deduction- now Birmingham's form imploded post lockdown but on return and before it looked pointless. Suppose it's important to uphold the principle as this system develops and the fact that Breach of Business Plan=Reprimand isn't a precedent feels potentially interesting.

Just reading the Sheffield Wednesday one now...oooh I see that Shaun Harvey gave evidence- anything's possible with him!

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Reading through the Sheffield Wednesday one now- "Heads of Terms" seems to be mentioned.

How legally binding it is I'm unsure but 3 valuations mentioned thusfar, as in "a minimum purchase price of"- £37.5m, £40m and £42m- they are all markedly below £60m!

In any event, I certainly would question the £60m sale price!!

Just put it to a vote, threaten the golden share- maybe make it clear that Chansiri is too inept, slippery, questionable to have as an owner in this League- you can't take the club off him but you can remove the issue- goes for Morris too- unless the punishment in this case and hopefully Derby's is accepted somewhat. Matt Slater of the Athletic thinks this will rally clubs around the EFL if Sheffield Wednesday appeal. Refuse to allocate them fixtures, clearly is not possible at this stage in Derby's case as it is still ongoing.

Maybe if this final appeal goes against the club and he still tries to kick off, the EFL should look at this! 

Stadium value of £40m with an annual Rent of £3m comes up again- this feels more in line with commercial reality IMO. I wonder how it reached £60m then??

Ah this is interesting- certainly not a valuation I considered feasible method wise!

Would appear the club were not keen on Depreciated Replacement Cost as the basis for Fair Market Value and wanted instead to use value of Insurance for the stadium as the valuation/sale price. ? 

I'd suggest for FFP purposes it is in the EFL's gift to determine, surely for such RPTs?

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One good thing to come out of all this- and I don't feel either side cover themselves in glory though I know whose side I am on and that The Good Guys subject to appeal seem to have won.

We now have an actual proper outline of excess losses to penalty. 

Starting point is 12 points deducted. Based on the sliding scale, it's 12 points minus depending on the overspend. Kieran Maguire outlined a template a while ago but we now have it in black and white.

Quote

Quantum of the Breach

  • 9 points if less than £2m
  • 8 points if between £2.0m - 4.0m
  • 7 points if between £4.0m - £6.0m
  • 6 points if between £6.0m - £8.0m
  • 5 points if between £8.0m - £10.0m
  • 4 points if between £10.0m - £12.5m
  • 3 points if between £12.5m - £15.0m
  • No deduction if the breach is greater than £15.0m

It's not worded in the best way- what it means is deduction from the deduction- think they should work on the wording a bit but these are the Sanctioning Guidelines. Losses trending downwards also count in a club's favour to reduce the deduction a bit.

As to that last point, I guess losses trending upwards could see an addition too- Birmingham got 7 + 3 after all for that reason, minus one back for cooperation etc.

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Yes- 100%. Agree wholly.

Utter idiocy as you rightly state! I remember thinking that from early on...

I've finally read through all the written reasons for Sheffield Wednesday. I note that contrary to claims on Owlstalk, the charges against the individuals were not necessarily dismissed, but I would interpret it as possibly dropped due to expediency ie to push for the main charges vs the club to be completed as quickly as possible. Didn't sound like they were dismissed, but more than likely stuck in arbitration, back and forth- very difficult to prove tbh- or at least would take a very long time.

Some of them are claiming racism etc.

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Just popped over to Owlstalk - not sure they actually understand the decision or the appeal.

The appeal panel does not take evidence it simply reviews the facts found by the Commission and decides if the decision is one that a reasonable Commission could make based upon the facts found.  Any alleged improprieties during the hearing process are also relevant, but of course any allegations of impropriety during the investigation that have already been dealt with in the decision fall outside the scope of any appeal.

 

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Thanks- so that clears that up- think there is a decent chance of things being upheld then?

Interesting paragraph in the verdict- taken from Owlstalk, as my Copy and Paste not so good.

image.png.1a0684d1fada6362c9bd4c2af6daa6

Shaun Harvey- what can we say!! ?

Email from him to the other EFL or the relevant EFL top brass. ⬆️

The Aston Villa thing is interesting, doesn't state which fixed assets, given this was August 2018 and the sale of Villa Park went through in May 2019- plus the Matt Lawton story on Projected Accounts was numerically very accurate- does it mean the HS2 stuff I wonder? This got some profit on disposal. After their accounting period had expired- the extended one at that.

Quote

"It is the clubs challenge to create a contract that satisfies their auditors that it can be included in their 2018 accounts".

Create- but this was after the extended Reporting Period had ended.

That is shambolic Governance on his part. Wonder how many of the other top brass were in agreement with his position? It's atrocious!

I'm still struggling too as to how they reached £60m as an true valuation. The key thing for me is that they shouldn't be allowed to benefit once again from the full £38m profit. The fact that they didn't seem to make their required submissions in terms of accounts in March 2019 though happy to go back and read is quite startling!

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56 minutes ago, Mr Popodopolous said:

Thanks- so that clears that up- think there is a decent chance of things being upheld then?

I would rather people made their own minds up - a checklist for you all:

In respect of the Charge under appeal only (that SWFC breached the FFP regulations):

  1. Are there any allegations of improprieties in the investigation that were not taken into account in the decision?
  2. Are there any allegations of improprieties in the hearing process?
  3. Are the material findings of facts substantiated by the evidence?
  4. Is the decision made one that a reasonable panel could have made based upon those findings?
  5. Is the punishment one that a reasonable panel could have made based upon the decision?

If the answers you get are No, No, Yes, Yes, Yes then the appeal will fail.

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1 hour ago, Mr Popodopolous said:

Interesting paragraph in the verdict- taken from Owlstalk, as my Copy and Paste not so good.

image.png.1a0684d1fada6362c9bd4c2af6daa6

Shaun Harvey- what can we say!! ?

Email from him to the other EFL or the relevant EFL top brass. ⬆️

The Aston Villa thing is interesting, doesn't state which fixed assets, given this was August 2018 and the sale of Villa Park went through in May 2019- plus the Matt Lawton story on Projected Accounts was numerically very accurate- does it mean the HS2 stuff I wonder? This got some profit on disposal. After their accounting period had expired- the extended one at that.

Create- but this was after the extended Reporting Period had ended.

That is shambolic Governance on his part. Wonder how many of the other top brass were in agreement with his position? It's atrocious!

I think that you are being a tad harsh on Harvey.  The man is not a Professional Accountant or Lawyer or similar and the email does appear to be to those he considers to be friends as well as colleagues, if it was intended to be for general consumption it might have been worded differently.  If you treat it as that sort of email and put in the context of the discussions that had taken place then it makes more sense.  The obvious flaw in SWFC's defences is that here Harvey is talking about a sale to Chansiri, that of course never happened.

There are circumstances where you can have an oral contract that leads to the valid disposal of land.  So there would be nothing wrong with Chansiri and SWFC agreeing to the immediately binding disposal of the stadium on 15 July 2018 and then that agreement later being ("created" or) turned into a binding written contract.  All the significant terms of the binding disposal would need to be agreed, including value, and then that transcation would need to actually take place.  Of course neither of those two rather important points happened.

 

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20 minutes ago, Hxj said:

I think that you are being a tad harsh on Harvey.  The man is not a Professional Accountant or Lawyer or similar and the email does appear to be to those he considers to be friends as well as colleagues, if it was intended to be for general consumption it might have been worded differently.  If you treat it as that sort of email and put in the context of the discussions that had taken place then it makes more sense.  The obvious flaw in SWFC's defences is that here Harvey is talking about a sale to Chansiri, that of course never happened.

There are circumstances where you can have an oral contract that leads to the valid disposal of land.  So there would be nothing wrong with Chansiri and SWFC agreeing to the immediately binding disposal of the stadium on 15 July 2018 and then that agreement later being ("created" or) turned into a binding written contract.  All the significant terms of the binding disposal would need to be agreed, including value, and then that transcation would need to actually take place.  Of course neither of those two rather important points happened.

 

Possibly in some respects,  but it appears that he was having read all this and followed it in depth, willing to let Sheffield Wednesday put it back into the 2017/18 accounts. 

Quote

"Our objective is to try and get the Club to a position that it is not in breach but at all times within the rules"

My response to that is that given this was after the Reporting Period, even the extended one ended, that the deadline had passed- they were in breach- charged like Birmingham were at that time! Possibly Derby too, we'll have to see how that one plays out.

Oral contract, interesting- binding disposal too. Bottom line is though, it doesn't sound like they had it within the required timeframe so should IMO have been charged with the simple overspend in 2018. Harvey and the EFL should not be helping clubs trying to avoid, as such IMO.

Put it this way, had it happened on Parry's watch...I don't think it would have been accepted.

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Good thread on this by Dale Johnson, who is a journo. 

Still one or two loose ends that the report hasn't tied up. 

1) The valuation of Hillsborough of £60m, is this deemed true and fair (profit £38m)- surely it won't just be moved into 2018/19 for FFP?

And

2) What sort of expectations will be on Sheffield Wednesday be under this year- as in will they be able to lose £50m or something stupid owing to a shift in ground sale profit?

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Apparently Charlton have requested the EFL to appeal the verdict or the season of the verdict. 

https://londonnewsonline.co.uk/charlton-athletic-request-efl-to-appeal-independent-disciplinary-commission-ruling-on-sheffield-wednesday/

In the Sheffield Wednesday written reasons, worth reading some of the Annexes at the end- laid out 5 scenarios for the sale and leaseback of Hillsborough (and I guess would be applicable for all clubs). Could it have repercussions elsewhere?

It is unclear but I wonder, dependent on what specific scenario this transaction happened under, could the profit be excluded from the P&S calculations in its entirety?

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