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The Championship FFP Thread (Merged)


Mr Popodopolous

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Thanks @phantom

It's capitalism but seems scandalous that an exceptionally well run club- or business- and leverage it with debt to seemingly finance the buyout.

Perhaps still having £50m in reserves would save the day- at least for a year or two but given what % of their revenue is linked to TV they might have to bounce back fairly sharpish. OTOH a quick repayment of a good chunk of it out of Parachute Payments and reserves might stabilise it.

The flipside might be that if they stay up and for a few years then they can start to accelerate a bit- risk and reward but I'm struggling to see a great deal of reward for the club itself currently.

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Had another look at Sheffield Wednesday.

All okay and as I said credit for the wages and amortisation dropping- Chansiri also seemingly stated an ambition of self-sufficiency a year or so ago.

What I would say is that based on a quick calculation, set of calculations their FFP loss once we use estimates plus the EFL's Covid loss allowance for the combined period well it could be anything between £15.5-17m. That's once 2018/19 profit drops off and should/could be a starting point for the 3 year cycle to 2022/23.

Meaning they can lose in FFP and Covid terms a combined aggregate of £22-23.5m across this and next season.

In other words- a while ago costs for Sheffield Wednesday in FFP terms were pegged at £2.5m per season and using this and the £2.5m Covid allowance for this year as a base...assuming the 2 are equal. Assuming too the FFP rules adjoining especially if they bounce straight back up. The £2.5m Covid allowance is applicable to 2021/22 but not to 2022/23- it could be different but the aggregate could be between £28.75-30.25m in the 2 seasons basically is what I am trying to say!

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As to Burnley, I don't really understand the journalist's comments.

I need to sit down with the accounts for Calderdale (the UK parent), its subsidiary Holdings (the company whose accounts were published), and its subsidiary Football to understand exactly what is going on.

Bearing in mind that Holdings and Football had turnover of £120 million, made a loss of £2.5million and have £50 million cash, not sure I have a huge amount of sympathy!

   

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20 hours ago, Hxj said:

As to Burnley, I don't really understand the journalist's comments.

I need to sit down with the accounts for Calderdale (the UK parent), its subsidiary Holdings (the company whose accounts were published), and its subsidiary Football to understand exactly what is going on.

Bearing in mind that Holdings and Football had turnover of £120 million, made a loss of £2.5million and have £50 million cash, not sure I have a huge amount of sympathy!

   

Last bit in particular, when you put it like that...

Guess what I am trying to say is that it feels wrong for a very well run club but not a just very well run club but clubs verbatim, to effectively pay for its own takeover- and be left less well off as a result.

Burnley may be able to absorb it more readily than I thought but I don't really see an upside for them. Perhaps my thinking here is short-termist.

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11 minutes ago, Mr Popodopolous said:

Last bit in particular, when you put it like that...

Guess what I am trying to say is that it feels wrong for a very well run club but not a just very well run club but clubs verbatim, to effectively pay for its own takeover- and be left less well off as a result.

Burnley may be able to absorb it more readily than I thought but I don't really see an upside for them. Perhaps my thinking here is short-termist.

Capitalism at its worst. Put little into the business and take the maximum out.

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15 minutes ago, WarksRobin said:

Capitalism at its worst. Put little into the business and take the maximum out.

Agreed.

Am trying to think of the upside if there is one down the track...struggling in this case. Debt to fuel growth maybe? Albeit relegation prior to the repayment looks like it maybe a disaster.

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1 hour ago, Mr Popodopolous said:

Agreed.

Am trying to think of the upside if there is one down the track...struggling in this case. Debt to fuel growth maybe? Albeit relegation prior to the repayment looks like it maybe a disaster.

Using debt for investment works in industries where it creates stable assets. I don’t think it works for on-field investment in sports because the value of playing assets is so intangible. Fine for improving infrastructure but not for buying players.

There should ideally be some sort of limit on debt as a proportion of turnover for football clubs as a health measure, but it would favour the big clubs.

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Might be a bit of a side note, but a really interesting thread from Andy Holt on Twitter. A great follow BTW.


Carrying on the thread about parachute payments and not defending Mel Morris,
the situation @dcfcofficialneed not have got so bad and toxic I.M.O.
When we played Derby in the cup (we got beat 1-0 when Dan Barlaser was very harshly sent off ) I walked round our…ground among home and away fans and chatting to him. Many fans present that day will remember seeing us. Mel, knowing
@ASFCofficialare operating within our means, said this.. ‘This is how football should be Andy, but it’s impossible to get there, it’s broken. 
He went on to describe the purgatory many champ clubs suffer. It opened my eyes.
You see@SkyBetChampclubs lose an average age of £16m per club, per annum, with a very slender hope of ever fixing it. To stop losing £16m, they either completely destroy their club and infrastructure and face a relegation or they get promoted to the @premierleague
Derby had lost £200m and was continuing to lose at a great rate of knots.
@dcfcofficial are a @premierleague club all day, but so are many others in this trap.
The same went for
 @LaticsOfficial who ended up in admin. I sat on a plane talking to someone on a plane journey discussing this issue. Wigan’s business plan was to lose £10m a year for the next 5 years, I can’t remember the year, but it was maybe 2018. I bought him a drink and said I’ll pay because ‘your need is greater than mine’
Not long after the club was transferred to the second chap (the one before Talal Al Hamed who has done a great job btw) The deal lasted weeks before Wigan ended up in admin.
The point of saying this is this, continued big losses lead to disaster , unless you’re owned by someone with an oil well or someone with Putin’s I’ll gotten dough to blow.
The other side of the coin is @ASFCofficial
We try to be sustainable, but we have no training ground, we have a very low budget, we’re at the back of the queue for players , we have very few staff, working out of portacabins, we had no water, not enough electricity, awful toilet facilities, laughable changing rooms that Roy Hodgson would let his players change in, no roof on the away end, everything falling to bits. But, we have a management team that is second to none, we have staff that are second to none, working all hours to make our new hospitality set up a success on top of their day jobs. We have each other’s backs, our manager isn’t looking over his shoulder all the time, our CEO isn’t.
I won’t throw hard earned dough down footballs money pit.. I will continually invest in facilities at a steady, manageable pace, topping up player sale income to complete the next piece of our jigsaw. I will commit the time and effort to finish what we’re doing It’s a boring 10 year plan.

More and more owners are waking up. My mate @DMAC102 went up to @SkyBetChamp with @theposh It will have killed him to accept that running the club sensibly meant chances of remaining in champ were low.. ..he’s a winner. 
@OfficialRUFC sit on the boundary, going up and down taking dough, getting parachute payments, Tony does a tremendous job there. Norwich, Fulham, up and down, win one season lose the next.
Football is BROKEN. A man on a galloping horse can see this. We need change and the only hope is @tracey_crouch fan led review.

Prem never distributes any cash without getting something in return. That’s where B teams, whole game solution and rest of ideas start. What can we give them. Like an abused child, thinking that smiling longingly will stop the abuse. Anyhow, you get where I’m coming from

Good morning BTW.

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Interesting line that I saw elsewhere, the Reading issue may still be a live one pertaining to this season.

https://www.peterboroughtoday.co.uk/sport/football/peterborough-united/why-there-is-still-a-bit-of-hope-peterborough-united-can-avoid-relegation-this-season-3684927

@Davefevs @Hxj @Sheltons Army

Sheltons Army first mentioned this over Easter weekend IIRC on another thread. Will post the link to the Agreed Decision from last November later.

Presumably McCann is alluding to the suspended minus 6 that was attached. If they are found in breach but it is applied to NEXT season, could we see a repeat of the Wycombe v Derby saga?

Should add that for an in-season breach or overspend if Projections arrive at the start of March and prior 2 actuals then mid April seems sensible, the EFL have improved a fair bit but still work to do.

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Here is the Agreed Decision as promised. Posted it a few times in the last 6 months on here but anyway.

https://www.efl.com/contentassets/065e21d5596b42e7a882322d3a203509/efl-v-reading-fc---agreed-decision-approved-for-publication.pdf

FWIW I doubt there will be an added -6 THIS season, perhaps they've even complied and will do so who knows but though points deductions should take place the following season, it is worth noting that Macclesfield saw suspended deductions activated in August 2020 after an EFL appeal- this is separate and different of course from the Sheffield Wednesday and Derby deductions, can be applied later and more flexibility over the timing based on the Macclesfield case.

Although I don't see how they could have breached this season if the EFL were approving transfers etc- and if they didn't submit required info in the required timeframe then that alone was worth an automatic -6 so unsure what will come of this tbh.

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On 12/05/2022 at 13:31, old_eastender said:

Hi Mr P,

With Leeds looking quite possible relegation candidates, I thought I'd read somewhere that Leeds would have breached FFP if they didn't get promoted, but that would have gone away when they did. If they do come down, could the EFL be after them?

 

Hi old eastender

I've taken a look at Leeds...I'd say not. Kieran Maguire and SwissRamble think they were right on/near the limit in the year of promotion but not over. The other thing to consider is that it was compliacated by Covid- benefitted all clubs, in the sense that there was no standalone test for 2019/20 or 2020/21...combined average of 2019/20 + 2020/21/2=the profit loss.

In the case of Leeds it was reported that a) Their promotion bonuses were £23m, these are excluded from FFP/P&S, b) Their FFP allowables- ie the usual- widely considered to be £5m per season...then you have an added layer of slight differentiation by the fact that they extended their 2019/20 accounts to 13 months, and as such the rebate to the PL was included in these accounts and not the 2020/21 as it shoudl have been...assume for cash flow purposes.

SwissRamble did a breakdown last year and may have done an updated one...taking these factors in I thought they were right up against £39m- indeed had they stayed down Phillips would have had to be sold, Bielsa and his staff- surely replaced by much cheaper alternatives to name but two measures.

Indeed, they weren't the only ones who were close- for had Fulham stayed down in 2019/20, it was reported that they would have walked into a soft embargo- and I can certainly believe that looking at their numbers.

Back to Leeds, think they were right on, walking along the line but just, just the right side.

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16 hours ago, Mr Popodopolous said:

Hi old eastender

I've taken a look at Leeds...I'd say not. Kieran Maguire and SwissRamble think they were right on/near the limit in the year of promotion but not over. The other thing to consider is that it was compliacated by Covid- benefitted all clubs, in the sense that there was no standalone test for 2019/20 or 2020/21...combined average of 2019/20 + 2020/21/2=the profit loss.

In the case of Leeds it was reported that a) Their promotion bonuses were £23m, these are excluded from FFP/P&S, b) Their FFP allowables- ie the usual- widely considered to be £5m per season...then you have an added layer of slight differentiation by the fact that they extended their 2019/20 accounts to 13 months, and as such the rebate to the PL was included in these accounts and not the 2020/21 as it shoudl have been...assume for cash flow purposes.

SwissRamble did a breakdown last year and may have done an updated one...taking these factors in I thought they were right up against £39m- indeed had they stayed down Phillips would have had to be sold, Bielsa and his staff- surely replaced by much cheaper alternatives to name but two measures.

Indeed, they weren't the only ones who were close- for had Fulham stayed down in 2019/20, it was reported that they would have walked into a soft embargo- and I can certainly believe that looking at their numbers.

Back to Leeds, think they were right on, walking along the line but just, just the right side.

Cheers!

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On 20/05/2022 at 10:39, Davefevs said:

https://www.bbc.co.uk/sport/football/61520318
 

Mr P - suggests that Reading are still under control of contract offers by EFL.  Hoilett, Swift and Morrison likely to be the high earners, unlike Rinomhota, Laurent etc.

Thanks Dave- finally got around to having a look at this thread. Swift gone that's one...good to see the Business Plan is still in play and tbh unlike a certain club in the East Midlands, Reading appear to have accepted things with relative good grace- Sheffield Wednesday got there in the end in that respect.

Rinohmota and Laurent, Yiadom could go either way- IMO anyway, Reading can probably offer them £x but I expect other clubs will be interested and can offer them y...but clearly not an A-lister free agent like Swift, Leeds were interested in him in January reportedly- surprised they didn't do back in for him given he's available on a free. He's attacking but also central- useful tactically for a CM 3, which I think they could do with. As well as his all round ability.

Laurent it was reported in the winter IIRC that Reading couldn't renew his contract, unsure if that's still the case. £16m the cap, but they might have figures covering both individuals and the squad as a whole so it's complex.

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46 minutes ago, Mr Popodopolous said:

Leeds were interested in him in January reportedly- surprised they didn't do back in for him given he's available on a free

Down to the change of manager I assume as they have now signed Aaronson from Salzburg.

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Bit of a knock on effect for Reading from Pisa's loss- you'll be interested in this one Dave,.

5m obligation for Pisa to buy Puscas the event they went up- he was on loan there.

They lost. He's one of their higher earners along with Liam Moore...£16m wage bill and probably keeping P&S/FFP losses to £13m or less- challenging summer ahead!

Remember too that the suspended 6 point deduction if activated does not mitigate or reduce the effect of further sanctions for the specifics of a breach should it arise.

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8 minutes ago, Mr Popodopolous said:

Bit of a knock on effect for Reading from Pisa's loss- you'll be interested in this one Dave,.

5m obligation for Pisa to buy Puscas the event they went up- he was on loan there.

They lost. He's one of their higher earners along with Liam Moore...£16m wage bill and probably keeping P&S/FFP losses to £13m or less- challenging summer ahead!

Remember too that the suspended 6 point deduction if activated does not mitigate or reduce the effect of further sanctions for the specifics of a breach should it arise.

I saw that he was playing, but had forgotten about the transfer obligation.  Makes you wonder if we had a promotion clause for Nagy…which we won’t get,

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12 hours ago, Davefevs said:

I saw that he was playing, but had forgotten about the transfer obligation.  Makes you wonder if we had a promotion clause for Nagy…which we won’t get,

My hunch is that even if we did, it was small beer. 

Probably in the region of £500k at most (I appreciate every little helps), Serie A is nothing like the league it was in its 80s heyday,  a small club like Salernitana (with Djuric) stayed up & they almost went bankrupt during the season.

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Done a bit of research and a little more detail on it- @Davefevs @chinapig @Hxj @ExiledAjax @downendcity and anyone else I've forgotten who is quite interested.

This is fairly interesting. Feels like somewhat of an ongoing tightening considering the amendments in mid February presumably haven't been thrown out.

https://www.carlisleunited.co.uk/news/2022/june/efl-clubs-vote-in-assessment-of-club-finances/

Certain amount of legalese in the below and will more than happily leave it to others to unpick. Sounds though unless I am getting this significantly wrong, that it would be the CRFU who would charge or not?

Quote

At today’s Extraordinary General Meeting, EFL clubs formally ratified the new Club Financial Reporting Panel (CRFP) and Club Financial Reporting Unit (CFRU).

9 June 2022

Club Financial Reporting Unit

The purpose of the CFRU is to oversee the League’s Regulations in relation to Club Financial Records, HMRC Reporting and the Financial Fair Play (FFP) Regulations (P&S in the Championship and SCMP in Leagues One and Two).

The CRFU will be the primary point of contact with Clubs and their Officials and will have delegated authority from favour for independent decision making and the Board.

This gives the CRFU the right to exercise the League’s existing powers to compel the provision of information and documents as it works to review Clubs’ submissions under the Financial Regulations.

Club Financial Reporting Panel

The CRFP will be an independently appointed expert panel, comprising of members with appropriate accountancy, legal and football expertise.

The Panel will make determinations based on the information provided to the CFRU and by the relevant Club(s).

In the event that either the CRFU or the Club consider that the CFRP has made an incorrect decision, a right of appeal to a League Arbitration Panel is available.

John Potterill-Tilney, Director of the Independent Club Financial Reporting Unit, said: “The formal introduction of the CFRU and the CFRP will bring additional consistency and independence to decision making in respect of matters relating to the Financial Regulations. 

“The CFRP is an important component in that its presence removes conflict of the EFL as a representative body but also as a sanctioning authority – adding a further layer of independence.”

 

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Not really FFP and I can't see it mentioned anywhere else, but it looks like the EFL are giving Derby a pretty strong warning regarding the lack of take over progress.

https://www.bristolpost.co.uk/sport/football/football-news/efl-derby-county-bristol-rovers-7198023?utm_source=taboola&utm_medium=display&utm_campaign=exchange

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43 minutes ago, bcfc01 said:

Not really FFP and I can't see it mentioned anywhere else, but it looks like the EFL are giving Derby a pretty strong warning regarding the lack of take over progress.

https://www.bristolpost.co.uk/sport/football/football-news/efl-derby-county-bristol-rovers-7198023?utm_source=taboola&utm_medium=display&utm_campaign=exchange

In fact it's very much FFP related and covered in some detail by us nerds in the Derby deserve relegation thread.

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Impressive...although some action vs PSG would be more welcome.

Talking of state funded clubs, I see La Liga have made intervention vs Getafe- Almeria who have an owner with Saudi ties. Basically adjusted down the sponsorship to 'Fair Value' and it means Almeria's possible expenditure has been reduced accordingly- in La Liga clubs have to submit their spending plans and work with La Liga pre season, can prevent players from being registered etc.  It seems to have been Almeria- will still try to find the story.

Edit- it was and seems to be Almeria.

https://onefootball.com/en/news/almeria-punished-by-la-liga-for-psg-style-sponsorship-deals-34805216

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