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The Championship FFP Thread (Merged)


Mr Popodopolous

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21 minutes ago, Davefevs said:

A very open statement from Huddersfield owner:

Even talks in advance about “budgeted losses” for the season, which is very transparent.

An excellent example of candid transparency and plainly understandable communication. Very good example for *cough* other clubs.

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2 minutes ago, ExiledAjax said:

An excellent example of candid transparency and plainly understandable communication. Very good example for *cough* other clubs.

You may recall I said something similar that it would be good if we knew what sustainable really meant.  Is it to live within £13m losses each year, and reduce by transfer profit, or is it to balance to £0m…or something completely different.

 

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8 minutes ago, Davefevs said:

You may recall I said something similar that it would be good if we knew what sustainable really meant.  Is it to live within £13m losses each year, and reduce by transfer profit, or is it to balance to £0m…or something completely different.

 

Under Ashton it meant being unsustainable. Perhaps Steve needs a dictionary?

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36 minutes ago, Davefevs said:

You may recall I said something similar that it would be good if we knew what sustainable really meant.  Is it to live within £13m losses each year, and reduce by transfer profit, or is it to balance to £0m…or something completely different.

Plymouth Argyle, who produce an excellent summary report to accompany their annual accounts, define it as: "...we will generate sufficient income to cover our costs and therefore will not be reliant on our owner to inject money into the business to cover any losses." Source: https://www.pafc.co.uk/news/2021/february/2020-financial-report

So they are seeking to move towards the net zero balance of income and outgoings. They wish to not be reliant upon a sugar daddy. I note though that they do not say "...generate sufficient income, independent of player sales, to cover costs...", so they are still open to following the "Ashton" style route of buy low, sell high, and assume the market keeps trending upwards*. Based on Hoyle's latest statement Huddersfield are inclined to accept a level of loss that keeps them comfortably within the current FFP rules. But are not seeking to move towards that breakeven point. Here Hoyle expressly states that they can do this without player trading.

Two interesting test cases. Not directly comparable as the different positions within the pyramid mean that Plymouth and Huddersfield are (obviously to you) governed by different financial sustainability schemes, and have wildly different prizes on offer should either achieve promotion.

But the general approach to transparency and communication from both clubs is to be applauded.

Gould to his credit did not laugh me out of town when I suggested that Bristol City might present its next set of accounts in a similar fashion to Plymouth.

*I am not suggesting they will get it so wrong as we did.

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Stoke seem to be complaining about the rules once more.

Now whether we agree with them or not-the rules that is, there must be equal treatment for all under the EFL's P&S regs. It's so important.

Stadium and Training Ground sale- £32m profit, £70-80m gross IIRC although tbh on the face of it a fair rent, plus far more flagrant was the £30m in Covid Impairment and £11m in Covid player sale add-backs across the two Covid seasons.

https://www.stokesentinel.co.uk/sport/football/transfer-news/stoke-city-financial-fair-play-7418273

Given the Covid aggregate is added then halved, that's £20-21m but in the case of the Impairment, an elimination of a large cost moving forward from FFP...disgraceful. Either rework straight line up to time of disposal OR add back the Impairment to FFP for that year.

He raises some interesting points in fairness although the equity bit is odd- fairly sure equity covers Lower to Upper Limit.

He can complain about Parachute Payments although Stoke benefitted from that x 3 plus £83m in Year 1, £61m in Year 2 loss limit post relegation with owners wealthy enough to hit that and not even notice- they botched it so must adjust.

Edited by Mr Popodopolous
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7 hours ago, Mr Popodopolous said:

Stoke seem to be complaining about the rules once more.

Now whether we agree with them or not-the rules that is, there must be equal treatment for all under the EFL's P&S regs. It's so important.

Stadium and Training Ground sale- £32m profit, £70-80m gross IIRC although tbh on the face of it a fair rent, plus far more flagrant was the £30m in Covid Impairment and £11m in Covid player sale add-backs across the two Covid seasons.

https://www.stokesentinel.co.uk/sport/football/transfer-news/stoke-city-financial-fair-play-7418273

Given the Covid aggregate is added then halved, that's £20-21m but in the case of the Impairment, an elimination of a large cost moving forward from FFP...disgraceful. Either rework straight line up to time of disposal OR add back the Impairment to FFP for that year.

He raises some interesting points in fairness although the equity bit is odd- fairly sure equity covers Lower to Upper Limit.

He can complain about Parachute Payments although Stoke benefitted from that x 3 plus £83m in Year 1, £61m in Year 2 loss limit post relegation with owners wealthy enough to hit that and not even notice- they botched it so must adjust.

I suspect Steve would agree with him but that would just benefit clubs who happen to have a filthy rich owner. So still not a level playing field.

Oddly, I don't recall him complaining about parachute payments when Stoke were getting them. Perhaps I missed it.

As to the UEFA proposals iirc they would no longer allow deductions for infrastructure, academy, women's team costs and so on so I wouldn't necessarily rely on those to save the day.

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Once again this isn't FFP or even Championship but an interesting insight into the complexity of businesses generally and Football clubs in particular.

If anyone found the Derby County structure stuff mind blowing, you may not thank me for posting this Private Eye article on the takeover of Chelsea FC, as Walter Scott said "'Oh what a tangled web we weave/When first we practice to deceive'"

 

IMG_20220808_170647.jpg

IMG_20220808_170827.jpg

IMG_20220808_170932.jpg

 

IMG_20220808_170932__01.jpg

Edited by Port Said Red
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26 minutes ago, Port Said Red said:

Once again this isn't FFP or even Championship but an interesting insight into the complexity of businesses generally and Football clubs in particular.

If anyone found the Derby County structure stuff mind blowing, you may not thank me for posting this Private Eye article on the takeover of Chelsea FC, as Walter Scott said "'Oh what a tangled web we weave/When first we practice to deceive'"

 

IMG_20220808_170647.jpg

IMG_20220808_170827.jpg

IMG_20220808_170932.jpg

 

IMG_20220808_170932__01.jpg

Good old Private Eye covers stuff the main press won't touch because they grovel to the Premier League.

Still, I'm sure the Premier League thoroughly investigated the takeover before approving it. Much like Newcastle where they went so far as to thoroughly read a letter that said there was no connection between PIF and the Saudi state, honest guv, before caving in to government pressure approving the deal.

Thank heavens the English game is squeaky clean, not like those foreigners.?

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Hmm so it is just a waiting game then for Uefa but if their proposals for this cash injection are accepted then we are essentially off the hook? 

With regards to our current finances what have we reduced our running costs to? I remember on one of our early televised games last season, a commentator said we had reduced the wage bill by 20%.

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On 09/08/2022 at 13:47, Kodjias Wrist said:

Hmm so it is just a waiting game then for Uefa but if their proposals for this cash injection are accepted then we are essentially off the hook? 

With regards to our current finances what have we reduced our running costs to? I remember on one of our early televised games last season, a commentator said we had reduced the wage bill by 20%.

Possibly- although is it also possibly the case that they will seek to punish either this season in real time ie next Spring or next season once they have the 3 years to 2023- and then reform? I hope not but as I recall in 2020 there were demands for ongoing/outstanding cases to be resolved before reform would be countenanced by the compliant majority. If we have a potential Projected Breach then that could be considered as an ongoing/outstanding case and these don't get abandoned do they?

On 09/08/2022 at 16:09, billywedlock said:

Sl said on Saturday our wage bill is under £20 m (I think he used "well under"  the EP has a transcript) . So more like 50% reduction. Impressive work. 

The £20m figure interests me- I did read what he said but is he including all in that- ie lock stock and barrel!

  1. All players, academy players, 1st team management, 1st team coaches, women's players and coaches, academy coaches, non footballing staff, scouting, those who work at the HPC, non footballing staff ie marketing, HR, retail etc- plus of course matchday staff
  2. All remuneration- ie basic wages, PAYE, NI, bonuses etc.

In other words, lock stock and barrel- and yes some of the above will be excluded for FFP/P&S but is our total BCFC Holdings fully remunerated bill truly £20m or even less? Put another way, if our total group wage bill is truly £20m (or less) I don't see how we exceed limits this season.

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13 minutes ago, Barrieowl said:

Some Wigan fan on a generic forum suggesting you've failed FFP....I called bollocks

No we haven’t….not for cycle ending 21/22.  We are certainly close on the projection for cycle 22/23….but as this season still has 8-9 months to run, there is lots that can happen, e.g. Semenyo leaves for £x million.  Kalas, Bentley, Dasilva and Massengo all sign extended deals (first three on post-covid wages).

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9 hours ago, Barrieowl said:

Some Wigan fan on a generic forum suggesting you've failed FFP....I called bollocks

What Dave said- plus yes the in-season projections I think we might fail to 2022/23 but we still have time to rectify.

8-9 months of the season although with this future projection stuff, it is still possible that if not resolved by March- and this is for any club in the division who might- I would say an instant in-season points deduction is more possible now.

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56 minutes ago, Mr Popodopolous said:

What Dave said- plus yes the in-season projections I think we might fail to 2022/23 but we still have time to rectify.

8-9 months of the season although with this future projection stuff, it is still possible that if not resolved by March- and this is for any club in the division who might- I would say an instant in-season points deduction is more possible now.

The only thing about an in-season deduction this season is they’ve never done it before, and we are about to move to a new FFP model in 23/24.  City could argue they are working to stay within two models, as they prep for 23/24.  Would be very harsh if we are only just over the £39m.  If we were taking the piss and £10m+ over that’s different.

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18 minutes ago, Davefevs said:

The only thing about an in-season deduction this season is they’ve never done it before, and we are about to move to a new FFP model in 23/24.  City could argue they are working to stay within two models, as they prep for 23/24.  Would be very harsh if we are only just over the £39m.  If we were taking the piss and £10m+ over that’s different.

Agree tbh, this is fair- just trying to put all sides of the argument.

I'd be stunned if we were the test case/guinea pig and I trust we would exercise our right to an appeal at an LAP, to at least get us to the summer and reassess given the efforts we've made in the last 12 months or so.

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21 minutes ago, Davefevs said:

The only thing about an in-season deduction this season is they’ve never done it before, and we are about to move to a new FFP model in 23/24.  City could argue they are working to stay within two models, as they prep for 23/24.  Would be very harsh if we are only just over the £39m.  If we were taking the piss and £10m+ over that’s different.

The extent to which the club is over the limit would determine the severity of the sanction I assume but unless the 72 clubs vote to suspend or nullify the current rules pending the coming changes I don't see how we could avoid sanctions altogether.

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8 minutes ago, chinapig said:

The extent to which the club is over the limit would determine the severity of the sanction I assume but unless the 72 clubs vote to suspend or nullify the current rules pending the coming changes I don't see how we could avoid sanctions altogether.

Oh yeah for sure- if we are over we would be sanctioned- the question is should it land in Spring 2023 pertaining to the period ending in 2022/23 or next season for the period ending in 2022/23?

A third but probably remote possibility, is that we have already agreed a points deduction ahead of time that would kick in next Spring- to take it THIS season as we don't intend to sell certain players. Plea bargains lead to reduced or partially suspended subject to conditions sentences, with FFP too. Maybe the cost of keeping Scott and Semenyo, maybe others. I think we're not far over but maybe it'd be a 2-3 point deduction in Spring 2023 with a few more suspended if we breach future conditions- like with Reading.

Can be win-win..

  1. We keep Scott and Semenyo
  2. The EFL get their prized in-season deduction and a template/precedent is set.
  3. Any losses in the prior 2 seasons are reset to £13m if in excess or stay below if not.
  4. Business Plan sure but so many are out of contract in summer 2023...if still a Championship club there is now real room to breathe.
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5 minutes ago, Mr Popodopolous said:

Oh yeah for sure- if we are over we would be sanctioned- the question is should it land in Spring 2023 pertaining to the period ending in 2022/23 or next season for the period ending in 2022/23?

A third but probably remote possibility, is that we have already agreed a points deduction ahead of time that would kick in next Spring- to take it THIS season as we don't intend to sell certain players. Plea bargains lead to reduced or partially suspended subject to conditions sentences, with FFP too.

Agreed, the position the EFL might take is far from clear. If like La Liga cost controls were imposed in advance it might work but the EFL is now caught between two stools.

Edited by chinapig
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13 minutes ago, chinapig said:

Agreed, the position the EFL might take is far from clear. If like La Liga cost controls were imposed in advance it might work but the EFL is now caught between two stools.

True, we're stuck a bit- La Liga clubs who go into Europe are really stuck as they literally operate under two different systems- cost control vs the loss limits although I suppose if you stick to the former, the latter takes care of itself.

A left field way to go about it, and dunno if we've done this could be if we actually approached them and offered a points deduction based on precedent and sliding scale that we considered to be fair in Spring 2023 to take it with the Business Plan combined with principle of reset- probably would throw the EFL a little.

3-4 for overspend based on guesstimates.  A further 3 for not selling players in summer or Jan ie if we actively turn down offers.

Minus 1 for cooperation.

Maybe halving or knocking 1/3 of the remainder off for it being a settlement- or suspending the balance within the next year or 2 for any further breaches.

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1 hour ago, Mr Popodopolous said:

True, we're stuck a bit- La Liga clubs who go into Europe are really stuck as they literally operate under two different systems- cost control vs the loss limits although I suppose if you stick to the former, the latter takes care of itself.

A left field way to go about it, and dunno if we've done this could be if we actually approached them and offered a points deduction based on precedent and sliding scale that we considered to be fair in Spring 2023 to take it with the Business Plan combined with principle of reset- probably would throw the EFL a little.

3-4 for overspend based on guesstimates.  A further 3 for not selling players in summer or Jan ie if we actively turn down offers.

Minus 1 for cooperation.

Maybe halving or knocking 1/3 of the remainder off for it being a settlement- or suspending the balance within the next year or 2 for any further breaches.

Points deductions are intended to be done on an agreed basis (Reading agreed theirs, Derby kept delaying theirs before realising they had no case, which made matters worse) so what you describe could be the case.

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5 minutes ago, chinapig said:

Points deductions are intended to be done on an agreed basis (Reading agreed theirs, Derby kept delaying theirs before realising they had no case, which made matters worse) so what you describe could be the case.

It would be on the embargo services website or in some minutes somewhere if anything had been agreed via an EFL board.…surely?

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24 minutes ago, chinapig said:

Points deductions are intended to be done on an agreed basis (Reading agreed theirs, Derby kept delaying theirs before realising they had no case, which made matters worse) so what you describe could be the case.

Although unsure about Birmingham or indeed Sheffield Wednesday- the latter got halved at the LAP for some opaque reasoning however, possibly linked to the EFL handling things badly in 2018.

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19 minutes ago, Davefevs said:

It would be on the embargo services website or in some minutes somewhere if anything had been agreed via an EFL board.…surely?

You'd think so, which takes us back to the question of how the EFL can square the circle between the current, untested, regime and the one to come.

What seemed like a good idea at the time may now be bogged down. From what Gould says things are still being debated. A dilemma for the EFL.

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Stoke

I look periodically at them and their position and have made some best guesses/estimates. I would say that their combined average loss after Covid and FFP allowances Covid period is £12m and maybe £6m in 2018/19.

Some key metrics from 2020/21 and this can form a bit of a basis for trying to work out 2021/22 and perhaps beyond...some of these are best guesses, some are media claims. Might try and make it more user friendly, better layout later- graph, spreadsheet whatever.

Quote

Turnover

£40,419,000

Other Operating Income- believed to be Business Interruption Insurance

£2.5m

Pre Tax Loss

£9,57m

Wage Bill

£50,206,000

Amortisation of Intangible Assets (Player Registrations)

£11,006,000

Impairment of Intangible Assets (Player Registrations)

£3.75m

Profit on Disposal of Player Registrations

£895k

Profit on Disposal of Fixed Assets- Bet365 Stadium and Training Ground

£32,946,000

Losses or add-backs attributed to Covid

£18,680,000

If all allowed to stand, that could be an FFP profit for the year of £18m.

Quote

Potential or estimated changes- for good and bad

Turnover- Parachutes to Solidarity in 2021/22

£25-30m...⬇️ £10-15m

Other Operating Income- believed to be Business Interruption Insurance- surely not replicated?

⬇️ £2.5m

Wage Bill- Apparently halved since O'Neil took over in late 2019 though do we believe??

⬇️ £23m

Amortisation of Intangible Assets (Player Registrations)

I estimate £5-6m- so ⬇️ £5-6m

Impairment of Intangible Assets (Player Registrations)

Have to assume not replicated so ⬇️ £3.75m

Profit on Disposal of Player Registrations

Post Balance Sheet Event suggests £11,508,000- ⬆️ £10,613,000

Profit on Disposal of Fixed Assets

£0- EFL removed it from the calculations from 2021/22 onwards. ⬇️ £32,946,000

Losses or add-backs attributed to Covid

£2.5m limit for 2021/22 as voted on...therefore ⬇️ £16,180,000

Rent- as per the SCH accounts, should be put through for FFP if nothing else

⬆️ £4,703,000

Estimated FFP exclusions

Still think £9m

I am taking some best estimates- e.g. I think their turnover will be closer to £30m than £25m, and that their amortisation closer to £5m rather than £6m. Plus am assuming that the EFL count and accept all of their add-backs etc.

If anyone wants to calculate the swings plus obviously add their own numbers and such, it'd save me a job!

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Thought I would have a quick extrapolation from the numbers and guesstimates I did the other day.

Stoke City Holdings- starting point, possible £18m FFP profit

Quote

Areas of improvement...2020/21 to 2021/22

Wage Bill

Down £23m

Amortisation of Player Regs

Down £6m

Once off Impairment Removed

Down £3.75m

Profit on Disposal of Player Registrations

Up £10,613,000

That is a swing to improvement of £43,363,000 which gives an FFP profit of a ludicrous £61,363,000.

Areas of swing back into the red...

Quote

Turnover

Down £10m (est)

Other Operating Income

Down £2.5m

Profit on Disposal of Tangible Fixed Assets

Down £32,946,000

Losses or add-backs attributed to Covid

Down £16,180,000- EFL limit for 2021/22 is £2.5m and assume they take the max.

Rent

To reflect the transaction for FFP purposes, up £4,703,000

Total downswing is £66,329,000

FFP loss inclusive of Covid allowance £4,966,000.

Unknowns. Are FFP exclusions still the same, and in which year does the onerous contract provision apply?

Big caveat too- this is assuming that their ridiculous Covid write-downs and add-backs are accepted in full and without question!

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Just to pass on the following update from Fair Game. I agree with everything:

There's been deathly silence on the much talked about ‘New Deal’ for football from the Premier League.

At a Premier League shareholder meeting last week they were due to approve a plan to scrap the current parachute payments and replace them with a merit-based system where the higher up clubs in the EFL finish the more money they receive.

To date there has been no announcement, which is a mixed blessing. The reported proposal is deeply flawed. The abolition of parachute payments would be welcomed, but the proposal fails to address the main cause of financial unsustainability - the endemic gambling culture that encourages clubs to spend more than they earn. Indeed the proposal will only serve to incentivise owners to spend more than the club can afford to finish higher up the table.

But regardless, no new proposal - flawed or otherwise - has materialised and quite frankly the time is up.

Repeatedly the football authorities have been warned by the Government that if they can't come to an agreement then the issue of financial flow would become part of the remit of a new independent regulator. At least three times the Government have set the authorities deadlines to reach a deal, and each time it has come and gone - the first in December and the latest just last month.

The fear has to be that the Premier League is waiting for a minute to midnight before presenting a deal that will not hold up to scrutiny nor offer a realistic solution to the problems the game faces. But with little time to find an alternative it will be pushed through.

That cannot be allowed to happen. This endless delaying and posturing has to end. Give the job of financial flow throughout the pyramid to an independent regulator that has the wider interests of the football ecosystem at its heart, not the 20 shareholders of the Premier League.
 
What we do know is the White Paper on introducing an Independent Regulator in football is now due in October. We hope it contains robust proposals on how to address the financial flow and hopefully bring in the much-heralded Sustainability Index.

We need your help to spread the message on social media. The dance is over. We need a commitment that the independent regulator will be in charge of football's financial flow. Call on your MP to ensure football's financial flow lies with an independent regulator.

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