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The Championship FFP Thread (Merged)


Mr Popodopolous
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1 hour ago, WarksRobin said:

Stoke just signed Gayle and O’Shea so can’t be struggling too much with FFP

Definition of "can't be struggling too much with ffp" = Frank Lampard's Derby County chasing promotion !

 

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19 hours ago, Mr Popodopolous said:

Cheers Dave- look forward to your analysis too.

Yes- agree on Covid being a big thing. That's a better way of looking at it than me- could it also apply to claims deemed excessive- e.g. Stoke? ie Retrospectively/retroactively pushing back against £30m in Covid Impairment e.g. I don't quite buy still the idea of Covid Impairment or transfer add-backs for P&S purposes. That is good though, in our reporting- indeed a Telegraph article in March/April suggested that all clubs had put in revised numbers to the EFL.

Agreed.

My quick and easy revised Covid estimates then would be quite simply- the hit in revenue in the two seasons and £2.5m last season...question is would this be net of cost savings ie putting on games or...? Likely would leave us right close to the £39m to 2022/23 but not exceeding, maybe a bit lower- or maybe just I dunno £1-1.5m over something like that but nothing that can't be easily resolved.

It is.

FWIW my view and only my view on the correct categories:

  • Gate Receipts
  • Season ticket lost revenue/cost of refund
  • Matchday revenue
  • Matchday hospitality losses
  • Corporate Revenue- ie all non matchday revenue on the footprint of the stadium.
  • Costs associated with Covid-19 Protocols- ie testing, PPE, hand sanitiser and so on. Goes for the training ground and other facilities a club use as well as the ground and matchday itself.
  • Losses or rebates in TV Revenue- especially applicable to PL or Parachute clubs.
  • Cost or foregone savings associated with non utilisation of furlough scheme- some clubs did this, especially in 2019/20.

Sure there are some I have missed but that covers a range of issues I'd say.

Still have a serious problem with hypothetical player loss add-backs or indeed seeking to write off £30m in Player Impairment as a Covid Cost- that latter one sticks out like a sore thumb!

Thanks for putting in the work.

Have skim read and for me you're onto the right track. Key phrase is "directly attributable". Indirect losses won't be accounted for under covid.

 

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Posted (edited)
5 hours ago, WarksRobin said:

Stoke just signed Gayle and O’Shea so can’t be struggling too much with FFP

 

4 hours ago, Port Said Red said:

Well they "think" they aren't but from memory their claims for COVID comp are way out of kilter with the figures in that EFL document. They might be one of the first in front of the dispute panel.

£56m or thereabouts in 2019/20 and 2020/21 alone!

Put another way, they listed revenue losses net of cost savings- fine- but the big bone of contention for me is the player impairment and the whole adding back for transfers that would have happened if not for Covid.

PS- they are also linked with Mawson (free) and signed Smallbone (loan) from Southampton.

image.png.da08feef5cf39cd6b3dbc86657657825.png

As we can see...£56.903m but of that, £41,47m.

Which would you say are directly attributable vs indirect losses @ExiledAjax ? I'd say the Lost revenues and costs net of savings are the former, whereas the Impairment and Net impact of lost disposals caused by Covid are indirect. Obviously Stoke are arguing that all of it is directly attributable but I just am unsure I agree, especially in a P&S context.

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

Which would you say are directly attributable vs indirect losses @ExiledAjax ? I'd say the Lost revenues and costs net of savings are the former, whereas the Impairment and Net impact of lost disposals caused by Covid are indirect. Obviously Stoke are arguing that all of it is directly attributable but I just am unsure I agree, especially in a P&S context.

Not my area of expertise so I stand to be corrected should "direct" or "indirect" have different interpretations in the world of accounting.

However, generally it's a pretty common sense interpretation that should be applied here. Yes lost gate receipts are obviously a direct item (although imo that should be mitigated and offset by any rise in streaming revenue). 

I'd agree that on the face of it lost impairment and projected lost transfer revenue is indirect. Those (projected and presumed) revenues rescue due to a flattening of the market caused by COVID. It's indirect because there's a step in-between COVID and the impact on the Club.

So I think, as we discussed at the time, that Stoke's gambit should fail.

 

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28 minutes ago, ExiledAjax said:

Not my area of expertise so I stand to be corrected should "direct" or "indirect" have different interpretations in the world of accounting.

However, generally it's a pretty common sense interpretation that should be applied here. Yes lost gate receipts are obviously a direct item (although imo that should be mitigated and offset by any rise in streaming revenue). 

I'd agree that on the face of it lost impairment and projected lost transfer revenue is indirect. Those (projected and presumed) revenues rescue due to a flattening of the market caused by COVID. It's indirect because there's a step in-between COVID and the impact on the Club.

So I think, as we discussed at the time, that Stoke's gambit should fail.

 

At one point Richard Gould claimed we had lost £30m in transfer income. Absolute nonsense imo but I wonder if we nevertheless tried that on with the EFL?

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42 minutes ago, chinapig said:

At one point Richard Gould claimed we had lost £30m in transfer income. Absolute nonsense imo but I wonder if we nevertheless tried that on with the EFL?

Someone will correct me if wrong but IMO that was "claimed" only in an interview or news piece. Suspect he floated it with the EFL, and based on their response and advice from the accountants it didn't become part of our final accounts - as it is with Stoke.

Said article:

https://www.google.com/amp/s/www.bristolpost.co.uk/sport/football/bristol-city-ceo-sends-message-6477092.amp

I agree it's bollocks as well.

Edited by ExiledAjax
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Posted (edited)
On 24/07/2022 at 16:35, ExiledAjax said:

Someone will correct me if wrong but IMO that was "claimed" only in an interview or news piece. Suspect he floated it with the EFL, and based on their response and advice from the accountants it didn't become part of our final accounts - as it is with Stoke.

Said article:

https://www.google.com/amp/s/www.bristolpost.co.uk/sport/football/bristol-city-ceo-sends-message-6477092.amp

I agree it's bollocks as well.

Do agree with your posts and @chinapig for that matter- only bit I would say is that it seemed unclear last time it was reported on...

In January the idea floated.

In March it was implied that the EFL were considering it, on the same day that Nottingham Forest posted large losses but had a chunk of their Covid losses attributed to this.

https://www.bristolpost.co.uk/sport/football/exclusive-bristol-citys-ffp-reform-6753159

In June it was implied that the transfer add-back rule was still undecided but not yet agreed.

Quote

The EFL are also yet to confirm if transfer “add-backs” will be permitted in submissions with City’s argument being that Covid-19 and playing a season behind closed doors led to the collapse of the transfer market outside of the Premier League, therefore their business model of leaning towards transfer revenue was adversely affected from 2020 onwards. The league has already allowed such add-backs for lost ticket revenue of £5m and £2.5m but transfer income is a more subjective figure to calculate.

https://www.bristolpost.co.uk/sport/football/bristol-city-points-deduction-finance-7219960

Certainly not hanging my hat on it but time will tell...I think for the rule utilised by anyone, well the rule itself is fairly bogus IMO.

Edited by 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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2 hours ago, 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%.

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. 

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