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The Championship FFP Thread (Merged)


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28 minutes ago, Mr Popodopolous said:

Might also add augurs well- as and when Aston Villa return I'd have thought all clubs would be united as one there, pretty much in terms of demands for an investigation/punishment?

Sometimes Aston Villa fans ask me on Twitter why I am so critical. Well it appears the Matt Lawton story about the big 3 Championship clubs who may have been in breach was broadly correct.

It stated Aston Villa losses for the season may have been as high as £60m.

Now consider:

Think was £68-69m- BUT minus £30m for Lerner promotion bonus-£15-16m for promotion costs inclusive of the bonuses- that's a nice easy £23m.

I already have factored in the HS2 would've been in there but costs of promotion would not have been and neither would Xia bonus- bith were contingent on promotion.

Profit on Villa Park- that article pretty much nailed on! £60m or close to- that's a full 12 point overspend over the 3 years and 3 for a deliberate breach as per Birmingham- may get one back due to terrible opwner and one back for not disregarding soft embargo but Matt Lawton- always said he's good.

This surely means that the stadium sale and leaseback must have been arranged/inserted AFTER the projected accounts. Given it was paid for in the form of Loans Receivable, wonder what the hell happened with the EFL analysis! Even a 5-6 points in the season in March/April would have knocked them out of playoff contention.

I get the feeling you would have enjoyed that.

You really do have to let this go.

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7 minutes ago, AnAstonVillafan said:

I get the feeling you would have enjoyed that.

You really do have to let this go.

Haha true and true!

The numbers do stack up however and it begs the question as to what the he'll the EFL were playing at with respect to a number of clubs in March 2019. 

I say stack up, possibly £1m either way divergence. I suppose the one remaining interesting q might be what statute of limitation.

Edited by Mr Popodopolous
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Posted (edited)

I note that Sheffield Wednesday have not yet published their accounts for 2018/19 owing to the EFL situation/dispute.

Thought this might be the case- interestingly they're not under any kind of embargo and it states that should an appeal be unsuccessful, it- the sale- will be stuck in the 2018/19 accounts.

Now this is problematic for a number of reasons!

  1. While I see the logic, it is true that they have benefited from it by cushioning the need to cut costs more drastically to an extent through the profit being on the books, this has to be mitigated in some way. One year targets that feed into ones for 2020-21 and possibly 2021-22 would do this, as in the stadium sale would help for 2018-19 but couldn't be of use beyond that.
  2. Feeding into point 1- is it the full £38m? This profit lifted them from at least one embargo I think though it's hard to keep track.
  3. Will this valuation/profit be challenged? Certainly should be- given how the EFL's valuation diverges so significantly in the case of Pride Park.
  4. What will the rent be? Chansiri can charge what he likes but the EFL have to substitute in a fair market rent.
  5. Why no Embargo- even a soft one- what sort of message does this send with respect to Governance!

https://www.thestar.co.uk/sport/football/sheffield-wednesday/exclusive-sheffield-wednesday-are-late-filing-their-accounts-again-why-2933813

Edited by Mr Popodopolous
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On 02/08/2020 at 12:20, Mr Popodopolous said:

Reading under John Madejski were a fairly well-run club IIRC.

However, they're no longer owned by him. Appears that their FFP issues are catching up with them...

Looks fairly blatant that their signings of Joao and Puscas in August 2019 within a month or so of being released from a soft embargo were a shit or bust roll of the dice IMO! Whatever the reasoning it was ridiculous.

The ONE thing the EFL- and I guess rival clubs- have to be alert to is that they don't offload at high prices to Beijing Renhe- in 2018/19 there was an Aluko loan there, for £3m!! I struggle to justify that one alone, that should draw a line under dealings profitable to them with Beijing Renhe I think at least in terms of FFP inflation.

John Swift was off to Sheffield United but a bid was rejected quite late it seems- on the flipside, Ejaria amongst other loanees appears not to have been renewed yet.

Moore, Swift, Meite, Joao and Puscas- you'd think some if not all of these constitute saleable assets. By which I mean genuine sales, as opposed to sales, inflated loans or worse still sale with loan back to Beijing Renhe.

 Just curious, but how would the EFL be able to regulate the sale of players to clubs abroad (even if they have the same owners)? I wouldn't think that any league would have the authority to scrutinize the amount for a player sale to another club without kicking up a storm with other clubs and their player valuations? Obviously the Aluko loan is highly questionable especially at that loan fee. I just don't know what could be thrown at them?? Am I missing something with that?

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25 minutes ago, visitingholte said:

 Just curious, but how would the EFL be able to regulate the sale of players to clubs abroad (even if they have the same owners)? I wouldn't think that any league would have the authority to scrutinize the amount for a player sale to another club without kicking up a storm with other clubs and their player valuations? Obviously the Aluko loan is highly questionable especially at that loan fee. I just don't know what could be thrown at them?? Am I missing something with that?

Disallow it for FFP purposes- just one idea- but you're right it's very difficult- the Aluko loan is a nonsense but okay- say for example Reading were to sell several of their players to Beijing Renhe for £30m fees in total and then loan them back- could they refuse to register them at the earliest opportunity? They couldn't let it pass IMO, you're right though it's not altogether easy to see what could be done- sure I've read something about UEFA and similar transactions- Nottingham Forest seem like they might do something similar from time to time but it's fair to say the fees and wages are not even in the Aluko £3m loan ballpark, let alone 

Embargoes pending investigation another idea maybe- you can bank the money but you ain't playing them when loaned back- if they 'sold' for arguments sake Joao, Puscas, Moore- Rafael maybe- these are decent players with for one reason or another some kind of resale value IMO- and banked £20-30m and loaned them back to play that season that would blatantly be taking the piss for want of a better term. They were under a soft embargo in summer 2019 or until late in that Reporting Period anyway, EFL need to be watching them like a hawk- most clubs including Reading- all but Derby in fact or so I've read use the straight line amortisation method though that of course is Book rather than Market value. 

The only real loopholes though, the gaping ones in the EFL system at this time seem to be:

  • The Fixed Asset Sale and Leaseback debate.
  • This theoretical one with Reading.

For sure, their FFP hole looks potentially not insignificant so they could sell the players but that would merely cover some of the problems, not enable significant reinvestment- an embargo pending further action may keep feet to the fire.

Here's a revealing line, from late April- maybe it was around the time of their accounts being released- the one on player wages- owner made the personal decision it would seem!

I should also add, I criticise Reading but I'm quite sure Nigel Howe DOES accept that players need to be sold- he's publicly stated it twice, maybe three times in 2020. It's the owner that is the issue, so it seems looking between the lines.

If they want to go down the Birmingham or Sheffield Wednesday route they know what to do.

Edited by Mr Popodopolous
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Posted (edited)

The other part of the issue in general is the EFL and inconsistent, often slow enforcement of their own regulations- happy to go through one or two now.

Quote

1.1.12 T means the Club’s Accounting Reference Period ending in the year in which assessment pursuant to Rules 2.2 to 2.9 takes place, and:

(a) T-1 means the Club’s Accounting Reference Period immediately preceding T;

(b) T-2 means the Club’s Accounting Reference Period immediately preceding T-1;

(c) T+1 means the Club’s Accounting Reference Period immediately following T; and

(d) T+2 means the Club’s Accounting Reference Period immediately following T+1.

I question how much real time in-season planning for T onwards- ie the existing season when Projected Accounts submitted occurs- let alone T+1 and T+2 with respect to the forward projections. I could be wrong but the evidence to date suggests that it has been somewhat patchy in terms of EFL oversight- 'T' is a significant difference to the old rules- T+1 and T+2 are certainly new ground as well.

Bit more on these below.

Quote

2 Profitability and Sustainability

2.1 Rules 2.2 to 2.9 shall apply with effect from Season 2016/17.

2.2 Each Club shall by 1 March in each Season submit to the Executive:

2.2.1 copies of its Annual Accounts for T-1 (and T-2 if these have not previously been submitted to the Executive) together with copies of the directors’ report(s) and auditor’s report(s) on those accounts;

2.2.2 its estimated profit and loss account and balance sheet for T which shall:

(a) be prepared in all material respects in a format similar to the Club’s Annual Accounts; and

(b) be based on the latest information available to the Club and be, to the best of the Club’s knowledge and belief, an accurate estimate as at the time of preparation of future financial performance; and

As we can see, the submission of 'T', combined with the real accounts for the last two can form a nice basis for ongoing assessment IMO- it gives you good basis to work from if you are the EFL Executive- any significant and unexpected submissions can be analysed there and then I'd suggest.

Quote

2.8 If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss that exceeds the Lower Loss Threshold, then the following shall apply:

2.8.1 the Club shall provide, by 31 March in the relevant Season, Future Financial Information to cover the period commencing from its last accounting reference date (as defined in section 391 of the 2006 Act) until the end of T+2 and a calculation of estimated aggregated Adjusted Earnings Before Tax until the end of T+2 based on that Future Financial Information;

That Lower Loss Threshold of course is £15m and anything over that- I don't suppose it means an insubstantial amount but you know talking sensibly excess means basically £15m+, higher than £15m in FFP losses but below £39m in FFP losses means that you need to as a Club submit by end of March the future FFP projections for not only the next season but the one after! You can keep a tight leash on clubs IF you so desire and you know what you're doing...you have the info with last two seasons and current one Projected- and any significant divergence looking forward or unlikely one in terms of the likely info will raise eyebrows I'm sure- or should if you're the regulator!

This last bit too.

Quote

2.9 If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss that exceeds the Upper Loss Threshold (calculated in accordance with Rule 3) then:

2.9.1 the Executive may exercise its powers set out in Regulation 16.20;

2.9.2 the Club shall be treated as being in breach of these Rules and accordingly The League shall refer the breach to the Disciplinary Commission in accordance with section 8 of the Regulations.

Now I take that to be if over limits in that existing season, you get referred in that existing season to the Disciplinary Commission. If done correctly! If you have a points tariff which is now in play and precedent has shown it, it should become more straight forward and harmonised over time.

There's more though- those upper and lower limits btw are £5m at lower end and £39m at upper for 3 years in Championship. For a year in PL it's £35m upper, £5m lower. I think most clubs will tend to come in over the 3 year loss limit in existing seasons for lower levels, ie between £15-39m in terms of an FFP loss.

Quote

4 Duty of Disclosure

4.1 The Executive may require a Club to provide such further information as the Executive deems necessary (acting reasonably) for the purposes of enabling the Executive to assess whether a Club has met (as applicable) the Profitability and Sustainability Rules or not.  By way of example, and without limitation, additional information may be requested where:

4.1.1 any submission is incomplete;

4.1.2 there are insufficient assumptions; or

4.1.3 additional evidence is required to support certain assumptions.

4.2 Any such request shall be made in writing (including by email to the Finance Director or equivalent) and shall be responded to in full within 5 Normal Working Days of any such request being made.

Now this one is interesting because though I remember it was a bit of a transitional phase between old and new rules and for some reason the EFL at the time did not have a points tariff in place- Late Again Harvey- but Birmingham were in breach or over limits in March 2018, almost certainly- but they said 'Oh we'll just fall into line- not by much but that is enough- through summer 2018 transfer profits'. EFL appeared to have taken it at face value, perhaps Birmingham did in fact believe these would transpire, read it was sell on money for Butland and Gray- would have kept them in line but they would have failed moving forward ie to summer 2019.

Anyway this sell on did not happen as intended/hoped and we all know how it played out but it sounds like the EFL Executive should have more strongly exercised 4.1.2 and certainly 4.1.3! I I dunno if taking it at face value cuts it for me given it is a material item and the club are relying on something that may or may not happen that is totally out of their hands, to pass FFP in the 3 years to 2018!

Where is the evidence, where is the paper trail to show that this is pretty much failproof, that it will 100% cast iron be rectified come the summer ie June 30th- is this not just wishful thinking by the club are the sort of debating points here!

There I go- only two points I said! 😆

Edited by Mr Popodopolous
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Selling players and leasing them back from a same owner club will be the foundation stone of a mockery statue to the FL. Rules should have been in place to enforce punishment long ago. I seem to recall Watford being told you cannot loan more than 7 or so players from a same owner 'sister' club. At that time FFP was not so much in the news or 'in service'. Watford soon adapted. 

Unless automatic relegation of at least one division is the punishment and a clear and precise set of rules are in place to follow the FFP arrangement is not fit for purpose.

We are seeing law suits starting to flow now and I think while Parry was brought in to clean this up so far the evidence suggests he is found wanting.

It's a sorry state of affairs.

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2 hours ago, havanatopia said:

We are seeing law suits starting to flow now and I think while Parry was brought in to clean this up so far the evidence suggests he is found wanting.

How?

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I would change the rules on accounting periods and projections.  The real problem is the lack of up to date information.

Firstly I would force all clubs to have a 31 May Accounting Date.

Secondly you submit your company accounts for 31 May audited and signed off to Companies House and the EFL by 31 July after the end of the season or you don't get to play the next season.  Anyone who says it can't be done has never tried or needs to improve the internal accounting or get a new Auditor.

The EFL can then review in August, apply any penalties necessary and do any investigations before Christmas.

Thirdly any transfer profits or losses you make (in or out) after the end of May but before the close of the summer window can be carried back but as a penalty are spread equally over the three year period, so the effect is reduced.

Fourthly if you are promoted or relegated you are still judged on the above standards and any failings result in the appropriate penalty being applied regardless of where you are currently playing.

 

Job done.

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3 hours ago, havanatopia said:

Selling players and leasing them back from a same owner club will be the foundation stone of a mockery statue to the FL. Rules should have been in place to enforce punishment long ago. I seem to recall Watford being told you cannot loan more than 7 or so players from a same owner 'sister' club. At that time FFP was not so much in the news or 'in service'. Watford soon adapted. 

Unless automatic relegation of at least one division is the punishment and a clear and precise set of rules are in place to follow the FFP arrangement is not fit for purpose.

We are seeing law suits starting to flow now and I think while Parry was brought in to clean this up so far the evidence suggests he is found wanting.

It's a sorry state of affairs.

Parry inherited a set of circumstances ( Derby, Wednesday, Reading)  caused by the previous regime’s ineptitude in allowing loopholes in the rules when they were drafted. 

To give him his due, at least he has pursued clubs on grounds under which action could be taken, whereas I have little doubt that had Harvey still be in charge he would have simply rolled over and let it go.

I do agree that what these cases have done is expose the gaping holes in ffp rules and the need for a revision, not only to close the loopholes already identified, but to anticipate the areas that clubs will next choose to attack. Perhaps if the punishment(s) are sever enough ( automatic relegation?) then that might be sufficient to cause clubs to comply for absolute fear of the consequences. In that respect, Parry’s stance in taking the action he has thus far will make club’s realise the EFL is no the soft touch they were previously.

 

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4 hours ago, downendcity said:

Parry inherited a set of circumstances ( Derby, Wednesday, Reading)  caused by the previous regime’s ineptitude in allowing loopholes in the rules when they were drafted. 

To give him his due, at least he has pursued clubs on grounds under which action could be taken, whereas I have little doubt that had Harvey still be in charge he would have simply rolled over and let it go.

I do agree that what these cases have done is expose the gaping holes in ffp rules and the need for a revision, not only to close the loopholes already identified, but to anticipate the areas that clubs will next choose to attack. Perhaps if the punishment(s) are sever enough ( automatic relegation?) then that might be sufficient to cause clubs to comply for absolute fear of the consequences. In that respect, Parry’s stance in taking the action he has thus far will make club’s realise the EFL is no the soft touch they were previously.

 

Except for the fact you seem to be suggesting he has inherited rules so his 12 pt deduction is the same Harvey would have and indeed did dish out.

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4 minutes ago, havanatopia said:

12 PTS for Wed for next season?

The case was taken to the INDEPENDENT DISCIPLINARY COMMISSION by the EFL with Parry in charge.  The decision of the INDEPENDENT DISCIPLINARY COMMISSION was as you state.  That could be appealed by both the EFL and the club.

How is that Parry found wanting?

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14 minutes ago, Hxj said:

The case was taken to the INDEPENDENT DISCIPLINARY COMMISSION by the EFL with Parry in charge.  The decision of the INDEPENDENT DISCIPLINARY COMMISSION was as you state.  That could be appealed by both the EFL and the club.

How is that Parry found wanting?

Are you implying his hands were tied? If so then perhaps that's another matter. As I understand it 12 PTS have been dished out for the same season before Parry arrived and yet he chaired that meeting and was happy with a deduction next season? 

From where I stand he looks weak.

Feel free to clarify though.

Edited by havanatopia
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6 hours ago, Hxj said:

I would change the rules on accounting periods and projections.  The real problem is the lack of up to date information.

Firstly I would force all clubs to have a 31 May Accounting Date.

Secondly you submit your company accounts for 31 May audited and signed off to Companies House and the EFL by 31 July after the end of the season or you don't get to play the next season.  Anyone who says it can't be done has never tried or needs to improve the internal accounting or get a new Auditor.

The EFL can then review in August, apply any penalties necessary and do any investigations before Christmas.

Thirdly any transfer profits or losses you make (in or out) after the end of May but before the close of the summer window can be carried back but as a penalty are spread equally over the three year period, so the effect is reduced.

Fourthly if you are promoted or relegated you are still judged on the above standards and any failings result in the appropriate penalty being applied regardless of where you are currently playing.

 

Job done.

I agree in principle with a good chunk though and yeah I agree on the Licensing thing- the carry back is an interesting idea for sure.

The only issue is that promoted sides, will the PL enforce penalties? This is genuinely a grey area.

Are Projected Accounts not a basis for charge then?

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5 hours ago, downendcity said:

Parry inherited a set of circumstances ( Derby, Wednesday, Reading)  caused by the previous regime’s ineptitude in allowing loopholes in the rules when they were drafted. 

To give him his due, at least he has pursued clubs on grounds under which action could be taken, whereas I have little doubt that had Harvey still be in charge he would have simply rolled over and let it go.

I do agree that what these cases have done is expose the gaping holes in ffp rules and the need for a revision, not only to close the loopholes already identified, but to anticipate the areas that clubs will next choose to attack. Perhaps if the punishment(s) are sever enough ( automatic relegation?) then that might be sufficient to cause clubs to comply for absolute fear of the consequences. In that respect, Parry’s stance in taking the action he has thus far will make club’s realise the EFL is no the soft touch they were previously.

 

Parry is taking too long to get his legs under the desk then.

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Posted (edited)
47 minutes ago, havanatopia said:

Are you implying his hands were tied? If so then perhaps that's another matter. As I understand it 12 PTS have been dished out for the same season before Parry arrived and yet he chaired that meeting and was happy with a deduction next season? 

From where I stand he looks weak.

Feel free to clarify though.

It's tricky. I think he's better than Harvey for a start! Mind you Harvey had been at two clubs who were in administration or similar financial distress on his watch so how he ever got the top job at the EFL is beyond me! Perhaps he was unlucky and then very lucky.

There were complex legal arguments- Sheffield Wednesday (and Derby which is still ongoing) both claimed they had permission, possibly from Harvey himself- with respect to their transactions. I actually credit the EFL with winning the case in those circs! Some legal opinion even suggested Sheffield Wednesday would get away scot-free!

Where I would query is why did they pursue individual charges concurrently with club ones? These are harder to prove, and possibly dragged things out somewhat- to me the club is the priority here- by all means if you win that case, go after or consider going after Chansiri, Meire and Redgate- unless of course legal advice suggested that they needed to make a play of that from early on too, but from what I could see, those particular charges were stuck in deadlock, possibly arbitration for months- I'd argue it took valuable time and potentially resources out of the 12 point deduction for breaching FFP aspect, possibly enabled Sheffield Wednesday to have the 12 points in 2020-21 as opposed to this season.

Parry or the head of the EFL AFAIK doesn't chair the Independent Panel- it's one appointee by the EFL, one by the club and the third, who knows- dunno! Independent legal adviser/QC possibly? I'd have to look in depth but fixed penalties would be a good way forward to expedite certain things in the future. I have the feeling that some of the EFL administration of FFP and implementation is being/has been carried out on the hoof.

I also agree with your post about sale and leaseback to related clubs would be a foundation stone of a mockery statue to the EFL.

Edited by Mr Popodopolous
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Thanks for clarifying the remark from HxJ about Parry not being on the panel Pop. 

I am rather taken aback there is no fixed penalty for given misdemeanours. It's a recipe for law suit one after the other. Mind boggling in its stupidity.

Parry has his work cut out. I see Championship clubs have rallied around Charlton making Wednesday the pariah... Not their fault they got away lightly though. 

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Maybe the fixed penalty point will become easier over time tbh Hav, as precedents are set and easier established, at least with respect to the points per overspend- combined with mitigating and aggravating factors of course would need hearings but a starting point "You overspent in this range therefore it's this number of points"- shouldn't be beyond the EFL to come up with a way to make this stick.

Some interesting snippets on Reading as well!

Seems they are having trouble with respect to signing Ejaria. Good- their expenditure in recent times has been a nonsense. They are trying to negotiate the fee down but this seems interesting...

Quote

Talks are still going on and I understand the League are involved too as they’re keeping an eye on the financial situation at the club.

Hopefully we’ll get some positive news soon.

This actually seems like they are doing their job correctly by now or at least moreso than before- if the League are involved then that is a big step- also reduces the chance quite significantly I'd suggest of some nonsense deals with Beijing Renhe.

On another interesting note, one of their saleable assets, seems that they have turned down a second bid from Sheffield United. John Swift- £4m.

Quote

It sounds like Mr Dai does not want to sell. So I guess unless a silly fee comes in then Reading will fight tooth and nail to keep him.

Remember the transfer window doesn’t close for another two months so this one could run on for quite a while yet at the rate it’s going!

Adds credence to what I say and what I posted I think about a possible disconnect in this area between owner and CEO.

Fine for the transfer window to have two months left but I make them over limits for the 3 years to season just gone.

If they were making £15-20m worth of net cutbacks this season or net combination of profit on disposal of players in genuine transactions and cutbacks I might say fair enough but...

Quote

I would imagine it’s getting on to between £75-100k a week overall.

That’s my best guess!

So we're saying around £3.9-5.2m per financial year/season so far. Not enough, not by a long chalk!

Their losses were increasing, with little regard for the regulations and the like- interesting to know how much though people left, Rafael, Morrison, Adam, Pele, Joao, Puscas and Boye would have added in wages!

These 7 players were of varying age and ability but from a mix of Championship, Serie A and one from Ligue 1- Pele Monaco IIRC- not cheap?

Little bit more on Swift.

Reading have (or more likely their Owner has) ****** things big time though, zero sympathy.

They lost this summer Loader on a free- they turned down a bid from Wolves for him a year ago.

Osho appears to have been an academy product- they could have got money for him but he's gone on a free. Having said that of the two, profit on Loader would've been more likely, as he was more known.

They received a bid from Brighton in summer 2018 for Liam Moore- £10m- they turned it down and promptly gave him a new large contract.

That's before we even get onto the folly of adding Puscas and Joao last summer- not saying they aren't good players- within a month-6 weeks of being released from soft embargo!

Edited by Mr Popodopolous
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Posted (edited)

With respect to Sheffield Wednesday, it's quite interesting seeing what is left.

Goals FOR in the League last year, 58.

Goals in the League which have left the squad- as it stands, temporarily or otherwise- be it loans expiring, be it out of contract who may yet get renewed under better terms etc but can only go on here and now. Not even bothering to look at assists as this will take some time!

  • Fletcher- 13
  • Forestieri- 2
  • Fox- 2
  • Hutchinson- 1
  • Joao- 1
  • Murphy- 9
  • Nuhiu- 6
  • Wickham- 2
  • Windass- 3
  • Winnall- 1

I make that 40/58 goals gone- as it stands. Amazingly, the one by Joao on opening day aside, Joao of course they sold to Reading by end of summer window, they got ZERO in terms of fee for the rest- mix of loanees and contracts expiring.

Clearly it's not that simple but it's interesting-their top 3 scorers for sure in Fletcher, Murphy and Nuhiu currently not there. At least Birmingham- a good comparable- got some cash for Adams, Jota and co!

A monument to mismanagement?

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4 hours ago, Mr Popodopolous said:

The only issue is that promoted sides, will the PL enforce penalties? This is genuinely a grey area.

Are Projected Accounts not a basis for charge then?

I agree that the PL need to get on side.  But I see it as a 'no-loss' position for them, it actually helps to stop any outsiders getting in. uphold the integrity of the PL.

The problem with 'projected accounts' is that they are always more open to abuse.

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6 hours ago, Hxj said:

I agree that the PL need to get on side.  But I see it as a 'no-loss' position for them, it actually helps to stop any outsiders getting in. uphold the integrity of the PL.

The problem with 'projected accounts' is that they are always more open to abuse.

Nicely put. 

They are indeed but interestingly based on an article by Matt Lawton in March 2019,the ones for Aston Villa worked out roughly in line with reality. 

Stated that losses were approaching £60m. Strip out stadium sale and leaseback, but also strip out payments to Xia and general costs of promotion as when they were put in they were playoff chasing and by no means guaranteed to make it, let alone win and their ones were very much in the right ballpark it'd appear.

The forward projections and backward data can enable a real strong scrutiny under the right Executive.

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Posted (edited)

I may as well for historical purposes look at the Aston Villa case yet again.

On 22nd March 2019 Matt Lawton wrote- and we know about Derby County and Sheffield Wednesday, the fact they have cases ongoing. One have been docked 12 points, one the case is still dragging but time will tell.

Quote

Villa could have to explain losses believed to total as much as £60million   

That was in the starter bullet points.

Quote

While the clubs declined to comment on Friday, privately insiders insist they will not be found to have breached financial fair play rules. But that will be a matter for interpretation.

Clubs may argue they can allocate certain costs, but the EFL may not accept their explanation and Villa could have to explain losses believed to total as much as £60million.

When Nassef Sawiris and Wes Edens took a controlling stake in Villa last year, they were warned that drastic action was needed to avoid issues with profit and sustainability regulations

One solution would have been to sell Jack Grealish, and it could now be that they have to take such an option even if a number of their players are out of contract this summer.

Unclear- does it mean EFL insiders or club insiders? Certainly means that they were wrong about Sheffield Wednesday. May well be wrong about Derby- they were charged and are at the hearing stage.

Remember too this was written under Harvey's leadership, this info came out under his leadership. It does appear also based on a subsequent article by Lawton that the PL would not be minded to enforce embargoes or deductions on a newly promoted club at the request of the EFL. Read differing things on this but the fact they had no points deduction mechanism in place as per Matt Hughes until lately- may still not, as in sliding scale suggests not!

How does that £60million in a season stack up? As we know:

NSWE UK (ie the Aston Villa consolidated accounts) posted losses of £68,884,000.

However, it is worth delving into those figures in a little more depth:

Quote

LOSS- £68,884,000

MINUS- £30,000,000 (XIA PAYMENT TO LERNER)

MINUS- £15,808,000 (Promotion Bonuses)

Loss Before FFP excluded items net of those two above=£23,076,000

However, this loss is of course inclusive of the stadium sale and the HS2.

Add back:

Quote

Loss Before FFP excluded items net of those two above=£23,076,000

Minus- Profit on Disposal of Villa Park- £36,374,000.

Minus Other Operating Income (HS2)- £14,494,000

New Loss Before FFP excluded items but exclusive of Villa Park and HS2=£73,944,000

Add Back HS2- £14,494,000

Revised and Rounded Loss Before FFP excluded items but exclusive of Villa Park=£59,450,000

By the process of elimination, I believe that the HS2 would have been included in the Projected Accounts that were submitted in March and fair enough but not the stadium sale.

Also how can you include as a given promotion bonuses in March of that season- you can't! Goes for both the bonuses and the payment to Lerner- nothing guaranteed in March, especially with not being miles clear at the top- and we all know how unpredictable the playoffs can be.

That means that sometime between the accounts being received and examined by the EFL, say a month, the stadium plan was put into place.

This in turn means that Matt Lawton's article was not far off right! Not far off at all...big hand to the guy! 👏 Well done that man!

That's pretty commercially confidential info too I'd say- had their accounts to within a very reasonable ballpark, wonder who leaked it??  Nearly spot on as well. 

In terms of the leak, did/does public interest outweigh right to commercial confidentially for Aston Villa and the EFL? Leaks in football are not so uncommon however.

On another note, I see that Reading turned down but it's unclear when, £7m for Loader in January or August 2019! No sympathy, they also turned down a £10m bid for Moore, Liam Moore in August 2019 and gave him a bigger new contract- now they must pay an FFP related price!

Edited by Mr Popodopolous
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Posted (edited)

Reading are still under some kind of EFL close monitoring/analysis/involvement. I'm sure they're well over to June 2020. Should also correct myself too, the Moore bid and subsequent new deal was August 2018.

Kieran Maguire's thread on Derby. Things moved on a bit since then, ie the charge is available now.

One of his subsequent Tweets in the thread- not looked at it myself really, the charge.

It seems the charge is over the leasehold- I think. Gellaw Newco 202 owns the freehold ie Pride Park. Do Freeholds and Leaseholds of the same property usually have different Title Numbers?

Bit more light? Detail anyway! ⤵️

EfNKd9TWAAAFI42?format=jpg&name=large

Charge appears to be over the lot.

Although Ryan Conway, the Derby journalist over on The Athletic suggested that they could spend £10m or up to 1/3 of this investment- which I assume is £10m- so what gives??

Indeed, the charge- which I still haven't looked at properly- as confirmed above is over all 8 companies. Still no accounts for the following though:

  • Club DCFC Limited
  • Stadia DCFC Limited
  • The Derby County FC Academy Limitd
  • Sevco 5112
  • The Derby County Football Club Limited
  • Gellaw Newco 203 Limited

The first 3 are under Sevco 5112. The football club is under Gellaw Newco 203 Limited- as is Sevco 5112 inclusive of the first 3.

Quite understand why you cannot yet release the football club accounts and quite possibly Gellaw Newco 203 as the ultimate company- but the other 4??

As for the Gabay related charge, still no sign of that having been cleared yet from Gellaw Newco 202 and Gellaw Newco 204- perhaps this is to clear some of that?

Edited by Mr Popodopolous
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On 06/08/2020 at 09:24, Mr Popodopolous said:

I agree in principle with a good chunk though and yeah I agree on the Licensing thing- the carry back is an interesting idea for sure.

The only issue is that promoted sides, will the PL enforce penalties? This is genuinely a grey area.

Are Projected Accounts not a basis for charge then?

I know you quote Kieran Maguire a bunch, but I'm not sure if you also listen along to his podcast. If not, he discussed it when talking about Sheffield Wednesday's points deduction. He said that EFL points deductions wouldn't count in the PL but theoretically a promoted team could possibly face a points deduction should they get relegated back to the EFL. 

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10 hours ago, Mr Popodopolous said:

 

1.  It seems the charge is over the leasehold- I think. Gellaw Newco 202 owns the freehold ie Pride Park. Do Freeholds and Leaseholds of the same property usually have different Title Numbers?

 

2.  Although Ryan Conway, the Derby journalist over on The Athletic suggested that they could spend £10m or up to 1/3 of this investment- which I assume is £10m- so what gives??

 

1. Yes - they are different assets, one can be disposed of without the other, so have different title numbers.

2. The spare £20 million is probably the cash burnt since the last capital injection.

It does increasing look like Morris has had enough.

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13 minutes ago, Hxj said:

 

1. Yes - they are different assets, one can be disposed of without the other, so have different title numbers.

2. The spare £20 million is probably the cash burnt since the last capital injection.

It does increasing look like Morris has had enough.

It would be good if he bought Oxford . 
( one for the old fellas there ) 

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15 minutes ago, Major Isewater said:

It would be good if he bought Oxford . 
( one for the old fellas there ) 

Or a team from the minor leagues as our american cousins might say?

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