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The Championship FFP Thread (Merged)


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Will be interesting to see where and how Pride Park features in the takeover.

I can’t imagine that the incoming buyers will want a football club without it’s ground. Accordingly, and as DCFC no longer own Pride Park, I can only presume that there will have to be a separate transaction for the purchase of Pride Park from Morris’s “other” company. If so it will be interesting to see what price is paid, as I am pretty certain the new owners will require their own (truly) independent valuation in order to determine a fair market price.

As this could cause serious egg  on the faces of Morris and the EFL as regards the ffp judgement, what’s the betting that when the figures are agreed the price paid for the stadium will be exactly that which was used when DCFC “sold" PP for ffp purposes, and that the price of the football club will be “adjusted to account for any shortfall in the buyers valuation of the ground? 

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20 hours ago, Mr Popodopolous said:

I'd like to say- the moral high ground, Sportswashing by Despots bad- but mainly it's because I wish ill on that club! 😃  There's a few clubs that aren't even traditional local rivals of us that I have a serious dislike of these days...

I will finally take a look at the charges over the assets and bits of the club- @Davefevs @myol'man may also find this interesting...seems odd that you'd buy a club whereby charges are over all the main assets from Dell, Gabay- at least as per CH. @Hxj might also- seems the EFL have given the green light anyway, there's no real reason AFAIK to stop it.

FFP equity limits, EFL need to scrutinise like a hawk any transactions between UAE and Derby too. I don't care about Covid, I don't even care about Derby's wellbeing as a club. The more hardship the better in fact.

At least you're honest. 

There is no guarantee that new foreign owners, automatically mean that the club fortunes instantly improve.

My club, Villa had a Chinese owner once. As do our rivals Birmingham. Neither of us have good things to say about them.

Wolves on the other hand may take a different view.

Man City had a Thai owner. They hated him. Leicester City have Thai owners. The fans sing his name.

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On 06/11/2020 at 15:35, AnAstonVillafan said:

At least you're honest. 

There is no guarantee that new foreign owners, automatically mean that the club fortunes instantly improve.

My club, Villa had a Chinese owner once. As do our rivals Birmingham. Neither of us have good things to say about them.

Wolves on the other hand may take a different view.

Man City had a Thai owner. They hated him. Leicester City have Thai owners. The fans sing his name.

Don't get me wrong, I'm no great fan of Sportswashing either- Man City- UAE, PSG- Qatar- nearly Newcastle with the Saudis, could argue some others too.

You're right. Even Man City didn't kick on that quickly- may have been better in first few years with Sven over Hughes I reckon for that phase of development but that's football talk, has no place on a finance thread. ;) 

Yeah you're right big variety. Birmingham and Aston Villa neither were ideal let's say...West Brom's seems so so, neither disastrous or anything amazing, Fosun at Wolves however seem very smart, very strategic.

Agreed- possibly only big positive he did there was selling, having to sell to to UAE!

It's just a thought of frustration at Derby wriggling out of issues with questionable sponsorships- like Man City, when they clearly have FFP issues.

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23 hours ago, Mr Popodopolous said:

Don't get me wrong, I'm no great fan of Sportswashing either- Man City- UAE, PSG- Qatar- nearly Newcastle with the Saudis, could argue some others too.

You're right. Even Man City didn't kick on that quickly- may have been better in first few years with Sven over Hughes I reckon for that phase of development but that's football talk, has no place on a finance thread. ;) 

Yeah you're right big variety. Birmingham and Aston Villa neither were ideal let's say...West Brom's seems so so, neither disastrous or anything amazing, Fosun at Wolves however seem very smart, very strategic.

Agreed- possibly only big positive he did there was selling, having to sell to to UAE!

It's just a thought of frustration at Derby wriggling out of issues with questionable sponsorships- like Man City, when they clearly have FFP issues.

I don't believe Derby will wriggle out of any issues. They are a mess at the moment and it will take time to sort. Morris was a geniune fan of the club. Like Lansdown and Gibson are of their clubs.

West Brom used to be one of the best run clubs in the country. Ruled by Jeremy Peace, who was born in the area, a fan and ruled with a rod of iron. He always got maximum value in every deal. The current Chinese owner seeks to lead in the same way. It was managerial problems which caused their relegation.

When Doug Eliis was Villa's major shareholder the club was debt free, and prudent. The fans hated this. We always wanted more and more money spent on new players. But we never apprieciated what we had with him. Its shame that it always seems to be foreign billonaires nessessary to push a club forward in these times.

 I used to deliver newspapers to Ellis's house as a teenager. 25 minutes drive from the stadium.

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12 minutes ago, AnAstonVillafan said:

I don't believe Derby will wriggle out of any issues. They are a mess at the moment and it will take time to sort. Morris was a geniune fan of the club. Like Lansdown and Gibson are of their clubs.

West Brom used to be one of the best run clubs in the country. Ruled by Jeremy Peace, who was born in the area, a fan and ruled with a rod of iron. He always got maximum value in every deal. The current Chinese owner seeks to lead in the same way. It was managerial problems which caused their relegation.

When Doug Eliis was Villa's major shareholder the club was debt free, and prudent. The fans hated this. We always wanted more and more money spent on new players. But we never apprieciated what we had with him. Its shame that it always seems to be foreign billonaires nessessary to push a club forward in these times.

 I used to deliver newspapers to Ellis's house as a teenager. 25 minutes drive from the stadium.

As Joni Mitchell wrote “ you don’t know what you’ve got ‘till it’s gone!” 

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14 hours ago, downendcity said:

As Joni Mitchell wrote “ you don’t know what you’ve got ‘till it’s gone!” 

If only the next line was 

"They paved Pride Park, put up a parking lot" :)

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Norwich's accounts out.

They're prudent, as ever. Well within FFP- all very, well Norwich really? :)

Bit busy to trawl through them so Swiss Ramble.

Think Hull made a profit too even last season in relegation from the Championship with ZERO Parachute Payments.

I may have mentioned it before but anyway...⬇️

Of course, the flipside of cutbacks, cutbacks and selling two star players in January, was relegation- FFP is important but the fact the fans and Allams have no relationship means that approach inevitable, despite a balance being needed.

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Football League have a task on their hands here IMO. They need to be ready and prepared...

  1. They need to find out a way to see how to remove Pearce from the club representatives on the Board, though maybe that's more of a medium-long term goal?

Then with respect to the takeover:

  1. This Abu Derby takeover- Abu Derby is it- they need to get in early and hard- lay out the position of the club with P&S, chances are they are pushing it, put them under a Business Plan ON ARRIVAL, warning that to deviate from it will incur a rapid referral to the Independent Disciplinary Commission.
  2. Meeting with the new owners like Aston Villa summer 2018- except this time DO IT PROPERLY. Interrogate them on and scrutinise to the full their plans, and whether they are compatible with P&S. I'd gladly do it given the chance, referring upwards to Senior Officials and Accountants/Auditors utilised by the League where necessary.
  3. They need to be uber tough when it comes to probable Related Party sponsorships- Birmingham got theirs downgraded in summer 2018 I read, they just need to use the relevant comparable with other clubs and external ones …and stick to it! Excluding the excess for P&S before it can even be properly utilised.
  4. They need to have them walk that line, exercise the powers open to them when losses exceed £15m but fall below £39m, utilise them to the full.
  5. If on track to fail P&S by a big margin and say a large ie excessive training ground sale, GET GOOD INDEPENDENT VALUERS IN INSTANTLY! Better yet, hire one or some on retainers!
  6. IF full disclosure demanded in the Meeting with new owners, the inevitable one with respect to possible P&S questions, demand disclosure to the fullest extent possible of HOW they intend to solve the P&S issue- again scrutinise, push back. That would help with 5).

On that Business Plan note, not that I have a great problem with Birmingham overall due to reform, sales and probably the biggest punishment for the smallest offence once compared, but why the Football League did not flag in the March 2019 Hearing their issues with the Business Plan is strange- they only sent it through in May 2019, despite the fact that January had been and gone by the time March came around. As it happens I think they've been punished and reformed, or are reforming but the Hearing in March 2019 suggested they had complied substantially with the Terms of the Business Plan...some kind of double punishment in March or a Second Hearing in March/April 2019 for not selling Adams in January 2019 might have been in order- mind you, Harvey let the in-season punishments drag waaaaay too far- in fact he didn't seem keen to push them at all, hence why Birmingham were charged in August 2018 and others not at all under him, for offences that took place in the 3 years concluding in 2017/18.

Sheffield Wednesday's accounts extension pushed them higher in terms of overspend. Lots of their smug and ill-informed fans say that a 12 point deduction would've been midtable to midtable- well if in the season OF the offence as intended, assuming the same time as Birmingham- I have the table from that date in front of me, in 2018.

In-season deductions for a) Size of overspend and projected and b) Rising losses=aggravating factor. No real grounds for mitigation at this point.

38 games in.

  1. Sheffield Wednesday 41 pts.
  2. Birmingham 33.

Think Birmingham looking at 9-10 points there, let's go with 9 as they were nonetheless pretty cooperative and maybe as they apparently put themselves under an embargo in January 2018 you could even make a case for 8. Nonetheless, whether reduced to 24 or 25, it surely consigns them to the drop? Only stayed up on last day as it was!

Sheffield Wednesday had a load of injuries and bad form at the time, though had just won at Leeds. 8-9 points plunges them RIGHT into the scrap, totally different ballgame psychologically- might they have dropped too?

Few of you might be interested in this- @Davefevs @Coppello @downendcity @Hxj

Apologies if I've missed anyone.

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Trying to work out Sheffield Wednesday's P&S losses if taken on 12-month accounts and this is the Sanctioning Guidelines.

Quote

The Following number of points shall be deducted from the 12 points.

Quantum of the Breach

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

Then the balance shall be further reduced if the loss in the final season is less than the season(s) before.

Typical Football League- deductions of points from the deduction- wonder if Harvey himself wrote the guidelines! 🤣 I know what it means but it's badly worded and poorly laid out.  Back to front, simply- "Overspend by £1-1,999,999=3 points, £2m-£3,999,999=4 pts" etc.

Their overspend if adjusted to 12 months was surely at least as large as that of Birmingham.

Losses by season.

2015/16- £9,755,000.

2016/17- £20,765,000.

*2017/18- £35,485,000

*=14 months. Think P&S allowances were estimated at £7.5m, maybe that falls to £7m with 3 x 12 as opposed to 2 x 12 and 1 x 14? Perhaps the losses would be lopped down to say £29m for the season, 9 point deduction plus rising losses each season?? Birmingham type levels and then a bit worse! That would plunge them to, well split the difference and say 10 points but that would put them into the drop zone or as good as. Based on the table on 17th March 2018, going into the International break.

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On 08/11/2020 at 19:02, AnAstonVillafan said:

I don't believe Derby will wriggle out of any issues. They are a mess at the moment and it will take time to sort. Morris was a geniune fan of the club. Like Lansdown and Gibson are of their clubs.

West Brom used to be one of the best run clubs in the country. Ruled by Jeremy Peace, who was born in the area, a fan and ruled with a rod of iron. He always got maximum value in every deal. The current Chinese owner seeks to lead in the same way. It was managerial problems which caused their relegation.

When Doug Eliis was Villa's major shareholder the club was debt free, and prudent. The fans hated this. We always wanted more and more money spent on new players. But we never apprieciated what we had with him. Its shame that it always seems to be foreign billonaires nessessary to push a club forward in these times.

 I used to deliver newspapers to Ellis's house as a teenager. 25 minutes drive from the stadium.

Doug Ellis was like our own Steve Lansdown in a way, you know the club is always going to be in safe hands with these types of men but over the years i think its fair to say we could have pushed the boat out considerably more than we have done and would have probably experienced Premier league football by now.

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I do apologise a bit for my slating of Sheffield Wednesday fans or what seemed like it. That post was written in a hurry by me, with little context.

To be clear, it is those morons who state that the punishment should be moved back tro 2018/19 from this season that I have a big beef with in this instance.

14 hours ago, bris red said:

Doug Ellis was like our own Steve Lansdown in a way, you know the club is always going to be in safe hands with these types of men but over the years i think its fair to say we could have pushed the boat out considerably more than we have done and would have probably experienced Premier league football by now.

FFP has been an issue for years, could you state when exactly?

Could you state when, given the extensive range of powers the Football League have- from automatic embargoes under the old system, to the current system in which the penalties are good but the implementation erratic- they should have automatic points penalties based on size of overspend tbh, like administration. 2 years of prior real accounts, 1 year of club projected and if £10m over, automatic 8 point deduction before a short hearing to determine aggravating and mitigating factors.

Remember in 2015/16, had we pushed the boat out and exceeded £13m which we were not altogether far from as I recall, it would have been an automatic embargo had we not gone straight up so that's out- similarly if our 2 year losses had hit or exceeded £26m going into 2016/17, that would have capped us that year and had it been 2015/16 and 2016/17 combined at £26m, it'd have capped us at £13m in 2017/18. A season in which even after deductions we lost 50% more, despite a record turnover in modern times certainly it was.

Now if we're going back to January 2008 I would agree that would be a great time to push the boat out, but I did some work on this a while ago and it's notable that from say 2010/11 or 2009/10, as our wage bill increased our League standing decreased. Which is massively counterintuitive but can be more common with clubs than people expect.

Was Coppell not an attempt to push the boat out- we actually got relegated in 2012/13 with a midtable or thereabouts wage bill yet finished bottom by a mile.

Let's not even forget that aforementioned 2017/18- we did push the boat out somewhat, we lost £25m- before allowances of course, and in January 2018 we kept Bryan, Flint and Reid. That alone was a sign of intent, keeping some of our best when arguably their stock at its highest, despite in the case of Bryan and Reid, summer 2018 going into the final year of their contract.

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17 hours ago, Mr Popodopolous said:

I do apologise a bit for my slating of Sheffield Wednesday fans or what seemed like it. That post was written in a hurry by me, with little context.

To be clear, it is those morons who state that the punishment should be moved back tro 2018/19 from this season that I have a big beef with in this instance.

FFP has been an issue for years, could you state when exactly?

Could you state when, given the extensive range of powers the Football League have- from automatic embargoes under the old system, to the current system in which the penalties are good but the implementation erratic- they should have automatic points penalties based on size of overspend tbh, like administration. 2 years of prior real accounts, 1 year of club projected and if £10m over, automatic 8 point deduction before a short hearing to determine aggravating and mitigating factors.

Remember in 2015/16, had we pushed the boat out and exceeded £13m which we were not altogether far from as I recall, it would have been an automatic embargo had we not gone straight up so that's out- similarly if our 2 year losses had hit or exceeded £26m going into 2016/17, that would have capped us that year and had it been 2015/16 and 2016/17 combined at £26m, it'd have capped us at £13m in 2017/18. A season in which even after deductions we lost 50% more, despite a record turnover in modern times certainly it was.

Now if we're going back to January 2008 I would agree that would be a great time to push the boat out, but I did some work on this a while ago and it's notable that from say 2010/11 or 2009/10, as our wage bill increased our League standing decreased. Which is massively counterintuitive but can be more common with clubs than people expect.

Was Coppell not an attempt to push the boat out- we actually got relegated in 2012/13 with a midtable or thereabouts wage bill yet finished bottom by a mile.

Let's not even forget that aforementioned 2017/18- we did push the boat out somewhat, we lost £25m- before allowances of course, and in January 2018 we kept Bryan, Flint and Reid. That alone was a sign of intent, keeping some of our best when arguably their stock at its highest, despite in the case of Bryan and Reid, summer 2018 going into the final year of their contract.

Yes it is the January of 2008 that sticks in my mind. Nothing against Dele Adebola or Nick Carle but they weren’t the type of quality signings that were going to push us over the line that year IMO.
I agree obviously since FFP has come into play we have had to play by the rules, the Lansdown family are sensible people and would obviously not risk fines or a points deduction by trying to bend the rules. I just still feel disappointed by January window in 08 to be honest.. i think under a different board we would have gone up that year. 

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1 hour ago, bris red said:

Yes it is the January of 2008 that sticks in my mind. Nothing against Dele Adebola or Nick Carle but they weren’t the type of quality signings that were going to push us over the line that year IMO.
I agree obviously since FFP has come into play we have had to play by the rules, the Lansdown family are sensible people and would obviously not risk fines or a points deduction by trying to bend the rules. I just still feel disappointed by January window in 08 to be honest.. i think under a different board we would have gone up that year. 

2008 definitely looking back is the one, I'll agree. Stoke pushed the boat out somewhat as I recall. Shawcross and some others?

I also think that switching from 4-4-1-1 which the signing of Adebola helped to facilitate didn't help. Adebola good depth but I thought that we lost a bit of control and security without Noble linking the midfield and attack as often.

Could Carle have maybe performed that role as an alternative to Noble for some games? He (Carle) was one I'm don't think we saw the best of.

However yes, splash say £10m in January on a mix of wages, fees and high quality loans and we have a very good chance.

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6 minutes ago, Mr Popodopolous said:

2008 definitely looking back is the one, I'll agree. Stoke pushed the boat out somewhat as I recall. Shawcross and some others?

I also think that switching from 4-4-1-1 which the signing of Adebola helped to facilitate didn't help. Adebola good depth but I thought that we lost a bit of control and security without Noble linking the midfield and attack as often.

Could Carle have maybe performed that role as an alternative to Noble for some games? He (Carle) was one I'm don't think we saw the best of.

However yes, splash say £10m in January on a mix of wages, fees and high quality loans and we have a very good chance.

Much as though many won;t like to admit, the biggest miss back then was LJ ’s injury. While he as out injured our form, and results, dropped off a cliff.

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Sheffield Wednesday written reasons released- well last week, just discovered them myself.

https://www.efl.com/siteassets/efl-documents/youth-alliance/201104---sheffield-wednesday-fc-v-efl-appeal---decision-final-201116.pdf

Few might be interested- @Davefevs @downendcity @BTRFTG @Coppello @Hxj

About to have a quick look myself.

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On 14/11/2020 at 05:21, bris red said:

Doug Ellis was like our own Steve Lansdown in a way, you know the club is always going to be in safe hands with these types of men but over the years i think its fair to say we could have pushed the boat out considerably more than we have done and would have probably experienced Premier league football by now.

I agree ,Steve Lansdown is an accountant and a fan.

 I believe both cause him pain and joy. 

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4 hours ago, Mr Popodopolous said:

Sheffield Wednesday written reasons released- well last week, just discovered them myself.

https://www.efl.com/siteassets/efl-documents/youth-alliance/201104---sheffield-wednesday-fc-v-efl-appeal---decision-final-201116.pdf

Few might be interested- @Davefevs @downendcity @BTRFTG @Coppello @Hxj

About to have a quick look myself.

Thanks - interesting read.

Provides some useful insight into the process.

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6 hours ago, Mr Popodopolous said:

Sheffield Wednesday written reasons released- well last week, just discovered them myself.

https://www.efl.com/siteassets/efl-documents/youth-alliance/201104---sheffield-wednesday-fc-v-efl-appeal---decision-final-201116.pdf

Few might be interested- @Davefevs @downendcity @BTRFTG @Coppello @Hxj

About to have a quick look myself.

I haven’t read past the first few pages....how is that not an aggravated breach?

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Scumbag Wednesday bring the game into disrepute, though as a long-established 'big club' are deemed more important than others.

Their arguments as set out in the first two appeals are clearly spurious and had regulation allowed should have allowed the EFL to impose additional sanctions, but that would never happen. EFL only like to punish the small and weak, those who aren't part of the Old Boys network.

Unlike as demonstrated against many smaller clubs sanctions are supposed to be immediate and non-negotiable, which beggars why the EFL were so collaborative in deferring the sanction at Wednesday's request in the full knowledge they might later appeal it not being to imposed as per the regulation? That 'loophole' exists for good reason and is to be used where clubs have unwittingly breached regulation, admitted having done so, have openly demonstrated remorse and made full effort to rectify matters. None of which scumbag Wednesday showed any inclination toward doing.

One thing is for sure, when they and their lawyers left court in taxis, it wasn't in those who purport to sponsor the club.....

What's the betting the £42m for the ground is never settled in full?

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On 24/11/2020 at 10:36, Hxj said:

Thanks - interesting read.

Provides some useful insight into the process.

It does. Still some opacity possibly though I read it reasonably quickly about actual in-season deductions.

On 24/11/2020 at 12:07, Davefevs said:

I haven’t read past the first few pages....how is that not an aggravated breach?

Your guess is as good as mine. If we look at Birmingham...

7 points for the overspend and 3 for the increasing losses per year.

1 back for early compliance.

Sheffield Wednesday overspend ALONE 12 points.

Theirs increased at a similar rate to and perhaps a greater rate than Birmingham AND they were less honest and cooperative.

Yet, because they were PLANNING to sell the Stadium- which they did not complete within the required timeframe quite clearly- that was worth SIX points back?? Would be pretty irate if I was Birmingham- let's not forget that they then had an EFL Business Plan to adhere to- and rightly so- but Sheffield Wednesday it seems not at least if so, it's not in the public domain.

If anything Sheffield Wednesday might have had 12 for the overspend and 2-3 more for escalating losses but no??

In the very most optimistic scenario, 1-2 back for at least having a plan ie selling the ground but to halve it?!

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On 24/11/2020 at 18:47, BTRFTG said:

Scumbag Wednesday bring the game into disrepute, though as a long-established 'big club' are deemed more important than others.

Their arguments as set out in the first two appeals are clearly spurious and had regulation allowed should have allowed the EFL to impose additional sanctions, but that would never happen. EFL only like to punish the small and weak, those who aren't part of the Old Boys network.

Unlike as demonstrated against many smaller clubs sanctions are supposed to be immediate and non-negotiable, which beggars why the EFL were so collaborative in deferring the sanction at Wednesday's request in the full knowledge they might later appeal it not being to imposed as per the regulation? That 'loophole' exists for good reason and is to be used where clubs have unwittingly breached regulation, admitted having done so, have openly demonstrated remorse and made full effort to rectify matters. None of which scumbag Wednesday showed any inclination toward doing.

One thing is for sure, when they and their lawyers left court in taxis, it wasn't in those who purport to sponsor the club.....

What's the betting the £42m for the ground is never settled in full?

Agreed.

I still dunno about whether there is a big club bias, Birmingham are a reasonable sized club but got hauled over the coals somewhat more than Sheffield Wednesday in some ways. EFL wanted to relegate Sheffield Wednesday so the claims go, so I am on the fence. There are additional powers though, you're quite right.

Now this is an undoubted bugbear of mine. I'm sure you're familiar with the regulations but if not there is something very specific in them that allows for in-season punishment. Will pull it out:

Quote

1.1.14 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-3 means the Club’s Accounting Reference Period immediately preceding T- 2;

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

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

Followed by.

Quote

2 Profitability and Sustainability

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

2.2  Subject to Rule 2.2A, 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

2.2.3  if Rule 2.5 applies to the Club its P&S Calculation in a form approved by the Executive from time to time and which as at the date of these Rules is set out in Appendix 1.

This ie T- that means when a club submits their Projected Accounts ie 2.2.2- this is in order to assess against the 2 prior sets of actual accounts- anything over £39m and it's sanctions there and then. Or should be.

Of course, there is a decent amount of blame to the Football League- Shaun Harvey only had the points tariff in place by September 2018 despite the fact that there had already been two years in which 'T' could have been applied with deductions etc. If anything it should have been in place going into 2016/17 so everyone knew where they were with it. How he became CEO of the Football League well...who knows!

Birmingham even got a bit fortunate as they were not correctly assessed until Summer 2018- I think Harvey was pretty keen to see clubs get off the hook with FFP in summer 2018, or buy time personally, but Birmingham and their idiotic breach of a soft embargo forced the Football League's hand.

Nick De Marco is the man- represented Derby as well, and the Saudis with Newcastle. Gives a fair idea about him tbh...yes waiting for a D-Taxi, that'd never arrive!

It's worse than that- £60m! £60m but look at their accounts for Sheffield Wednesday from 1997 to 2014 with a range of valuations and I'd say Sheffield Wednesday PLC from 1990-1997, I choose 1990 as that is when we could factor in improvements post Hillsborough and necessary expenditure.

Even if we take 1997 when it last had work done on it in a major way, valued after that the years before for Euro 96 it was not far off the £22-24m in 2014. It never diverged a huge amount from that range...

To add insult, there is speculation that they can stick it in the 2018/19 accounts giving them a big FFP boost for at least one or two more years.

The one good thing to materialise is that the rent is mooted to be in the range of £3m per season, which will act as a drag on FFP for years to come but god I hope they go down.

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https://www.efl.com/contentassets/c9fc5dceaa7f4b62b81dca0b9e2f7c9d/2020.10.26---decision-on-mfc-redaction.pdf

Seems Middlesbrough launched an appeal against the Pride Park valuation- about to read it myself.

I assume that is the end of it but who knows...?

Man who went into bat for Derby- Sheffield Wednesday, QPR prior to this and even the Saudis at Newcastle appeal- is the well known QC who specialises in such areas as Sports Law, and his name is ***** De Marco. Well that's what I think he is anyway.

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12 hours ago, Mr Popodopolous said:
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I haven’t read past the first few pages....how is that not an aggravated breach?

Your guess is as good as mine. If we look at Birmingham...

Because the EFL did not contend for an aggravated breach at the Sanctions Hearing see paragraph 20 efl-v-sheffield-wednesday---decision-on-sanction.pdf  

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15 hours ago, Mr Popodopolous said:

Agreed.

I still dunno about whether there is a big club bias, Birmingham are a reasonable sized club but got hauled over the coals somewhat more than Sheffield Wednesday in some ways. EFL wanted to relegate Sheffield Wednesday so the claims go, so I am on the fence. There are additional powers though, you're quite right.

Now this is an undoubted bugbear of mine. I'm sure you're familiar with the regulations but if not there is something very specific in them that allows for in-season punishment. Will pull it out:

Followed by.

This ie T- that means when a club submits their Projected Accounts ie 2.2.2- this is in order to assess against the 2 prior sets of actual accounts- anything over £39m and it's sanctions there and then. Or should be.

Of course, there is a decent amount of blame to the Football League- Shaun Harvey only had the points tariff in place by September 2018 despite the fact that there had already been two years in which 'T' could have been applied with deductions etc. If anything it should have been in place going into 2016/17 so everyone knew where they were with it. How he became CEO of the Football League well...who knows!

Birmingham even got a bit fortunate as they were not correctly assessed until Summer 2018- I think Harvey was pretty keen to see clubs get off the hook with FFP in summer 2018, or buy time personally, but Birmingham and their idiotic breach of a soft embargo forced the Football League's hand.

Nick De Marco is the man- represented Derby as well, and the Saudis with Newcastle. Gives a fair idea about him tbh...yes waiting for a D-Taxi, that'd never arrive!

It's worse than that- £60m! £60m but look at their accounts for Sheffield Wednesday from 1997 to 2014 with a range of valuations and I'd say Sheffield Wednesday PLC from 1990-1997, I choose 1990 as that is when we could factor in improvements post Hillsborough and necessary expenditure.

Even if we take 1997 when it last had work done on it in a major way, valued after that the years before for Euro 96 it was not far off the £22-24m in 2014. It never diverged a huge amount from that range...

To add insult, there is speculation that they can stick it in the 2018/19 accounts giving them a big FFP boost for at least one or two more years.

The one good thing to materialise is that the rent is mooted to be in the range of £3m per season, which will act as a drag on FFP for years to come but god I hope they go down.

There's still a major issue football needs to address in how IFRS allows infrastructure assets to be accounted. As Sheff Wed, Derby et al have shown it's possible to think of a number and provided one is selling to an 'interested party' one may evidence 'market value', even if it's nothing of the sort.

Sports stadiums, unless there's another team needing such facility, are largely specialist, limited value assets. It's only the land on which they stand that has long-lasting value. Problem is if it's land for development once one takes into account clearance, CIL & Section 106 costs it's probably only worth a quarter of what the asset's valued at. Not sure it's yet been tested but should one of the clubs struggle, sell the ground at a loss (possibly to temporarily groundshare elsewhere,) does the hit they take count as expense under FFP in the same way as the inflated sales account as income? If they don't there's an opportunity to keep flipping assets to incur profits and losses as deemed necessary.

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On 26/11/2020 at 11:26, BTRFTG said:

There's still a major issue football needs to address in how IFRS allows infrastructure assets to be accounted. As Sheff Wed, Derby et al have shown it's possible to think of a number and provided one is selling to an 'interested party' one may evidence 'market value', even if it's nothing of the sort.

Sports stadiums, unless there's another team needing such facility, are largely specialist, limited value assets. It's only the land on which they stand that has long-lasting value. Problem is if it's land for development once one takes into account clearance, CIL & Section 106 costs it's probably only worth a quarter of what the asset's valued at. Not sure it's yet been tested but should one of the clubs struggle, sell the ground at a loss (possibly to temporarily groundshare elsewhere,) does the hit they take count as expense under FFP in the same way as the inflated sales account as income? If they don't there's an opportunity to keep flipping assets to incur profits and losses as deemed necessary.

Agreed. It's FRS 102 now though I believe, transition in mid 2010s? 

It's interesting, as I read the report for the Derby case- very long it was too, but quite sure it cited "Depreciated Replacement Cost" as the correct valuation method here. Sheffield Wednesday not so sure, but it mentioned yield so even if it went for £60m, if annual rent is £3m some kind of merit? Rental charge would count against FFP also, even though we all know it's overvalued- surprised the Football League chose not to challenge the valuation, maybe that could still come down the track. What's your thoughts on it potentially being restated to the correct accounts? If there was a way to exclude it verbatim for FFP purposes it'd be good, but might that prove impossible?

Agreed. Specialist assets, with limited value. However from what I read on this, Depreciated Replacement Cost appears to be a good proxy for it- which is why it confuses me so much as to why using this very same method, it rises from say rounding up £24m in 2014, to £60m in 2018 or 2019! 2014 accounts are worth a read, they seem to state it inclusive of land under the DRC. Might have been yield related for sale price though, £60m price/£3m rent.

Talking of rent, Pride Park appears to be annually £1.1m or £1.3m or something, for an £81.1m transaction- the Report showed much difference ie £4m or more a year BUT they invoked a clause on days that it would only be used for football related activities. Which knocked between £2.5-3m off it but there is also talk that Football League can substitute in a Fair Market Rent basically, for FFP/P&S purposes.

Birmingham's looks easily the cleanest of any at £22.76m price- that's price not profit- and a £1.25m annual rent x 25. 2nd city, not a million miles from City centre and they downsized in other areas, player sales- I can live with that. They were seemingly the most honest of the clubs anyway yet got the biggest punishment to date!

Aston Villa, Derby, Sheffield Wednesday- and must not forget Reading, who sold ground in 2017/18, then Renhe Sports Management Ltd sold it to owners Chinese company in 2018/19 for £37.5m- up from £26.5m in 2017/18, also sold was the Training Ground and some land- even loaned Sone Aluko to Chinese club owned by their owner for £3m!? Lower profile as a club and I hope we win tomorrow for both on the pitch and off the pitch, but they're one of the worst actually in this respect! CEO is also or has also been on EFL Board too- him and the Derby one, Nigel Howe and Stephen Pearce respectively- especially the latter- should be drummed off at the earliest.

Might also add, in the case of Aston Villa they also received £3m in 2017/18 for what may have been HS2 related land and £14.4m in 2018/19! I bet there are many, many people awaiting compensation still for HS2- but Aston Villa got bumped right up- without that £14.4m they fail FFP. That's even with the Stadium sale factored in. Despite 3 years of Parachute Payments- I do hope the Football League are patiently waiting for them to return.

AFAIK, the situation is this- and it goes for all Fixed Assets, not just Stadia:

Stadium sold- Profit can be accounted for if the Stadium is sold and deemed to be at Fair Value. If not then disputes over valuation, adjustments for FFP kick in etc.

Stadium sold at loss- I'd like to think the loss would go against for FFP, as well as in the accounts- in theory it absolutely should, but you're right it hasn't been tested- but I imagine it would be "Loss on Disposal of Tangible Fixed Assets" appearing in P&L. Selling at under value though can or should bring outside trouble greater than the EFL, HMRC would surely want words...?

The solution here for Football- it's so simple. Exclude Profit or loss on disposal of Fixed Assets from FFP/P&S calculations. UEFA do this with their FFP- but even better, the Football League themselves did this until 2015/16 season. In 2016/17 season, for reasons unknown- could easily be an error at EFL HQ- when they transitioned from those old rules to the new ones, this clause was removed and nobody has ever explained it. The old rules themselves excluded Fixed Asset Profits or Losses from the calculations- you can interchange, transfer and flip as much as you like, it's just irrelevant for the calculations- like various other items.

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I'd add Sheffield Wednesday to that.

Won't happen I am sure but I'd piss myself (with laughter) if they after all that, had it adjudicated that because they botched the 2017/18 transaction dates and were- a polite way to put it might be flakey albeit assisted by the Football League- had it excluded entirely from the calculations.

Reading the criteria from the Written Reasons released a while back, could there be a small chance??

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