Jump to content
IGNORED

The Championship FFP Thread (Merged)


Mr Popodopolous
 Share

Recommended Posts

So @Mr Popodopolous, with the apparent news of Nigel P getting the job, where do we stand in regards to FFP for wriggle room during the transfer window? 

Also are there any hints or suggestions that FFP may have to be tweaked to take account of this year of lockdown?

Edited by Port Said Red
Link to comment
Share on other sites

I was actually heading towards this thread to post a list of Championship clubs- including this and last season- who haven't yet posted Accounts to CH, and it's quite a long list! In some cases there has been EFL related Disciplinary issues, in two- Wigan and Charlton- issues with takeovers that were on and off but it's quite long!

Current Championship clubs who have not:

  • Barnsley
  • Blackburn- Though if consolidated are Venkys London Limited that may do it, albeit that runs until March 2020 so...can be a bit difficult to reconcile though.
  • Cardiff- Both Club and Holdings
  • Coventry (Trades under the name Otium Entertainment- or vice versa).
  • Derby- The Club, the consolidated and all the small companies that make up the consolidated- not for two years, so to Summer 2018 posted in Spring of 2019.
  • Huddersfield
  • Luton- Both Club and Holdings.
  • QPR- Both Club and Holdings.
  • Stoke- Both Club and Holdings.
  • Sheffield Wednesday- Be it the Club, the Parent/controlling company- Plus Sheffield 3 Limited (Stadium Purchasers) and Sheffield 5 Limited (The controlling company of Sheffield 3 Limited).
  • Wycombe

Clubs relegated to League One- The aforementioned Charlton and Wigan. Includes Club and all associated companies.

Clubs relegated from PL- Watford, plus Hornets Investment Limited.

Clubs promoted last season- Fulham. That's the Club, Fulham Football Leisure and the overall top company.

Swansea have and Parachute Payments though they have had, credit where it is due. A PROFIT.

Cut the wage bill by 1/6 as well and the Amortisation charge now <£10m- seem fairly sensibly run, keep selling as well- see Rodon to Tottenham. A slightly longer look shows Operating Expenses cut by £111m from 2017/18 to last season- so in two years.

Compared to Stoke...well though no Accounts yet, they came down the same year as Swansea, therefore on the same Parachute Payments 3 year Schedule- their results maybe skewed by Accounts ending in May so some Parachute Payments deferred to 2020/21 is possible, whereas Swansea's Accounts until July.

Stoke's are interesting as they include a £43m (IIRC) Impairment Charge and the club have claimed based on media Reports and snippets in Bet365 Accounts that of that, £30m could be considered to be an excludable cost under Covid- claimed to be "In accordance with EFL guidance". That means £87m-I dunno say £3m in Revenue losses directly attributable to Covid-£30m-£7m generally stated for their Allowable Costs (ours around £5m)- that is still £47m! However as we know Impairment reduces expenses in future years, but unsure how much in this instance- and it's skewed as well because the Bet365 Accounts are to late March, in a 12 month period- therefore Stoke's Accounts on there run until late March and incorporate April and May of the 2018/19 season...so it could push their losses higher still! One thing is for sure, Parachute Payments up next year- as they are for Cardiff- and both are staying down. Stoke by dint of the rollup will be on £39m loss limits next season, this year it's about £55.5m, due to the loss limits being different in PL and Championship and some sort of Averaging out Formula...can make guesswork as to whether their loss last season was higher, lower or the same but until their consolidated Accounts out it'll be hard to say!

And rather interestingly- or might be nothing- Stoke City Property has shifted its Reporting Date to 31st May 2021 as opposed to end of March.  👀

Could be as simple as aligning with Club and Holdings or could be part of a Plan. By (pure coincidence?) they have appointed a Surveyor who was already on Stoke City Property and Stoke City FC as one of the Directors of Stoke City Holdings. Again could be alignment...or could be an (attempted) plan.

  • Thanks 1
Link to comment
Share on other sites

Posted (edited)
1 hour ago, Port Said Red said:

So @Mr Popodopolous, with the apparent news of Nigel P getting the job, where do we stand in regards to FFP for wriggle room during the transfer window? 

Also are there any hints or suggestions that FFP may have to be tweaked to take account of this year of lockdown?

Hi @Port Said Red

I believe that we are, will be one of the better placed in this respect. Parachute clubs and Brentford (if they stay down of course) maybe better placed still e.g. The amount of Profit they make on Players- we're good but they're top IMO.

As it stands currently, the Regs were tweaked but it's always possible they can be tweaked again if Governing Bodies and Clubs so desire.

Pre Pandemic this could have been, in conjunction with the 2019/20 season but especially this season, could have been our "Go for it!" However clubs agreed, after UEFA made a start that 2019/20 and 2020/21 would be merged in order to try and neutralise the impact of the Pandemic. Further, Covid Costs would be added for 2019/20 and 2020/21 only as one of the items that can be disallowed from expenditure- so Accounting Loss/2-P&S Allowances-Covid Costs=P&S., Subject to EFL guidelines and externally audited I am sure.

By my estimates, we lost:

£25m in 2017/18- This if not for Covid would have gone by now, but is T-3 and for these purposes T-2. Believe our Allowances were £5m.

PROFIT- £10m in 2018/19- add back the £5m in Allowances and that season is a £15m Profit for T-2- albeit of course for this roll up it represents T-1.

LOSS- £10m in 2019/20- add back the £5m in Allowances and I've seen estimates ranging from £2-5m for Covid Costs. Point is it's either £0-3m in P&S loss which is well well within.

However you then halve that and remember the Profit and Loss in 2018/19 and 2019/20 included around £38m in Profit and £25m in Profit on Disposal of Player Registrations respectively.

Where we're at to 2020/21 is therefore...

T-2/T-3 depending on how you want to look at it, P&S= -£20m

T-1/T-2 depending on how you want to look at it, P&S= +£15m

This year incorporates as said, this and last season averaged so for P&S purposes it'd be T- think regardless of Covid quite a lot of clubs would have failed to Summer 2020 if not for the rollup and averaging...we would 100% not have.

The fact Covid losses are allowable means that, let's assume that all clubs have Gate Receipts and Corporate Losses ie no Concerts, Events etc wiped- and that our wage bill remains fairly static...£2m Profit on Disposal of Players so a possible P&S loss of £30m if all is wiped as it might be for all clubs- unable to sell Season tickets, Concerts etc is directly attributable to Covid. If I haven't factored in the Covid losses for 2019/20 as well then it'd be more like £25-27m P&S loss for this year.

£0-3m in 2019/20 + £25-27m=£25-30m/2=£12.5-15m for this combined and averaged year.

-£15m in 2018/19.

Add £20m in 2017/18.

In short, £17.5-20m Covid loss...but that major millstone in 2017/18 drops off and our new starting point will be the big Profit in 2018/19!

The big assumption here is that the system doesn't change again but we could have a combined FFP Profit of £2.5m or average of around breakeven for 2018/19 and the combined period- which might mean we can make an Accounting loss of £54m (£13m x 3 + £5m in Allowable Costs) in 2021/22. Maybe even a couple of million more.

@Davefevs estimated a while back that Cost Savings in Summer could add a further £5m in Wages and Amortisation- assuming that's the net total of all who might leave. In theory if that is accurate and my interpretation of the regs is also right, maybe we could lose as much as £64m next year and remain compliant- of course doing that and not getting up- it would completely knacker us for a while thereafter, with Player Sales, probably Embargoes if we're lucky, significant Cost Savings- swingeing ones maybe to move into compliance for the following two seasons!

Could be as simple in my scenario of "Roll the dice- go for it fully, Play to win..." if we don't go up- ooh I dread to think, we're talking Reading type overspend! As in £30-35m overspend moving into the following year. P&S regs now allow for T +1 and T + 2 to be forecasted by the club, with respect to future compliance in that period.

Edited by Mr Popodopolous
  • Like 2
  • Thanks 1
Link to comment
Share on other sites

With all that potential leeway on spend, if we got recruitment right and signed 5-8 players of Brentford Ilk that could not only help us push for promotion but individually increase their value significantly a la Toney, it would make the spend all worth it. Recruitment is the key to this. God I hope we get it right

Link to comment
Share on other sites

Thank you @Mr Popodopolous, I am sure you have probably covered a lot of this in previous posts, so I apologise for getting you to summarise it all at such a late hour.

If your figures are close to reality which I think is very likely then I think we are in a good position.

I don't think we will "go for it" however for 2 reasons.

1. Pearson's comments about 4 to 6 windows makes me think that he has bought in to the academy and will look to bolster a squad built around the most talented, and use the profit from others to fill positional gaps, e.g. right back.

2. The deficit we are allowed to make, doesn't tally with the way SL works and that he would want us to make. At the very least I would expect us to spread any potential losses over 2 or 3 seasons.

I still feel confident that we will be pushing back up the table at least.

Edited by Port Said Red
  • Like 2
Link to comment
Share on other sites

Posted (edited)

Quick note on Sheffield Wednesday. They appear to have taken/be taking advantage of the Covid extension for a 2nd year on the spin!?

This is fairly unprecedented, can't think of any club who have done it twice.

Certainly not at Championship level or above.

Could be an automated CH error thing, but it says due date end of July 2021 yet they did it last year. The only club worse are Derby.

Derby's are once extension factored in are almost 10 months overdue for last season and almost 22 months overdue for 2018/19.

You have to look through the Companies that make up the consolidator for Derby, some different deadlines but bottom line is no Accounts for any season since 2017/18, last published Spring 2019.

Open ended embargo for each feels appropriate IMO.

Edited by Mr Popodopolous
Link to comment
Share on other sites

Posted (edited)

Little bits to add- that may be general finance, maybe FFP or may cross over.

Sheffield Wednesday have once more failed to pay wages on time. Telegraph suggested for April, potentially March as well. This feels like maybe the 3rd time this season? Rumours of this or of an unusual payment mechanism first materialised in December 2019, when they were in the top 6 but not long after the EFL charged them- could be cashflow related too of course. Or transferring money from Thailand, delays about that- same happened with Reading two years ago but that seems to have been an isolated incident. :hmm: Feels like gaining an unfair sporting advantage but the players seem to still play despite it.

Cardiff. Mick McCarthy when he first came in suggested that playoffs was the aim. They are staying down!

Why this is interesting is that this will be the first season, ie 2021/22 since 2012/13 since they had neither the benefit of Parachute Payments or PL money. With a very different FFP system to back then...wonder if sell before buy a part of that. Surely they won't be able to retain Wilson and Ojo, renew their loans for a start.

They along with Sheffield Wednesday- these were two of the 10 clubs listed as under an Embargo in April- as mentioned above, Sheffield Wednesday took the Covid extension again and nothing on Cardiff in terms of released Accounts for 2019/20.

Edited by Mr Popodopolous
Link to comment
Share on other sites

So why haven’t derby been sanctioned at all yet? Didn’t they fail to pay their players at one point this season? Should have been an instant points deduction. Could derby still gain a points deduction at all and still get relegated?

  • Like 1
Link to comment
Share on other sites

Posted (edited)

In theory yes.

There is supposed to be an EFL Appeal against the Amortisation issue ongoing. The season technically hasn't closed yet with Playoffs so any deduction should be applied instantly I think. If it is one point that would be the ultimate cop-out that keeps them up on GD, 2 pts or more sends them down.

Both Derby and Sheffield Wednesday have had issues paying wages this season- there should be action about that. I agree, should be an instant deduction- the ridiculous thing was that when wages were finally paid a month late after money and player sales, they signed 5 on loan!? Derby I mean.

As for Reading, it's not their current managers fault, the bulk of this predates him- but as a club they got themselves into a major mess:

  1. Liam Moore- Bid turned down.
  2. Loader- Bid turned down- he left on a free or for minimal compensation.
  3. Swift- Turned down bid in Summer 2020.

Also speculation about Meite bid turned down and in Summer 2019 after being released from a Soft Embargo, they promptly within a month, proceeded to add Joao and Puscas. 😱

Should they even have signed Ejaria permanently in Summer 2020 given their position?

Not as if they're a poor, struggling bumping the bottom club without saleable playing assets.

As for Derby, their fans seem to think the EFL Appeal it's a relatively minor offence which can't result in a deduction- erm dunno about that! If it's just a fine, reprimand or point of law/regulation why the 7 weeks and counting! Was meant to have started on 20th March 2021.

Edited by Mr Popodopolous
Link to comment
Share on other sites

1 minute ago, BOSRed said:

So why haven’t derby been sanctioned at all yet? Didn’t they fail to pay their players at one point this season? Should have been an instant points deduction. Could derby still gain a points deduction at all and still get relegated?

Not likely, Wayne Rooney is their manager after all, which would be grounds for giving them a points addition surely?

Link to comment
Share on other sites

13 hours ago, Mr Popodopolous said:

Bit of FFP speculation below.

I think that this is all a bit premature.  No one has been charged yet and no one has submitted 2021 accounts.  They have some time to rectify matters.

I hope that this part of a media campaign by Reading on the unfairness of sanctions, not a private deal done in the back corners of a smoky zoom call!

  • Thanks 1
Link to comment
Share on other sites

3 hours ago, Hxj said:

I think that this is all a bit premature.  No one has been charged yet and no one has submitted 2021 accounts.  They have some time to rectify matters.

I hope that this part of a media campaign by Reading on the unfairness of sanctions, not a private deal done in the back corners of a smoky zoom call!

True. The media campaign, maybe there will be one, Paunovic put a case in the run up to this weekends game about as he put it, 'A fair chance to compete'. Also something about actions this season being taken into account etc.  

A Disciplinary Commission should do that as part of mitigating and aggravating factors but no reason to push any hypothetical charges/soft embargo and more away.

Many of the issues predated him in fairness but unless big player sales by end of June...

Can only assume the prognosis for them isn't good based on manager comments etc.

Link to comment
Share on other sites

Posted (edited)

I'm not going to get excited until we have more out there but read online that Nixon has apparently stated that a big points deduction could be on the way for Derby.

https://the72.co.uk/234649/alan-nixon-derby-county-face-massive-points-deduction-as-finer-details-emerge-following-season-finale/

On a side note, Derby fans or at least their forum. I dunno- a few still seem to propagate the myth that Gibson selling a tax loss helped then pass FFP in 2016. FFP calcs are tax neutral, FFS!! The clue is in Profit or Loss Before Tax.

If interpretations of his Report are to be believed, they may have won Appeal but held off details so that it didn't disrupt their relegation battle. Er, what!? How is that fair on rivals down the bottom.

They announced on September 7th or 8th 2020 their intention to Appeal, they reportedly submitted evidence in December 2020 and it reportedly began ie the latest Instalment on March 20th 2021.

I could be unfairly extrapolating from a single forum or mouthy Twitter posters but they strike as needing taking down a peg.

Edited by Mr Popodopolous
Link to comment
Share on other sites

Posted (edited)

New charges eh?? That would be fantastic, I've not found the piece, but new charges would be excellent.

Decent numbers of their fans seem awfully blind to a lot of things, maybe wilfully so. If you want a different perspective let's say, have a read of Dcfcfans (if you don't already).

They've never once mentioned eg James Delve being a passionate Derby fan (he signed off the Accounts in the year of the Stadium Sale) let alone the other stuff that's of possible interest between Auditor, Club, Morris down the years.

Just how arms length could it have been.

I digress, new charges would be interesting to see in terms of what they might be.

Edited by Mr Popodopolous
Link to comment
Share on other sites

Posted (edited)

Well, which was it G STAR- if it's an offset vs Debtors and intercompany loans, where does the Cash Flow come in- see other clubs for this unique approach. Anything else sold for £81.1m?

image.thumb.png.0ebbeb7be4a450a44b41a83509b066fb.png

image.thumb.png.eb68f38cc4101a374bab03f83db19b3d.png

image.thumb.png.ce7a6c945250cb0d4104b4ab4b553c6f.png

Increased by about £61m in terms of Amounts owed by Group Undertakings. 

As for another poster, maybe just maybe I'm not wanting clubs to wriggle off the hook and am scared off the back of a resurgence by a lightly dealt with club.

Edited by Mr Popodopolous
Link to comment
Share on other sites

Putting aside my long range arguments with varied posters on DCFCFans, I would make one objective point.

It is possibly bad reporting by Nixon or alternatively the penny may not have dropped with them that fresh charges for a 3 year period could be coming. That if so would be quite separate to the EFL Amortisation Appeal.

Assume they've won this ongoing case then.

Link to comment
Share on other sites

7 minutes ago, Mr Popodopolous said:

Page 31 onwards on the EFL Appeal thread makes for very amusing reading.

They’re saying we’re (well you 😂) are hypocrites because ‘City bullied their players into ripping up their contracts’ re the AG8. Love to see them go down still. 

Link to comment
Share on other sites

1 minute ago, lenred said:

They’re saying we’re (well you 😂) are hypocrites because ‘City bullied their players into ripping up their contracts’ re the AG8. Love to see them go down still. 

Haha I have said some hard things but here is my position now, hope a few see it:

*Do I wish bankruptcy. Ultimately no. I have angrily ranted in the past.

*Do I wish relegation at the earliest? Hell yes!!

*Do I consider them cheats? Not in so many words but if the Independent Panel rule against, how can we argue!

*Do I consider them arrogant? Yes. I think back to their Statements, the gloating of Sideshow Mel on Talksport, the constantly getting away with it. Their forum and social media yes, good proof.

*Should Stephen Pearce be booted off the EFL Board? Hell yes, overdue.

*Have I found the fall from overspend to leveraging assets amusing? Yep.

*Do I think Sideshow Mel and Alonso eg would be daft enough to try and diddle MSD? If sufficiently desperate and it'd be a car crash but car crashes can be oddly compelling, with Popcorn to hand- Dell is worth billions and is American so reckon he wouldn't be that averse to litigation.

Ultimately though, I so, so hope they drop.

Up The Wycombe, Up The EFL.

Link to comment
Share on other sites

The position is now clearer having revisited the original decision.

I doubt that the appeal was made on a point of principle, we want to appeal but if we win it has no impact.

So if we assume that the amortisation policy is held to be wrong and the appeal has an impact then Derby must have breached FFP.

That would be a starting point of a 12 point deduction.  Can't see it being any less than that.

Kieran Maguire's figures suggest that that is the case.

Edited by Hxj
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...