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The Championship FFP Thread (Merged)

Mr Popodopolous

By Mr Popodopolous
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Mr Popodopolous

Mr Popodopolous

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52 minutes ago, Hxj said:

Nope.

Where the accounting period for the football cub (or football group) doesn't end in the period from 31 May to 31 July separate accounts need to be drawn up to a date in that period, which will be the relevant accounts for FFP purposes.

 

41 minutes ago, Davefevs said:

Yep

Thanks both.

It can go through as fine then, subject to fair value? Bit of wishful thinking on my part although Blackburn is oddly aligned as the club itself, their accounting period goes to 30th June, whereas VLL goes to 31st March.

Therefore it should appear in 2020/21 Blackburn accounts but VLL, the accounts to 31st March 2022. 

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ExiledAjax

ExiledAjax

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38 minutes ago, Davefevs said:

That is one big oversight.

@ExiledAjax what’s the legal position on two many digits between the commas!

That the trainee who proof-read the loan agreement gets a bollocking.

I'd say it's a pretty obvious typo...I mean what is likely to be meant by £2,7500,000? Is it actually a written representation of £27,500,000? Or is it a typo? Spurs will say that they'll pay £2,750,000 as intended (and as is likely recorded in emails and other pre-contract docs) (although there will be an entire agreement clause that renders those pre-contract chats indicative only. If Swansea would like to argue that in fact the typo is the position of the first , rather than the presence of an extra 0 and thereby try and force Spurs to pay £27.5m then they will have to sue for it in court. I'd imagine the court will say "There is an extra 0. Please go away."

I guess you might look at case law around similar typos in prices of goods that have appeared on line. In general, to my memory, those have broadly decided that such typos - ie where amazon lists a TV for £10.30 instead of £1,030.00 - don't bind the seller to accept the lower offer. There might be some nuance to that whcih I don't remember. 

44 minutes ago, NcnsBcfc said:

Doesn't it say Swansea have to repay £275m in 2023  on the form?

I hope someone saw that typo before signing the agreement?

£27.5m surely?

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Davefevs

Davefevs

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33 minutes ago, ExiledAjax said:

That the trainee who proof-read the loan agreement gets a bollocking.

I'd say it's a pretty obvious typo...I mean what is likely to be meant by £2,7500,000? Is it actually a written representation of £27,500,000? Or is it a typo? Spurs will say that they'll pay £2,750,000 as intended (and as is likely recorded in emails and other pre-contract docs) (although there will be an entire agreement clause that renders those pre-contract chats indicative only. If Swansea would like to argue that in fact the typo is the position of the first , rather than the presence of an extra 0 and thereby try and force Spurs to pay £27.5m then they will have to sue for it in court. I'd imagine the court will say "There is an extra 0. Please go away."

I guess you might look at case law around similar typos in prices of goods that have appeared on line. In general, to my memory, those have broadly decided that such typos - ie where amazon lists a TV for £10.30 instead of £1,030.00 - don't bind the seller to accept the lower offer. There might be some nuance to that whcih I don't remember. 

£27.5m surely?

Offer, Acceptance and Consideration is about the only thing I remember from the Banking Foundation Course I did, oh, and Bolton vs Stone (cricket ball and fence).  Most websites have things like Errors and Omissions Excepted to protect the seller from putting up a stupid price.  Some do still sell at that price for goodwill / lack of bad press.

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NcnsBcfc

NcnsBcfc

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1 hour ago, ExiledAjax said:

That the trainee who proof-read the loan agreement gets a bollocking.

I'd say it's a pretty obvious typo...I mean what is likely to be meant by £2,7500,000? Is it actually a written representation of £27,500,000? Or is it a typo? Spurs will say that they'll pay £2,750,000 as intended (and as is likely recorded in emails and other pre-contract docs) (although there will be an entire agreement clause that renders those pre-contract chats indicative only. If Swansea would like to argue that in fact the typo is the position of the first , rather than the presence of an extra 0 and thereby try and force Spurs to pay £27.5m then they will have to sue for it in court. I'd imagine the court will say "There is an extra 0. Please go away."

I guess you might look at case law around similar typos in prices of goods that have appeared on line. In general, to my memory, those have broadly decided that such typos - ie where amazon lists a TV for £10.30 instead of £1,030.00 - don't bind the seller to accept the lower offer. There might be some nuance to that whcih I don't remember. 

£27.5m surely?

Quite right, it's obviously catching.

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Hxj

Hxj

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4 hours ago, NcnsBcfc said:

don't bind the seller to accept the lower offer.

Legally a seller can only accept or reject an offer from a buyer, a buyer cannot force a seller to sell at a price even if advertised.  So if a buyer offers £100 for goods advertised for sale at £10, the seller is perfectly within their rights to reject the offer. Technically the advertised price is a 'Invitation to Treat', in other words an invitation to make an offer.

 

6 hours ago, ExiledAjax said:

If Swansea would like to argue that in fact the typo is the position of the first , rather than the presence of an extra 0 and thereby try and force Spurs to pay £27.5m then they will have to sue for it in court.

The charge relates to funds lent to Swansea, so Swansea would be on the hook for the additional payment to the bank not Spurs.  If there was not a similar issue with the Transfer Contract Swansea would need to rely on the goodwill of the bank, failing that the courts.  If the same error appears in the Loan Agreement and the Charge the bank could sue for the full amount.  Whilst that may seem odd if the contract makes sense as it is, a court could be reluctant to intervene.

Which is why contracts are drawn up by lawyers so the lawyers can be sued when mistakes are made.

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Hxj

Hxj

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It looks as if it is all beginning to fall apart at Derby.  Is this the beginning of the end?

As per Derbyshire Live:

Joint administrator, Carl Jackson, said: "The joint administrators continue to have positive and fruitful discussions and negotiations with interested parties but these are complex and require input and decisions from other stakeholders.

"Despite our best intentions, it is now unlikely any announcement will be made pre-Christmas as to the preferred bidder.

And by Kirchner:

"It’s not necessarily that… very very complex situation the admins were dealt. I do have issues with the delays and inability to keep deadlines. The only one to really blame for this situation is Mel Morris. Proper f...k job." 

and:

"Only getting worse as player contracts expire… club becomes much less valuable without the proper moves in January. This is done in December or going to be nearly impossible to find a buyer."

"Which means it becomes worth less than HMRC and football creditors are owed (both fixed percentages under EFL rules) and then becomes nearly impossible for someone to buy as they will start so far under water"

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Mr Popodopolous

Mr Popodopolous

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Said on the accounts thread that I'd do a quick comparison of a few clubs. Credit to SwissRamble for the figures- two or three clubs that I am wondering about- two of them once their 2018/19 figures drop off. Yet two of these clubs are strongly committed to FFP and one of these even launched his legal campaign vs the EFL and Derby in pursuit of upholding the rules so I struggle to see that they breach- otoh their figures are in a similar range to us, based on what we know etc. The level of EFL intervention will be interesting to see.

Middlesbrough FC

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Nottingham Forest FC

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The former, I don't think they fail to 2021 or 2022 but could be in a similar boat to us...remember that £24m will be halved but also added to whatever after Covid costs was lost last season- Parachute Payments, the final season of these was 2018/19.

The latter if they exceeded an FFP loss of £13m in 2020/21 stood to fail FFP to the combined average of 2020 and 2021 but also remember they sold Cash that season for a decent fee which can help. Even if they kept that below £39m though, they have a starting point to 2022 that was markedly worse than that to 2021- a £20m loss!! Otoh Brennan Johnson is linked with the PL, sell him and they can continue to stay above FFP, Worrall is also often linked- again sell him and that helps a lot- Brereton sell on clause as well if Blackburn sell him.

Stoke CIty FC

Stoke are a pretty interesting one for sure...and definitely should be on a list whereby the EFL are closely monitoring them, more than most.

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By dint of 1 season in PL and 3 in the Championship, their Upper Loss Limit to 2021 will be £55.5m in FFP terms. Their estimated FFP loss in the first 3 years of that would be £52.5m- thereby if their FFP loss exceeds £6m in 2020/21, they surely have failed? Give or take some rounding up or down.

Because of the way Covid fell, it won't be a straight line between Parachute Payments typically in Year 2 and 3, given how these are paid- but all the same we'd expect 2020/21 to be lower than 2019/20 even if not quite as low as usual.

Impairment if fully accepted, clears a chunk of amortisation off moving forward but even if they succeed to 2020/21, it still leaves a combination of Parachute Payments ending in Year 3 combined with the Upper Loss Limit dropping to £39m...£8m + whatever the combined average for the last 2 seasons was- could leave a £13m FFP target or less this season...that is minus Parachute Payments and with probably a lower Profit on disposal of Players than 2018/19 ie the year they dropped.

For a bit of context

Middlesbrough FC

Made a combined FFP loss of £15m in 2018/19 and 2019/20 despite a 2nd and final year of Parachute Payments in 2018/19 and combined transfer profits of around £36.7m across the two seasons. Granted amortisation and wages will have dropped off since as well...hired and fired Woodgate, Warnock and Wilder since.

Nottingham Forest FC

Made a combined FFP loss of £33m in 2018/19 and 2019/20 despite a combined transfer profits of around £23.8m across those two seasons- so Cash's sale, welcome though it is would just be a repeat to an extent of the prior 2 seasons? Also  sacked Lamouchi and hired and fired Hughton in that time before hiring Cooper.

Stoke City FC

In 2018/19 and 2019/20, had that combined FFP loss of £51m despite Year 1 and a fair bit of Year 2 of Parachute Payments plus a Profit on disposal of players of around £21.3m- although hiring and firing Rowett, Jones and O'Neill will be costs that haven't been repeated since. Lambert's departure just about fell into 2017/18 so won't be a factor as such- easier to hire and fire on PL cash and loss limits!

You do though have to add then halve whatever the figure is for 2019/20 and 2020/21 to get it in full at this stage...

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Mr Popodopolous

Mr Popodopolous

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Interesting line from Reading, albeit not today- just seen.

http://sportwitness.co.uk/reading-player-set-leave-club-january-ffp-forcing-contract-termination/

Goalie Rafael- signed in more expansive times, sounds like they have January targets as part of their Business Plan- perhaps 6 would become 12 in the spring if they don't hit these. This is how it should have been done with Birmingham in 2018/19.

As for Stoke. Their fans still appear to be reasonably calm, a few even bullish FFP wise.

https://oatcakefanzine.proboards.com/thread/302642/ffp-again

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Hxj

Hxj

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51 minutes ago, Davefevs said:

Must have some serious cash flow issues.

They assigned their 'central funds distributions' for 2020/21 for £30 million odd cash up front.  Then Covid hit - so no income and no central distributions.  Cash would have got very tight.

That said, I believe that it was Hoyle who lent the club the cash up front in the first place so everything he says or does needs to be looked at in that context.

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Mr Popodopolous

Mr Popodopolous

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Brentford.

£8m loss last season but that was inclusive of a £44m profit on transfers.

£41m wage bill but inclusive of a £12m Promotion Bonus.

In theory they could have kept Benrahma and Watkins and remained FFP compliant.

Not a Parachute Payment in sight!!

Wasn't our BCFC Holdings wage bill about £34m last season?

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Mr Popodopolous

Mr Popodopolous

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On 16/01/2022 at 10:36, Bodiesaffer said:

Is there enough relief for clubs, with the world being sort on cash and covid issues?

Do you mean FFP or in general?

FFP relief, well some amendments anyway.

1) Losses directly attributable to Covid 19 are excluded, however these are in accordance with guidance from the EFL Board. Devil and detail springs to mind??

Saw a couple of reports that suggested only £5m in matchday revenue would be the one but that's madly low.

2) One we definitely know about. The profit or loss in 2019/20 and 2020/21 are added together and then halved. Thereby reducing the impact and making a 3 year cycle a sort of 4 year cycle.

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