The Championship FFP Thread (Merged)

[Davefevs]

8 hours ago, Mr Popodopolous said:

https://cottageanalytica.com/2022/04/04/ffc-2020-21-ffp-assessment/

Interesting article- not least the amount being claimed by Fulham or at least this educated/informed guess.

They would like to claim based on this £22.5m in lost revenue over the 2 years- and of course the £21m Impairment written off as an FFP cost.

Think that the argument is along the lines of the fact they were a PL club last season so that should be applicable to 2020/21 and the EFL limit to 2019/20...more troubling is the Player Impairment bit, the EFL a) Have set prescribed limits for FFP in general and b) Got via the Derby case grounds to enforce a straight line policy...surely all Covid claimed Impairment should be reallocated straight line?

I’d assumed Fulham would be well clear until I started plugging their numbers in last week.  Their losses even with PPs are incredible.  I guess we could’ve guessed things weren’t great by looking at the Wilson deal, £12m fee, but only if they get promoted and done as a loan this season.

[1960maaan]

1 hour ago, Davefevs said:

I’d assumed Fulham would be well clear until I started plugging their numbers in last week.  Their losses even with PPs are incredible.  I guess we could’ve guessed things weren’t great by looking at the Wilson deal, £12m fee, but only if they get promoted and done as a loan this season.

I seem to recall, their first (recent) Promotion the went up playing brilliant football and dominating games. Then spent something over £100m in that first year, a whole new squad and got relegated. Spent a little more the following year, another £40+ the year after. Only Promotion has kept them safe. The 2 years & £200m for being in the Prem & then parachute payments can cover up a lot of wasteful spending.

Some very dodgy , back of a fag packet sums, I have them spending around £200m in 4 years. While getting not very much in. 

*caveat - these figures come from the internet and may be slightly inaccurate 

[Davefevs]

12 minutes ago, 1960maaan said:

I seem to recall, their first (recent) Promotion the went up playing brilliant football and dominating games. Then spent something over £100m in that first year, a whole new squad and got relegated. Spent a little more the following year, another £40+ the year after. Only Promotion has kept them safe. The 2 years & £200m for being in the Prem & then parachute payments can cover up a lot of wasteful spending.

Some very dodgy , back of a fag packet sums, I have them spending around £200m in 4 years. While getting not very much in. 

*caveat - these figures come from the internet and may be slightly inaccurate 

My simplistic take on their numbers:

 

[1960maaan]

41 minutes ago, Davefevs said:

My simplistic take on their numbers:

 

What are the figures in blue ? That's an almighty allowance for COVID

[Davefevs]

Just now, 1960maaan said:

What are the figures in blue ? That's an almighty allowance for COVID

Just taking their stadium costs out of the calculation.  Not sure if right or not.

[Mr Popodopolous]

7 hours ago, Davefevs said:

I’d assumed Fulham would be well clear until I started plugging their numbers in last week.  Their losses even with PPs are incredible.  I guess we could’ve guessed things weren’t great by looking at the Wilson deal, £12m fee, but only if they get promoted and done as a loan this season.

Agreed tbh- I was thinking about it earlier and despite 2001/02 to 2013/14 and then 2018/19 and 2020/21 in the PL with PL revenue and 2014/15-2017/18, 2019/20 and 2021/22 with Parachute Payments their losses are crazy considering 20 years before this year of either PL or Parachute cash.

5 hours ago, Davefevs said:

My simplistic take on their numbers:

 

I think Promotion Bonuses- SwissRamble is the best guess I've seen so it could be way out, but the suggested numbers from memory were 2017/18 and 2019/20, £15m and £20m respectively.

Academy expenditure wise, seen it suggested that their expenditure is £5-8m per year, even seen £10m mooted! Possible extrapolation from other Category 1 and then adjusted for extra London costs.

The thorny issue of course is how the hell do we judge Covid losses for clubs that in 1 year were at this level then the following year in the PL. Both have different standards- unsure at this time that the PL has any standards! Whereas the EFL voted for £5m x 2 and £2.5m this year.

I thought they lost, as per the FFL accounts anyway, £48.112m before Tax in 2019/20? Possibly something I am missing? Ah I see, the stadium revaluation- dunno if that counts for FFP but that would certainly help.

Edited April 5, 2022 by Mr Popodopolous

[Mr Popodopolous]

Silva is on the record as saying he's not concerned about it at the moment...probably an extrapolation of his quote, some managers at this level though it doesn't seem to touch as a concept- have Cooper or Parker e.g. ever mentioned it once?

I do have to wonder if the EFL are applying the same rigorous processes to yoyo clubs e.g.

Let's hope the EFL get a move on and if required or if their numbers don't align with Fulham's let's say for Covid write offs and that swings, that they get a move on and charge them before the season is out- it wouldn't at all surprise me if this time next year we find Fulham breached on the way up!

Edited April 5, 2022 by Mr Popodopolous

[Mr Popodopolous]

Leeds although a PL side now, had an EFL starting point.

£5m profit last season, huge contrast with Fulham who went up the same season. Another interesting bit, skimread their accounts and it mentioned a £35m bonus for staying up.

Wonder if we'll see this become more commonplace post Covid. Kieran Maguire said that their wage bill in 2020/21 was 2nd lowest in PL albeit that was with 11 month accounts. (2019/20 were to July 2020, 2020/21 were back to end of June 2021).

Edited April 7, 2022 by Mr Popodopolous

[Mr Popodopolous]

Of much more instant significance than Leeds or Fulham, Stoke's accounts are out!!

Had a very quick look, looks like a) A £7m Pre tax loss b) Inclusive of the Training Ground and Stadium Profit and c) A 'mere' £56m or thereabouts in Covid losses over the two seasons claimed!

One interesting note is that the combined profit on Stadium and Training Ground was lower than feared!! Kieran Maguire seemed to think that the Profit on Disposal for the Stadium alone would be £65m or so but the combined profit for the two was around on first glance, £40m.

Is notable that in the 2020/21 accounts they have sought to include hypothetical lost gains/savings from player sales as a Covid loss. Exactly what we've been arguing?

[Mr Popodopolous]

Stoke fans well some of them anyway- have defeated the EFL or outwitted them apparently. This bit perhaps hasn't gone noticed yet but looks a fair rent to me.

Rent as it should do- paper or real I don't care- should count towards FFP, I believe it does in any case.

It's certainly not yet AFAIK reached Derby levels of jubilation. Talking of Derby, if you're still around @AnotherDerbyFan

Interested in your take on Fulham and Stoke FFP wise. Locking horns on DCFC aside, we've had some good discussions on FFP in general.

Edited April 7, 2022 by Mr Popodopolous

[Ska Junkie]

Just us in breach then so far?

[Davefevs]

24 minutes ago, Ska Junkie said:

Just us in breach then so far?

We haven’t breached for the cycle ending 20/21, nor will we breach for this season.

Unless we remove some cost this summer or increase revenue (selling players) then we may breach next year.

For some clubs, what they’ve posted in their accounts may not be what they put in their P&S / FFP return to the EFL, e.g. Stoke’s impairment might not be considered a covid allowance by EFL.

[Mr Popodopolous]

10 minutes ago, Davefevs said:

We haven’t breached for the cycle ending 20/21, nor will we breach for this season.

Unless we remove some cost this summer or increase revenue (selling players) then we may breach next year.

For some clubs, what they’ve posted in their accounts may not be what they put in their P&S / FFP return to the EFL, e.g. Stoke’s impairment might not be considered a covid allowance by EFL.

Agreed.

EFL limits are quite clear- Stoke by my quick estimates over the last two full seasons are claiming about £44m in excess of that*

*=2019/20 and 2020/21- Have not included £2.5m in Covid addbacks for THIS season.

The last item is very interesting. The Lost revenues bit and the non utilisation of furlough look reasonable...the rest looks purely speculative! This is basically what we are trying to claim- the final item, newly added in 2020/21.

Edited April 7, 2022 by Mr Popodopolous

[Mr Popodopolous]

Back to Fulham- they have sold Fabio Carvalho to Liverpool for £4-5m- academy product=pure profit and therefore improves their position by £4-5m to this season. Assuming that it is includable in 2021/22 accounts..

Edited April 7, 2022 by Mr Popodopolous

[Davefevs]

6 minutes ago, Mr Popodopolous said:

Back to Fulham- they have sold Fabio Carvalho to Liverpool for £4-5m- academy product=pure profit and therefore improves their position by £4-5m to this season. Assuming that it is includable in 2021/22 accounts..

Wait til they pay £12m for Harry Wilson

[Mr Popodopolous]

25 minutes ago, Davefevs said:

Wait til they pay £12m for Harry Wilson

I think was confirmed as a loan wasn't it? Loan to buy although I wonder if the two deals were connected.

[Davefevs]

7 minutes ago, Mr Popodopolous said:

I think was confirmed as a loan wasn't it? Loan to buy although I wonder if the two deals were connected.

That’s why I said “wait until”….loan this season, permie transfer at £12m for next season.

 

Here’s my quick and dirty look at Stoke, based on 2 scenarios, not inc stadium and impairment, and including it.

 

[Mr Popodopolous]

4 minutes ago, Davefevs said:

That’s why I said “wait until”….loan this season, permie transfer at £12m for next season.

 

Here’s my quick and dirty look at Stoke, based on 2 scenarios, not inc stadium and impairment, and including it.

 

Thanks.

That headroom is only going one way- think they made £10-15m in transfer profit on disposal this season, and obviously income bounced back- otoh Parachutes replaced by Championship cash, no averaged one off gain includable ie the Stadium and Training Ground and an Upper Loss Limit of £39m to this season...by your calcs any FFP loss exceeding £19.558m would mean an FFP breach on the horizon! The FFP allowance might also fall with no Depreciation to add back, and Rent is due this season (paper or real I don't care as long as it's included for FFP).

[View from the Dolman]

3 hours ago, Mr Popodopolous said:

EFL limits are quite clear

Are they? I'm not so sure.

Stoke City say "this disclosure has been produced in accordance with the guidance provided by the English Football League on applicable Covid-19 costs and loss of income."

Nottingham Forest say in their accounts "this disclosure has been produced in accordance with the guidance provided by the English Football League on applicable Covid-19 costs and loss of income."

Is it a total coincidence they have got the same wording word-for-word?

[Mr Popodopolous]

19 minutes ago, View from the Dolman said:

Are they? I'm not so sure.

Stoke City say "this disclosure has been produced in accordance with the guidance provided by the English Football League on applicable Covid-19 costs and loss of income."

Nottingham Forest say in their accounts "this disclosure has been produced in accordance with the guidance provided by the English Football League on applicable Covid-19 costs and loss of income."

Is it a total coincidence they have got the same wording word-for-word?

Could be in accordance with their interpretation of the guidance. Perhaps they are going to go to the EFL and claim X even though clubs voted on Y this February.

The wording is very interesting too as you say- noticed that when Nottingham Forest's accounts came out but forgot until you mentioned it.

Edited April 7, 2022 by Mr Popodopolous

[Mr Popodopolous]

https://www.telegraph.co.uk/football/2022/04/08/cost-controls-wild-west-championship-finally-sight/?

In theory these rules could well be simpler...

[Mr Popodopolous]

One snippet I took from a bit of UEFA analysis the other day, was that the loss limit was doubled but the wage and amortisation- football costs were 70%, albeit on a sliding scale...90% > 80% > 70% and then 70% would be a new benchmark- albeit transfer fee profits can help to boost this.

This article also mentions reform of distribution which would be welcome- another bit I took from the general stories, not particularly this article was that although the loss limit would be doubled, the excludable costs bit would go- ie you take the accounting pre tax loss as your starting point, not trying to estimate and extrapolate- much simpler. Nothing mentioned about Fixed Asset sale profits- assume UEFA wouldn't suddenly reverse on that after a decade!?

Edited April 8, 2022 by Mr Popodopolous

[Davefevs]

33 minutes ago, Mr Popodopolous said:

One snippet I took from a bit of UEFA analysis the other day, was that the loss limit was doubled but the wage and amortisation- football costs were 70%, albeit on a sliding scale...90% > 80% > 70% and then 70% would be a new benchmark- albeit transfer fee profits can help to boost this.

This article also mentions reform of distribution which would be welcome- another bit I took from the general stories, not particularly this article was that although the loss limit would be doubled, the excludable costs bit would go- ie you take the accounting pre tax loss as your starting point, not trying to estimate and extrapolate- much simpler. Nothing mentioned about Fixed Asset sale profits- assume UEFA wouldn't suddenly reverse on that after a decade!?

I read the same.

 

[Mr Popodopolous]

14 minutes ago, Davefevs said:

I read the same.

 

Thanks, just saw snippets on social media before.

One bit that is strikingly different is...

Quote

"Another difference between FFP and FSCLR is in "fair value" and related-party transactions.

The old rules said that only related party transactions had to be fair value. The new rules, however, say all transactions have to be fair value. As such there will no longer be as much emphasis and time spent on determining related party transactions- all must be fair value."

Intriguing for sure. Presumably benchmarking of comparable clubs will be one basis- a bit like a catch-all anti-avoidance clause? In fact there probably should be one of those as well.

Edited April 8, 2022 by Mr Popodopolous

[Mr Popodopolous]

SwissRamble and some Cardiff plus Fulham analysis.

That's contained within the Cardiff thread for it. Worth noting that a good slug of their income was made up of Parachute Payments- also surprised at the low losses attributed to Covid.

Cardiff will be fine to 2021, I expect 2022- could 2022/23 be an issue for them and failing that 2023/24 subject to how the rules change?

Seems to be granting them a hefty amount attributed to Covid- £40m across the last two full seasons.

SwissRamble aside, still we await from Championship clubs this or last season, Swansea, West Brom and although relegated, Sheffield Wednesday.

Oh and of course one who have not submitted for 3 long years be it club, parent, overall parent or subsidiary of parent/overall parent! Derby of course- Championship club this year...for now.

Birmingham basically were saved by Bellingham. They lost only £4.75m but this was inclusive of and despite a £26.5m profit on disposal of players.

I expect Birmingham to be fine to 2021 in fact the figures indicate it, 2022 and probably 2023- 2023/24 depending on how the rules change or don't change could be a question for them.

Edited April 20, 2022 by Mr Popodopolous

[Mr Popodopolous]

The one that interests me, from a regulatory position if nothing else is Sheffield Wednesday.

Yes when relegated they fall into the League 1 60-70% of turnover ratio but things down there that count towards turnover don't at our level. I digress...In fact the extra allowance for former Championship clubs kicks in too.

Can someone interpret this particular rule for me- is there any argument to say that it should follow them down or down and back up if they return until such time as 2020/21 has dropped off...or would it literally end with 2020/21 Championship?

https://www.efl.com/contentassets/b3cd34c726c341ca9636610aa4503172/regulations-season-2021-22-final.pdf

There are two distinct ways to interpret this.

1. The period up to and including but not beyond 2020/21 or with Covid 2019/20 and 2020/21 combined. Bumping the stadium sale a year forward after it was disallowed takes care of that.
2. The period beginning 2020/21...but with Covid it would be the combined average of 2019/20 and 2020/21.

If it is the latter, the stadium sale drops off after this season and in the event it followed them down their new starting point would be the combined average (probable) loss in 2019/20 and 2020/21!

As far as the first part of that goes- well it depends which accounts you read, the club or Sheffield 2 Limited.

Club- 12 months to 31st July 2020

£24.084m loss despite and including a Profit on disposal of £6.203m...this was also in a year relatively unaffected by Covid.

Or- consolidator to 31st July 2020

It all with a bit of work computes out similarly- obviously you exclude the £14.788m of Impairment from Goodwill and this appears to include a bit of costs and profit on disposal from 2018/19. These latter ones were 13 months and 9 days- June 21st 2019 through to July 31st  OTOH will that £15.385m in Profit on disposal be replicated? Possibly the gap accounted for a little by a Rhodes loan fee or similar.  Or Bruce, Agnew etc compensation too in one but not the other.

Simplest to use the club accounts really as 12 months is 12 months...hopefully both will be neatly aligned with 12 month periods from 2020/21 onwards.

Will certainly concede that this time last year I was mistaken when querying whether Sheffield 3 or Sheffield 5 Limited were somehow included within Sheffield 2 Limited group.

I wonder what SWFC Holdings over in Hong Kong includes...it sits under Sheffield 2 as a subsidiary for one.

All being equal it should only include...

SWFC Holdings-Sheffield Wednesday (plus any subsidiaries of Sheffield Wednesday sitting under them ie Women's team, Community Trust or similar). Probably hard to find though...

Sitting under Sheffield 2 Limited.

Edited April 20, 2022 by Mr Popodopolous

[Mr Popodopolous]

I still though don't see what purpose Sheffield 4 Limited served.

https://find-and-update.company-information.service.gov.uk/company/12062155/filing-history

It initially controlled Sheffield 3 Limited- and then this was pulled and Sheffield 5 Limited became the controlling entity there,

Sheffield 3 Limited of course 'purchased' the stadium. Sheffield 4 Limited was dissolved- but of course if somehow Sheffield 4 Limited had been the consolidator then the transaction would have cancelled out and not counted in any event- so why not just setup Sheffield 3 Limited to purchase, Sheffield 5 Limited to sit above on the stadium side and Sheffield 2 Limited as the overall Topco on the football side with SWFC Holdings between that and the football club.

If it was an attempt to dodge FFP it didn't do that in any case! Plus would be quite easy to unpick FFP wise as far as the 3-5 different companies goes.

Edited April 20, 2022 by Mr Popodopolous

[Davefevs]

Good to see Swiss Ramble have updated their templates to includes the average 2 years.

Interesting that promotion bonuses are included for Cardiff as excludables, because I can find nothing in the current rules about it, but they were mentioned in an old version….Shaun Harvey copy and paste error again?

[Hxj]

19 hours ago, Mr Popodopolous said:

why not just setup Sheffield 3 Limited to purchase, Sheffield 5 Limited to sit above on the stadium side and Sheffield 2 Limited as the overall Topco on the football side with SWFC Holdings between that and the football club.

For tax and legal reasons a 'Section 110 Reconstruction' took place, nothing to do with FFP.  It allows you to separate the 'Stadium Group' and 'Football Group' tax free.  This was the same technique used by Morris to separate the various Derby County enterprises.   

[Mr Popodopolous]

17 hours ago, Davefevs said:

Good to see Swiss Ramble have updated their templates to includes the average 2 years.

Interesting that promotion bonuses are included for Cardiff as excludables, because I can find nothing in the current rules about it, but they were mentioned in an old version….Shaun Harvey copy and paste error again?

Agreed. That makes it easier to follow- I am looking forward to Swiss Ramble's dissection of Stoke and how they view the Covid claimed losses there!

Tbh the only sensible solution is to exclude IMO- because they are contingent on a non guaranteed event- promotion. The FFP rules pre being re-written in summer 2020 and subsequently again in 2021 were pretty badly written which is probably yet another legacy of Shaun Harvey's tenure! I'd be amazed if they weren't excluded though otherwise club after club should face FFP charges, pretty well every promoted club over a given period tbh. Not every but a fair few.