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Understanding FFP


JonDolman

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2 hours ago, downendcity said:

 

l meant to add that until now, under the old for rules, the only penalty the ELF could dish out was a fine ( transfer embargo also but not sure if this was for ftp breach) .

Therefore it's not a question of the EFL not having adequately punished club's, they have given the only penalties that were available.

I wonder if the penalty is to become big enough to worry clubs, will clubs start to act more sensibly, possibly making it a slightly more level playing field.

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Little line on the Aston Villa thing...

Quite unbelievably they may get £30m for HS2 Compensation. That would mean they have a surplus of £1-5m on FFP.

Now it'd be a once off payment so they would have an enormous hole to fill for next season...because though that £30m would wipe out the deficit...would still be £30m over 2 years from this and last season based on projected figures and real figures.

Then next season they would need an FFP loss of no more than £9m- while revenue falls £17m...because FFP losses this season £9m even with the hypothetical £30m, add back that £30m, subtract parachute payments and the once off- that's another £17m. 

I make that a shortfall/hole of £42-46m just to get FFP compliant over the 3 years to May 2020 and that is even with the £30m mooted for HS2. 

That would be the least deserved lifeline of all time though, FFP wise. Hope the book is thrown.

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Quite how that £30M is taken into consideration is beyond me, what can’t SL or any other wealthy owner find a way to inject £30M in to counter that?

The parachute payments really bug me, not that they happen, I understand the reasoning, but the value of them should be applied to all clubs in the Championship (and lower leagues if a club went down again with PP) in FFP calculations. i.e. the highest PP payment should be added to the bottom FFP line of every club in the league, if they or their owner can afford to use that allowance is another matter, but they should have the opportunity.

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13 minutes ago, Maesknoll Red said:

Quite how that £30M is taken into consideration is beyond me, what can’t SL or any other wealthy owner find a way to inject £30M in to counter that?

The parachute payments really bug me, not that they happen, I understand the reasoning, but the value of them should be applied to all clubs in the Championship (and lower leagues if a club went down again with PP) in FFP calculations. i.e. the highest PP payment should be added to the bottom FFP line of every club in the league, if they or their owner can afford to use that allowance is another matter, but they should have the opportunity.

It surely can't be, it would be absolutely well ridiculous underplays it- scandalous if counted as legit income...

I'm unsure about Parachute Payments, Kieran Maguire explains it quite well on one of his YouTube vids. I  reluctantly come down on the side of necessary evil- doesn't mean it can't be reformed though. Should be conditional to clubs making every effort on shifting too costly players off the wage bill and demonstrating the fact that they do so..as well as making it for players unable to shift, once efforts demonstrated and being ringfenced from new costly permanent or loan signings.

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6 hours ago, downendcity said:

While the Prem has different ffp rules and administers them itself, from your position do you get any feedback from colleagues within football as to  how hard the new EFL ffp rules will be applied to offending clubs and how tough the penalties will be?

I don't think anyone really knows this aside from the EFL themselves who appear to be making it up as they go along. What is quite interesting, is that in the Premier League, they hold our hand pretty tightly and require pretty regular reporting. If there are any areas of concern, they will know they are coming and flag them before our final FFP reporting and strongly advise us on how we should act in an upcoming transfer window etc. This method is quite good and will give a clear indication of a club's attitude with regard to compliance as it's quite hard/brave to ignore their advice. 

I'd be intrigued to see how this differs in the EFL where, in reality, the FFP rules are far more likely to be broken. The short-term cost control (STCC) rules in the Premier League have never been breached, whereas it's not uncommon for promoted sides in the Championship to go over the limit. As we know, when this is flagged it is often far too late and the team's are now promoted to the Premier League. In my opinion, the next club to break them in the Championship, and not get promoted, will be made an example of. Villa look like they could be heading that way but it sounds like they may wriggle their way out with the HS2 money. 

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9 hours ago, Coppello said:

I don't think anyone really knows this aside from the EFL themselves who appear to be making it up as they go along. What is quite interesting, is that in the Premier League, they hold our hand pretty tightly and require pretty regular reporting. If there are any areas of concern, they will know they are coming and flag them before our final FFP reporting and strongly advise us on how we should act in an upcoming transfer window etc. This method is quite good and will give a clear indication of a club's attitude with regard to compliance as it's quite hard/brave to ignore their advice. 

I'd be intrigued to see how this differs in the EFL where, in reality, the FFP rules are far more likely to be broken. The short-term cost control (STCC) rules in the Premier League have never been breached, whereas it's not uncommon for promoted sides in the Championship to go over the limit. As we know, when this is flagged it is often far too late and the team's are now promoted to the Premier League. In my opinion, the next club to break them in the Championship, and not get promoted, will be made an example of. Villa look like they could be heading that way but it sounds like they may wriggle their way out with the HS2 money. 

I think a lot of clubs who get promoted or at least talking last 2-3 seasons since the 3 year rolling rules, tend to look like they have been in breach- or be really close to the limit, but once promotion bonuses and allowable costs are stripped out just get home. Wolves a good example, Cardiff another- Newcastle seemed like they had breached but the higher loss limits in PL saved them. Fulham will be a good example when their accounts come out...thought Cardiff were in breach personally by a pretty small amount but then hadn't considered the cost of impairment of non footballing assets, depreciation of those too.

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HS2 compensation, recent tv documentary reported that compensation was being held up or not paid at all in just about every case, why should villa be any different?  Surely any compensation would belong to the owners, not the club

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That's interesting stuff. Sounds like my fears about them getting a deeply undeserved (temporary) lifeline could be moot then!

Who the compensation would belong to is I feel a thornier issue...Bodymoor Heath is their existing training ground- and the site was purchased in the early 1970's by Doug Ellis (for it is he- how long did he run Villa??) according to Wiki.

A club asset then, which as a club they would be compensated for- maybe there would be some kind of formula that the owners would get a % based on the fact they sponsored it, but unsure how the bulk would go to the owners? It undoubtedly shouldn't count towards FFP though...because if training facilities are exempt from FFP, in terms of you can spend what you like on them, then compensation for this bit of possible misfortune should class as income in general- to help them rebuild it, they can do what they want with it but never in a million years for income towards FFP IMO.

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On 12/03/2019 at 11:31, Mr Popodopolous said:

Ha if you want to see a club in trouble, Swiss Ramble's estimates for Aston Villa...which are mostly in line with mine for this season that I made the other week as it goes. :laughcont:

The one bit I forgot was the Adama Traore sell on fee. Other differentials were that this account assumed a reduction of £5m whereas I generously (?) said £10m and it also doesn't mention the £3m in land compensation which presumably is non-recurring income- it could be HS2 but that's not certain. Broadly the same though.

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Hi @Mr Popodopolous sorry to keep testing you on this stuff, but from this table am I right to assume that the EFL can take in their losses  from 2015/16 even though they were in the Premier League  that season? If that was the case  this table seems they have already exceeded FFP in a 3 year period? 

 

A couple of other things stand out to me, they still managed to make a £4m loss in 2016/17 despite the £41m parachute payments 

They appear to have almost used up their total FFP in this one season (I think you have already referred to this and say West Brom have done the same),. I think there is a case to also have a limit on a season by season basis as well as the 3 year limit to stop that.

 

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1 hour ago, Port Said Red said:

Hi @Mr Popodopolous sorry to keep testing you on this stuff, but from this table am I right to assume that the EFL can take in their losses  from 2015/16 even though they were in the Premier League  that season? If that was the case  this table seems they have already exceeded FFP in a 3 year period? 

 

A couple of other things stand out to me, they still managed to make a £4m loss in 2016/17 despite the £41m parachute payments 

They appear to have almost used up their total FFP in this one season (I think you have already referred to this and say West Brom have done the same),. I think there is a case to also have a limit on a season by season basis as well as the 3 year limit to stop that.

 

2015-16 to 2017/18.

There was a big write-down which was revaluation of Villa Park in 2015/16 which takes their losses for that season down somewhat, hence they passed. Don't have the detail right now but will look into that in due course! All fine under FFP though I believe.

Yeah, very profligate.

In terms of FFP losses, you have to strip out the following:

  • Youth Expenditure
  • Infrastructure Expenditure
  • Community Expenditure
  • Women's Football Expenditure

This is all seen as 'good' Expenditure, either building up the club without saddling it with unsustainable wage bill or a crazy owner- or performing a social good.

Additionally, cost of impairment and depreciation plus possibly amortization of non football assets- so let's say Computers decreasing in a straight line value, or I don't know infrastructure...non footballing though so players wouldn't count towards this- this doesn't count towards FFP.

WBA? I think their issue is more cash flow than FFP right now but last season's accounts will be instructive when released. I'm on the fence about one year and 3 year mixed, because it limits ambition but it also limits the chance to grow, to build a solid foundation and then go for it in Year 2 or 3...if clubs manage that aspect responsibly  then I personally have no problems provided they stick to the rules. Besides which I'm unsure chairmen/owners would vote for this. EFL rules ultimately are decided by majority vote by chairmen etc I believe. This is probably something they could all live with and provided the EFL penalise in a timely manner when needed, I think the system isn't too bad...

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Only one way to stop the nonsense.

1 - points deduction for minor breaches.

2 - Relegate one league for medium sized breaches.

3 - Relegate two leagues for big breaches.

you have to hit teams like villa where it hurts. Make it a major deterrent.

They will start playing to the rules if you hit them with the above.

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On 13/03/2019 at 10:07, reddogkev said:

I refuse to believe anybody in the world understands FFP. 

 

 

89588585_dianneabott.jpg.0e5b21698d50799c88b965f5781015f4.jpg

1369400060_briancox.thumb.jpg.cffbdb8389dd5488cf3934a0207ee66e.jpg

One of these two has a brilliant mind and brain, and is therefore capable of understanding complex and difficult concepts and articulating them in a way that ordinary people can comprehend, so will understand FFP perfectly.

The other is Dianne Abbott.

 

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On 13/03/2019 at 10:07, reddogkev said:

I refuse to believe anybody in the world understands FFP. 

They've produced a handy, easy to understand pictorial explanation for us mere mortals.

 

610957984_ffppicture.png.6db25d979bcad3d40cc881f1b3f69a58.png

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On 12/03/2019 at 10:46, JonDolman said:

Shows how unrealistic people can be on here with their expectations in the transfer market.

It also shows how unrealistic it is of SL to talk about the playoffs if we can't afford to bring in the quality needed.

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2 minutes ago, Spike said:

It also shows how unrealistic it is of SL to talk about the playoffs if we can't afford to bring in the quality needed.

Believe it's a bit of both.

I think Assombalonga on loan for the quoted figures might have been viable in January, albeit a bit of a gamble...money isn't everything in that respect though- I look around Europe and closer to home on their good years Brentford and under Wilder Sheffield United and I see sides seemingly vastly outperforming where they should be based on wage bill.

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1 hour ago, Spike said:

It also shows how unrealistic it is of SL to talk about the playoffs if we can't afford to bring in the quality needed.

Maybe. But then it is possible to get a quality side together doing it our way. We simply cannot afford to do it any other way.

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13 hours ago, Davefevs said:

Interesting that Feb’s meeting was deferred because of a conflict of interest.

Could that be that Reading are in trouble too, and their guy is on the board?

https://www.efl.com/-more/all-about-the-efl/efl-board/

I wondered whether it was Mark Ashton that caused it. Voting for play off rival to lose points.

Could be our secret weapon!

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39 minutes ago, Drew Peacock said:

I wondered whether it was Mark Ashton that caused it. Voting for play off rival to lose points.

Could be our secret weapon!

Wondered that too, but then again so is Brentford guy too.

I think you meant to say Mark Ashton is a weapon 🤣

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On 14/03/2019 at 12:04, Mr Popodopolous said:

Believe it's a bit of both.

I think Assombalonga on loan for the quoted figures might have been viable in January, albeit a bit of a gamble...money isn't everything in that respect though- I look around Europe and closer to home on their good years Brentford and under Wilder Sheffield United and I see sides seemingly vastly outperforming where they should be based on wage bill.

Spot  on Mr P - too many are obsessed by budget and wages and believe that is the only reason and way clubs can get promoted from the Championship.

It really isn’t, of course you have to spend but you don’t need to risk everything on fees and wages.

Quality of recruitment, top level coaching and motivation along with ambition all play their parts.

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https://www.skysports.com/football/news/11694/11669376/birmingham-city-could-avoid-points-deduction-until-next-season

This has to be a nonsense. My (and I'm sure many others) concerns about the EFL could have some merit here. Rules seem sound, just a question of the quality of the EFL, and their speed/nimbleness- dexterity etc...if they got into playoffs and won them having likely been in breach for this season and clearly the 3 year period until May 2018...

@Davefevs I guess you're using the Bristol City FC rather than Bristol City Holdings one? Tbh sounds right, BCFC Holdings probably covers a lot of non-football ops etc. Ours maybe a bit higher, but I'd still mark them out as significantly overachieving- not talking in relation to us, but the 3 relegated sides, Aston Villa, Middlesbrough, maybe Leeds, maybe Norwich- Hull, QPR, Reading, Birmingham...Derby have in recent times been generous payers too.

Actually putting them aside, we in consideration have seen a rising wage bill...but we're doing alright all in all IMO. Let's hope for a final push but I can't see it.

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To add a little to that note.

Sure it's been mentioned on here before- but then many things are eh :whistle:- if a side gets docked points say in FFP, then it resets.

Not in the way of to zero like what for example Aston Villa fans would believe but seemingly past seasons get wiped for that period and it comes to having to hit £13m per season for remaining period...given Birmingham on course to lose nearly double that or more than double based on figures, and unable to renew Morrison- a sale of Messrs Adams and loan with fee and wages paid by a club of Jota seems plausible- only gets harder. :laughcont::thumbsup: That's before even factoring in possible points removed next season for the other aggravated breach i.e. not selling Adams in January. That's more hypothetical at this stage though.

Oh- plus the transfer embargo, soft or otherwise that'll be there next season unless they bring themselves into compliance again.

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2 hours ago, Mr Popodopolous said:

https://www.skysports.com/football/news/11694/11669376/birmingham-city-could-avoid-points-deduction-until-next-season

This has to be a nonsense. My (and I'm sure many others) concerns about the EFL could have some merit here. Rules seem sound, just a question of the quality of the EFL, and their speed/nimbleness- dexterity etc...if they got into playoffs and won them having likely been in breach for this season and clearly the 3 year period until May 2018...

@Davefevs I guess you're using the Bristol City FC rather than Bristol City Holdings one? Tbh sounds right, BCFC Holdings probably covers a lot of non-football ops etc. Ours maybe a bit higher, but I'd still mark them out as significantly overachieving- not talking in relation to us, but the 3 relegated sides, Aston Villa, Middlesbrough, maybe Leeds, maybe Norwich- Hull, QPR, Reading, Birmingham...Derby have in recent times been generous payers too.

Actually putting them aside, we in consideration have seen a rising wage bill...but we're doing alright all in all IMO. Let's hope for a final push but I can't see it.

Yeah, I use BCFC because AGL made a loss too so BCH has a bigger loss!!  I don’t know on what basis the FFP submissions are made, but using BCH worsens our position!  No reason other than that.  I’m sure there is clever accounting in there somewhere.

596k followers....obviously that means nothing.

bet365 12-1 Brum relegated....just had £1 on it.  No smoke without fire.

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5 hours ago, Davefevs said:

Yeah, I use BCFC because AGL made a loss too so BCH has a bigger loss!!  I don’t know on what basis the FFP submissions are made, but using BCH worsens our position!  No reason other than that.  I’m sure there is clever accounting in there somewhere.

596k followers....obviously that means nothing.

bet365 12-1 Brum relegated....just had £1 on it.  No smoke without fire.

Could be totally wrong but I reckon BCFC Holdings ideal guide for the FFP figure, but if we're looking predominantly at football then BCFC Limited for wages and that. Non football wages still possibly count towards the wage bill for FFP though i.e. running costs but BCFC Ltd the best guide for football figures IMO.

12/1- like those odds. Don't usually bet much but may put a few quid on tomorrow- I hope before the panel makes a judgement though or it'll be pointless- much like Birmingham's playoff or even survival hopes if EFL get their way!  😃

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Another potential candidate @Mr Popodopolous?

https://www.bbc.co.uk/sport/football/47650699

Championship club Blackburn Rovers have reported a £16.8m net loss for their 2017-18 League One promotion season.

The Lancashire side spent 187% of their £9m turnover on wages - which fell by 24% - with owners Venky's injecting £14m to keep the club afloat.

In all, Blackburn's Indian owners are owed £108m in loans, having invested a further £147m in shares since buying the then Premier League club in 2010.

Rovers are 17th in the second tier, 11 points above the relegation zone.

They finished second in League One last season under manager Tony Mowbray to return to the Championship at the first attempt.

Wigan - who finished as champions - last month posted net losses of £7.7mfor the same period, while fellow Championship side Bolton have this week been given two weeks to settle an unpaid £1.2m tax bill.

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Not yet IMO as they made some big sales in 2016/17 which took their losses down to about £3.8m for that season...then you need to factor in the fact that League One TV money, solidarity payments are so much lower than Championship- you add maybe £5-5.5m that back on to counteract some extra expenses this season and perhaps not.

Next season though- so the end of the cycle that began last season? Yeah I'd say they could be ones to watch in that respect. I think it's likely the 3 years to this season, they have complied though- albeit perhaps not by much.

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