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Our Finances...a bit of a dive into where we are at, what we have done so far and what may- or may not- be possible this season!


Mr Popodopolous

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8 minutes ago, JonDolman said:

I would say Bakinson and Semenyo, but possibly more like by summer of 2022.

Massengo at some point too but still so young.

We apparently have some very special talent coming through, so who knows who else. Owura Edwards looks so quick and skilful. Looks like he has the raw talent to go very far. 

Benarous England youth international. And many others who look really good, but so hard to judge which ones will go the furthest.

We will be another £25m+ down by summer 2022!

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The easiest way around it, when FFP cycle comes around again...

£25m disappears.

£10m PLUS allowable costs starting point.

Wages- look how many out of contract in summer.

Headroom- and less, a lot less injuries- with or without Holden?

Project Promotion that season- the aim for promotion in 2021/22, within FFP and the troubles would be done.

That said, a big loss last year Covid notwithstanding, and this theory could fall away- but I do believe in pre Covid world that starting summer 2019, this was a two year window for a real crack at promotion- but also possibly as @Davefevs said higher up the thread, we got carried away?

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1 hour ago, Davefevs said:

Who’s the next player to help close the financial gap?

Kalas is arguably the most sellable asset we have - international experience, good age, a bit of PL experience, promotions to the PL. I think we could recoup close to what we paid for him and save £20k p/w in wages, so that would help close the financial gap. It'd also significantly weaken us in a key area on the pitch. 

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For reference purposes, out of contract by this summer- not including loanees, can add them to a secondary list- not including youth either. Will also add players we have loaned out who are at an end:

  1. Wollacott?
  2. Hunt
  3. Baker
  4. Mariappa
  5. Rowe
  6. Walsh
  7. Paterson
  8. Brunt
  9. Diedhiou
  10. Weimann- however we have a year option on him?

Loanees:

  1. Sessegnon
  2. Mawson

Players we have loaned out, whose contract is up in summer 2021:

  1. Adelakun
  2. Watkins

This summer, working on the basis that we are still a Championship club, it could make or break the next few years. Could be a very big summer indeed. Hope Walsh can be renewed and maybe some of the others too.

Young players Cundy, Morton and I think Hinds are also out of contract in summer 2021.

The annual amortisation to be saved, using Transfermarkt as my guide might be:

Maybe £3.165m. The fees for Cundy, Paterson, Hinds are undisclosed- assume compensation for Adelakun will be amortised over the length of his contract- this plus whatever amortised fees for the undisclosed would all be saved. With respect to Walsh it would be fairly minimal as the year option was taken.

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57 minutes ago, tin said:

Kalas is arguably the most sellable asset we have - international experience, good age, a bit of PL experience, promotions to the PL. I think we could recoup close to what we paid for him and save £20k p/w in wages, so that would help close the financial gap. It'd also significantly weaken us in a key area on the pitch. 

Even if we got back the £7m for Kalas this summer, in the accounts it would only be transfer profit of £3.5m.

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I would expect FFP rules to be changed so that they don't include this years figures (and probably an adjustment for last year). It's good news that we have so many out of contract and I would not offer any new contacts to these players. As I've said on previous threads, I would expect there to be a 'fire sale' the likes of which we have never seen before as clubs assess their dire financial positions and cut their cloths accordingly. Players looking for new contracts will find that the power balance has shifted in the clubs favour and they'll have to modify their expectations. In this 'new reality' the fact that we have a solvent owner will put us in a strong position. If all this means that we have to write this season off and 'survive' then so be it. The football might be shit in the meantime but fortunately it's unlikely that we'll be there to see it ( or endure it) live anyway!!

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@Scrumpylegs

On that note, there have been some sort of amendments- but could there be more to come?

Might have to write it off- so long as we don't go down, which basically seems somewhat unlikely IMO.  Maybe Holden was appointed with that in mind to some extent? A wage cap and the general dire financial situation caused by Covid, plus the fact that all the sides who take a loan have it repaid out of Future Solidarity Payments or Central Awards- this could really drive down wages at this level.

Now, FFP.

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/

The key amendments to date seem to be the following- this may state the rule and the amendment below:

Rule as of now.

Quote

1.1.2  Adjusted Earnings Before Tax means Earnings Before Tax adjusted to exclude costs (or estimated costs as the case may be) in respect of the following:

Amendment number 1.

Quote

(f)  in respect of Seasons 2019/20 and 2020/21 only, COVID-19 Costs.

I assume this would refer to, amongst other things, losses on ticketing, merchandising, possible TV rebates, and direct costs associated with making the ground, training facilities and other club Properties Covid Secure. Commercial revenue both on and off matchday should surely be factored in as well. Must have missed some stuff!

Amendment Number 2.

Quote

1.1.7  COVID-19 Costs means lost revenues and/or exceptional costs incurred by a Club that are directly attributable to the COVID-19 pandemic and that are identified and calculated in accordance with such guidance as issued by the Board;

There is some debate about whether Player Impairment could be an exceptional cost due to Covid-19, I'd suggest not- just because of one club ruining it for the rest of us, think we can all guess who but they amortise differently to the rest of us! No deal on that IMO. EFL need to make quite clear that Impairment of Player Registrations is not a covid cost to be factored in for FFP.

Rule.

Quote

1.1.11  P&S Calculation means, save as indicated below, the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2. In respect of Season 2020/21 only, the P&S Calculation shall be the aggregation of:

Amendment Number 3.

Quote

(c)  the Adjusted Earnings Before Tax of T-3;

Usually as above, it is T- ie existing season, T-1 and T-2. That'd be last and the year before.

T-3=2017/18, T-2=2018/19, T-1 and T averaged=Average Profit or loss added in those 2 seasons then halved and assessed as one year. Save for FFP deductions and the acceptable Covid losses. That said it means their PL profit halved, and if usual rules it'd be £61m so they actually slip back a bit! Bournemouth and Watford however...

£35m x 3 + £13m. £118m/4 x 3=£88.5m!!?

The usual Rule.

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.

Context and background, with some more changes factored in.

Quote

Guidance

The Executive will in due course consider the Annual Accounts for the Accounting Reference Period in respect of which information pursuant to Rule 2.2.2 is submitted and in particular examine whether any material variances indicate that the estimated financial information was not prepared in accordance with Rule 2.2.2(b).

2.2A In respect of Season 2019/20:

2.2A.1  the deadline for submission of the information required by Rule 2.2 shall be 26 August 2020; and

2.2A.2  there shall be no obligation on each Club to submit the information referred to in Rule 2.2.3.

Guidance

The review of Clubs’ P&S Calculations for 2018/19 against actual figures in Clubs’ Annual Accounts (and supporting information) will still be undertaken by the EFL. The adoption of Rule 2.2A.2 does not release any Club from liability relating to any breach of these Rules relating to Season 2018/19 or any prior Seasons. The EFL Board will continue to seek sanctions in line with the existing sanction guidelines.

Arguably Amendment Number 4.

Quote

2.5  If the aggregation of a Club’s Earnings Before Tax for T-1 and T-2 (or in the case of Season 2020/21 T-2 and T-3) results in a loss, any consideration from Related Party Transactions having been adjusted (if appropriate) pursuant to Rule 2.3, then the Club must submit to the Secretary its P&S Calculation.

Arguably Amendment Number 5.

Quote

3.4  In respect of Season 2020/21, the Lower Loss Threshold and Upper Loss Threshold for each Club shall be calculated based on the aggregation of the Club’s Annual Lower Loss Threshold and Annual Upper Loss Threshold for T, T-1, T-2 and T-3 as per the figures set out table in Rule 3.1 as amended by dividing those figures by 4 and then multiplied them by 3.

No difference for us but guess which clubs will benefit! Those with at least one year in the Premier League. £35m upper for each PL season, £5m lower, whereas for our level it's £13m and £5m respectively! Subject to equity or secure funding of course to top up the difference between higher and lower- lower at each level is £5m per season.

To take an example, Norwich's higher loss limit would be £35m x 1 and £13m x 3=£74m. £74m/4 x 3=£55.5m. I wouldn't see them as a club who would breach FFP anyway and maybe there has been less equity put in which takes it down, but you see my point.

That is a list of the amendments and context to date.

To add a little bit on the Impairment point, one club in the East Midlands would be hit more than many if unable to do it- or if the rules didn't change to exclude it from FFP. Seems no change is anticipated in this to date.

Seems not to be separately stated as a Covid cost- and arguably rightly so, UEFA eg haven't.

Quote

(b)  amortisation or impairment of goodwill and other intangible assets (but excluding amortisation and/or impairment of the costs of players’ registrations);

It's too open to abuse.

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6 hours ago, Mr Popodopolous said:

Amortisation reduction of £1.75m too though? Never fully sure how to calculate this one.

I’d built that in by saying “this summer”, I.e. 2 years into his 4 year deal.  So he’ll be worth £3.5m in our books this summer.

5 hours ago, Scrumpylegs said:

I would expect FFP rules to be changed so that they don't include this years figures (and probably an adjustment for last year). It's good news that we have so many out of contract and I would not offer any new contacts to these players. As I've said on previous threads, I would expect there to be a 'fire sale' the likes of which we have never seen before as clubs assess their dire financial positions and cut their cloths accordingly. Players looking for new contracts will find that the power balance has shifted in the clubs favour and they'll have to modify their expectations. In this 'new reality' the fact that we have a solvent owner will put us in a strong position. If all this means that we have to write this season off and 'survive' then so be it. The football might be shit in the meantime but fortunately it's unlikely that we'll be there to see it ( or endure it) live anyway!!

Mr Pop has replied but in summary the rules have already been agreed and as far as we can see:

2017/18 - £13m

2018/19 - £13m

2019/20 plus 2020/21 divided by 2 - £26m / 2 = £13m

Same £39m just calculated a bit differently.

Clubs should’ve been using the summer to get their houses in order.  In many cases it looks like they were with minimal fees outplayed, and a few clubs selling players to the Prem.

That fire sale might be January. Summer 2021 seems too late.

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20 hours ago, Davefevs said:

I don’t believe they do.  Do they realise our costs are £25m more than our income?

In terms of the specific numbers I doubt it, but the general picture? Yes. Or at least I do. That’s where the criticism comes from, we haven’t got the budget to keep making the mistakes that we do.

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3 hours ago, KegCity said:

In terms of the specific numbers I doubt it, but the general picture? Yes. Or at least I do. That’s where the criticism comes from, we haven’t got the budget to keep making the mistakes that we do.

You will be in the minority Keg, believe me.

When I see people spouting stuff like “Holden will get a £10m transfer chest” or “we should’ve bought Player X” I’m pretty sure most people don’t understand it.

Agree re mistakes.  We need a clear recruitment strategy.

If it were me I’d be looking at young players again....but once acquired, play them.  Either from the weaker  financial clubs in this division or from Lg1, or PL youngsters with a point to prove.  Take advantage of the financial climate.  Perhaps Dean had started to do that with Williams?  I certainly got the Martin signing (as an exception), Brunt, I never understood.

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50 minutes ago, Davefevs said:

You will be in the minority Keg, believe me.

When I see people spouting stuff like “Holden will get a £10m transfer chest” or “we should’ve bought Player X” I’m pretty sure most people don’t understand it.

Agree re mistakes.  We need a clear recruitment strategy.

If it were me I’d be looking at young players again....but once acquired, play them.  Either from the weaker  financial clubs in this division or from Lg1, or PL youngsters with a point to prove.  Take advantage of the financial climate.  Perhaps Dean had started to do that with Williams?  I certainly got the Martin signing (as an exception), Brunt, I never understood.

Yep and that’s why there’s plenty of criticism for the way we’re currently doing things as the limited budget that we have isn’t getting utilised properly.

Martin isn’t in the same category as Brunt, Marriappa or Williams etc imo, he brings something different to the table rather than just being an expensive stopgap, so I think that was a sensible signing.

Agree with the policy of young, hungry players, it’s something that I think the club have been trying with players such as Eisa, Szmodics etc but they clearly weren’t rated by the manager. That’s why I think we need to tweak the way the club is run in order to get some cohesion between the business side and the footballing side. Based on what I’ve read in other threads that would mean getting rid of Ashton and giving the manager a greater say in transfers, so that they can pick their youngsters rather than being handed them based on a moneyball style transfer policy.

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18 minutes ago, KegCity said:

Yep and that’s why there’s plenty of criticism for the way we’re currently doing things as the limited budget that we have isn’t getting utilised properly.

Martin isn’t in the same category as Brunt, Marriappa or Williams etc imo, he brings something different to the table rather than just being an expensive stopgap, so I think that was a sensible signing.

Agree with the policy of young, hungry players, it’s something that I think the club have been trying with players such as Eisa, Szmodics etc but they clearly weren’t rated by the manager. That’s why I think we need to tweak the way the club is run in order to get some cohesion between the business side and the footballing side. Based on what I’ve read in other threads that would mean getting rid of Ashton and giving the manager a greater say in transfers, so that they can pick their youngsters rather than being handed them based on a moneyball style transfer policy.

Will be interesting whether SL sees MA as a fall-guy.  I doubt it, but you never know.

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12 hours ago, Davefevs said:

You will be in the minority Keg, believe me.

When I see people spouting stuff like “Holden will get a £10m transfer chest” or “we should’ve bought Player X” I’m pretty sure most people don’t understand it.

Agree re mistakes.  We need a clear recruitment strategy.

If it were me I’d be looking at young players again....but once acquired, play them.  Either from the weaker  financial clubs in this division or from Lg1, or PL youngsters with a point to prove.  Take advantage of the financial climate.  Perhaps Dean had started to do that with Williams?  I certainly got the Martin signing (as an exception), Brunt, I never understood.

I suppose Brunt could have been good cover, with experience- but that's it cover, coming on to help see out the game- but used sparingly. Actually if injuries allow we should have been using Martin a bit more sparingly too- Brunt for Morrell effectively though? Not for me.

11 hours ago, KegCity said:

Yep and that’s why there’s plenty of criticism for the way we’re currently doing things as the limited budget that we have isn’t getting utilised properly.

Martin isn’t in the same category as Brunt, Marriappa or Williams etc imo, he brings something different to the table rather than just being an expensive stopgap, so I think that was a sensible signing.

Agree with the policy of young, hungry players, it’s something that I think the club have been trying with players such as Eisa, Szmodics etc but they clearly weren’t rated by the manager. That’s why I think we need to tweak the way the club is run in order to get some cohesion between the business side and the footballing side. Based on what I’ve read in other threads that would mean getting rid of Ashton and giving the manager a greater say in transfers, so that they can pick their youngsters rather than being handed them based on a moneyball style transfer policy.

Mariappa was short term I thought? However yes, agreed.

I suppose a concern I have with that is that manager comes in, picks poor players, or players whose sell on value isn't as hoped, is moved on or moves on and we're left with a problem- so from a financial POV I can see pros and cons to Ashton or maybe someone else in his role picking players- philosophy consistent, manager relatively interchangeable- last thing we want is Manager A picking a host of players, Manager B doesn't fancy a lot of them yet their sell on value is failing and we have a problem! At least age would give hope of a) Room for growth in a squad and b) Gaining that sell on value.

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8 hours ago, Mr Popodopolous said:

I suppose Brunt could have been good cover, with experience- but that's it cover, coming on to help see out the game- but used sparingly. Actually if injuries allow we should have been using Martin a bit more sparingly too- Brunt for Morrell effectively though? Not for me.

Mariappa was short term I thought? However yes, agreed.

I suppose a concern I have with that is that manager comes in, picks poor players, or players whose sell on value isn't as hoped, is moved on or moves on and we're left with a problem- so from a financial POV I can see pros and cons to Ashton or maybe someone else in his role picking players- philosophy consistent, manager relatively interchangeable- last thing we want is Manager A picking a host of players, Manager B doesn't fancy a lot of them yet their sell on value is failing and we have a problem! At least age would give hope of a) Room for growth in a squad and b) Gaining that sell on value.

True, equally if we gave managers more freedom then a Howe or Hughton might come through the door who you would trust to have considerable influence over transfers. I would say signing players that the manager clearly doesn’t rate (Szmodics and Eisa spring to mind) is a bigger waste of money than the risk of a lack of sell on value.

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2 hours ago, KegCity said:

True, equally if we gave managers more freedom then a Howe or Hughton might come through the door who you would trust to have considerable influence over transfers. I would say signing players that the manager clearly doesn’t rate (Szmodics and Eisa spring to mind) is a bigger waste of money than the risk of a lack of sell on value.

Do you think LJ didn’t want Szmodics?  He was a key part of pre-season, until.....we signed Palmer.

Eisa was a weird one.  Conspiracy theory no176i6 says it stank of “Johnson”.

I honestly couldn’t care less whether the DoF model is successful in other countries, if I was the manager, I’d want final say on transfers, and a significant input into the process, inc scouts and analysts I trust.

I don’t buy the scenario that MA decides on the players coming in.

We were told often enough the process, LJ himself told us that he’d watch the players several times too.  How often did he fly to Italy? Maybe he got lazy and stopped doing his own due diligence on some players?  Don’t get me wrong, if it’s a young fringe player who we are genuinely looking to develop / take a punt on then that’s a bit different, but any genuine first team squad player has to be on the agreement of the manager (imho).

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1 hour ago, Davefevs said:

Do you think LJ didn’t want Szmodics?  He was a key part of pre-season, until.....we signed Palmer.

Eisa was a weird one.  Conspiracy theory no176i6 says it stank of “Johnson”.

I honestly couldn’t care less whether the DoF model is successful in other countries, if I was the manager, I’d want final say on transfers, and a significant input into the process, inc scouts and analysts I trust.

I don’t buy the scenario that MA decides on the players coming in.

We were told often enough the process, LJ himself told us that he’d watch the players several times too.  How often did he fly to Italy? Maybe he got lazy and stopped doing his own due diligence on some players?  Don’t get me wrong, if it’s a young fringe player who we are genuinely looking to develop / take a punt on then that’s a bit different, but any genuine first team squad player has to be on the agreement of the manager (imho).

Neither Palmer or Szmodics seemed to get much of a look in which makes it seem like he didn’t overly want him, wasn’t there a quote at the time from Lee that he hadn’t been interested but Sammie’s stats were too good to turn down?

I don’t know either and agree it doesn’t make sense that the manager doesn’t have final say, but it would explain players being signed and then never seen and also why managers were interviewed but then walked away after hearing of the restrictions placed upon them. This is all speculation at the end of the day, based on other posters who know how the club is run.

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2 minutes ago, KegCity said:

Neither Palmer or Szmodics seemed to get much of a look in which makes it seem like he didn’t overly want him, wasn’t there a quote at the time from Lee that he hadn’t been interested but Sammie’s stats were too good to turn down?

I don’t know either and agree it doesn’t make sense that the manager doesn’t have final say, but it would explain players being signed and then never seen and also why managers were interviewed but then walked away after hearing of the restrictions placed upon them. This is all speculation at the end of the day, based on other posters who know how the club is run.

Yes, remember that, but we also had:

https://www.bcfc.co.uk/news/johnson-a-big-influence-on-my-decision-szmodics/

0113215A-BE0D-4CF6-BFE0-480406B4A321.thumb.jpeg.b70e29e8328a80a15d1e671520beebfa.jpeg

 

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1 hour ago, Davefevs said:

Do you think LJ didn’t want Szmodics?  He was a key part of pre-season, until.....we signed Palmer.

Eisa was a weird one.  Conspiracy theory no176i6 says it stank of “Johnson”.

I honestly couldn’t care less whether the DoF model is successful in other countries, if I was the manager, I’d want final say on transfers, and a significant input into the process, inc scouts and analysts I trust.

I don’t buy the scenario that MA decides on the players coming in.

We were told often enough the process, LJ himself told us that he’d watch the players several times too.  How often did he fly to Italy? Maybe he got lazy and stopped doing his own due diligence on some players?  Don’t get me wrong, if it’s a young fringe player who we are genuinely looking to develop / take a punt on then that’s a bit different, but any genuine first team squad player has to be on the agreement of the manager (imho).

Agree with every bit of that

I don’t have the theory MA is buying players, not for one moment

No one has a single shred of evidence of this but he is also ‘accused’ of interfering in the process (And so he should - to a level)

What he is , or should be , is the person to say no, if  needed ,

He is the ‘overseer’ - the person who try’s to ensure we stick to a budget and a plan , and rightly questions the thoughts and plan behind signings , and squad structure and balance 

A Head Coach wanting to sign player X should be able to explain and justify his wish and his overall and ongoing , ( or changing) plan.

It is this respect I see questionable performance in MA.

 

MA is also there to provide a budget management which has to include a full understanding of the proposed acquisition

 

I have no problem with input from various directions into a recruitment group but agree with you again , that the head coach should always be able to utilise his trusted sources or ideas and importantly approve of all signings

 

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On a general note.

Whether the manager getting the final say or not, or models in Europe catch on elsewhere, I do think a combination of FFP, the idea of wage caps, owners wanting greater oversight on spending and moneyball type models- this will see certain types of manager struggling to find work as readily as before, as it all kicks in. Certainly at higher levels. I wonder how Brentford e.g. decide incoming transfers, or increasing numbers of Championship clubs. I suppose if Ashton controls the budgetary requirements it can negate this.

What you don't want however is a Hughes and Redknapp followup at QPR e.g., maybe Hughes takes more of the blame on that, or a Redknapp at Birmingham type scenario. Pot of money spent, players of variable quality, no real headroom. At least if they're young, you have somewhat more scope to sell on and claw back a bit of time and space in the cycle.

See also Sheffield Wednesday for the last few years. They have been hemmed in somewhat for a while now- Chansiri was going for promotion in 2 years, 3 years at a push. He gambled, he failed...their next few years speak for themselves.

Carvalhal got the bulk of the spending- Luhukay, Bruce, Monk and now Pulis have not had much cash to work with. Yet until this summer they were stuck with quite a few aging players, who they couldn't or wouldn't shift.

Whereas Swansea unti Laudrup went, Brentford at present- could argue Barnsley too- these are examples where manager may or may not have had final say yet in came manager, out went manager, continuity, quality, improvement over a number of years.

In fact, though there wasn't FFP or salary cap then really, we could look at us from the latter days of GJ to arguably with respect to some younger signings O'Driscoll and then absolutely to finish it off, Cotterill. Between then though, latter days of GJ, in comes Coppell- out goes Coppell- in comes Millen, in comes McInnes- all brought in some of their own players, we had a variety we couldn't or wouldn't shift, each had a different philosophy and we were a real mess!

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Came across this bit and forgot all about, well largely I forgot about it anyway, the Future Financial Information bits!

The regulation pre-Covid. ⬇️

Quote

16.16 Subject to Regulation 16.16A, by 31 March in each Season, each Championship Club shall submit to The League in respect of itself (or if the Championship Club considers it appropriate or The League so requests in respect of the Group of which it is a member) future financial information (‘Future Financial Information’) in a format prescribed by The League comprising projected profit and loss accounts, cash flow, balance sheets and relevant explanatory notes commencing from its accounting reference date or, if it has submitted interim accounts pursuant to Regulation 16.11, from the date to which those interim accounts were prepared and expiring on the next accounting reference date after the end of the following Season. The projected profit and loss accounts, cash flow and balance sheets shall be prepared at a maximum of six- monthly intervals.

Wasn't fully aware of the finer details!

However, Covid came along and now. ⬇️

Quote

16.16A In respect of Season 2019/20, the deadline in Regulation 16.16 shall not apply and, instead, each Club remaining in membership of The League shall submit its Future Financial Information to the Board by no later than 26 August 2020.

I think the below covers both what was required before Covid and now, in Covid times- just the deadline that has shifted, with one or two tweaks. ⬇️

Quote

16.17  The Future Financial Information shall:
16.17.1 be prepared in accordance with the accounting principles adopted in the preparation of the Championship Club’s annual accounts (except where the accounting principles and policies are to be changed in the subsequent annual accounts, in which case the new accounting principles and policies should be followed);
16.17.2 be approved in writing by the board of directors of the company to which they relate;
16.17.3 include in the explanatory notes thereto principal assumptions and risks; and
16.17.4 include for comparison profit and loss accounts for the period covered by the Annual Accounts and interim accounts submitted pursuant to Regulation 16.2 and 16.11, a forecast for the current financial year and a balance sheet as at the date of the interim accounts submitted pursuant to Regulation 16.11.

Would not surprise me that much, if just for this season we were walking the line a bit. Come summer things change, with many out of contract, Covid losses able to be written off, and that £25m loss being replaced with a £10m profit as starting point- and that's before the allowable costs ie Youth, Community etc.

Essentially, it joins up the FFP/financial monitoring thing it seems.

You have your actual accounts for 2 seasons back and certainly last season- the League have them too, (in this case last and this season are as one ie averaged) but anyway...

They have this backward information, you submit your most recent figures, and then you submit your accounts for the current season, which in turn seems to be separate from March. If you're submitting 6-month accounts too, there's no real excuse really why Projected Accounts, Business Plans etc should not work in-season.

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@Mr Popodopolous

When you say COVID losses written off - where are you getting that from?

I’ve seen “covid costs can be excluded”, but not losses.  I read that to be things like the cost of testing, any stadium / training ground changes, e.g. temporary conversion of a room to make it a changing room, etc.

I honestly don’t see a £25m loss being converted to a £10m profit.  Our losses aren’t COVID losses, they are the costs of our football operation!

At best, perhaps offsetting lost income....but I don’t believe that is what is meant.

 

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7 hours ago, Davefevs said:

@Mr Popodopolous

When you say COVID losses written off - where are you getting that from?

I’ve seen “covid costs can be excluded”, but not losses.  I read that to be things like the cost of testing, any stadium / training ground changes, e.g. temporary conversion of a room to make it a changing room, etc.

I honestly don’t see a £25m loss being converted to a £10m profit.  Our losses aren’t COVID losses, they are the costs of our football operation!

At best, perhaps offsetting lost income....but I don’t believe that is what is meant.

 

You know Dave, you might be right.

I took COVID costs to mean lost revenue etc be excluded from losses, as well as costs of making ground/facilities Covid secure, cost of Testing etc- but maybe not?

£10m of refunds over the season and a bit (just for sake of an example)- Covid Cost?

Cross purposes on the £25m to £10m bit, what I meant by that bit was when FFP rolls over, the new starting point would be the £10m in 2018/19 as opposed to the £25m in 2017/18.

Back to COVID costs though, it's really not certain is it.

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1.1.2  Adjusted Earnings Before Tax means Earnings Before Tax adjusted to exclude costs (or estimated costs as the case may be) in respect of the following:

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(f)  in respect of Seasons 2019/20 and 2020/21 only, COVID-19 Costs.

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1.1.7  COVID-19 Costs means lost revenues and/or exceptional costs incurred by a Club that are directly attributable to the COVID-19 pandemic and that are identified and calculated in accordance with such guidance as issued by the Board;

Devil in the Detail a bit I think! At least to us, clubs I'm sure will have more detailed info on top of this.

If it is though as you say, then it's tighter still for us- and if it's tighter for us, it's wafer thin for many clubs!

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I thought I'd return to this thread.

I hope I'm not coming across as making excuses for the club- Brentford after all show what is possible, so too in their own way have Preston and Millwall e.g.- Barnsley too perhaps this year- so far anyway!

I just thought I'd post something purely factual though, it's a rough calculation and it is pre Covid times.

*A club coming down to the Championship who has spent 1 year in the PL can lose £61m in FFP- that is £13m + £35m + £13m=£61m. For us, it's £39m.

*A club coming down to the Championship who has spent 2 years in the PL can lose £83m in FFP- that is 

*Subject to owner equity etc- Lower limits in both=£15m per 3 year period, equity difference in Scenario 1 is £46m- ie the difference in that 3 years combined between minimum and maximum FFP losses. In Scenario 2 it is £68m.

Higher Losses=£35m in PL, £13m at our level-Lower at both is £5m, that's for one season.

Working on the basis that the owners have sufficient wealth for the equity differences, that is £22m and £44m respectively!

Then we get onto Parachute Payments. Now I think there is an argument for but they must be distributed in a way that doesn't impact the Profit and Loss. Clubs falling straight into admin and through the divisions is bad, but the basic award differences mean that there is a problem. Pay them in loans? Help with stability but at the same time, the club has to get into cost management from the getgo- perhaps even restrict the distribution as LOANS and this will only come once it is clear that costs being reduced by clubs, proactively and visibly.

Still with me? Hope so.

Let's assume now that their prior 2 year losses are equal to ours or a typical Championship club. As we know in Year 1, the Parachute Payment differential is about £35-40m. Let's assume equity limits also matched at both levels.

Club A- Let's say the YoYo club- has an advantage of £55-60m- maybe a bit higher and maybe a bit lower.

Club B- Let's say the more established club dropping £77-82m! Again bit up, bit down- but all things being equalish...

If they want and subject to Business Plans, and they had an owner of sufficient wealth and liquidity Club A can lose or spend £55-60m more in Season 1 and Club B can spend in said same season, £80-85m more!

Well maybe my sums are a bit wrong but in this scenario us, Club A and Club B can lose/spend the following:

Us- £39m

Club A- A further £57-62m. Comprised of 1 year in PL of £22m higher losses + Year 1 Parachute differential of £35-40m.

Club B- That + £22m- that's £44m higher losses over the prior 2 PL seasons + Year 1 Parachute differential of £35-40m. £79-84m?

Maybe they will have lost higher amounts but if they come down in profit, and with the equity that's added to the above! Frankly in the PL, you should (this is pre Covid) be making a profit. You just should.

Side A comes down £10m in profit as combined total over last two seasons.

That's £71m in losses allowable in theory in Championship season- this assuming the equity is there. Add in the Parachutes...

Side B also comes down with £10m in profit as per the above. That's £93m in losses allowable in theory in Championship season. Add in the Parachutes to turnover...all assuming the equity is there of course!

You've been a bit critical of the club @Clutton Caveman I'd be interested in your thoughts on this thread- in particular the Parachute and higher loss differentials as above.

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We are fortunate that most seasons, some of the relegated clubs are basket cases, and they don’t use their money wisely.  The question is to not compare us to them, but compare us to Preston, Brentford, Millwall, now Barnsley, etc.  We need to finish top of that group, just once, surely.  There is always at least one of them above us each season.

Whether that is then good enough to be ahead of some other bigger teams is another question.

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Agreed @Davefevs

Think Brentford have perfected or are perfecting their model but agree- always at least one above us- sometimes more? No basket case this year though maybe Watford will fall away a bit, to playoff chasing rather than strong playoffs- 2nd manager of the season and no great away record to speak of.

Edit, just checked- won 2, drew 5, lost 4! Still with tough away games at Norwich, Brentford, Bournemouth, Middlesbrough, Stoke and Blackburn plus tough in their own way, Luton, Coventry, Millwall, Preston and Cardiff- to come!

That's actually really quite tricky away games in the 2nd half of the season.

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