City release accounts - Ouch!

[NcnsBcfc]

48 minutes ago, Mr Popodopolous said:

A Kelly sell on clause would be really handy right now. My gut feeling is that Bournemouth would leave it to the summer or next season in the event of staying down, they of course cheated FFP under the old regs but since coming down they've been quite willing to sell and cut back thusfar. Their Post Balance Sheet Events in 2020 accounts suggested a £51m profit on player disposal last season so they will trade!

Think @Davefevs mentioned it a while back.

Had we sold Kelly in 2019/20 as opposed to 2018/19, it was literally a couple of weeks from the end of our Reporting Period then we wouldn't have made a profit in 2018/19 but it would have pushed the Kelly profit on disposal into 2019/20. Same deal, same club just 2-3 weeks on- big difference! Probably would have moved £10-15m into this new starting point albeit averaged across 2019/20, 2020/21 due to the effect of Covid as with losses.

Would Moore be of interest to Hearts on a more long term basis? Maybe- they look likely to lose Souttar after all.

Palmer there has been speculation about.

I think DaSilva is still a good player with time of time on his side but if he needed to go due to finances so be it.

I wonder if someone got a bonus for turning over the first profit in 20 years ?.

I think it was about £10m, so this fee is the difference between a loss or profit for that set of results of course

[BTRFTG]

If Gould really believes that attributed to him in The Evil, rather than it being a strategic communication ploy, then City truly are screwed.

First up, City haven't lost nor will they lose anywhere near the sum quoted as a result of Covid. Last reporting period the virus cost City somewhere between £8-9m (lost income minus reduced operating costs.) Add in City's historic operating losses and you're bang on the money. That loss is in the same quantum as the liability incurred in signing 'Kaki' Wells and however poor he is few would argue he alone caused City to breach (the meaningless) FFP.

Secondly, whilst all fans know City are a selling club from where the hell did this 'player trading policy' appear? Hidden behind one of the numerous pillars? What actually does the policy say as I've never heard City say they've signed a player in an attempt to flip him later on at a profit?

But let's run with Gould's 'policy'. As CEO he'll know from 'policy' leads 'process' from which leads 'procedure'. At minimum I'd have thought the 'process' to take the form of a rolling review, probably 3-4 year cycle, in which players are categorized as to actions to be taken. One assumes categories to be of the form 'Required Sale' (both short & mid term,) 'Retain Key', 'Retain Runaround', 'End of Career' and 'Offload at First Chance'. Now the blindest Pew would have spotted pre Covid that City's quality player cupboard was Mother Hubbard. Assuming there are folks at the club who understand football they'd also appreciate City's squad are top-heavy in the latter two categories and do not be fooled into thinking 'End of Career' excludes some not long out of nappies. As for procedure: take the case of CoD. Footballing waste of space, zero end product, given ten chances too many. So when he got ideas above his station, made clear he was off to pastures bigger and brighter than AG, the appropriate procedure would have been for the CEO to have informed him: "There's the door, use it." And when the market clearly demonstrated the worth of CoD's talent (sic) the procedure was not to feel sorry for his crocodile tears by offering him a new contract. In recent times City have landed more CoDs than Grimsby Docks.

More plausible than Gould's raw deflections are conspiracist arguments that Lansdown has had enough and is manoeuvering a route out. Perchance Championship clubs collectively will seek to play their 'get out of jail' cards allowing owners to offload the folly of their 'investments'.

 

[GrahamC]

57 minutes ago, chinapig said:

It is crazy but it's of a kind with the mindset that led to the 2008 crash. Part of which is the belief that asset values will always increase. Even if that is true in the long term, as Keynes replied "In the long term we are all dead".

It's essentially a hubris that leads rich and successful people to believe they must always be right because they are rich and successful. Masters of the Universe and all that.

That's in part why Steve is so prickly about criticism from fans imo: "How dare you paupers criticise me, look how much money I have"

He needs somebody to whisper memento mori in his ear. I'm up for the job.

Can I just say that the mention of John Maynard Keynes on here has made my day.

Definitely raised the calibre of debate.

[Eddie Hitler]

5 minutes ago, GrahamC said:

Can I just say that the mention of John Maynard Keynes on here has made my day.

Definitely raised the calibre of debate.

I thought the reference to the Roman Triumph even better!

https://classicalwisdom.com/culture/memento-mori-in-the-ancient-world/#:~:text=Memento mori is a Latin,found in many ancient civilizations.&text=Highly successful generals were awarded,in honor of their victories.

 

Great post @chinapig

 

[Mr Popodopolous]

Interesting thread on the West Ham forum of all places citing our examples- and seemingly many clubs outside the PL want FFP to be scrapped or similar. OP says he was speaking to a BCFC Board member!

https://www.kumb.com/forum/viewtopic.php?t=182307

The Telegraph article- behind the paywall- that someone on there kindly posted.

Quote

Bristol City have expressed fears of being forced into a points deduction as the transfer market collapse has made it impossible to offset financial fair play losses.

Middlesbrough and Stoke are also expected to face severe scrutiny as the Football League enters the next 12 months of its three year "Profit and Sustainability" cycle.

Under the ownership of billionaire Stephen Lansdown, the West Country club has long been perceived as one of the most financially stable regimes below the Premier League.

However, Richard Gould, the club's chief executive, described to Telegraph Sport how the Covid-inflicted collapse in transfer values in the second tier has cost the club £30 milllion alone.

The executive has now taken the unprecedented step of warning they could be left with no choice but to take a points deduction next season unless the league fast-tracks reform.

EFL executives are exploring allowances for Covid-losses, but City are among a host of clubs concerned that the increased wiggle room will only cover matchday losses. For most clubs at City's level, a matchday-only saving might allow only around £5m on top of the current £39m upper-loss threshold for losses.

City and a host of rivals in the league now appear increasingly likely to back a salary-cap system broadly along the lines that were introduced in League One and League Two.

"We've got this big bow wave about to hit us next year on Profit and Sustainability," said Gould. "We can see it coming and it's only been brought about because the transfer market has crashed. Otherwise the business plan, which albeit required quite a lot of investment from the owner, was relatively sound. But now this big bow wave is coming, we know that we're probably going to breach it next year unless we sell a lot of our best players. And we don't want to sell a lot of our best players."

Bristol City are in ongoing talks with the EFL about their plight, and Gould accepts that the club could end up in a position next season where "maybe we'll just take the points".

Long-term reforms to the current system appear inevitable. The league and its Championship members are considering following the path taken by Uefa in exploring new rules to focus on the high levels of spending on wages and transfers rather than profit lines.

However, those reforms could come too late for City and rivals as unprecedented numbers of clubs prepare for the prospect of falling foul of the rules over the next year. In November, Reading were deducted six points, with a further six-point deduction suspended until the end of the 2022-23 season, over a loss of £57.8m.

There is no risk of City going into administration like Derby, who were deducted 21 points in total this season. However, calculations first uncovered by Liverpool University football finance expert Kieran Maguire revealed the eye-watering costs for a club which has never benefited from Premier League parachute payments.

City have lost £412,000 a week, every week, for the last 10 years from day-to-day trading, Maguire found. Overall, in the latest annual finances, City's revenue was down 39 per cent to £16.7m but wages had increased six per cent to £35.3m. Day-to-day losses increased by a quarter to £44m, with owner investment up to £214m.

Assessing the dire situation facing clubs, Gould warned that owners would get very frustrated if they managed to weather this storm and then suddenly find themselves foul of rules "that weren't designed for Covid issues".

https://www.telegraph.co.uk/rugby-union/2022/01/12/bristol-city-facing-points-deduction-transfer-market-collapse/

I don't think you can pull the system out mid stream- any reform IMO should kick in come 2024/25 at the earliest- two clubs this season have albeit via agreed settlements received deductions, Sheffield Wednesday last year and Birmingham 2 years before.

On a side note, if the EFL are only including gate receipts and matchday losses as FFP related then surely a) Rather a lot of sides will get deductions at one level or another and b) PL and EFL rules are basically the same- will this also apply to the PL? Everton are fairly close, Aston Villa up until 2021 still include 2 seasons of EFL loss limits- if in PL case you only include matchday revenue and there were also TV rebates up there, you might have some PL sides fall foul no?? I would also say it's fair if an owner pays staff instead of furloughing to add that back although that would have to be scrutinised very closely.

If Aston Villa's FFP losses exceed £72m to 2021 then they should be punished accordingly. If it's only matchday revenue, TV rebates and possibly furlough losses that can be excluded then that's quite likely they are over no?

Edited January 12, 2022 by Mr Popodopolous

[Eddie Hitler]

2 minutes ago, Mr Popodopolous said:

OP says he was speaking to a BCFC Board member!

 

Probably Mark Ashton making things up again like his buying Oxford and inventing the hovercraft.

[Mr Popodopolous]

Stoke- *******. Not only are they claiming the £30m Impairment due to Covid in 2019/20, seen it suggested on their forum that maybe they would seek approval for the remaining £20m or however much it was left of Book Value to be written down last season.

One quick estimate suggests that IF accepted that typical amortisation charge falls from £30m in 2019/20 to £5-6m last season. Although probably different in reality with differing contract lengths.

Now the Collins sale will have helped and I can also see value to be had injury permitting in Bursik, Souttar and Campbell but if that £30m approved then...

Edited January 12, 2022 by Mr Popodopolous

[BTRFTG]

12 minutes ago, Mr Popodopolous said:

Interesting thread on the West Ham forum of all places citing our examples- and seemingly many clubs outside the PL want FFP to be scrapped or similar. OP says he was speaking to a BCFC Board member!

https://www.kumb.com/forum/viewtopic.php?t=182307

The Telegraph article- behind the paywall- that someone on there kindly posted.

https://www.telegraph.co.uk/rugby-union/2022/01/12/bristol-city-facing-points-deduction-transfer-market-collapse/

I don't think you can pull the system out mid stream- any reform IMO should kick in come 2024/25 at the earliest- two clubs this season have albeit via agreed settlements received deductions, Sheffield Wednesday last year and Birmingham 2 years before.

On a side note, if the EFL are only including gate receipts and matchday losses as FFP related then surely a) Rather a lot of sides will get deductions at one level or another and b) PL and EFL rules are basically the same- will this also apply to the PL? Everton are fairly close, Aston Villa up until 2021 still include 2 seasons of EFL loss limits- if in PL case you only include matchday revenue and there were also TV rebates up there, you might have some PL sides fall foul no?? I would also say it's fair if an owner pays staff instead of furloughing to add that back although that would have to be scrutinised very closely.

If Aston Villa's FFP losses exceed £72m to 2021 then they should be punished accordingly. If it's only matchday revenue, TV rebates and possibly furlough losses that can be excluded then that's quite likely they are over no?

As has been demonstrated over and over FFP has nothing to do with attempting to bring sanity to football's failed finances and EVERYTHING to do with it being a protectionist cartel by a dozen or so of Europe's biggest clubs to ensure they may never be displaced within that hierarchy.

[Davefevs]

44 minutes ago, NcnsBcfc said:

I wonder if someone got a bonus for turning over the first profit in 20 years ?.

I think it was about £10m, so this fee is the difference between a loss or profit for that set of results of course

£15m + add-ons (circa £6m) is the figure I have, which was enough to turn a loss into a profit…and definitely some willy-waving regarding that.

The other argument was Bournemouth were aware of Liverpool’s interest and wanted the deal done, hence paid a bit more and did it early, to stop Liverpool stealing him.  Possibly mindful of him going to Euro u21s in June and more clubs being interested too.

[The Bard]

6 hours ago, NcnsBcfc said:

Gould strikes me as a CEO who is going to be pushed to the front by a number of clubs to collectively argue on their behalf alongside City.

He is articulate, thoughtful; and comes across as a man with experience who perhaps the EFL will feel they can negotiate with?

Some of the CEO's at other clubs come across as either second hand car dealers, or nothing more than nepotistic appointments by Foreign owners.

Add to that our owner's experience of dealing with a Salary cap in Rugby (this will really come to the fore very soon).

We can't really talk about nepotistic appointments when you consider who the Chairman is.

 

[Mr Popodopolous]

40 minutes ago, BTRFTG said:

As has been demonstrated over and over FFP has nothing to do with attempting to bring sanity to football's failed finances and EVERYTHING to do with it being a protectionist cartel by a dozen or so of Europe's biggest clubs to ensure they may never be displaced within that hierarchy.

That may well be the case, there are arguments either way IMO.

My basic point in this instance though is will the PL apply what are effectively the same regulations to their club in the same way that the EFL do? Everton either are up against or close to FFP, were they in the EFL they certainly wouldn't be signing players as they have this January!!

[BTRFTG]

Just now, Mr Popodopolous said:

That may well be the case, there are arguments either way IMO.

My basic point in this instance though is will the PL apply what are effectively the same regulations to their club in the same way that the EFL do? Everton either are up against or close to FFP, were they in the EFL they certainly wouldn't be signing players as they have this January!!

Has FFP caused clubs to moderate their spending? No.

For those with private, deep pockets does loan to stock conversion make a wholesale mockery of FFP's measures? Sure as hell it does.

In which case why does FFP exist?

[NcnsBcfc]

1 hour ago, Mr Popodopolous said:

Interesting thread on the West Ham forum of all places citing our examples- and seemingly many clubs outside the PL want FFP to be scrapped or similar. OP says he was speaking to a BCFC Board member!

https://www.kumb.com/forum/viewtopic.php?t=182307

The Telegraph article- behind the paywall- that someone on there kindly posted.

https://www.telegraph.co.uk/rugby-union/2022/01/12/bristol-city-facing-points-deduction-transfer-market-collapse/

I don't think you can pull the system out mid stream- any reform IMO should kick in come 2024/25 at the earliest- two clubs this season have albeit via agreed settlements received deductions, Sheffield Wednesday last year and Birmingham 2 years before.

On a side note, if the EFL are only including gate receipts and matchday losses as FFP related then surely a) Rather a lot of sides will get deductions at one level or another and b) PL and EFL rules are basically the same- will this also apply to the PL? Everton are fairly close, Aston Villa up until 2021 still include 2 seasons of EFL loss limits- if in PL case you only include matchday revenue and there were also TV rebates up there, you might have some PL sides fall foul no?? I would also say it's fair if an owner pays staff instead of furloughing to add that back although that would have to be scrutinised very closely.

If Aston Villa's FFP losses exceed £72m to 2021 then they should be punished accordingly. If it's only matchday revenue, TV rebates and possibly furlough losses that can be excluded then that's quite likely they are over no?

Hmm.. How many Board Members do we actually have?

Given that the person that has apparently "Spoken to our Board Member" last night.; but waited until the RG interview has come out to post all about his meeting with the "Board Member"; it seems somewhat coincidental that every detail of that meeting seems to be identical to comments made by RG in his interview. 

Yep, seems legit.....

Edited January 12, 2022 by NcnsBcfc

[chinapig]

10 minutes ago, BTRFTG said:

Has FFP caused clubs to moderate their spending? No.

For those with private, deep pockets does loan to stock conversion make a wholesale mockery of FFP's measures? Sure as hell it does.

In which case why does FFP exist?

Pedantically, it's P&S. But since almost nobody is profitable and/or sustainable your point stands.

[ExiledAjax]

9 minutes ago, NcnsBcfc said:

Hmm.. How many Board Members do we actually have?

Given that the person that has apparently "Spoken to our Board Member" last night.; but waited until the RG interview has come out to post all about his meeting with the "Board Member"; it seems somewhat coincidental that every detail of that meeting seems to be identical to comments made by RG in his interview. 

Yep, seems legit.....

Depends which board you're talking about. 

Bristol City Holdings Limited - the company that published our consolidated group accounts - that has two directors, Doug Harman and Jon Lansdown.

It's subsidiary is Bristol City Football Club Limited which has 4 directors - Richard Gould, Gavin Marshall, Doug Harman and Jon Lansdown.

Edited January 12, 2022 by ExiledAjax

[NcnsBcfc]

14 minutes ago, ExiledAjax said:

Depends which board you're talking about. 

Bristol City Holdings Limited - the company that published our consolidated group accounts - that has two directors, Doug Harman and Jon Lansdown.

It's subsidiary is Bristol City Football Club Limited which has 4 directors - Richard Gould, Gavin Marshall, Doug Harman and Jon Lansdown.

Well I think we can rule Jon out 

Unless it's a strip design competition he was also talking to him about.

Edited January 12, 2022 by NcnsBcfc

[Mr Popodopolous]

50 minutes ago, BTRFTG said:

Has FFP caused clubs to moderate their spending? No.

For those with private, deep pockets does loan to stock conversion make a wholesale mockery of FFP's measures? Sure as hell it does.

In which case why does FFP exist?

Arguments for and against here too IMO. I'd say that at Championship level there has been SOME moderation of spending, look at 2017/18 e.g.- mix of Pandemic and Covid has bitten hard- average transfer fees are down but this trend was beginning before Covid.

UEFA's figures in 2019 or 2020, stated that there was a collective loss across European football top flights in 2009 and a collective profit in 2019- ie the 2018/19 vs 2008/09 season- FFP may have played a part. The Championship is and has been a shocking League in terms of financial control for some time now.

Again it depends. For UEFA e.g. the 3 year FFP loss is- prior to Covid clearly- stated at 30m euros ie 30m accounting loss plus youth, community etc. However without the equity this falls to 5m euros plus the youth, community etc in a 3 year period- equity injections designed to take it from lower to upper limits. Whereas in the Championship it's £5m per year ie £15m per 3 year cycle without equity, rising to £39m with- and the PL is where it really runs away with itself, £5m per year or £15m in 3 year cycle if no equity but equity can take it up to £105m in 3 years or £35m in one...the UEFA one isn't actually that irresponsible in terms of the gap between equity and non equity. If you recall too, the one at our level and PL until this summer allowed 'sales' of fixed assets to related parties or whoever to bump up the spending- this distorts matters further, whereas the UEFA one never did.

If we're talking about pure solvency, then all clubs having through their own endeavours to break even on a cash basis seems the best bet to me. Probably needs some work but it's cash losses and cash flow- or lack of- that kills a business ultimately.

[Davefevs]

1 hour ago, NcnsBcfc said:

Hmm.. How many Board Members do we actually have?

Given that the person that has apparently "Spoken to our Board Member" last night.; but waited until the RG interview has come out to post all about his meeting with the "Board Member"; it seems somewhat coincidental that every detail of that meeting seems to be identical to comments made by RG in his interview. 

Yep, seems legit.....

The Telegraph reporter and James Piercy were at the same discussion with RG.

[The Bard]

20 minutes ago, Davefevs said:

The Telegraph reporter and James Piercy were at the same discussion with RG.

I wonder if James Piercy is a West Ham fan?

[Mr Popodopolous]

10 minutes ago, The Bard said:

I wonder if James Piercy is a West Ham fan?

https://twitter.com/search?q=%40piercy360 "west ham"&src=typed_query&f=live

2 + 2=5 I expect but. Or just general sports reporting?

Probably just a pretend ITK on their forum citing the article? Yes I'll go with that.

Edited January 12, 2022 by Mr Popodopolous

[BTRFTG]

39 minutes ago, Davefevs said:

The Telegraph reporter and James Piercy were at the same discussion with RG.

Whisper quietly but such is the squeeze on newspapers these days there are many official and unofficial tie-ups, with journos squatting at desks in each other's offices sharing info. DT & Reach (Mirror, Evil et al) started a sports collaboration for football prior to Russia 2018.

[Davefevs]

39 minutes ago, The Bard said:

I wonder if James Piercy is a West Ham fan?

I thought he was a Pompey fan.

[Mr Popodopolous]

Another thought occurred to me about Gould's comments.

He was softening us up for (necessary) player sales and cut backs- tough decisions, because the alternative would be a points deduction and business plan etc.

I don't think we're in firesale territory certainly, but cuts, restraint and yes some sales and savings on one hand while trying to extract revenue from all angles on the other- a theme of this and perhaps next season. Maybe even 2023/24.

Edited January 12, 2022 by Mr Popodopolous

[Hxj]

My view is that City are under no real threat from FFP failures.

The clear out worked well last summer and there are clearly others who might need to do a 'Weimann' or move on this summer. although the offers elsewhere will clearly be diminishing.

The article strikes me as a 'position piece', let's get our accounts out early and then apply the pressure where needed.  'We are considered to be a sensibly run club, we are in difficulty in these times, watch the carnage behind us.'

[Kodjias Wrist]

3 minutes ago, Hxj said:

My view is that City are under no real threat from FFP failures.

The clear out worked well last summer and there are clearly others who might need to do a 'Weimann' or move on this summer. although the offers elsewhere will clearly be diminishing.

The article strikes me as a 'position piece', let's get our accounts out early and then apply the pressure where needed.  'We are considered to be a sensibly run club, we are in difficulty in these times, watch the carnage behind us.'

Sorry if this seems lazy for asking but without trawling through the thread, what income roughly do we need next season to avoid a fine or points deduction? 

[Hxj]

3 minutes ago, Kodjias Wrist said:

Sorry if this seems lazy for asking but without trawling through the thread, what income roughly do we need next season to avoid a fine or points deduction? 

2021/22 is fine.

2022/23 is the problem year.  Various estimates exist, mine is a pre-tax accounting loss of around £20 million might squeak us through the test.

[Davefevs]

11 minutes ago, Hxj said:

2021/22 is fine.

2022/23 is the problem year.  Various estimates exist, mine is a pre-tax accounting loss of around £20 million might squeak us through the test.

My estimates, based on assumptions re Income and Costs (inc assumptions on wages and amortisation) is that we are just over £40m, so only a smidge over the £39m for the cycle ending END of next season.

It shouldn’t take much to sort that, and then it becomes a question of how we trade to improve the squad.

I will continue to refine the wages and amortisation profiles as players come and go, more likely go!

[ChippenhamRed]

Very late to this conversation so apologies if I’m going over old ground. But I’m really surprised to hear that the situation could get anywhere near a points deduction.

My impression since our last relegation in 2013 is that Lansdown and the club has generally tried to operate within its means,  to at least some extent. That’s not to say profitable, of course. We haven’t spent extravagantly in the transfer market and have generally taken a pragmatic approach to player sales - losing players we would rather have kept from a footballing point of view, but made financial sense to sell. Many criticisms have been thrown at Lansdown, but financial recklessness isn’t normally one of them.

Obviously Covid has had a massive impact on our finances and, while acknowledging generally that football outside the Prem lives on the edge financially, I’m not sure many clubs could reasonably be expected to financially plan to cope with such an unprecedented event. So is it Covid that’s predominantly to blame for our woes - and if so, should clubs be given some leniency with regard to FFP in light of the pandemic?

Hesitate to post this as I’m acutely aware it might be rather naive, but I simply don’t have the in-depth knowledge or understanding of our financial operations that others do. But I just don’t perceive us as financially reckless in the same way as other clubs, so I don’t quite understand how we’ve ended up here.

[Hxj]

25 minutes ago, Davefevs said:

My estimates, based on assumptions re Income and Costs (inc assumptions on wages and amortisation) is that we are just over £40m

I think that we are all in the same ball park - I'd like to think that there was room now for another Atkinson and a Tanner this year.

Edited January 12, 2022 by Hxj

[Kodjias Wrist]

25 minutes ago, Davefevs said:

My estimates, based on assumptions re Income and Costs (inc assumptions on wages and amortisation) is that we are just over £40m, so only a smidge over the £39m for the cycle ending END of next season.

It shouldn’t take much to sort that, and then it becomes a question of how we trade to improve the squad.

I will continue to refine the wages and amortisation profiles as players come and go, more likely go!

So this includes the wage reduction we already have then included in your forecast?