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Article by Football365

https://www.football365.com/news/opinion-bristol-city-losses-pandemic-championship-opinion

Says we won't be the worst hit but also queries validity of our arguments in terms of trying to change FFP. Not read it in depth.

What I will say is that thusfar we are the worst affected and have made the biggest losses. 17 clubs at least still to release however!

Middlesbrough, Nottingham Forest and Stoke could be interesting. Cardiff too?

Edited by Mr Popodopolous
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3 minutes ago, Mr Popodopolous said:

Article by Football365

https://www.football365.com/news/opinion-bristol-city-losses-pandemic-championship-opinion

Says we won't be the worst hit but also queries validity of our arguments in terms of trying to change FFP. Not read it in depth.

What I will say is that thusfar we are the worst affected to date. 17 clubs at least still to release however!

 At Bristol City, the wages to turnover ratio for 2019/20 was 123%, actually below the midway point in that particular table. At the top were Reading, on 211%. We’d expect these figures to deteriorate as the accounts covering last season continue to be released.

We will ne nowhere near the worse, just went first. Will be 6-8 teams in a darker place I would predict. 

There will have to be some kind of COVID "right off" year.

 

 

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Just now, VT05763 said:

 At Bristol City, the wages to turnover ratio for 2019/20 was 123%, actually below the midway point in that particular table. At the top were Reading, on 211%. We’d expect these figures to deteriorate as the accounts covering last season continue to be released.

We will ne nowhere near the worse, just went first. Will be 6-8 teams in a darker place I would predict. 

There will have to be some kind of COVID "right off" year.

 

 

Worth remembering of course that if there are big player sales or Parachute Payments that cushions things significantly even if only as a one off.

Not in terms of wages/turnover which in itself is a distortion last year for all as turnover was hit but in terms of the losses.

As for Covid:

1) 2019/20 and 2020/21 added and halved. Which helps.

2) The key devil in the detail is, what constitutes losses directly attributable to Covid 19? SwissRamble says our losses over 2 years were £16m IIRC.

IF that was the case and given our usual allowable costs of £5m per season, then I'd make our FFP loss in that combined period £11m or thereabouts. Which is less scary.

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1 hour ago, VT05763 said:

 At Bristol City, the wages to turnover ratio for 2019/20 was 123%, actually below the midway point in that particular table. At the top were Reading, on 211%. We’d expect these figures to deteriorate as the accounts covering last season continue to be released.

We will ne nowhere near the worse, just went first. Will be 6-8 teams in a darker place I would predict. 

There will have to be some kind of COVID "right off" year.

 

 

And in 20/21 (including £1.6m of Government Grant income some of which I suspect will be repaid,) wages were 195% of Turnover.

Exclude the Government Grant and wages to Turnover were 212%.

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4 hours ago, Mr Popodopolous said:

Worth remembering of course that if there are big player sales or Parachute Payments that cushions things significantly even if only as a one off.

Not in terms of wages/turnover which in itself is a distortion last year for all as turnover was hit but in terms of the losses.

As for Covid:

1) 2019/20 and 2020/21 added and halved. Which helps.

2) The key devil in the detail is, what constitutes losses directly attributable to Covid 19? SwissRamble says our losses over 2 years were £16m IIRC.

IF that was the case and given our usual allowable costs of £5m per season, then I'd make our FFP loss in that combined period £11m or thereabouts. Which is less scary.

Our direct losses due to Covid in 20/21 were in the region £8-9m. Income was down £11m but operating costs also came down £5m.

Don't think one could bank transfer losses due to Covid, unless we've written off others debt, which I didn't see.

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11 minutes ago, BTRFTG said:

Our direct losses due to Covid in 20/21 were in the region £8-9m. Income was down £11m but operating costs also came down £5m.

Don't think one could bank transfer losses due to Covid, unless we've written off others debt, which I didn't see.

That's a good point- hadn't thought of that, the net saving/loss.

Agreed on transfer losses, that would be spurious- think the calcs by SwissRamble were basicallyquick- Revenue in 2018/19, Revenue in 2019/20 and Revenue in 2020/21.

Lost x in 2019/20, y in 2020/21=revenue lost to Covid. The EFL's exact wording in their regulations is...

image.png.e6032e6ee71830ca03d5b0e688264843.png

Bit vague and wooly? Doesn't seem to state costs net of savings but may mean that.

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11 minutes ago, BTRFTG said:

Our direct losses due to Covid in 20/21 were in the region £8-9m. Income was down £11m but operating costs also came down £5m.

Don't think one could bank transfer losses due to Covid, unless we've written off others debt, which I didn't see.

That's a good point- hadn't thought of that, the net saving/loss.

Agreed on transfer losses, that would be spurious- think the calcs by SwissRamble were basicallyquick- Revenue in 2018/19, Revenue in 2019/20 and Revenue in 2020/21.

Lost x in 2019/20, y in 2020/21=revenue lost to Covid. The EFL's exact wording in their regulations is...

image.png.e6032e6ee71830ca03d5b0e688264843.png

Bit vague and wooly? Doesn't seem to state costs net of savings but may mean that.

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51 minutes ago, Mr Popodopolous said:

That's a good point- hadn't thought of that, the net saving/loss.

Agreed on transfer losses, that would be spurious- think the calcs by SwissRamble were basicallyquick- Revenue in 2018/19, Revenue in 2019/20 and Revenue in 2020/21.

Lost x in 2019/20, y in 2020/21=revenue lost to Covid. The EFL's exact wording in their regulations is...

image.png.e6032e6ee71830ca03d5b0e688264843.png

Bit vague and wooly? Doesn't seem to state costs net of savings but may mean that.

I’ve started adjusting my estimates of “covid allowances” down a bit.  I said before (agree with @BTRFTG) that the cost of creating some of that Income won’t have been incurred.

It won’t be possible to be totally accurate, e.g. how will EFL deal with £x million of lost season ticket revenue, but £y million of increased Robinstv payments?  As you say Swiss Ramble’s calculation a bit quick and dirty.

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There is nothing new to report as such but a couple of thoughts did occur if we do fall foul.

Using Derby and Reading as a precedent, we might fall into a) Some kind of embargo situation and b) Wage limits.

Derby

Had FFP and a myriad of other issues. As such they were under some very strong limits indeed, which were 4 signings on a wage not exceeding £4,500 per week. Jagielka and Baldock were emergency signings permitted owing to long term injuries to Bielik and an apparent *ahem* season ending injury to Kazim-Richards

No transfer fee, no loan fee, no permanent contract exceeding 12 months or no loan contract exceeding 6 months- that's for inbound transfers.

As for the squad size and criteria, this was Professional Standing. Professional Standing from memory was one appearance be it start or sub in a relevant competition. Maximum 23, Derby had 19 hence the 4 signings limit.

Unsure how contract extensions were treated but possibly they also fell under EFL jurisdiction to some extent. The EFL eg cancelled one for Jack Marriott last season, I assume it was linked to his wage on an extended contract exceeding embargo limits or similar.

Reading

This was purely linked to FFP. Squad limited to 24 but the criteria were a bit looser- eg they were permitted 6 signings on £8.5k per week per signing. Presumably the expenditure on permitted signings will have been linked to headroom.

They were, are under the established players rule. This was 24 players but with looser criteria than the Derby one.

Obviously no transfer fees, no loan fees, no contracts for new signings exceeding 12 months. Unsure how contract extensions work under this.. 

Of the two Reading would be preferable but neither leave us in a great place if we slide into these restrictions this summer.

Unsure how to square the circle of remaining headroom allocated to a new signings allowance vs a projected breach during the existing season that might need fixing.

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Still £5m appears to be the magic number in terms of Covid allowances too, although it remains subject to internal debate.

https://www.footballinsider247.com/west-brom-may-force-efl-law-change-as-5m-hangs-in-balance-maguire/

Quick rough calculations for us if it's indeed £5m makes our FFP losses- remember 2019/20 and 2020/21 averaged into one- with that in mind I make it £16-16.5m for us. Perhaps £17m at a push.

The key of course is what were Derby and Reading allowed to exclude once FFP losses calculated in their settlement agreements- both absolute numbers wise and categories. If it was only £5m in the two seasons then precedent set?

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25 minutes ago, Mr Popodopolous said:

Still £5m appears to be the magic number in terms of Covid allowances too, although it remains subject to internal debate.

https://www.footballinsider247.com/west-brom-may-force-efl-law-change-as-5m-hangs-in-balance-maguire/

Quick rough calculations for us if it's indeed £5m makes our FFP losses- remember 2019/20 and 2020/21 averaged into one- with that in mind I make it £16-16.5m for us. Perhaps £17m at a push.

The key of course is what were Derby and Reading allowed to exclude once FFP losses calculated in their settlement agreements- both absolute numbers wise and categories. If it was only £5m in the two seasons then precedent set?

 

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1 hour ago, Mr Popodopolous said:

Still £5m appears to be the magic number in terms of Covid allowances too, although it remains subject to internal debate.

https://www.footballinsider247.com/west-brom-may-force-efl-law-change-as-5m-hangs-in-balance-maguire/

Quick rough calculations for us if it's indeed £5m makes our FFP losses- remember 2019/20 and 2020/21 averaged into one- with that in mind I make it £16-16.5m for us. Perhaps £17m at a push.

The key of course is what were Derby and Reading allowed to exclude once FFP losses calculated in their settlement agreements- both absolute numbers wise and categories. If it was only £5m in the two seasons then precedent set?

@Mr Popodopolous

 Did we get any income for using the South Stan concourse for Covid jabs?

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59 minutes ago, Davefevs said:

 

 

54 minutes ago, Hxj said:

I read this as a fixed COVID allowance for 2021/22 of £5 million per club.

How would this work then? Would this mean a loss of £18m instead of £13m- and Covid losses for quite a few clubs would significantly exceed this.

20 minutes ago, Davefevs said:

It seems as if Kieran didn’t know where he got the figure from! ???

It's all very wooly isn't it. I can trace back the original starting point of the number to articles in the Telegraph and then in the column Ahead of the Game.

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15 minutes ago, cidered abroad said:

@Mr Popodopolous

 Did we get any income for using the South Stan concourse for Covid jabs?

Good question- nothing specific that I can see in the AGL accounts or the club accounts- or the BCFC Holdings accounts for it.

Maybe it would appear in 2021/22 because they finally stopped doing vaccinations down there in late July IIRC.

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20 minutes ago, Mr Popodopolous said:

How would this work then? Would this mean a loss of £18m instead of £13m

You would work out your P&S FFP position for the 2021/22 accounts and then make a further adjustment in your favour of £5 million.

20 minutes ago, Mr Popodopolous said:

Covid losses for quite a few clubs would significantly exceed this

Maybe for 2021/22 season they do.  But I guess that the methodology was agreed before the season started as a rough and ready simple solution.

Edited by Hxj
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17 minutes ago, Mr Popodopolous said:

While I'm at it, my calculations- amortisation bill cut by £4m but am unsure on the wage cut- one article suggested £6m but has anyone got any more accurate figures? Think Bristol Post said 20%, £6m something like that.

Amortisation in 20/21 BCFC Ltd (football side rather than Holdings) was £12.358m.

The projection for:

  • 21/22 is £6.698m (down £5.669m on 20/21)
  • 22/23 is £6.631m (down £5.727m on 20/21)
  • 23/24 is £0.947m (down £11.411m on 20/21)

Obviously this will change due to contract extensions, transfers in and out, etc.

Thats almost £23m in total, a significant reversing trend!

Edited by Davefevs
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Quick caveat….when I do my amortisation calculations I tend to work in seasons rather than years, e.g. 30/6 contract expiry, whereas financial year end is 31/5.  And contract extensions tend to use 6 / 12 months for the windows.  It’s not exact, but we’re talking +/- £0.1m 

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IF we slide into the FFP issue, with an embargo and then more, I predict that we will not be under the Professional Standing one but the other type- the one that Reading appear to be under.

The below could be pertinent to us- if we reach that point but...

Quote

In relation to Profit & Sustainability rule breaches, under what circumstances would a Championship Club operate under an Embargo?

If a Club fails to provide the required information in relation to Profit & Sustainability rules, then they will be subject to an Embargo.

Clubs that don’t forecast to breach the Upper Loss Threshold within their submissions – but only on the basis of future receipts – will also be subject to an Embargo.

Clubs that breach the Upper Loss Threshold will also be subject to an Embargo.

A Club is under Embargo in relation to a Profit & Sustainability rule breach, is there any circumstances under which that Club can register players?

Each individual case will be determined by the EFL, though considerations will be given in the circumstances of:

Re-engagement with currently registered players

Signing an Emergency Loan Goalkeeper

Academy players

The Club having less than 24 Established Players

Established Player (Championship Clubs) - A player aged 21 or over as at the 30 June immediately prior to the commencement of the season in which the Club is subject to the Embargo and who has been named in the starting XI on a total of at least five occasions*.

*in EFL League, EFL Cup, EFL Trophy, FA Cup or equivalent competitions for any Club in any equivalent League to the Championship or higher.

How is the number of players these Clubs can acquire managed?

If the Club has 24 or more Established Players they can only sign new players on a one in one out basis, though this will be dependent upon the circumstances of the individual Club and will be determined by the League.

Where a Club has less than 24 Established Players they can register players up to the 24 limit, though again this will be dependent upon the circumstances of the individual Club and will be determined by the League.

In short, the number of signings we can make might be determined by how many players at or above the age of 21 who have made 5 starts at least, we have by the start of 2022/23 on the books at the time. I assume too that there would be limitations in terms of leverage- see the Derby and Reading cases- when the EFL push for an agreed sanction if it reached that stage.

Although another take on this regulation is that only if we breach next season might it come in, for 2023/24 along with either a points deduction or an Independent Disciplinary Commission. Devil is in the detail although good to be prepared for all outcomes.

Loaning players out wouldn't increase the numbers, selling or releasing would.

I listened to the stuff btw mentioned elsewhere on the Podcast by @NcnsBcfc and it was good but I'm not convinced we avoid a deduction if we overspend either in 2022/23 or in the following season. Maybe it's mitigated by good conduct or maybe the amounts lost to Covid combined with heavy lifting this summer keep us clear but if we breach it's a deduction and possible business plan IMO.

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I've done a few different calculations- and this is prior to January ie the main business being Klose in on a 6 month deal with Bakinson loaned out. Unsure that would swing it vastly either way but maybe?

The simple approach...subtract revenue from 2018/19 to 2020/21 via 2019/20. I've modelled a couple of different scenarios. This doesn't include unknowns such as future transfer profits, future sell on clauses- how far revenue has bounced back or otherwise from the 2018/19 peak, how far we have been able to slash costs outside of wages and amortisation. Am using the Bristol City Holdings as my reference point because I believe it to be the Reporting Entity for P&S/FFP. Can't be bothered to do spreadsheets etc at this juncture, maybe later. Could there be a nice fee for the Covid Vaccination in the South Stand that comes through in the 2021/22 accounts?

Quote

Good

Aggregate loss across 2019/20 and 2020/21 was £48,507,376.

Of that, there is an estimated £10m of usual FFP costs over the two seasons, ie £5m per season, Lop £10m off then.

In this scenario, we can put through the entire revenue hit from these two seasons. This would be a great help. It will also see our total revenue this season at least bounce back to 2019/20 levels- optimistic? For comparison, I note that Derby have claimed a £20m revenue hit over the 2 seasons and our baseline revenue pre Covid in recent times, has been not far off theirs- not saying it's as high as that but it could be between £15-20m.

Revenue 2018/19

£30,250,718

Falls down to in the slightly Covid affected season.

£27,235,826

Some might see that as a £3,014,892 hit year on year. Not delved down into the granular detail.

In the season fully hit by Covid our Revenue was £16,652,708.

A further fall of £10,538,118.

Total attributable to Covid based on this- cumulatively we're talking £16,612,902.

Aggregated adjusted  loss=£31,894,474- add back the usual £5m per year on FFP costs and it's £21,894,474.

Halved it is £10,947,237.

Remember too though that we averaged transfer profits of £15,899,385.5- this has been good at masking losses for us and other clubs and when that well runs dry...

The best way is to then take 2020/21 in isolation- a £33,433,125 FFP loss but revenue also bounces back by £10,538.118- then you add in the likely £6m in wage savings and £4m in amortisation but also lop off £6,210,899 in Profit on disposal of Player Registrations.

£19,060,906 in FFP losses probably.

Which means that our aggregate 2 year loss would be £30,008,143.

Seen estimates of a £2m wage saving if everyone out of contract goes in the summer and we sign nobody. Let's assume revenue stays the same and transfer profits also- next season might be looking at a £17m FFP loss.

Might have a £8m hole to fill in 2022/23 although there are a number of assumptions at play.

That could be a good one but what about slightly less optimistic ones?

Quote

Medium scenario

Pretty much as above except for the amounts attributable to Covid being lower. In the sense that Loss year on year 2019 to 2020=£3,014,892 and then 2020 to 21=£10,538,118. This way of measuring it means our Covid losses would be £13,598,010.

£48,507,376-£10m-£13,598,010. Our FFP loss is therefore £24,909,366, but aggregated and halved it is £12,454,683.

The rest remains the same- bounceback in revenue etc, £19,060,906. Two year aggregate=£31,515,589.

Again with the £2m in wage savings come summer 2022 and no signings but also assuming no profit on disposal of players it's £17,060,906.

That mans that for rounding purposes, going into 2022/23 it is a hole of £9.57m!?

Now what about if media reports are true about only permitting £5m in Covid losses- dunno if there was a vote etc, or if it is still up for debate.

Quote

BAD scenario- ie Worst case probably

None of these scenarios are great but the following numbers inputted much the same but the media stories about only £2.5m per season or £5m over 2 seasons are permissible for Covid.

That basically means you only lop off £5m in Covid losses from the prior 2 seasons, and the usual £5m per season. The FFP loss would therefore be £16,753,688 once aggregated and halved etc.

2021/22 and 2022/23 remain the same- that means you add it up the same and in this one our hole to fill is off into the stratosphere- £13.87m!? That's not far off a 12 point breach, think it is/was in the 10-11 point bracket.

That's assuming that revenue hasn't yet bounced back to £30m levels, that we don't gain profit on transfer or sell on clauses and that ALL of Simpson, Cundy, Klose, King, O'Dowda and Martin leave and aren't replaced- any additional fees, wages add to this hole. Unsure what happens to Moore and Bakinson in this scenario.

I will concede that I often err on the side of pessimism and caution in these matters- if I've underestimated legitimately excludable costs and revenue all good. If I have vastly underestimated savings or the extent to which revenue bounces back then excellent. Hell could it even be the £5m in addition to the regulation about Covid costs- in which case we wouldn't have much pf a problem and given the number out of contract in summer 2023 if we can get through this little period unscathed we have room to breathe and hopefully build on some of the good things.

Edited by Mr Popodopolous
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Of course had we sold Kelly a fortnight or so later- how much did he go for in 2019- was it £13m?

Had we sold him at that stage, we would still have been compliant AND it would have given us an extra once averaged out £6.5m in the period to 2023. Not for cash splashing but for breathing space as it now turns out.

Of course there are things that we can do subject to any EFL limits- extending Kalas and Massengo reduces the annual amortisation charge a bit. IF we get a sell on for Kelly or Webster then impairing Palmer and Wells can help us to ease them out- less amortisation to worry about and clubs might pay the wages, ie the Kelly or Webster sell on might absorb this. Sell on clauses for Kelly, Webster let alone both at the sort of fees being touted would help out a lot. Player sales obviously will be something we have to consider come the summer. Under a business plan however, contract extensions for Kalas and Massengo might exceed allowable salaries. See Derby's contract extension for Marriott being cancelled by the EFL, Birmingham being unable to renew Morrison in 2018, Reading reportedly even unable to renew Josh Laurent the other year, Stoke unable to renew last April, Nick Powell. This then leaves us with a dilemma if we fall into that scenario. Would actually resolve the worst case scenario if Kelly went for £50m and Webster for £60m- as touted in January given the sell on clauses and give us a little bit to strengthen as well.

Remember that worst case is probably not how it plays out as well.

Edited by Mr Popodopolous
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I won't quote you @Mr Popodopolous due to the length of your posts, but just to say that the reason I am thinking Worst Case is because of the that Richard Gould has pushed for changes. I think if we were safe enough he would just be sitting back and letting others make waves.

Edited by Port Said Red
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