Operation let's avoid Failing FFP

[Mr Popodopolous]

Maybe I'm overstating the risk- well it wouldn't be the first time. 

Think we'll be fine to 2021/22 but the trouble if it arises is likely to be to be the season. Owing to monitoring of the future as well as the past and importantly the present, what I can see as possible is EFL and club sitting down in the summer, Gould even alluded to it.

If we are on track to fail to 2023, we will be expected to fill the hole. To remain at or below £39m (adjusted for allowances and Covid costs).

Unfortunately for us and I assume a range of clubs, the Covid number that had been mooted is £5m!!

I have a few ideas on how to fill that hole though some are fairly unpalatable. The contract extensions subject to wage limits can also pose an issue.

Bentley- Sell

Kalas- Seek to extend, even by 1 year but maybe longer.

Massengo- Extend or sell.

Purpose of extension for these 2 was mentioned by @Davefevs a while back was to smooth the amortisation. Obviously they're 2 of our better players too

What of the out of contract? Simpson, Cundy, King, O'Dowda and Martin. Simpson can probably go but what about the rest? Decisions to be made.

Now for some of the more unpalatable bits. Subject to fees and possibly sell on clauses we use part of them to restructure.

Eg a bit of a windfall and perhaps we look to loan out Wells or pay him off and accelerate the Impairment hit.

Palmer. Wasn't there a link with Dean? Perhaps we trade and accept the amortisation hit- Dean we can maybe use due to fears over Baker's long term fitness or we look to flip- he would join at zero Book Value, that could be pure profit.

Some of these options are less than desirable but trying to think outside the box a bit- over to you lot.

On the other side, naming rights for AG, individual stands and so on? All suggestions welcome :laugh:.

Forgot to add, Moore- to Hearts again, permanent deal there or perhaps elsewhere owing to his good form there perhaps.

We've done some of the heavy lifting granted.

Edited January 15, 2022 by Mr Popodopolous

[Major Isewater]

I like the fact that Gould is challenging the EFL and prefers à points deduction to selling the family jewels.

 

[Mr Popodopolous]

I'm unsure challenging the EFL usually ends well for clubs. The EFL have a range of powers that have only been enhanced in recent times.

What happens if we are under a Business Plan in 2022/23 and we have Bentley, Kalas, Massengo expiring in June 2023- would they fall within allowable limits? DaSilva and Palmer, wages exceed then that could be a theoretically saleable asset leaving on a free!

A deduction and all that can come with it isn't to be taken lightly.

Edited January 15, 2022 by Mr Popodopolous

[Mr Popodopolous]

Course the simplest and cleanest solution would be winning the playoffs this season but no chance surely!!

[Supersonic Robin]

20 minutes ago, Mr Popodopolous said:

Unfortunately for us and I assume a range of clubs, the Covid number that had been mooted is £5m!!

£5m!?!?! Is that it!?!?! I recall seeing suggestions that it would be closer to 2 or 3 times that a couple of weeks ago!

Any idea of the logic the EFL are using to arrive at that number?

[Mr Popodopolous]

7 minutes ago, Supersonic Robin said:

£5m!?!?! Is that it!?!?! I recall seeing suggestions that it would be closer to 2 or 3 times that a couple of weeks ago!

Any idea of the logic the EFL are using to arrive at that number?

It shocked me too.

Could just be paper talk but I think the Telegraph article suggested it, Bristol Post (well nothing original of its own) did and Matt Hughes with his excellent Ahead of the Game also referenced £5m in Gate Receipts.

3 minutes ago, billywedlock said:

I think there are a few areas , namely ffp , where efl are on weak ground with parachute payments . It maybe challenged in the near future 

May well be the case in the medium term, but I think the big pressing priority is to get ground rules established on wha

In fairness the EFL themselves have a significant issue with Parachute Payments. 

I have seen it cited that however Solidarity Payments are tied to acceptance of a) Parachute Payments and b) The harmonised (although the harmonisation seems to be heavily enforced at EFL level, PL level not too much- with the PL not that vigorously chasing those who went up).

[Davefevs]

I think much depends on how much is “covid allowable”, football + commercial or just football.  That drives whether next season’s cycle is a small amount over £39m or a larger amount.  I have no concerns about the cycle ending this season (21/22)

Although we do have to work with the EFL we have this window and 2 more after it before the end of 22/23 cycle….you could argue a flash sale before 31/5/23 is ok too.  So there is time to sort.

As you say, above there are lots of individual decisions to make, that combined get us back in line.

There’s probably £2.0m-2.5m in wages to save in players OOC this summer.

And many players OOC in summer 2023, like Kalas, Massengo, Wells, Palmer, Bentley etc can have decisions made on them.  Some, the sooner the better!!

We do have to recruit though, but it’s gonna be free transfers and Tanner-types over the next few windows unless we get a windfall from Kelly, Webster or Brownhill.

 

 

Mr P - the one thing I’ve added to my spreadsheet this time is a load of notes to document my assumptions.  Therefore as things change, e.g. players leave, re-sign contracts etc, I can more accurately re-baseline.

 

Edited January 15, 2022 by Davefevs

[Redstart]

If Semenyo suddenly starts banging them in then that may lead to a windfall.

[Davefevs]

Mr P - when the window is over and we see if there’s any ins / outs and adjustments to my estimates, I’ll ping you over my xls.  

[Mr Popodopolous]

4 minutes ago, Davefevs said:

Mr P - when the window is over and we see if there’s any ins / outs and adjustments to my estimates, I’ll ping you over my xls.  

I'll take a look at some figures myself Dave and perhaps we can exchange some notes after the window slams shut.

The bit that shocks me in this issue is how reports suggest that only Matchday revenue maybe a criteria. To me it's:

*Matchday Revenue perhaps net of costs saved, including season ticket and ticket rebates.

*Corporate/Events Revenue again perhaps net of costs saved.

*Costs incurred through paying full wages rather than furlough.

*TV rebates.

Can't think of much else but these 4 seem the fair categories here.

[Pezo]

56 minutes ago, Major Isewater said:

I like the fact that Gould is challenging the EFL and prefers à points deduction to selling the family jewels.

 

The problem with that is we don't own the family jewels we have expensive contracts to rent them.

@Mr Popodopolous how many of your ideas do you think we actually need to do?

Selling players is all about how much they cost us IMHO so selling someone like Pring won't be anywhere near as good as selling JD, selling Semenyo wouldn't be as good as selling Wells. So what we want is other teams to buy the players that are costing us the most, what we really don't want to do is sell people like Pring, Scott and Semenyo because going back out to the market and replacing them is going to cost us more in the long run even if they are league 1 players.

[KegCity]

Quite happy to shift Bentley and Kalas, Max is a competent number one and I think there’s surely better value for money centre backs than Kalas. I don’t think he’s justifying his wage at the moment.

[Bedred31]

Everyone seems convinced that we will escape relegation this season, but I’m not. The fact that the club seems desperate to secure good offers for Mass. and Bentley, without any additions this window to an already below average squad, terrifies me. I do appreciate that tough talk is easy, as is spending someone else’s money, but I think I would do whatever it takes to survive now, and take the consequences in due course. It seems to me that when other championship clubs start to report horrendous losses, as they assuredly will, the pressure will mount on the EFL to relax the rules temporarily. Either way, I can’t conceive of dropping a division, and any risk of doing so is too high.

[Pezo]

2 minutes ago, KegCity said:

Quite happy to shift Bentley and Kalas, Max is a competent number one and I think there’s surely better value for money centre backs than Kalas. I don’t think he’s justifying his wage at the moment.

We get rid of Kalas and we will ship 6 goals every week. And this is the problem, who's going to buy him? Who are we going to sign to replace him? We need a stronger defence with Kalas - without him we don't have a defence.

[Slack]

1 hour ago, Mr Popodopolous said:

Course the simplest and cleanest solution would be winning the playoffs this season but no chance surely!!

Still never hurts to dream

[Supersonic Robin]

5 minutes ago, Bedred31 said:

Everyone seems convinced that we will escape relegation this season, but I’m not. The fact that the club seems desperate to secure good offers for Mass. and Bentley, without any additions this window to an already below average squad, terrifies me. I do appreciate that tough talk is easy, as is spending someone else’s money, but I think I would do whatever it takes to survive now, and take the consequences in due course. It seems to me that when other championship clubs start to report horrendous losses, as they assuredly will, the pressure will mount on the EFL to relax the rules temporarily. Either way, I can’t conceive of dropping a division, and any risk of doing so is too high.

We should be fine. There are definitely 3 worse teams than us this year, probably more.

I don't get the impression that the club are actively trying to sell Massengo or Bentley (perhaps quite the opposite in Massengo's case).

[grifty]

18 minutes ago, KegCity said:

Quite happy to shift Bentley and Kalas, Max is a competent number one and I think there’s surely better value for money centre backs than Kalas. I don’t think he’s justifying his wage at the moment.

So you're saying to sell the only defender we have because there 'might' be better value for money centre backs elsewhere?

There's about 8 players who aren't justifying their wage more than Kalas who plays every week and had to do the job of 3 defenders every game.

[Davefevs]

28 minutes ago, Pezo said:

The problem with that is we don't own the family jewels we have expensive contracts to rent them.

@Mr Popodopolous how many of your ideas do you think we actually need to do?

Selling players is all about how much they cost us IMHO so selling someone like Pring won't be anywhere near as good as selling JD, selling Semenyo wouldn't be as good as selling Wells. So what we want is other teams to buy the players that are costing us the most, what we really don't want to do is sell people like Pring, Scott and Semenyo because going back out to the market and replacing them is going to cost us more in the long run even if they are league 1 players.

No, it’s the opposite of that.  Pring and Semenyo are valued at £0 in the books, so anything we sell them for is profit.  For Kalas we have to sell him for more than £3m (current asset value in the books) to make a profit.

[Ska Junkie]

I do wonder, when other Championship clubs enter their figures, whether many clubs are going to be in the same position? Surely, if that is the case, the EFL would have to reassess the Covid issues?

[Davefevs]

12 minutes ago, Ska Junkie said:

I do wonder, when other Championship clubs enter their figures, whether many clubs are going to be in the same position? Surely, if that is the case, the EFL would have to reassess the Covid issues?

If we are looking at the cycle ending 21/22 (this season) I think most clubs will be fine.

Going into next season’s cycle 22/23, then most of the PP clubs will be ok, so they will be “I’m alright Jack”.

A number of low budget clubs will be ok too, because they weren’t pushing the limits.

Its in that mid-group of clubs, the ones who’ve got a bit careless with their spending, that are really gonna have to scale back.  City, Cardiff, Forest, Stoke, Boro, those types of club.  Those last three are maybe hoping for promotion to avoid it becoming an issue.

So, in summary I don’t think it’s gonna be everyone in the same boat.  Not everyone is gonna have sympathy for us, Stoke, etc.

Our best bet is to get our own house in order.  There are multiple ways around it, plus working with the EFL at this early stage (18 months before the end of the cycle likely to be the tightest) is only gonna be favourable for us.

[Ska Junkie]

4 minutes ago, Davefevs said:

If we are looking at the cycle ending 21/22 (this season) I think most clubs will be fine.

Going into next season’s cycle 22/23, then most of the PP clubs will be ok, so they will be “I’m alright Jack”.

A number of low budget clubs will be ok too, because they weren’t pushing the limits.

Its in that mid-group of clubs, the ones who’ve got a bit careless with their spending, that are really gonna have to scale back.  City, Cardiff, Forest, Stoke, Boro, those types of club.  Those last three are maybe hoping for promotion to avoid it becoming an issue.

So, in summary I don’t think it’s gonna be everyone in the same boat.  Not everyone is gonna have sympathy for us, Stoke, etc.

Our best bet is to get our own house in order.  There are multiple ways around it, plus working with the EFL at this early stage (18 months before the end of the cycle likely to be the tightest) is only gonna be favourable for us.

Totally understood  Fevs. The EFL surely can't punish lots of clubs though? It would make a mockery of the 22/23 season if (eg) 10 clubs are punished? Those clubs mentioned are surely going to have struggled with Covid as well?

Edited January 16, 2022 by Ska Junkie

[Davefevs]

5 minutes ago, Ska Junkie said:

Totally understood  Fevs. The EFL surely can't punish lots of clubs though? It would make a mockery of the 22/23 season if (eg) 10 clubs are punished? Those clubs mentioned are surely going to have struggled with Covid as well?

Yeah, agree, just not convinced it’ll be as many as 10.  I guess when we see a few more accounts come out we might get a better feel.  Who knows it might be more than 10.

[Mr Popodopolous]

1 hour ago, Davefevs said:

Its in that mid-group of clubs, the ones who’ve got a bit careless with their spending, that are really gonna have to scale back.  City, Cardiff, Forest, Stoke, Boro, those types of club.  Those last three are maybe hoping for promotion to avoid it becoming an issue.

Largely agree with your assessment- one exception. Cardiff might get an outrageous lifeline- if they win the Sala case then the treatment of the fee- provision in the 2018/19 accounts that still appears to be in there. Where that goes and how it is accounted for and then in an FFP context is very important.

I totally agree though- will be a lot of self-interest around, low budget clubs had less to lose financially so won't lose it- mid-range group of clubs seem at risk.

Getting our own house in order and working with the EFL seems like the best approach from here- proclaiming or letting it be known that we are considering using experts and independent auditors to try and find out whether we can claim for notional transfer income- worth a go maybe but strikes me as not being terribly smart.

Edited January 16, 2022 by Mr Popodopolous

[Mr Popodopolous]

3 hours ago, Pezo said:

@Mr Popodopolous how many of your ideas do you think we actually need to do?

Unsure- may just be the lower end of it if it's only a modest overspend.

My calculations have always been on the basis that we won't exceed £39m but that it will be a tough season and a tough season next year in the market and we can spend with a bit more freedom in 2023/24!

There are undoubtedly factors that can help us- and that can hinder us. Plenty of unknowns.

Sell on clauses would be a big help and if Kelly goes for the fees mooted could even move the dial a bit. Assume we have sell on clauses for Ayling, Webster, Kelly and Brownhill? Magnússon and Eliasson too?

Covid losses- I think the criteria I set out are the sensible ones but a lot will depend based on precedent on what costs and types of costs Derby and Reading were allowed to exclude- because when they reached settlements to 2021 with the EFL, I assume that some kind of Covid related addbacks would have occurred- £5m cap on matchday revenue sounds too thin as there were plenty of income streams hit for clubs. If that is all Derby and Reading were granted though then it puts the EFL in a difficult position is my thinking.

Edited January 16, 2022 by Mr Popodopolous

[KegCity]

7 hours ago, Pezo said:

We get rid of Kalas and we will ship 6 goals every week. And this is the problem, who's going to buy him? Who are we going to sign to replace him? We need a stronger defence with Kalas - without him we don't have a defence.

We’ve conceded 45 goals already. Kalas has been sloppy for the last 2 seasons.

 

7 hours ago, grifty said:

So you're saying to sell the only defender we have because there 'might' be better value for money centre backs elsewhere?

There's about 8 players who aren't justifying their wage more than Kalas who plays every week and had to do the job of 3 defenders every game.

We need an entirely new set of defenders and shifting Kalas is a good way to fund them. He’s been hit and miss since Webster left so taking his wages off the books and signing a centre back who can head a ball seems sensible to me.

Kalas is not the defensive messiah some view him as. He puts players around him in trouble with dodgy passing at times, doesn’t organise and doesn’t deal with anything in the air. If we can get a Webster style centre back to do that for him then great, but I don’t see that happening without sales.

[Major Isewater]

8 hours ago, Redstart said:

If Semenyo suddenly starts banging them in then that may lead to a windfall.

Let’s hope he stops banging theme in until the transfer window closes.

[Waconda]

5 hours ago, Davefevs said:

Yeah, agree, just not convinced it’ll be as many as 10.  I guess when we see a few more accounts come out we might get a better feel.  Who knows it might be more than 10.

8 - 10 would be a decent guess I would think.

Some sort of COVID "right off" will come into play, I would think.

[Pezo]

8 hours ago, Davefevs said:

No, it’s the opposite of that.  Pring and Semenyo are valued at £0 in the books, so anything we sell them for is profit.  For Kalas we have to sell him for more than £3m (current asset value in the books) to make a profit.

Ok, that seems counter intuitive to me, I thought it was about shifting wages and Kalas and Wells are going to be on higher wages than Pring and Semenyo?

Also if we sell the likes of Pring and Semenyo we would have to go replace them at an additional cost in terms of fee and wage.

[Guest]

10 hours ago, Mr Popodopolous said:

Course the simplest and cleanest solution would be winning the playoffs this season but no chance surely!!

As said on another thread we SHOULD be matching/competeing with most of the teams in the play offs atm even with our current squad and at least a couple more just outside.

Really there is no reason why we shouldnt be, apart from WBA there is no-one to fear up there, even they (WBA) are not unbeatable; poor team selection and management is keeping us where we are.

Edited January 16, 2022 by gl2

[bexhill reds]

10 hours ago, Bedred31 said:

Everyone seems convinced that we will escape relegation this season, but I’m not. The fact that the club seems desperate to secure good offers for Mass. and Bentley, without any additions this window to an already below average squad, terrifies me. I do appreciate that tough talk is easy, as is spending someone else’s money, but I think I would do whatever it takes to survive now, and take the consequences in due course. It seems to me that when other championship clubs start to report horrendous losses, as they assuredly will, the pressure will mount on the EFL to relax the rules temporarily. Either way, I can’t conceive of dropping a division, and any risk of doing so is too high.

No, the underlying performances of late suggest that a good run is possible especially with the games coming up. A decent Jan/Feb and we’ll be fine. Next season however could be problematic without improvement, there’s unlikely to be a couple of teams with large points deductions and those teams coming up, Sunderland especially (unless there is the standard 2nd half seasonJohnson implosion), could well be well set for Championship football.