Points Deduction - When will we know?

[Mattredrobin]

Thinking back to Richard Gould's interview with twentyman at the last game of the season i'm sure he said we'd asked the efl to give clarity on this around the middle of june so i'm sure we should hear something soon.

[Davefevs]

3 minutes ago, Mattredrobin said:

Thinking back to Richard Gould's interview with twentyman at the last game of the season i'm sure he said we'd asked the efl to give clarity on this around the middle of june so i'm sure we should hear something soon.

Yep, EFL meetings are this week.

[Mr Popodopolous]

6 minutes ago, Mattredrobin said:

Thinking back to Richard Gould's interview with twentyman at the last game of the season i'm sure he said we'd asked the efl to give clarity on this around the middle of june so i'm sure we should hear something soon.

One prediction of mine is that it might not be an instant deduction but perhaps some monitoring tied to targets- ie if we had a several million pound hole to fill, fill it by the time the projections go in- or get docked the agreed/commensurate amount in the spring.

A number of clubs will also likely be in the same boat.

[chinapig]

1 hour ago, Mr Popodopolous said:

I make the FFP hole to be filled perhaps £4-5m, maybe £6m at a push so it certainly isn't insurmountable

Does that take into account the significant reduction in the wage budget we made last summer?

[Davefevs]

21 minutes ago, chinapig said:

Does that take into account the significant reduction in the wage budget we made last summer?

Yes….if Mr P is working to similar estimates as me.

My estimate is about £3m gap…but is based on no player sales and a bit of re-contracting / extending (smoothing amortisation over longer period).  It includes the likes of O’Dowda not having his option exercised for example.

Edit: once a few more deals are known, I’ll do a refresh of my estimates.

Edited June 9, 2022 by Davefevs

[Sir Geoff]

Doesn't matter when their contracts run out, the sell on clause carries over.

[Monkeh]

On 28/04/2022 at 09:04, And Its Smith said:

And it would be further mismanagement if we had points deducted 

The damage is already mostly done

[Bar BS3]

Surely there's no real chance of us actually getting a points deduction..? 

I could be wrong, but it's complete scaremongering nonsense. 

[PHILINFRANCE]

1 hour ago, Sir Geoff said:

Doesn't matter when their contracts run out, the sell on clause carries over.

Although presumably, if, for instance, LK’s contract were to run out, and he signed for X club on a free transfer, there would be no (transfer) fee and, consequently, nothing paid to us as a result of any transfer profit.

[Davefevs]

1 hour ago, Sir Geoff said:

Doesn't matter when their contracts run out, the sell on clause carries over.

Some sell-ons / add-ons include time stipulations, e.g. 20% sell-on within the next 3 years.  I’ve no idea how commonplace they are though.

[And Its Smith]

4 hours ago, Monkeh said:

The damage is already mostly done

We won’t get a points deduction so clearly it has been reversible. Which is why I said it would be further mismanagement if we were to get one. 

[Mr Popodopolous]

5 hours ago, Bar BS3 said:

Surely there's no real chance of us actually getting a points deduction..? 

I could be wrong, but it's complete scaremongering nonsense. 

I'd be interested in this the reasons behind the take- we may well avoid an FFP points deduction or even tough monitoring requirements but I am interested in the reasons as to why

1 hour ago, And Its Smith said:

We won’t get a points deduction so clearly it has been reversible.

This too.

As I said earlier in the thread too, the enhanced monitoring requirements can be more damaging than a points deduction.

By my numbers, the deduction to be faced as things stand at this second would be either- baseline followed by mitigating and aggravating potential factors- I reckoned a £4-5m overspend quite possible therefore...

Baseline points to overspend ratio

1. £4m overspend- falls within the £2-4m bracket and this is 4 points.
2. Somewhere between £4-5m overspend- falls within the £4-6m bracket and this is 5 points.

Mitigating

One point back for compliance, cooperation and efforts to comply- see the other BCFC v EFL in 2018/19. This might take the deduction down to 3-4 pts.

Aggravating

Up to 3 pts if we did not sell players to make good the deficit- this was what the EFL were pushing for in the Birmingham 2nd case- a deduction that as it turned down if upheld would have sent them down although it looked insignificant in Spring 2020.

Total if we fall foul

Could be anything between 3-7 pts- part of which maybe suspended- see Reading, docked 6 and a further 6 suspended subject to compliance with their Business Plan which lasted from mid November 2021 to the end of June 2023. Falling foul would not mitigate against or preclude from further punishment.

That said Reading's overspend was absurd and ours patently would not be in that bracket.

Like I say though the actual deduction that this kind of overspend could bring, it might not be so damaging- the issue is more the risk of enhanced monitoring requirements, such as lacking approval for signings above certain wages but also contract extensions.

I've read the regs and read all the cases...no two are identical but there are undoubted precedents and some basic principles in the equation too.

Edited June 9, 2022 by Mr Popodopolous

[Mr Popodopolous]

Small update here- nothing concrete but Kieran Maguire thinks we might have 'baked in' one for this upcoming season.

Based on the regs, I'd say the earliest would be March when the Projections go in- I also stand by my estimates above of the overspend and potential tariff, plus aggravating and mitigating (if any) factors.

If no mitigating or aggravating factors, 4 or 5 points?

https://www.bristolpost.co.uk/sport/football/bristol-city-points-deduction-finance-7219960

@Davefevs @chinapig @BCFCGav 

On 09/06/2022 at 18:10, Sir Geoff said:

Doesn't matter when their contracts run out, the sell on clause carries over.

Agreed, my main thinking was that if contract extended then it retains value better or makes a sale less likely- both are possible!

Still interested in why @Bar BS3 thinks there is zero chance- if we trade within limits as we always have then this is true, but if not? "Complete scaremongering nonsense"? Time will tell.

[Davefevs]

1 minute ago, Mr Popodopolous said:

Small update here- nothing concrete but Kieran Maguire thinks we might have 'baked in' one for this upcoming season.

Based on the regs, I'd say the earliest would be March when the Projections go in- I also stand by my estimates above of the overspend and potential tariff, plus aggravating and mitigating (if any) factors.

If no mitigating or aggravating factors, 4 or 5 points?

https://www.bristolpost.co.uk/sport/football/bristol-city-points-deduction-finance-7219960

@Davefevs @chinapig @BCFCGav 

Agreed, my main thinking was that if contract extended then it retains value better or makes a sale less likely- both are possible!

Still interested in why @Bar BS3 thinks there is zero chance- if we trade within limits as we always have then this is true, but if not? "Complete scaremongering nonsense"? Time will tell.

I replied to Benjamin Bloom / Kieran Maguire yesterday on twitter.

[Mr Popodopolous]

3 minutes ago, Davefevs said:

I replied to Benjamin Bloom / Kieran Maguire yesterday on twitter.

So you did! About to watch it myself...even with the stadium sale and that, Stoke's numbers going into 2022/23 must be looking very dicy given they are on £39m losses to 2021/22 and Parachute Payments ended in 2020/21.

[Mr Popodopolous]

Something just gives me a gut feeling that we will be the only club docked points although I could be wrong- and I hope I am wrong, will look at my estimates for Stoke again- I think Gibson will sell some if required, Spence for £20m will help no end if it goes through. Tavernier to Bournemouth for £10m is also being suggested.

Edited June 17, 2022 by Mr Popodopolous

[Mr Popodopolous]

Back to us, one key bit in that article and not solely Kieran Maguire- well I think it maybe important anyway, maybe not who knows.

Lack of clarity doesn't help- seems we (and probably a few clubs) are waiting still. Stoke have (supposedly) cut their wage bill by £20-23m from 2020/21 to 2021/22 but how feasible does that actually sound?? One report suggested that their current wage bill was £27m...from £54m in 2019/20 and £50m in 2020/21.

Quote

The EFL are also yet to confirm if transfer “add-backs” will be permitted in submissions with City’s argument being that Covid-19 and playing a season behind closed doors led to the collapse of the transfer market outside of the Premier League, therefore their business model of leaning towards transfer revenue was adversely affected from 2020 onwards. The league has already allowed such add-backs for lost ticket revenue of £5m and £2.5m but transfer income is a more subjective figure to calculate.

Having hired independent auditors to asses the impact, the Robins estimate they lost around £30m in potential revenues, a figure that, again, would allow them to meet P&S and avoid a points deduction.

Feels to me like we are relying on this somewhat. It also says £5m and £2.5m...I hope that is as I understand it, £5m x 2 and £2.5m otherwise add £2.5m onto the shortfall to be made up. Ticket revenues is one thing but what of commercial revenues. Transfer add-backs is quite suspect however- put it to a vote of clubs?

Would be unfortunate indeed if we did business now and found out sometime in July- after all the accounts for the 24 are in and the updated Projections for 2021/22 that in fact it was not to be included and we had a £5-6m, or £4-5m hole to fill by March!

It also mentions a player wage bill- dunno if that is solely wages or includes tax, NI etc- of £20m in the article. A few errors and questionable points in the article but the bolded bit could be quite key.

Edited June 17, 2022 by Mr Popodopolous

[chinapig]

2 minutes ago, Mr Popodopolous said:

Back to us, one key bit in that article and not solely Kieran Maguire- well I think it maybe important anyway, maybe not who knows.

Lack of clarity doesn't help- seems we (and probably a few clubs) are waiting still. Stoke have (supposedly) cut their wage bill by £20-23m from 2020/21 to 2021/22 but how feasible does that actually sound??

Feels to me like we are relying on this somewhat. It also says £5m and £2.5m...I hope that is as I understand it, £5m x 2 and £2.5m otherwise add £2.5m onto the shortfall to be made up. Ticket revenues is one thing but what of commercial revenues. Transfer addbacks is quite suspect however.

I agree on transfer add backs, an entirely hypothetical loss of revenue. The EFL should resist it imo.

Agree also re commercial revenues, which could easily be based on an average of say the previous 2 years.

Nevertheless the EFL has done a better job than the PL whose approach seems to be to accept whatever figures the club's make up. Everton losing £300m over 3 years but P&S compliant? No problem, carry on spending chaps!

 

[Mr Popodopolous]

24 minutes ago, chinapig said:

I agree on transfer add backs, an entirely hypothetical loss of revenue. The EFL should resist it imo.

Agree also re commercial revenues, which could easily be based on an average of say the previous 2 years.

Nevertheless the EFL has done a better job than the PL whose approach seems to be to accept whatever figures the club's make up. Everton losing £300m over 3 years but P&S compliant? No problem, carry on spending chaps!

 

Everton one really grates...Aston Villa were strong candidates too until the sale of Grealish for £100m and tbh they seem to have improved on player trading a bit as well, but yeah those losses are a disgrace for Everton. As for Aston Villa, I hope that IF they return and no matter when, the EFL launch an inquiry- John Percy in late 2019 and Nixon in summer 2020 thought had they dropped trouble would have been ahead. Everton wise, do hope Leeds and Burnley continue to push the issue.

Commercial revenue- that's an idea, mine was more simplistic tbh- if £10m commercial revenue in 2018/19, £8m in 2019/20 and I dunno £3m in 2020/21 then add back £9m in commercial revenue- I've made those numbers up but commercial revenue, ticketing revenue and a couple of other categories- not though transfer add-backs..

Edited June 17, 2022 by Mr Popodopolous

[BCFCGav]

@Mr Popodopolous thanks for the updates. So layman’s terms, we’re looking likely to be deducted points but won’t know until next March, at which point they’d be deducted from the current league table (ie 2022-23)? That could really hurt us one way or another. Surely we can still make a big sale and sort all this?

Sorry if I’ve missed stuff - babysitting a chaotic 10 month old niece today who WON’T STAY STILL. 

[Mr Popodopolous]

4 minutes ago, BCFCGav said:

@Mr Popodopolous thanks for the updates. So layman’s terms, we’re looking likely to be deducted points but won’t know until next March, at which point they’d be deducted from the current league table (ie 2022-23)? That could really hurt us one way or another. Surely we can still make a big sale and sort all this?

Sorry if I’ve missed stuff - babysitting a chaotic 10 month old niece today who WON’T STAY STILL. 

Been no news for a while- only saw it myself today- I ,mean likely or possible of course a big sale will resolve it, I make it £4-5m hole to make up- it would be unprecedented to actually be docked in spring as usually it is supposed to follow the season but the amended rules and the future Projections combined with Business Plans to try and avert it do make me wonder- the rules of course do allow for in-season breaches but an alternative course of action is that next summer we would be facing action for a breach to 2022/23. Big sale would resolve it all yes, and only getting better with so many out of contract next summer- if Webster or Kelly in particular go for a large fee that also would help a lot as it would if the Football League decide that transfer fees lost are an appropriate add-back.

I know Brownhill we have a sell-on for but he's not exactly being touted for major cash yet.

Edited June 17, 2022 by Mr Popodopolous

[BCFCGav]

15 minutes ago, Mr Popodopolous said:

Been no news for a while- only saw it myself today- I ,mean likely or possible of course a big sale will resolve it, I make it £4-5m hole to make up- it would be unprecedented to actually be docked in spring as usually it is supposed to follow the season but the amended rules and the future Projections combined with Business Plans to try and avert it do make me wonder- the rules of course do allow for in-season breaches but an alternative course of action is that next summer we would be facing action for a breach to 2022/23. Big sale would resolve it all yes, and only getting better with so many out of contract next summer- if Webster or Kelly in particular go for a large fee that also would help a lot as it would if the Football League decide that transfer fees lost are an appropriate add-back.

I know Brownhill we have a sell-on for but he's not exactly being touted for major cash yet.

You’re a star pop, thanks for keeping on top of all this and summarising. 

[Davefevs]

2 hours ago, Mr Popodopolous said:

Back to us, one key bit in that article and not solely Kieran Maguire- well I think it maybe important anyway, maybe not who knows.

Lack of clarity doesn't help- seems we (and probably a few clubs) are waiting still. Stoke have (supposedly) cut their wage bill by £20-23m from 2020/21 to 2021/22 but how feasible does that actually sound?? One report suggested that their current wage bill was £27m...from £54m in 2019/20 and £50m in 2020/21.

Feels to me like we are relying on this somewhat. It also says £5m and £2.5m...I hope that is as I understand it, £5m x 2 and £2.5m otherwise add £2.5m onto the shortfall to be made up. Ticket revenues is one thing but what of commercial revenues. Transfer add-backs is quite suspect however- put it to a vote of clubs?

Would be unfortunate indeed if we did business now and found out sometime in July- after all the accounts for the 24 are in and the updated Projections for 2021/22 that in fact it was not to be included and we had a £5-6m, or £4-5m hole to fill by March!

It also mentions a player wage bill- dunno if that is solely wages or includes tax, NI etc- of £20m in the article. A few errors and questionable points in the article but the bolded bit could be quite key.

My gut feel is that these allowances are a case of “here’s what you are allowed to claim without anything to back it up”, I.e. if you want to claim more, as other clubs have specifically annotated in their annual accounts, then you must provide documentary evidence.  Audited accounts may be classed as evidence???

[Mr Popodopolous]

1 hour ago, Davefevs said:

My gut feel is that these allowances are a case of “here’s what you are allowed to claim without anything to back it up”, I.e. if you want to claim more, as other clubs have specifically annotated in their annual accounts, then you must provide documentary evidence.  Audited accounts may be classed as evidence???

That is potentially an improvement on matters- Audited accounts are documentary evidence, but whether the EFL agree with the analysis from us and other clubs is a different angle- a strong regulator pushes back as we have seen with other clubs who included certain items in their accounts, you don't just take audited accounts at face value even if I agree with the point about evidence-- maybe it would be up for an IDC to adjudicate on it, or would it be up for clubs to vote on the player add-back rule...I reckon that nebulous one aside, our true Covid losses are in the £15-20m bracket over the 3 years, the bulk coming in 2019/20 and 2020/21- quick sums make me think it would knock £3m off the size of a potential hole to be filled, much more manageable.

What kind of business plan would we consider okay- as a points deduction would entail a 2 year business plan in the year following the breach unless the rules change markedly- a lot out of contract in summer 2023 would help of course but would restrict just what we could spend, capped to £13m P&S losses with principle of reset kicking in.

For example (and you and some others know this already of course) if we hit or exceeded £13m in 2021/22 and the same this year then 2023/24 would be £13m and if at £13m the same again in 2024/25...if exceeding £13m charges for a second breach, if falling below say an £11m P&S loss then that adds a bit of headroom to 2024/25. Reading decision of course had both a squad total and perhaps a player average for salary cap under their Business Plan.

Edited June 17, 2022 by Mr Popodopolous

[Mr Popodopolous]

I mention another City with questions- Stoke. Will dig out some numbers for them later, based in part on media reports, in part on extrapolations and some research.

Edited June 17, 2022 by Mr Popodopolous

[Bar BS3]

6 hours ago, Mr Popodopolous said:

Small update here- nothing concrete but Kieran Maguire thinks we might have 'baked in' one for this upcoming season.

Based on the regs, I'd say the earliest would be March when the Projections go in- I also stand by my estimates above of the overspend and potential tariff, plus aggravating and mitigating (if any) factors.

If no mitigating or aggravating factors, 4 or 5 points?

https://www.bristolpost.co.uk/sport/football/bristol-city-points-deduction-finance-7219960

@Davefevs @chinapig @BCFCGav 

Agreed, my main thinking was that if contract extended then it retains value better or makes a sale less likely- both are possible!

Still interested in why @Bar BS3 thinks there is zero chance- if we trade within limits as we always have then this is true, but if not? "Complete scaremongering nonsense"? Time will tell.

I say it based purely on it surely being something that SL will be aware & in full control of - even if it's a case of bailing us out in some way. 

Plus, surely covid times make everyone immune to any sanctions during that period...? 

[Sheltons Army]

29 minutes ago, Bar BS3 said:

I say it based purely on it surely being something that SL will be aware & in full control of - even if it's a case of bailing us out in some way. 

Plus, surely covid times make everyone immune to any sanctions during that period...? 

He can’t just chuck money in to solve FFP

[Bar BS3]

49 minutes ago, Sheltons Army said:

He can’t just chuck money in to solve FFP

No, of course not. 

But if there was a clever way of doing it, I'm sure he'd be clued up on it. 

But more so - that's why I'd doubt he'd let it get out of hand to the point we'd face points deductions anyway. 

I could be wrong - but sounds like scaremongering to me. 

[Wanderingred]

6 hours ago, Mr Popodopolous said:

I mention another City with questions- Stoke. Will dig out some numbers for them later, based in part on media reports, in part on extrapolations and some research.

What do you think are the chances of it actually happening Mr P? Surely we aren’t going to keep all of Massango, Scott and Semenyo… then we’ve got the likes of Brownhill and Webster with potential percentage fees. It makes grim reading for sure, but I hope we are going to be okay. If we have another difficult season, a points deduction could be devastating.

[City oz]

10 hours ago, Mr Popodopolous said:

That is potentially an improvement on matters- Audited accounts are documentary evidence, but whether the EFL agree with the analysis from us and other clubs is a different angle- a strong regulator pushes back as we have seen with other clubs who included certain items in their accounts, you don't just take audited accounts at face value even if I agree with the point about evidence-- maybe it would be up for an IDC to adjudicate on it, or would it be up for clubs to vote on the player add-back rule...I reckon that nebulous one aside, our true Covid losses are in the £15-20m bracket over the 3 years, the bulk coming in 2019/20 and 2020/21- quick sums make me think it would knock £3m off the size of a potential hole to be filled, much more manageable.

What kind of business plan would we consider okay- as a points deduction would entail a 2 year business plan in the year following the breach unless the rules change markedly- a lot out of contract in summer 2023 would help of course but would restrict just what we could spend, capped to £13m P&S losses with principle of reset kicking in.

For example (and you and some others know this already of course) if we hit or exceeded £13m in 2021/22 and the same this year then 2023/24 would be £13m and if at £13m the same again in 2024/25...if exceeding £13m charges for a second breach, if falling below say an £11m P&S loss then that adds a bit of headroom to 2024/25. Reading decision of course had both a squad total and perhaps a player average for salary cap under their Business Plan.

Gees Mr Pop.

That is a great concise over view of something I do not understand or have a clue of what you are talking about. However it sounds good. I have too do my tax return soon, how much do you charge