Points Deduction - When will we know?

[Mr Popodopolous]

11 minutes ago, Hxj said:

I'm not sure how any penalty can be imposed for a period where the final figures are not available.  Yes good estimates are available, but for example what if you would have ended up 6th without the points penalty and made it to the play-off final, that might be enough to mean that you didn't fail at all.  I appreciate all conjecture, but who knows??

It's the club who put in the estimates though albeit the Football League might push back on aspects, but if it's club submitted in a sense it's their hard luck? The club's I mean. I guess a way around it is to include player sales which will occur by the end of the Reporting Period- in our case 31st May, ostensibly already lined up. I definitely remember articles in 2018 whereby it was stated that Aston Villa had the summer and January to get it sorted out by March...prior to new owners and their creative solution of course.

I think it possible to harmonise in such a way whereby you can drop the deduction in March/April of the existing season. Especially with the pre-emptive Business Plans...suspended sanction maybe a final piece of the jigsaw? Activated in March if over. ie "Sell players or committ contractually to selling players by March 20xx in the case of the former or 31st May 20xx in the case of the latter- or it's a deduction in line with the overspend". Kinda thing- or filling the hole through increased revenue, reduced cost etc.

11 minutes ago, Hxj said:

I reckon that we are flying at around £38-£39 million FFP losses for the period ending 31 May 2023.  I think that you and @Davefevs are too conservative on allowables and too conservative on income growth from the Stadium.

£5m per year was mine for allowables, possibly can't speak for Dave but my anticipation for turnover this year was £28m and the wage bill falling by £2m to get us to our £4-5m hole- this was also on the basis that the only Covid add-backs or costs allowed would be the £5m x 2 and £2.5m mentioned in the EFL rule changes  in February. If these are or indeed can be higher than I'll happily revise.

Edited June 27, 2022 by Mr Popodopolous

[Hxj]

7 minutes ago, Mr Popodopolous said:

£5m per year was mine for allowables

The 2021 add back for Fixed Asset Depreciation was £2.9 million, the Women lost £0.5 million (a subsidiary of Holdings), that doesn't leave much for the other allowables covering the Academy, and Community.

Plus there are items in the accounts such as interest of £1.5 million odd from Pula Sports where I would happily argue that the market value is nil.  Pula Sports doesn't have a "cat's chance in hell" of being paid any interest.

All personal opinion, and everyone has a different view.

[Davefevs]

1 hour ago, Mr Popodopolous said:

In short I believe that there are grounds for a deduction in the season of the breach now that various loose ends have been tied up, the February 2022 changes etc.

I agree that points deductions can happen in the season, based on projections…I just don’t think City will fall foul of it.

Waiting for news on how the EFL are gonna adopt the new UEFA FFP rules.

[Davefevs]

1 hour ago, Hxj said:

I reckon that we are flying at around £38-£39 million FFP losses for the period ending 31 May 2023.  I think that you and @Davefevs are too conservative on allowables and too conservative on income growth from the Stadium.

I can only go on what we’ve seen published from the EFL…which in fairness is a bit vague!

On income, I’ve already stated that I think income will be higher than my projections.  I think we are between the £39m and the £42m I predicted.  Every little outward deal helps.

[Hxj]

10 minutes ago, Davefevs said:

I agree that points deductions can happen in the season, based on projections

I'll happily stick on the basis that an in season deduction can be agreed by both parties, but cannot be the subject of an EFL referral.

[Mr Popodopolous]

2 hours ago, billywedlock said:

It is very hard to make a clear reading of the situation without knowing club and EFL finer details . However it does point to this coming season being ok , tight but ok . Next season will possibly require the sale of Scott/Semenyo .Or promotion . I prefer the later solution . 

I think the departure of Wells and the sale of one or both of Kalas, Massengo could do it- perhaps I am a bit bearish in the size of hole that needs filling too.

[Mr Popodopolous]

13 hours ago, Hxj said:

I'll happily stick on the basis that an in season deduction can be agreed by both parties, but cannot be the subject of an EFL referral.

Fair. I am thinking that if a club basically put in Projections in March 20xx that show them in excess of £39m...not a basis for a deduction? Clearly in practical terms the club would contest it unless it's truly meaningless- ie midtable not going up or down, a handful of points. Consider the following.

Quote

£10m FFP loss in T-2.

£15m FFP loss in T-1

£15m FFP loss in 'T'

That would constitute a £3m P&S/FFP £1m overspend- they have the tariff, they have the absolute obligation ruling- 3-4 2-3, perhaps even for good behaviour 1-2 point deduction and then appeal there and then? Complicated by Covid calculations, it could also read T-3 and T-2 averaged, T-1 and T.

Edited June 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

13 hours ago, Davefevs said:

Waiting for news on how the EFL are gonna adopt the new UEFA FFP rules.

Very good point- this could all render it moot- have to say from a football regulatory perspective, bringing in new rules mid-stream is unsatisfactory- would be sods law if this was the final year of FFP but really and especially given the amendments in Feb 2022, I think that 2021/22 to 2023/24 should be the final 3 year P&S cycle- that's the only fair and consistent way IMO.

[Davefevs]

4 minutes ago, Mr Popodopolous said:

Fair. I am thinking that if a club basically put in Projections in March 20xx that show them in excess of £39m...not a basis for a deduction? Clearly in practical terms the club would contest it unless it's truly meaningless- ie midtable not going up or down, a handful of points. Consider the following.

That would constitute a £3m P&S/FFP overspend- they have the tariff, they have the absolute obligation ruling- 3-4 point deduction and then appeal there and then?

That’s a £1m overspend

[Mr Popodopolous]

5 minutes ago, Davefevs said:

That’s a £1m overspend

So it is! Wondered who would spot that first...but no seriously thanks- will amend accordngly, 2-3 point deduction then?

Ha got that one wrong didn't I!

Edited June 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

*As for our non Covid allowable costs, if we think we spend £1.5m per year on the academy? I forget how much each category of academy is expected to put in as a base mininum, then our allowable costs for 2020/21 would have been £5.85m from a quick calculation. £5,856,643 to be precise.

£5.62m in 2019/20. £5,626,378 to be precise.

I'm rounding- the precise numbers are a little higher so maybe I should post these too.

£5.42m in 2018/19. £5,423,382 to be precise.

*This assumes an average or an annual expenditure of £1.5m on the academy. Suddenly things look a bit better.

Edited June 28, 2022 by Mr Popodopolous

[Davefevs]

[CyderInACan]

17 hours ago, Hxj said:

•   Profit share on the onward transfer of an ex-player - Brownhill, Kelly or Webster.
•  

Or maybe even Nagy? Sure I saw something recently about him being a possible transfer target having had a good spell with Pisa since we let him go

[Davefevs]

Forgot to add that I read somewhere that you have to spend the minimum amount….think Brum have lost their cat1 status partly because they didn’t spend enough, I.e. you can’t have cat1 status and then do it in the cheap.

[Mr Popodopolous]

Other bit I forgot to add- clearly his health is first, second and third tbh but if Baker as sadly looks likely cannot play for us again, is that some kind of offset against FFP?

It's not exactly a top consideration but I wondered- not to use the possible saving to strengthen the squad but how would all of that work.

[Kingswood Robin]

43 minutes ago, Davefevs said:

I'm not up to speed with the various academy categories, I don't even know our current status? What are the benefits of being Cat 1 over say Cat 2? How do you get to Cat 1, is it just a case of proving you're spending the money and making an application? 

I know we're in every penny counts territory, but £2.3-4.9m seems relatively small when compared to what we've spent on some less than productive players down the years. There are more young players coming through which is great to see, maybe we are slowly moving up the categories.

[ExiledAjax]

22 minutes ago, Kingswood Robin said:

I'm not up to speed with the various academy categories, I don't even know our current status? What are the benefits of being Cat 1 over say Cat 2? How do you get to Cat 1, is it just a case of proving you're spending the money and making an application? 

I know we're in every penny counts territory, but £2.3-4.9m seems relatively small when compared to what we've spent on some less than productive players down the years. There are more young players coming through which is great to see, maybe we are slowly moving up the categories.

We are Cat 2. Going to Cat 1 is much much more than just upping the funding and applying. You don't really "slowly" move up. It's more absolute than that.

Just one example is that Cat 1 academies have to have a dedicated full-sized indoor pitch. We don't have that, and won't have it anytime soon. When you see pictures of our players on an indoor pitch they are at the Bears' facility, which is half size and not 'dedicated' as it's a shared facility. Building something that meets requirements would cost millions.

That's just one example.

[CyderInACan]

13 minutes ago, ExiledAjax said:

When you see pictures of our players on an indoor pitch they are at the Bears' facility, which is half size and not 'dedicated' as it's a shared facility.

Have read about this before and for all the massive PR onslaught that accompanied both training facilities opening (world class etc etc*) I really don't understand why the Rugby only had a half-pitch installed under the roof. Surely if you're doing it, do it bloody properly. 

*As good as the RHPC is, if that's world class (or whatever guff was spouted at the time) I'm Lionel Messi 

[ExiledAjax]

10 minutes ago, CyderInACan said:

Have read about this before and for all the massive PR onslaught that accompanied both training facilities opening (world class etc etc*) I really don't understand why the Rugby only had a half-pitch installed under the roof. Surely if you're doing it, do it bloody properly. 

*As good as the RHPC is, if that's world class (or whatever guff was spouted at the time) I'm Lionel Messi 

To my mind it's perhaps better phrased as "world class for a club of our size and stature". The official PR leaves off that qualification, but to me that makes more sense. Anyone claiming that Failand and the Bears facility are on a par with La Masia or Man City's facilities (or any other of the truly elite centres) is clearly wrong.

[The Bard]

19 hours ago, Hxj said:

My take on this is that there will be no points deduction - it will be tight as we can see from the current recruitment policy.  My belief is that the club are planning on a worst case scenario to just meet the requirements.

In any case the earliest time that there will be a default will be the accounting period to May 2023.  Due to the delays in final figures this will impact on 2023/24 season.

That said there are several situations which could arise that could arise to make passing FFP easy:

1.   Sale of an existing player over the written down value - take your pick from many currently worth far more than their written down cost.
2.   Sale of an existing player at more than their remaining salary costs - again take your pick.
3.   Profit share on the onward transfer of an ex-player - Brownhill, Kelly or Webster.
4.   Event income - This is interesting as when the new stadium opened Ashton Gate Ltd decided to just let the stadium for a fee - all other services were provided by others.  The intent, once they had watched and learned, was to move to a different model whereby they provided all the services as well, and despite taking on more risks over a period would make significantly more profit.
5.   A good cup run
6.   Promotion.  

On 4, if I buy a beer at a Bears match, to who is the money going?  Ashton Gate Stadium Ltd, Bristol Sport, Bristol Bears or an outside organisation?

[SBB]

10 minutes ago, The Bard said:

On 4, if I buy a beer at a Bears match, to who is the money going?  Ashton Gate Stadium Ltd, Bristol Sport, Bristol Bears or an outside organisation?

I like where this is going. Eagerly waiting for the answer my wife may be hearing after every game. 

[Hxj]

8 minutes ago, The Bard said:

On 4, if I buy a beer at a Bears match, to who is the money going?

I don't think that any goes to Bears directly or to Bristol Sport.  The Stadium will either sell you the beer or get a rent from a concession that sells you the beer.

[Davefevs]

1 minute ago, Hxj said:

I don't think that any goes to Bears directly or to Bristol Sport.  The Stadium will either sell you the beer or get a rent from a concession that sells you the beer.

My understanding too.

[The Bard]

3 minutes ago, Hxj said:

I don't think that any goes to Bears directly or to Bristol Sport.  The Stadium will either sell you the beer or get a rent from a concession that sells you the beer.

So, one way or another Ashton Gate Stadium.  

Now, for FFP does the income from Bears games count? 

[Hxj]

5 minutes ago, The Bard said:

Now, for FFP does the income from Bears games count? 

Ticket income no.  Bears receive the ticket income and pay a rent, which does count.

Any income received by the Stadium counts for FFP purposes, and any costs incurred also count for FFP purposes.

Edited June 28, 2022 by Hxj

[Steve Watts]

18 hours ago, Hxj said:

I'm not sure how any penalty can be imposed for a period where the final figures are not available.  Yes good estimates are available, but for example what if you would have ended up 6th without the points penalty and made it to the play-off final, that might be enough to mean that you didn't fail at all.  I appreciate all conjecture, but who knows??

I reckon that we are flying at around £38-£39 million FFP losses for the period ending 31 May 2023.  I think that you and @Davefevs are too conservative on allowables and too conservative on income growth from the Stadium.

On the Stadium side good to see that Lisa Knights has been appointed a Director of Ashton Gate Limited.

I guess the argument here would be that if you had kept you finances fair then you possibly wouldn't have finished 6th.  If you've extended yourself to the extent that you've violated FFP then it would be strongly argued that you've gained an unfair advantage.

Of course, where the EFL leave themselves open to appeal with all this is where they failed to punish Bournemouth in the season that they got promoted to the Prem for a massive overspend. If they had applied the punishment before the club left membership of the EFL then that would be different.  But I believe they've possibly shot themselves in the foot a little there.  Certainly left lawyers a thread to pick at I'd have thought... 

[The Bard]

12 minutes ago, Hxj said:

Ticket income no.  Bears receive the ticket income and pay a rent, which does count.

Any income received by the Stadium counts for FFP purposes, and any costs incurred also count for FFP purposes.

Thanks.  If the stadium is losing money for an event where you charge £5+ for a pint and sometimes sell up to 50,000 pints then there is something seriously wrong. 

[Mr Popodopolous]

11 minutes ago, Steve Watts said:

I guess the argument here would be that if you had kept you finances fair then you possibly wouldn't have finished 6th.  If you've extended yourself to the extent that you've violated FFP then it would be strongly argued that you've gained an unfair advantage.

Of course, where the EFL leave themselves open to appeal with all this is where they failed to punish Bournemouth in the season that they got promoted to the Prem for a massive overspend. If they had applied the punishment before the club left membership of the EFL then that would be different.  But I believe they've possibly shot themselves in the foot a little there.  Certainly left lawyers a thread to pick at I'd have thought... 

Rules were different then- it was literally one year, after and only after the event- ie next season at the earliest, perhaps December of the following season and crucially there was no scope for points deductions, only a hefty fine subject to size of overspend in the event of promotion or a transfer embargo if not- open ended transfer embargo until the club got back to balance.

The way Leicester went up in 2013/14 though was much more opaque...would the EFL have looked for some different sanctions there or would they have had to stick to the fine/embargo? Wasn't so much the size of the overspend as the potential masking of it.

Agree with your general point though but yes- it's covered a bit in EFL v Birmingham IDC1 when the latter claimed they had gained no sporting advantage so should not be punished- counterfactual of others being allowed to overspend to the same level...in other words had a club overspent by £4m say and finished 6th- well then it comes down to by how many points, what that extra £4m gained in terms of players, goals and points and so on. OTOH had the side in 7th been able to overspend by £4m then different ballgame.

Edited June 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

May as well update this thread a little- in recent days we have heard two contradictory explanations arguably from those high up in the club- I'll summarise.

@Davefevs @BCFCGav @Hxj @chinapig @Port Said Red

@downendcity @ExiledAjax

Feel free to tag others etc.

SL- Saturday

Quote

I'm not too worried about FFP, the only thing that worries me is that people start to do it in theory and I think in practice we need a cap on which we're not allowed to spend more than..."

Ha the bit in bold sounds a little like it could describe some of my posts.

Mr. Gould- today

"Might still get a deduction, should know more in next 6-9 months, degree of uncertainty and UEFA reform feeds into this" However he also mentions significant reforms along the lines of UEFA?

Which is it then- I've had a slight bad feeling for a little while that we will be the ones holding the parcel when the music stops in the spring or next summer and the reforms will follow on pretty quickly after. Any or all of the 3 promoted would avoid by dint of promotion, Stoke through their £56m losses attributed to Covid, Middlesbrough more conventionally by selling Spence and Tavernier. Reading have resigned Long, loaned Hendrick- players departed sure, some hard work last season to get costs down yes- but that season will also have included the profit on Olise and maybe others...are they not also at risk? Then again shouldn't be as the EFL approve all of their inbound transfers- would be pretty negligent of the Football League to have an Agreed Business Plan with required approval of signings that sees them breach- and a reasonable defence too I'd suggest.

Of course perhaps if required we will do what has been done before and sell some more, reinvest a bit and stick to or below £39m that way.

One interpretation is that when a combination of allowances and reforms are finalised we will be okay- another might be that we are banking on reforms to an extent to bail us out.

Edited August 9, 2022 by Mr Popodopolous

[BCFCGav]

We should sell Scott or Semenyo, much as it pains me. We have the 4th highest xG in the league (understood it's a small sample size, but it's consistent with last season really), we can afford to lose one or the other. It'd be so nice to only have the league table to worry about, not the finances too! Plus a significant windfall would allow us to strengthen where we actually need to, defense. 

Dream scenario is we make the money from Han-Noah or Kalas or maybe Bentley, but those offers ain't coming.