Points Deduction - When will we know?

[1960maaan]

1 minute ago, Mr Popodopolous said:

RPT Fair Value kick in if it's to SL or one of his companies or a Related Party. Benchmarking and comparable will form a part so it should help but no magic bullet IMO.

If there is a third party that is arms length, the question is how much would we get. Could the fact that Bristol Rugby play there too enhance it when set against pure football? Because naming rights for clubs at this level aren't so much or haven't been.

Not sure how much it would bring in reality, but I'm thinking,   every little helps. Plus if we are close to complying with FFP, then that "little" may be enough. All conjecture ATM.

[Mr Popodopolous]

2 hours ago, 1960maaan said:

To me, this is the interesting part. Only guessing, but I imagine a higher percentage of our off pitch income relied on the Stadium than many other teams. A big part of building the new stadium was the conferencing, events and Concerts. All of which have been decimated by COVID just as our income had hit record levels. 

Perfect Word has us getting £20m from sell ons, enough leeway from FFP to keep us out of trouble, all the young kids staying and Pearson given money to spend . There is a worse case scenario , but let's not go there just yet. 

I reckon more like £10-15m from sell ons realistically at the upper end but I do agree with your point.

It would a) Steer us clear of FFP, b) Give us a bit of scope to extend or offer better terms to our young players and some of those more established that we want to stick around- I'd say Bentley, Kalas, DaSilva, Massengo, Scott and Semenyo if we can keep we do, d) Enable us to be more creative with how we offload those we think have run their course- Moore, Bakinson, Palmer, Wells, perhaps Vyner. Then a bit of scope to strengthen as you say, because any fee or saving on those 4 in particular we want to move on would still represent a positive.

If we're talking pure Covid losses I reckon in the £15-20m bracket across the prior two seasons. Plus the £2.5m addback this year.

What I do like about a hard limit though is it stops eg Stoke claiming £30m in 'Covid Impairment' in 2019/20 and £11m in lost player sale profits/cost savings in 2020/21. That is clearly a pisstake for want of a better phrase.

[Port Said Red]

2 hours ago, Davefevs said:

At a really basic level:

Income fell from £30.300m in 18/19 (the last year not impacted by Covid) to £18.258m, so £12m lost.  EFL recent rules say £5m allowed.  I still think this might be “£5m without having to prove it”, so if you want to set-off more you can, but you’ll have to provide the proof.

Did I see a post saying that Stoke City were claiming £26m? That seems ambitious but maybe they have realised that it's open to negotiation and have gone in with a high opening gambit?

[Mr Popodopolous]

1 minute ago, Port Said Red said:

Did I see a post saying that Stoke City were claiming £26m? That seems ambitious but maybe they have realised that it's open to negotiation and have gone in with a high opening gambit?

£56m across 2019/20 and 2020/21 is what they have put the bidding in at.

[Port Said Red]

1 minute ago, Mr Popodopolous said:

£56m across 2019/20 and 2020/21 is what they have put the bidding in at.

SO £28m a season? Wow! It will be interesting to see how they prove that.

[Davefevs]

7 minutes ago, Port Said Red said:

Did I see a post saying that Stoke City were claiming £26m? That seems ambitious but maybe they have realised that it's open to negotiation and have gone in with a high opening gambit?

Yep, and what gets written into the club’s formal accounts, isn’t necessarily acceptable to put into their P&S return

[Port Said Red]

2 minutes ago, Davefevs said:

Yep, and what gets written into the club’s formal accounts, isn’t necessarily acceptable to put into their P&S return

Ah, that makes a bit more sense, I suppose there could be losses for the "business" that don't come under FFP, so we will see what the difference will be soon I guess.

[Davefevs]

Just now, Port Said Red said:

Ah, that makes a bit more sense, I suppose there could be losses for the "business" that don't come under FFP, so we will see what the difference will be soon I guess.

Suspect clubs like Stoke and Forest are hedging their bets!

Forest have gone down a similar line to Gould in suggesting they’ve lost “transfer revenue” because of covid…but have actually put in a prediction for 21/22 in 20/21’s accounts….to the tune of £8m.

[Port Said Red]

1 minute ago, Davefevs said:

Suspect clubs like Stoke and Forest are hedging their bets!

Forest have gone down a similar line to Gould in suggesting they’ve lost “transfer revenue” because of covid…but have actually put in a prediction for 21/22 in 20/21’s accounts….to the tune of £8m.

I don't like the "transfer revenue" approach, mainly because I can't really see who we might have sold in the previous season that would have generated much income. Massengo maybe? Kalas? Bentley? They all did pretty well, but were they in the kind of form that would have teams queueing up in a normal season?

Season ticket repayments, loss of match day revenue and the slowing of our rapidly increasing corporate income, you could see some justification for though. 

[Jerseybean]

50 minutes ago, 1960maaan said:

Totally agree, the way we were doing it was unsustainable. A few hits and lots of scattergun signings that we hoped would work.
As has been said over and over, recruitment, recruitment, recruitment. We need the academy, we need to sign good young talent, and inevitably there will be interest. I think where we went wrong was, sign a real prospect (Webster) and think that's it job done. Then panic when he actually gets head hunted. Like the ongoing work of the Academy, natural progression that a player either grows out of the age group and moves on, or moves up. There is always the next year and you work to replace good ones with better ones. That's how the recruitment should work. We've heard it said that we have 4/5 targets for every position, yet all the time under Ashton/Johnson you never saw a plan or direction, just more players. 
Southampton are the best example I can think of. Over several years they spotted and signed players that eventually went to bigger clubs, yet they always seemed to be able to replace them.  EVERYONE is a selling Club when more money/ambition/power enters the equation , it's how you deal with the loss of a player. Southampton have done that brilliantly . 

The plan should never be buy to sell, which was our mantra for a while. It should be buy to be the best, the rest will fall into place. This summer will show if the recruitment, targeting and planning have improved since Ashton has left the building.

IMO this is a key reason (along with COVID) for our present predicament. NP is addressing this - he doesn’t sign players for fun, is recruiting carefully without splashing too much out and blooding the youngsters. As has been discussed on here many times LJ and MA collected players like they were going out of fashion, which incidentally many of them did! 

[Davefevs]

8 minutes ago, Port Said Red said:

I don't like the "transfer revenue" approach, mainly because I can't really see who we might have sold in the previous season that would have generated much income. Massengo maybe? Kalas? Bentley? They all did pretty well, but were they in the kind of form that would have teams queueing up in a normal season?

Season ticket repayments, loss of match day revenue and the slowing of our rapidly increasing corporate income, you could see some justification for though. 

Agree, and what happens when they are sold

[Mr Popodopolous]

42 minutes ago, Port Said Red said:

SO £28m a season? Wow! It will be interesting to see how they prove that.

The revenue losses and costs of non utilisation of furlough come to £15-16m across the two seasons and that seems fine to me, EFL allowances notwithstanding. Tbh they've laid it out in their accounts.

The contentious parts feel twofold...

1) £30m in Player Impairment attributed to Covid 19. Basically implying a combination of lost transfer profit, then wage savings and amortisation savings post disposal due to the market collapsing. However this is a double attempted benefit because unlike lost revenue which is a one off hit and therefore gain, this would remove future costs of amortisation or hypothetical loss on disposal from the calculations altogether. This was in 2019/20.

2) Part two is similar to ours. £11m in lost profit or other such items from supposedly being unable to offload said players owing to said impact of Covid.

Part 1 I would suggest either count it for FFP purposes as regular impairment or reamortise straight line over the length of the contract again for FFP purposes and adjust the calculations accordingly. The first pushback is straightforward, the second isn't a small exercise but probably a truer reflection.

As for Part 2, all depends on whether the EFL want to accept claimed lost Transfer Revenue as an addback. My view is that they shouldn't but if they do then it has to be a uniform policy for all.

Key bit to remember about the £30m Impairment is that it isn't just a one off relief but an attempt to wipe it altogether.

Edited April 28, 2022 by Mr Popodopolous

[1960maaan]

16 minutes ago, Mr Popodopolous said:

The revenue losses and costs of non utilisation of furlough come to £15-16m across the two seasons and that seems fine to me, EFL allowances notwithstanding. Tbh they've laid it out in their accounts.

The contentious parts feel twofold...

1) £30m in Player Impairment attributed to Covid 19. Basically implying a combination of lost transfer profit, then wage savings and amortisation savings post disposal due to the market collapsing. However this is a double attempted benefit because unlike lost revenue which is a one off hit and therefore gain, this would remove future costs of amortisation or hypothetical loss on disposal from the calculations altogether. This was in 2019/20.

2) Part two is similar to ours. £11m in lost profit or other such items from supposedly being unable to offload said players owing to said impact of Covid.

Part 1 I would suggest either count it for FFP purposes as regular impairment or reamortise straight line over the length of the contract again for FFP purposes and adjust the calculations accordingly. The first pushback is straightforward, the second isn't a small exercise but probably a truer reflection.

As for Part 2, all depends on whether the EFL want to accept claimed lost Transfer Revenue as an addback. My view is that they shouldn't but if they do then it has to be a uniform policy for all.

Key bit to remember about the £30m Impairment is that it isn't just a one off relief but an attempt to wipe it altogether.

So, in that part 1, what's to stop us saying that the 14 players we released might have been sold in a "normal" market. 
Paterson and Walsh for instance. Our plan was to resign and sell for £2m each a year later. They can't prove it wasn't the original plan and the COVID didn't end it. I know that is a real stretch, but lost transfer profit has to be difficult to prove, it's all speculation. I'll be glad when it's all done and dusted TBH.

[Davefevs]

22 minutes ago, Mr Popodopolous said:

As for Part 2, all depends on whether the EFL want to accept claimed lost Transfer Revenue as an addback. My view is that they shouldn't but if they do then it has to be a uniform policy for all.

 

Imagine the uproar from the chunk of Championship clubs whose model isn’t to rely of transfer profit!  That’s why I can’t see it “flying”.  But who knows!

[Davefevs]

1 minute ago, 1960maaan said:

So, in that part 1, what's to stop us saying that the 14 players we released might have been sold in a "normal" market. 
Paterson and Walsh for instance. Our plan was to resign and sell for £2m each a year later. They can't prove it wasn't the original plan and the COVID didn't end it. I know that is a real stretch, but lost transfer profit has to be difficult to prove, it's all speculation. I'll be glad when it's all done and dusted TBH.

You’d certainly apply that to Diedhiou.

[GrahamC]

2 hours ago, And Its Smith said:

@GrahamC I can name them if it helps

Massengo, Scott and Semenyo are sought after for sure.  Kalas would attract interest no doubt about it.  Depending on opinion of current market values that is anywhere between £20m to £35m worth of talent. 

I know who they are, thanks.

Let’s start with Kalas, he’s on a rumoured £20k+ a week & didn’t move after a season when he had just played in the Euros quarter final. I have no doubt we will do a deal if one can be arranged, but saying it & actually doing it are 2 completely different things.

As for Scott, Semenyo & HNM, your argument here appears to be that if we get an offer for one of them we might then turn it down knowing that if we did so we would fail FFP, this position seems so far fetched as to not even be worth debating.

Of course we would sell a player in those circumstances, so are you seriously suggesting it is a possibility?

[And Its Smith]

23 minutes ago, GrahamC said:

I know who they are, thanks.

Let’s start with Kalas, he’s on a rumoured £20k+ a week & didn’t move after a season when he had just played in the Euros quarter final. I have no doubt we will do a deal if one can be arranged, but saying it & actually doing it are 2 completely different things.

As for Scott, Semenyo & HNM, your argument here appears to be that if we get an offer for one of them we might then turn it down knowing that if we did so we would fail FFP, this position seems so far fetched as to not even be worth debating.

Of course we would sell a player in those circumstances, so are you seriously suggesting it is a possibility?

All I’m saying is that if we get points deducted it would be mismanagement. It is you that felt the need to debate this further 

[italian dave]

3 hours ago, ExiledAjax said:

Selling is a short term solution. We've sold £20m(ish) of talent a few times in recent years. Bryan + Reid + Flint in 2018, Webster in 2019, and Kelly in 2020 (iirc). And yet here we are discussing points deductions and saying we need to yet again flog our bright young things to the highest paying Premier League vulture.

It is an unsustainable, hand to mouth type model that no club can hope to sustain for season after season after season. It also, and I speak personally now, is depressing for fans to see young exciting players ply their trade at AG for just one or two seasons. I hate it.

The long term, necessary solution, is to wean ourselves off of relying on big sales to stay ahead of FFP. That means cutting wages, costs, and finding creative alternative income streams. We are doing that, but we need to do more. Because doing that is the only way that we can reach true sustainability.

Agree EA, and even more so when you don’t have alternatives lined up. Arguably we did when we cashed in on the likes of Kodjia and Reid but didn’t when we sold Webster and Brownhill. At the end of the day, it’s not much consolation if you avoid a points deduction but end up going down because the depleted team isn’t good enough.

To be fair, though, the alternative income streams is exactly what we have done with the ground redevelopment and it’s a stroke of real bad luck that just as that starts to bear fruit along comes a pandemic that no-one predicted. 

[ExiledAjax]

2 minutes ago, italian dave said:

Agree EA, and even more so when you don’t have alternatives lined up. Arguably we did when we cashed in on the likes of Kodjia and Reid but didn’t when we sold Webster and Brownhill. At the end of the day, it’s not much consolation if you avoid a points deduction but end up going down because the depleted team isn’t good enough.

To be fair, though, the alternative income streams is exactly what we have done with the ground redevelopment and it’s a stroke of real bad luck that just as that starts to bear fruit along comes a pandemic that no-one predicted. 

The bit I have put in bold is key to me. I hope that is written in giant letters on the walls of Gould's office.

Your second point I attempted to acknowledge, but wasn't explicit enough. I absolutely recognise that using AG for concerts, conferences and the like is fantastic.

[Tinmans Love Child]

2 hours ago, Jerseybean said:

IMO this is a key reason (along with COVID) for our present predicament. NP is addressing this - he doesn’t sign players for fun, is recruiting carefully without splashing too much out and blooding the youngsters. As has been discussed on here many times LJ and MA collected players like they were going out of fashion, which incidentally many of them did! 

I wonder if NP has blooded a few youngsters with the sole purpose of giving them some games on their CV to help increase there value for sale.

Wenger did this at Arsenal for many years, playing youth team players in the cups and early euro stages who are never going to be considered first team regulars, but they then have games on the CV and can get sold at more than they are probably worth because of it.

[Mr Popodopolous]

36 minutes ago, Tinmans Love Child said:

I wonder if NP has blooded a few youngsters with the sole purpose of giving them some games on their CV to help increase there value for sale.

Wenger did this at Arsenal for many years, playing youth team players in the cups and early euro stages who are never going to be considered first team regulars, but they then have games on the CV and can get sold at more than they are probably worth because of it.

A more pessimistic interpretation- not that I think this is necessarily the case but it's good to consider all angles.

A more pessimistic interpretation might be that we are giving them game time in anticipation of an embargo/a Business Plan. If we are set to breach then I am unsure why the EFL as their stating point would allow us (or anyone in that position) the opportunity to sign players and therefore increase the size of the hole to 2023.

With the added factor that the EFL can now impose Business Plans or appropriate monitoring requirements with the goal of keeping clubs in line in the existing season and indeed at all times, perhaps even slightly beyond but certainly the existing season. This may or may not have been possible before but was never formally ratified.

Quote

Introduction of Monitoring for Forecasted Breaches

With a priority to ensure future compliance with the P&S rules, Clubs have agreed that where a breach is forecasted in future years then the League should have the ability to impose a business plan or appropriate monitoring requirements.

Trevor Birch, EFL Chief Executive said:

“Over the past two years of unprecedented challenges and upheaval, the priority of the EFL has been to support Clubs practically wherever possible while maintaining the ongoing integrity of our competitions and the League as a collective. I’m pleased to say that the changes agreed by Clubs will help them manage ongoing financial issues in the short term, while providing the League with additional powers to assist Clubs in complying with their P&S obligations going forward.”

Gamechanger without a doubt.

In layman's terms it means that if a club have lost I dunno in FFP and Covid adjusted terms £10m and £15m in the prior 2 periods, and they are forecasted to lose £12m in the upcoming season then the EFL can step in and prevent them from extending spending as a starting point by more than £2m. Clearly Player transfer profits would extend that, as would extra revenue or cost savings but the EFL now have the power to step in to prevent overspending or forecasted overspending before it happens.

By spend I mean all- for example if a club needs 4 players to take them up to the squad limits, then £2m/4 players...£10k per week wage cap or thereabouts, inclusive of all player costs- think with Reading I saw agents fees could only be 3% of the salary as part of theirs.

If a club are forecast to overspend the following season as a starting point, then the EFL would be well within their rights I reckon to turn around and prevent any new signings at all while that remained on course.

Easy example

Club are set to lose £10m, £15m and then are forecast to lose £16m the following season in FFP terms. A £2m overspend. Cannot sign anyone while that remains on course.

The club sell a player and a combination of cost, wage and amortisation savings are £3m.

Club can then go and spend up to not beyond, £1m on reinforcement of the side/contract renewal whatever.

Edited April 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

No news- just wondering if anyone had heard anything.

Both in respect of the points deduction and the potential for monitoring requirements etc. No news can often be good news but at the same time some news would be ideal...

[Davefevs]

EFL board Meeting was either yesterday / today, with Club level meeting today / tomorrow.

[Bristol Rob]

So we have 12 months effectively for the club to win the lottery, either through sell-on fees received, selling someone, reducing wages, a naming rights deal or EFL agreeing to huge covid losses.

Of players we have sold in recent years, any of them likely to be sold at more than we sold them for.

[Mr Popodopolous]

22 minutes ago, Bristol Rob said:

So we have 12 months effectively for the club to win the lottery, either through sell-on fees received, selling someone, reducing wages, a naming rights deal or EFL agreeing to huge covid losses.

I mean in theory although I would say the 12 month thing is a bit complicated by the new regulation that I have mentioned before. Could be two windows ie next March as assessments go in at the start of March.

In the past a Business Plan or even at times appropriate monitoring requirements were only put in place after a proven overspend/breach. Not so clear now.

From Feb.

This is totally different as it actually means early intervention for an upcoming season or two is possible! Forward looking rather than retrospective.

https://www.efl.com/news/2022/february/meeting-of-efl-championship-clubs/

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

In terms of Covid losses, still up in the air probably but clubs voted on the following in the same piece.

Looks like a cap of £12.5m across the 3 seasons.

In theory therefore we along with several others in the danger zone, will have put numbers in and if those numbers don't stack up by March, the EFL would have sufficient evidence to dock points there and then probably.

Edited June 9, 2022 by Mr Popodopolous

[Bristol Rob]

1 minute ago, Mr Popodopolous said:

I mean in theory although I would say the 12 month thing is a bit complicated by the new regulation that I have mentioned before. Could be two windows ie next March as assessments go in at the start of March.

In the past a Business Plan or even at times appropriate monitoring requirements were only put in place after a proven overspend/breach. Not so clear now.

From

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

So a wage bill reduction, a cup run and say, 2 mil for a player in Jan might be enough.

Or am I way out with year on year accounts?

[Mr Popodopolous]

4 minutes ago, Bristol Rob said:

So a wage bill reduction, a cup run and say, 2 mil for a player in Jan might be enough.

Or am I way out with year on year accounts?

It might. 2019/20 and 2020/21 remain aggregated and halved. Palmer going will help too. Sale of Kalas and Massengo will surely do the job?

Hoping for a big move for Webster or Kelly although I'm not confident of this- and would see it as a nice bonus and not something to be banked on.

Edited June 9, 2022 by Mr Popodopolous

[Bristol Rob]

8 minutes ago, Mr Popodopolous said:

It might. 2019/20 and 2020/21 remain aggregated and halved. Palmer going will help too. Sale of Kalas and Massengo will surely do the job?

Hoping for a big move for Webster or Kelly although I'm not confident of this- and would see it as a nice bonus and not something to be banked on.

Isn't Brownhill a more likely profit generating player? Only because I assume Kelly and Webster must be nearing the end of the contracts they signed when they left us.

[Mr Popodopolous]

10 minutes ago, Bristol Rob said:

Isn't Brownhill a more likely profit generating player? Only because I assume Kelly and Webster must be nearing the end of the contracts they signed when they left us.

He might be but I don't see him going for a huge amount...most recent suggested fee was £15m.

Unsure about Webster, but know Kelly still has 2 years left. Edit just googled- Webster signed a major contract in 2021 and is there- on paper anyway- until 2026.

Dunno if I am as bullish as Mr. Gould- for example his words the other month about retaining the same budget- unless one of several things falls into place.

Edited June 9, 2022 by Mr Popodopolous

[Bristol Rob]

14 minutes ago, Mr Popodopolous said:

He might be but I don't see him going for a huge amount...most recent suggested fee was £15m.

Unsure about Webster, but know Kelly still has 2 years left. Edit just googled- Webster signed a major contract in 2021 and is there- on paper anyway- until 2026.

Dunno if I am as bullish as Mr. Gould- for example his words the other month about retaining the same budget- unless one of several things falls into place.

United realising that Maguire isn't the player they thought he was and that to start their rebuild, they should spend a gazillion pounds on Webster and Kelly.