Davefevs

2 minutes ago, Silvio Dante said:

There are a few angles here now about legality and morality.

- Irrespective of what the insurance was/wasn’t, Cardiff bought Sala and agreed the fee. They owe Nantes the money come what may, unless Nantes agree to write some/all off. Cardiff wouldn’t have been relying on insurance to pay the fee so have to pay

- However, it’s undoubtedly morally wrong for Nantes to start making legal threats (if that is the case), when ES hasn’t even been confirmed as dead yet and with the plane rescue ongoing. That’s terrible form.

- Again, though, we don’t know what obligations Nantes have to meet which they have scheduled from the fee. They may well need the money and are being leaned on by other people.

This would have been better served and everyone better off had this particular aspect not been played in the media. But legally, I’d say Cardiff have to meet the obligation and should probably do so and sort the insurance out later.

On the subject of insurance, I am very unconvinced that this will pay out - and I’m sure the insurers will resist. If the pilot didn’t have the appropriate licence or the plane wasn’t licenced for passengers (as mooted), any insurance firm will look to use it as a get out - again, not morally right, but I see this being majorly fought.

What I think will be the ultimate outcome here is Cardiff having to pay the full fee and ES’s contractual obligations, with no insurance paid out and then seeking civil recourse against the agent/aviation company.

Bottom line remains though there is a family at the end of this (well two families) who have lost a loved one and looking after them should be both clubs primary concern at the moment as opposed to fighting this out in the media at this point

 

That is Mrs F’s View too (ex-Insurance Underwriter).

13 minutes ago, BS4 on Tour... said:

Although, perhaps Nantes still had him insured until Cardiff paid the transfer fee....

They could insure against payment default (unlikely), but...

3 minutes ago, RumRed said:

The transfer had completed, Cardiff will have to pay.  The way it’s being dealt with is distateful but Cardiff have to honour the contract. 

They are more likely to sue for breach of contract.

18 minutes ago, BS4 on Tour... said:

According to a report I heard on the radio today, Nantes had insured Sala for more than the transfer fee they were due to receive from Cardiff....so they will receive two very hefty amounts after this absolute tragedy....just doesn’t seem right, even if it is...

Assuming he is Cardiff’s player officially, Nantes no longer have an insurable Interest over Sala.  

32 minutes ago, JamesBCFC said:

Its only because the bit you pasted said they hadnt.

Whether he accepts or not is unimported as far as the tribunals go- as far as I'm aware. I think the only condition is it can't be a pisstake offer, like 1/4 of whatever he's currently on.

They have to offer him a contract of at least equal to his current contract.

yes, re pasted bit, I missed that, but they don’t have to offer him anything yet....of course it would be good if they could tie him to a new deal.  But they don’t have to let him go in the summer, and they can wait til next summer to offer him another contract.  Gonna piss the player off, yes, but it’s in their control to some extent.

27 minutes ago, cidercity1987 said:

More insensitive that Cardiff are withholding payment I would have thought

I wonder if this is down to Cardiff’s insurers making them check everything is present and correct before authorising the claim.

1 minute ago, Super said:

Obvious this was going to happen.

https://www.bbc.co.uk/sport/football/47146614

They were satisfied enough with the documents to fly him over privately to start training the next day.

As you say, no surprise though.

They probably have and he’s turned it down on interest from other clubs.

Really need the EFL to come down hard on Brum to set a precedent for Villa if needed.

Thought the Swansea / Leeds / Dan James But was worth copying in full.  It’s not just a case of agree a fee, the terms that go with it are key also.

Loan terms cost Leeds
Huw Jenkins, the Swansea City chairman, vetoed the club’s decision to sell the winger Daniel James to Leeds United at 10pm on Thursday after discovering the terms of the payment structure, which would have meant that they did not receive any money for one of their best players until June. The club had agreed to loan James for £1.5 million for the rest of the season, with Leeds obliged to buy him for a set fee of £7 million if they are promoted to the Premier League.

On closer examination of the paperwork, however, Jenkins found that Leeds were not obliged to pay the loan fee for the 21-year-old winger until June 30, with any subsequent transfer fee payable in instalments over four years. That deal would have significantly strengthened Marcelo Bielsa’s Leeds squad, as they chase promotion, for no initial outlay.

Leeds are unhappy at the late collapse of the transfer but may benefit in the long run as James has only 18 months left on his contract and Swansea have not offered him a new deal, so he is likely to be available for much less this summer.

5 minutes ago, 29AR said:

Feel quite a bit of unease seeing that photograph of the plane underwater and a caption 'body seen in plane'. It feels a bit crass and lacking humility - not digging you out @phantom just the fact it was released. 

Yeah, glad you can’t see anything (apart from the plane).

Hope the family of both guys get some closure on this ASAP.

Flint’s amortisation would’ve been pretty minimal, so having paid a sell-on percentage to Swindon, he probably went through the accounts as a £6m profit.

3 minutes ago, Silvio Dante said:

Agree.

I think the question here, and the one that’s been bugging me since yesterday, is that if you wouldn’t fly a £30m Renoir/Van Gogh etc on that plane in those conditions (as nobody would), why would you fly a £30m (when wages included) asset? (Or, indeed, anyone).

This is why I see this going a (protracted) negligence route - as long as they look after the family while that’s being sorted, that’s the important thing

Mrs F who hates footie, said exactly that.

13 minutes ago, RumRed said:

Wrong time for this question, but I’ll answer it anyway, most companies take out a ‘relevant life’ policy (effectively death in service) on individuals to provide financial compensation for their families, or in the case of Walmart (used to do before they were sued for it) as ‘dead peasant’ policies where the company takes the cash. ‘Key man’, is what they take out to cover recruitment costs and the implied value of the lost employee.

Grim, but that’s what should happen.

Yes, I have a relevant life policy set up on my business.

19 minutes ago, spudski said:

Not sure there is ever a right time to ask about this...but I've never been able to find an answer.

What happens with the contract signed?

Do Clubs insure against such a thing?

Is there a clause in the contract?

Do relatives receive the contract total?

Guess it's a personal contact that are all different and agreed between agent, Club and player. Everyone being different.

I guess it would also come into FFP rules as well.

Complicated...

Sorry if this seems inappropriate...but when is there a right time?

Wondering the same.  Not a nice subject.

Deal has been signed I assume, so Nantes due Transfer Fee, etc.

Cardiff you would expect to have a key-person type policy to cover for this, but covering his value as an asset.  How you value that is not something i’ve Got a clue about. 

Sala’s dependent could be due death in service payments, so expect Cardiff to insure against that too.

Could be a compensation claim against the aviation company under aviation law.

Who knows, murky old subject.

5 hours ago, handsofclay said:

Unfortunately, machismo kicks in. With the Munich Air Crash it was stated afterwards that many on board were apprehensive about boarding the plane a third time after two aborted takeoffs in the snow, yet nobody said that they refuse to get on board. Had someone done so there's a good chance others would've followed the lead. Sometimes the bravest thing of all is to be the first to admit that you are too scared to do something and thus refuse to do it.

Similar machismo kicked in with the deaths in plane crashes of music stars Buddy Holly, The Big Bopper and Richie Valens in 1959 and Otis Redding and the Barkays in 1967. In the latter case, they boarded Redding's private aircraft and, according to the only survivor, were apprehensive when the pilot said that the battery was low but hoped there was enough juice in it (in freezing cold weather) to get them from Cleveland, Ohio to Madison, Wisconsin! Indeed, the heating in the plane couldnt be turned on for this reason. Yet, they all boarded without a whimper.

I know it’s very different, but a week before 7/7, I was heading back from meetings in London and had just boarded my train (still a few minutes til it left) at Paddington when the alarms went off and we were all told over the tannoy to evacuate.  Not one of us moved, expecting a false alarm and likelihood of losing your seat.  It was only when the guard came onboard and told us to move that we did.  Within 5 yards of getting off the train a few people said “it will be a false alarm” and now out of the guard’s eye, turned around and got back on the train.  Like sheep we all followed them.  It was a false alarm, but none if us knew that at the time.

16 minutes ago, Mr Popodopolous said:

Probably right- it does very get very complex in terms of rounding, 31st Jan would make sense for exercising an option in fact.

That's a good point that, maybe 1/12 would go into the next year or maybe it would be rounded to include the 1/12th. No idea however on this latter point.

...and probably something we don’t really need to worry ourselves about 

37 minutes ago, Mr Popodopolous said:

I wondered if given contracts tend to run out on 30th June for players.

If we renewed it, i.e. exercised the option at the end then it would be pure profit as 3 years is up and maybe treated as a new deal? However, doing it now which is give or take 2 and a half years in, would have the remaining balance- £500k in the £3m over 3 years scenario- set over the new lifespan of the deal i.e. now until June 2020? In other words, £500k/1.5 rather than contract run down, amortised £3m/3 then option exercised in say May or June 2019 which could in theory have a zero remaining balance.

I very much suspect there’s a trigger point in the contract that says the option has to be exercised by 31st January, or else the player is eligible to start talking to other clubs re being a free-agent in the summer.

Also, not sure how we deal with contracts til 30th June annually, but our accounts up to 31st May.  Would we amortise 11/12ths in the accounts?

20 minutes ago, Coppello said:

Good thread by the way @Mr Popodopolous, I started developing a website analysing FFP but had to give it up due to work. The growing importance of it is quite interesting. I'm actually an accountant a football club and part of my role is analysing their FFP position. It's a Premier League club though so they're subject to slightly different rules. 

Yeah, I can't see a get out unless they get promoted this season. They really have gone gung-ho and show no signs in slowing down in terms of spending. 

In which case, can you answer a Q re amortisation, topical as if yesterday’s contract announcements.

Would O’Dowda’s 3+1 contract have been amortised over 3 or 4 years?

Iscthere any subtlety in a contract “extension” versus “new deal”....terms we hear banded around.  What would happen if COD signed a “new contract” in the summer?  Answer may defend on above answer.

19 minutes ago, Mr Popodopolous said:

Tend to agree- they seem to have been kicking the can down the road a bit.

The interesting thing about Derby- and it is a big unknown- is that while most clubs have amortisation straight line in the standard way, they seem to have players valued and sales or release depend on that- unique among football clubs. Could either bolster them or see them take a big hit this summer with all the out of contract players. Definitely unclear though, sounds like a boost on paper but then again...

 

I remember seeing this.  I guess they could maje their valuations work for them, but they would have to be careful to be consistent it they’ll have big swings each year.

8 minutes ago, Mr Popodopolous said:

Oh yeah, when I said payment terms I meant which year it would be in the books. As you say payment terms however they want- would hope though given Villa's accounts are (as it stands) to the day before the window opens that any transfer would have to be to before that date- so this January. I suppose there is a remote chance of him going abroad when the transfer windows differ e.g. if a Chinese club put in £30m bid in mid February their window is different to ours and that may count. You'd hope a move in Summer 2019 but with the cash flowing in the season before wouldn't fly though, but who knows.

@downendcity Fully agree.

You can probably transfer a player whenever you like in theory....it is only being the registration that that passes in the window.  Whoever buys Grealish in this example, could make a downpayment?

@downendcity 100%

14 minutes ago, Mr Popodopolous said:

Hmm, you're right- it's such a grey area. Their accounts run to May 31 2018 and I assume for 2018/19, it would be May 31 of this year.

Could they arrange a transfer for example and sell on seasons end- on the other hand thereby it being registered in this season for FFP purposes, even if the cash comes in next it would be in this years books.

 Summer window opens 1st June 2019, May 31st is when Aston Villa's accounts run to- as with my answer to question 2 by @Loderingo it's another area that's fairly unknown. Would probably have to be determined as to whether acceptable via lawyers or arbitration- some sort of test case.

Payment terms could be whatever they want.  £1.00 on 31/5, £29,999,999.00 sometime after....they would include the £30,000,000.00 in this year’s player sales.

On 08/01/2019 at 12:15, Mr Popodopolous said:

With Tammy unbelievably staying at Villa and them adding Kalinic and Hause to their already highly expensive squad, they need denying promotion if they go up. 15-20 points and a transfer embargo, if as expected they charge through FFP.

If it looks like they won't stick it onto next season.

On 08/01/2019 at 12:58, Mr Popodopolous said:

Good questions @Loderingo

1. They could. I mean it's debatable as to whether they would be able to raise enough in the case of Birmingham with cost of transfer, amortisation but they could reduce their punishment I am sure. Birmingham would probably need to sell Adams, Jota, Dean to name 3- but if they could raise sums to the right level then yes punishment could be avoided. Or if it was a bit above, punishment could be mitigated significantly as they would be showing big steps towards compliance, by having said fire sale within the required timeframe.
2. This second bit is one area that is unclear to me. It's hard to say- I would say that if punished but still in breach then maybe a lesser punishment would be applied e.g. a fine or embargo if the club is showing concrete steps. For example if Birmingham had that firesale and were compliant for the 3 years to this season, they would still have the problem of the £37m loss last season (minus deducted costs) as the starting point and if there was anyone left worth selling, they may well need another to comply.

Aston Villa have been so flagrant in their approach that I would hope they would really get made an example of, even more than Birmingham. Lengthy embargo and insistence on compliance even after punishment or risk rolling points deductions. Whether that would stand up though, I don't fully know.

This is the problem with the season finishing before the financial year.  Villa could easily argue / include the sale of Grealish for £30m in early summer in their projected accounts to bring them within FFP for example.

10 hours ago, Mr Popodopolous said:

Good news

Think the estimate in the Autumn was 12 + 3 for the aggravated breach. Seems fairly consistent with the Autumn reports though and as such if it still holds, should be between 12-15 anyway- if there was a way to make it have the biggest impact that would be great i.e. this season if playoffs was likely or next season if not.

@solihull cider red Bolton just seems to be a mess, as the Dale Vince thread shows. Yet in FFP terms aok- they're a weird and possibly unique example because it is far more common for a club to be cash fine through a rich owner but in FFP trouble but so random for it to be in reverse- yet Bolton seem to be such a club!

The SCMP rules of 60% of turnover seem complex- perhaps they are being enforced more readily now but it's hard to say. Fairly sure our wage bill was >60% in League One in the 2 years under SO'D and Cotterill. Maybe there is some kind of exemption for existing contracts, don't really know though. Sunderland most definitely will be over and above 60%!

http://www.financialfairplay.co.uk/scmp.php

4 minutes ago, BTRFTG said:

I take it the OP is an accountant and, if so (and don't take this the wrong way,) would take everything they say with a pinch of salt (for that's how accountants operate.)

We were discussing City's position the other day post SL's informative talk to the Senior Reds.

If we're only allowed to lose £39m over 3 years (we claim the larger amount as SL has personally increased his equity in the football club to cover its unsustainable losses,) I don't see how it is the football club lost £39.9m during the last 3 year period without being punished ( the £23.4 would also have breached the single year limit?) Perhaps there's some indexation discounting involved that drops the overall number just under the limit?

I also don't fully understand how FFP relates to wider activity other than football and whether or not (as in our case) allowances are able to be made? The football club doesn't own beneficial control in Bristol Sport, The Stadium Company or the Holding Company, so presume ffp relates wholly to its accounts and nothing more?

I believe the football club at present has net liabilities of £60m. And though SL may be happy to write that off as and when it's his time, it has to be worrying for the future.

There are allowances, such as Academy costs.  MrP will give you a fuller answer.

7 minutes ago, Mr Popodopolous said:

QPR are as part of their settlement, but that maybe a one window thing- it wasn't clear. Definitely shouldn't be however! Birmingham were but can now sign players under very strict conditions, think Sheffield Wednesday were but won't sign anyone anyway and Aston Villa aren't but probably should be- probably will be in the summer! Don't think anyone else is.

Possible that one or all of the last 3 are under a business plan where they work with the EFL. 

The other interesting thing that makes it a bit harder for public analysis is that so few clubs have released their accounts for last season! Only 7 thusfar (plus we can have approximations based on Blackburn Venky's London e.g., probably not a huge difference)  the EFL will have the financial info for last season and projected accounts for this season by March/end of March I think.

Think Villa are fine until they submit their predicted accounts in a couple of months.

By that time Birmingham will have had their hearing, and if the EFL think they want to come down hard on Villa, they need to set a precedent with Brum to leave Villa’s lawyers with no wriggle room.

Great 1st post MP.

To the dogs!!