The Championship FFP Thread (Merged)

[Hxj]

I think that there is some 'over-thinking' going on here.  Just because we don't like something doesn't mean that it is wrong.

The position in respect of the amortisation is as follows:

1.  The treatment of intangible assets for accounting purposes have to follow the required accounting standards

2.  Those rules are then modified by the EFL regulations for FFP purposes.

So as regards Stoke the first test is whether or not the amortisation impairment is valid under the relevant accounting standard.  That standard requires you to impair intangible assets to the recoverable amount where the carrying value is less than the recoverable amount.  The recoverable amount is that which you expect to receive from the sale or use of the asset.  Provided Stoke can demonstrate the correctness of the impairment with respect to the accounting standard they meet the first test.

As regards the second point, there is nothing that I have seen in the EFL Regulations which modifies that treatment, so provided the accounting standards are met the write down is entirely acceptable.

Note that paragraph 1.1.17 of the regulations specifically insists on this treatment.

Edited November 22, 2022 by Hxj

[Mr Popodopolous]

4 hours ago, Hxj said:

I think that there is some 'over-thinking' going on here.  Just because we don't like something doesn't mean that it is wrong.

The position in respect of the amortisation is as follows:

1.  The treatment of intangible assets for accounting purposes have to follow the required accounting standards

2.  Those rules are then modified by the EFL regulations for FFP purposes.

So as regards Stoke the first test is whether or not the amortisation impairment is valid under the relevant accounting standard.  That standard requires you to impair intangible assets to the recoverable amount where the carrying value is less than the recoverable amount.  The recoverable amount is that which you expect to receive from the sale or use of the asset.  Provided Stoke can demonstrate the correctness of the impairment with respect to the accounting standard they meet the first test.

As regards the second point, there is nothing that I have seen in the EFL Regulations which modifies that treatment, so provided the accounting standards are met the write down is entirely acceptable.

Note that paragraph 1.1.17 of the regulations specifically insists on this treatment.

If I am reading this correctly,  and I agree on the 'over-thinking' point without doubt.

My favoured solution for P&S purposes would be to either:

a) Have some restated straight line amortisation for all clubs who have done this. Then let the chips fall where they may.

b) Failing that, just don't allow it for P&S returns- no Covid relief for Impairment of Player Registrations in Covid seasons.

c) Appoint some kind of Commission to adjudicate on the validity of the issue and if the EFL get a favourable verdict then the FFP numbers may change from compliant to breach for Fulham and certainly Stoke. To 2021-22 anyway I expect. Everton almost certainly would.

Still don't fully understand what you mean by..

"As regards the second point, there is nothing that I have seen in the EFL regulations that modifies that treatment, so provided the accounting standards are met the write down is entirely acceptable".

Does this make exclusion from losses more or less acceptable? Even if we accept the concept of the write-down, should it be excluded from P&S calculations?

Stoke signed a bunch of players who turned out to be not that good. A mess of their own making.

"Ooh but Covid meant we couldn't sell- why can't this be excluded from costs"?

More like overspending and a toxic club environment dragging them down messing up their valuation.

Entitled, cynical bunch of tossers at Stoke.

Edited November 22, 2022 by Mr Popodopolous

[Hxj]

59 minutes ago, Mr Popodopolous said:

My favoured solution for P&S purposes would be to either:

a) Have some restated straight line amortisation for all clubs who have done this. Then let the chips fall where they may.

b) Failing that, just don't allow it for P&S returns- no Covid relief for Impairment of Player Registrations in Covid seasons.

None of this is going to happen.

 

1 hour ago, Mr Popodopolous said:

c) Appoint some kind of Commission to adjudicate on the validity of the issue and if the EFL get a favourable verdict then the FFP numbers may change from compliant to breach for Fulham and certainly Stoke. To 2021-22 anyway I expect. Everton almost certainly would.

That option is already available to the EFL, or rather the Finance Unit now.

 

1 hour ago, Mr Popodopolous said:

As regards the second point, there is nothing that I have seen in the EFL regulations that modifies that treatment, so provided the accounting standards are met the write down is entirely acceptable"

The rules say use the appropriate accounting standard and then modify where the EFL regulation state that you can/have too.  For example if a player retires early injured then normally you would write off the remaining intangible and the remaining salary costs at the point that they were not going to pay.  The EFL rules modify that to say that you treat the salary as a cost over the remaining period of the contract.  So that is the normal accountancy treatment being modified for FFP purposes.

1 hour ago, Mr Popodopolous said:

Does this make exclusion from losses more or less acceptable? Even if we accept the concept of the write-down, should it be excluded from P&S calculations?

Under the current rules - entirely and yes - under the current rules.  Provided of course that it is correctly calculated within the accounting standards.  Remember that it was previous sentence which resulted in Derby getting penalised.

 

1 hour ago, Mr Popodopolous said:

Stoke signed a bunch of players who turned out to be not that good. A mess of their own making.

"Ooh but Covid meant we couldn't sell- why can't this be excluded from costs"?

Absolutely and they were lucky.

[Mr Popodopolous]

32 minutes ago, Hxj said:

None of this is going to happen.

Prohibited or just unrealistic? Seems fair to me. You're right though I suspect, certainly the League would need to get a favourable judgement for any kind of re-statement probably.

32 minutes ago, Hxj said:

That option is already available to the EFL, or rather the Finance Unit now.

It's not an IDC but another form of Commission isn't it? It's adjudication rather than punishment- I forget the correct term but one of the Derby cases referenced it as an option.

Either way I'd say it needs referral.

32 minutes ago, Hxj said:

The rules say use the appropriate accounting standard and then modify where the EFL regulation state that you can/have too.  For example if a player retires early injured then normally you would write off the remaining intangible and the remaining salary costs at the point that they were not going to pay.  The EFL rules modify that to say that you treat the salary as a cost over the remaining period of the contract.  So that is the normal accountancy treatment being modified for FFP purposes.

Is this not a unilateral and subjective interpretation of the regulations though, by Stoke? I'm struggling to see the FFP/P&S regulation even with Covid amendments that says a club can just exclude millions in amortisation of Player Registrations for Covid particularly given the massive cost saving in upcoming years.

There was certainly no career ending injury in the mass write-down of 2020. All of those players who were there at that stage, none have retired through injury.

I haven't even got onto salary yet although on that note there is a Provision for Onerous Contracts totalling about £9-9.5m in 2020-21 Stoke accounts.

32 minutes ago, Hxj said:

Under the current rules - entirely and yes - under the current rules.  Provided of course that it is correctly calculated within the accounting standards.  Remember that it was previous sentence which resulted in Derby getting penalised.

Not altogether sure that I wrote my part of that post you responded to so well. My fault.

I should have written 'more likely' or 'less likely'.

Trying to get my understand this bit:

*Concept- Accepted. 

*Exclusion from  P&S?

Yes. Does that mean then it's £88m - FFP allowance - Rest of Covid allowance=FFP loss. The remainder of the Covid costs that year were £8m or thereabouts.

Or

£88m-FFP allowance-the £30m impairment and the £8m remainder (yes I know impacts are halved and averaged but one dodgy FFP practice at a time eh. ).

32 minutes ago, Hxj said:

Absolutely and they were lucky.

Still time for this practice to be challenged. Other clubs really need to lodge complaints with the League, Stoke are as dodgy FFP wise as Derby were I'd say.

Edited November 22, 2022 by Mr Popodopolous

[Mr Popodopolous]

Should Lansdown try to rally support  of other owners against Stoke? I think he should consider it.

Should he do a Gibson and lodge a formal complaint about perceived serious and cynical breaches or at least attempts to mask FFP issues. My view is maybe.

Edited November 22, 2022 by Mr Popodopolous

[Davefevs]

25 minutes ago, Mr Popodopolous said:

Prohibited or just unrealistic?

Unrealistic…they produced a set of guidelines…why would they back-track on these? And why now?

26 minutes ago, Mr Popodopolous said:

Is this not a unilateral and subjective interpretation of the regulations though, by Stoke?

Yes, and their independent people they used.  We can only assume that several months since these accounts were produced, that if the EFL disagreed, Stoke would be under embargo.  Once again we have to look beyond what is FRS102 standards…used in production of the accounts and what allowances the EFL have beyond this in the P&S submission.  For example (a simple example) there’s nothing in the production of the annual accounts that allows a company to “remove Academy costs”, but the rules of P&S absolutely allow it.

29 minutes ago, Mr Popodopolous said:

Still time for this practice to be challenged. Other clubs really need to lodge complaints with the League, Stoke are as dodgy FFP wise as Derby were I'd say.

Why would other clubs lodge complaints?  They agreed the revised Covid P&S rules.  If they felt the rules unfairly favoured a small number of clubs, e.g, the likes of Stoke, us, etc…why accept the rules?

That is your opinion.  You may be right.  I think there is a huge difference between the ownership of both clubs, and that has a bearing.  From our outside view onwards, the Coates (and Lansdown) ownership and approach to these types of things is to work with the EFL.  Morris’s approach was to work against them.

 

 

[Davefevs]

1 minute ago, Mr Popodopolous said:

Should Lansdown try to rally support against Stoke? I think he should.

Should he do a Gibson and lodge a formal complaint about perceived serious and cynical breaches or at least attempts to mask FFP issues. My view is yes.

How would Lansdown know what Stoke have put into their P&S submission?  Should he?  Nope.

You’re letting your personal opinion of perceived wrong-doing (with no evidence) get the better of you.

Its great that this thread and others have educated ourselves and others of some of the finer details of the financial side of football, but your “crusade” to opine that there is wrong-doing against a set of guidelines that aren’t in the public domain, nor Stoke (or City’s) P&S submissions that aren’t in the public domain either, and suggest someone at City (SL) who has seen the guidelines, but not Stoke’s submission…should lodge a complaint is probably going too far.

It’s probably time to just rely on official comms coming out of clubs and / or EFL.  Due to new rules for P&S as a result of covid, we (as fans, albeit ones who like the financial side) can no longer pick up 3 or 4 years of accounts, pop them into excel, and accurately say a club is in breach of £39m or not.

Sorry if that seems harsh (rude?).

[chinapig]

12 minutes ago, Davefevs said:

From our outside view onwards, the Coates (and Lansdown) ownership and approach to these types of things is to work with the EFL.

And didn't Gould indicate some time ago that we and Stoke were aligned, at least as far as adding back loss of transfer income was concerned?

I certainly don't see any grounds for conflict between us and them in any event.

[Davefevs]

Just now, chinapig said:

And didn't Gould indicate some time ago that we and Stoke were aligned, at least as far as adding back loss of transfer income was concerned?

I certainly don't see any grounds for conflict between us and them in any event.

They certainly garnered each other’s support on the overall “covid allowances” and costs of the collapsed transfer market.

If they were a small group of beneficiaries, the other 60+ clubs would’ve seen through it.

[Mr Popodopolous]

1 minute ago, Davefevs said:

Unrealistic…they produced a set of guidelines…why would they back-track on these? And why  now?

More time to better assess the impact of Covid on the market. Of course the specifics of these guidelines are quite important. In theory they could raise issues yes but the specifics of the type of and conditionality of the approval can also be important.

Only the clubs and EFL will the finer detail.

4 minutes ago, Davefevs said:

Yes, and their independent people they used.  We can only assume that several months since these accounts were produced, that if the EFL disagreed, Stoke would be under embargo.  Once again we have to look beyond what is FRS102 standards…used in production of the accounts and what allowances the EFL have beyond this in the P&S submission.  For example (a simple example) there’s nothing in the production of the annual accounts that allows a company to “remove Academy costs”, but the rules of P&S absolutely allow it 

Independent advice in a case like this I'm sceptical about just how independent it is. Stoke hired the independent advisers, Stoke presumably paid for the independent advisers therefore...

Agreed FRS 102 isn't everything but this seems an unusual and opportunistic accounting treatment that only a handful of clubs (that we know of) appear to have utilised.

If loads have done it or have done transfer add-backs then it's a lot more acceptable.

I wonder if they could though- surely it takes investigation over the medium to longer term for a case like this. The timeframe of some past cases shows it wasnt as quick as it should have been. Derbt could and did trade normally until Jan 2020 albeit with a couple of short term embargoes.

13 minutes ago, Davefevs said:

Why would other clubs lodge complaints?  They agreed the revised Covid P&S rules.  If they felt the rules unfairly favoured a small number of clubs, e.g, the likes of Stoke, us, etc…why accept the rules?

That is your opinion.  You may be right.  I think there is a huge difference between the ownership of both clubs, and that has a bearing.  From our outside view onwards, the Coates (and Lansdown) ownership and approach to these types of things is to work with the EFL.  Morris’s approach was to work against them.

 

 

Depends how many clubs have argued this sort of thing. From what we can see publicly and yes that maybe at odds with the reality, not many have.

The only thing we all easily know about publicly agreed was the initial £5m x 2 and £2.5m. The rest is conjecture as to what has and hasn't bren agreed- or what categories are deemed permissible or still should be tested.

More open yes but there was a little snippet in one of the cases that said EFL advice or working with them let us say was not able to override the regulations.

In other words if the EFL permitted something and the advice turned out to be wrong, the club could be the ones to carry the can. I'd have to trawl through old cases...see if it's findable.

In terms of Stoke v Derby it's more I mean the cheek of it, the range of loopholes. Find it highly dubious.

[Davefevs]

2 minutes ago, Mr Popodopolous said:

The only thing we all easily know about publicly agreed was the initial £5m x 2 and £2.5m. The rest is conjecture as to what has and hasn't bren agreed- or what categories are deemed permissible or still should be tested.

No, we know that it is possible from the published rules that sums greater that these amounts can be claimed with the right supporting evidence.  There is a difference between a summary comms issued by the EFL on 17th Feb 2022 and the full minutes of that meeting and guidelines issued to each club.  The rules have been updated and include more detail than that summary statement.

 

8 minutes ago, Mr Popodopolous said:

From what we can see publicly and yes that maybe at odds with the reality, not many have.

Have any clubs?

[Mr Popodopolous]

20 minutes ago, Davefevs said:

No, we know that it is possible from the published rules that sums greater that these amounts can be claimed with the right supporting evidence.  There is a difference between a summary comms issued by the EFL on 17th Feb 2022 and the full minutes of that meeting and guidelines issued to each club.  The rules have been updated and include more detail than that summary statement.

Supporting evidence can argue a case and definitely there will be more detail 'in-house' ie between clubs and the League but don't think it can amount to a final determination. The closest category I can find is Review Applications but whether it's applicable here I'm unsure.

21 minutes ago, Davefevs said:

Have any clubs?

On a basic level so far we know of...Fulham and their impairment, Nottingham Forest and their transfer add-backs and Stoke and their Impairment and transfer add-backs.

I suppose loads of others may have done this internally. Maybe nobody will fail P&S to 2021-22 and 2022-23.

[Davefevs]

9 minutes ago, Mr Popodopolous said:

Supporting evidence can argue a case and definitely there will be more detail 'in-house' ie between clubs and the League but don't think it can amount to a final determination. The closest category I can find is Review Applications but whether it's applicable here I'm unsure.

the internal process for receiving any P&S submission is an unknown for us, let alone where there are covid numbers to exclude.

On a basic level so far we know of...Fulham and their impairment, Nottingham Forest and their transfer add-backs and Stoke and their Impairment and transfer add-backs.

sorry, I thought you meant have any clubs complained.

I suppose loads of others may have done this internally. Maybe nobody will fail P&S to 2021-22 and 2022-23.

As I’ve said before I suspect clubs would rather just include a mention of Covid impacts in their Strategic Report, rather than go overt with actual numbers.  Stoke’s 19/20 accounts, signed off on 29/3/21, before the new rules were in place, looks like an attempt to get ahead of the curve (maybe influence others?), but you wonder if they’d known they could do covertly, whether they might’ve taken a less disclosed approach.

 

FWIW I’ve asked the EFL to share their guidance on add-backs.  I’m not expecting a response!!!

[Mr Popodopolous]

2 hours ago, Davefevs said:

FWIW I’ve asked the EFL to share their guidance on add-backs.  I’m not expecting a response!!!

Fair play! Let's hope they shed some light but it's doubtful as you say.

As to your other point, won't quote the whole post but yes I should take a bit of a step back in respect of specific allegations- however I still consider the transfer add-backs and the concept of excluding Impairment of Player Registrations due to Covid as being open to question both under FFP regs and maybe in certain aspects under accounting standards (FRS 102). Neither sit well with me as concepts on the face of it.

Think it's fair to estimate as a starting point for Stoke e.g. and for Fulham and Nottingham Forest to an extent- in the case of Fulham they did reference the £20.9m Impairment as a perceived Covid cost. Strategic Report referencing however may be the way.

I might send them an e-mail too the EFL, about whether policies fit consistently.

[Mr Popodopolous]

Another observation is that specific to us, the club, them sending mixed messages doesn't help. I get that this situation is fluid, complex and open to interpretation but:

1) Claims such as the wage bill down by 1/3, is liable to blur lines at best and potentially misleading (to fans I mean).

2) Especially when the starting point for FFP is the bottom figure, the consolidated wage bill that includes everything. Yes not the club in isolation or the playing squad in isolation- or the figure afaik net of NI or say matchday staff.

3) See also The claims that were perhaps out of context mamely the wage bill was now at £20m or even halved or between £15-20m. Feeds into point 1 again. What is a strict definition of the wage bill.

4) In August when both Gould and SL came our with differing messages on FFP in the space of a few days.

There are valid grounds for criticism of the club here. As well as praise namely the disclosure of the headline loss at Fans Forum, the early release of accounts well before the end of February.

Edited November 22, 2022 by Mr Popodopolous

[Davefevs]

6 minutes ago, Mr Popodopolous said:

Another observation is that specific to us, the club, them sending mixed messages doesn't help. I get that this situation is fluid, complex and open to interpretation but:

1) Claims such as the wage bill down by 1/3, is liable to blur lines at best and potentially misleading (to fans I mean).

2) Especially when the starting point for FFP is the bottom figure, the consolidated wage bill that includes everything. Yes not the club in isolation or the playing squad in isolation- or the figure afaik net of NI or say matchday staff.

3) See also The claims that our of nowhere saw the wage bill stated at £20m or even halved or between £15-20m. Feeds into point 1 again.

4) In August when both Gould and SL came our with differing messages on FFP in the space of a few days.

There are valid grounds for criticism of the club here. As well as praise namely the disclosure of the headline loss at Fans Forum, the early release of accounts well before the end of February.

Agree to an extent…but I’ll give them benefit of the doubt because was also around the time of lots of conversation re UEFA salary cap rules coming in.  That salary cap is likely to be much more closely linked to player costs.  Going back to my early days of looking at FFP, 5/6 years ago (!!!) I assumed Holdings company rather than just BCFC was hugely advantageous to us…but over time I’m not sure it is really.

Complete speculation from me, but you could forgive the EFL wanting to quickly get the current P&S stuff done and dusted without anyone punished and usher in the new rules as a nice blank sheet of paper to work from going forward.

[Mr Popodopolous]

1 hour ago, Davefevs said:

Agree to an extent…but I’ll give them benefit of the doubt because was also around the time of lots of conversation re UEFA salary cap rules coming in.  That salary cap is likely to be much more closely linked to player costs.

That's true, fair. Context of August but my own view even at that time and clearly I'm just a fan on the forum was that it'd be completely incongruous for the League just to say "Ah you know what, forget it to 2022-23 as the system changes anyway in 2023-24". I do get it though and there was uncertainty.

Can see that, some of the numbers mooted still feel a bit toppy and on the optimistic side though.

1 hour ago, Davefevs said:

Going back to my early days of looking at FFP, 5/6 years ago (!!!) I assumed Holdings company rather than just BCFC was hugely advantageous to us…but over time I’m not sure it is really.

I think it probably computes out over time proportionally speaking. The revenue is undoubtedly higher in Holdings although the cost base is lower and profit and loss a bit superior...

...Although regular FFP allowances will also be lower with the club accounts in isolation. Big gap in depreciation alone some years. Plus a lower revenue base- both have pros and cons though with Holdings more money to waste I guess as we've seen!!

1 hour ago, Davefevs said:

Complete speculation from me, but you could forgive the EFL wanting to quickly get the current P&S stuff done and dusted without anyone punished and usher in the new rules as a nice blank sheet of paper to work from going forward.

Agree, that could be the way that it proceeds in the next year or 2.

Another thought that occurs is that IF Everton emerge unscathed wirh most revenue, add-backs and claims of £170m from 2019-20 and 2020-21 then how can pretty much anyone be punished.

Both Premier League and Championship see governed by P&S after all- would there be any scope for a case against the PL for failure to enforce the same regs.

Edited November 22, 2022 by Mr Popodopolous

[Mr Popodopolous]

I might also add, if they (the League- ie in this instance the Football League) are found to have been excessively sympathetic or lenient to clubs, any clubs that is.

Well it wouldn't surprise me if that was open to legal challenge down the pipe, the EFL working too closely I mean if it turned out that had happened.

As a regulator they should not he steering a club out of the shit for want of a better term. Not saying that it's happened here but covering all bases...could have happened with PL and Everton.

Edited November 22, 2022 by Mr Popodopolous

[Mr Popodopolous]

Again read an interesting claim about Stoke. SCFC- or as I call them Stoke Cheaters FC.

Anyway. Apparently their wage bill fell 50 pct in O'Neil's time there...in the season in whixh he joined it was £54m...

Unsure if it means it's 50 pct lower now or this referred to last season but it really puts our efforts into perspective if it's anywhere near true.

£50m in 2020-21, for their consolidated wage bill and ours was £35m.

Now theirs is/was reportedly £27m and ours is £30m- as of last season!!

Our efforts really don't look all that, in that context. Plenty of devil in the detail of course...

...For example how was the Provision for Onerous Contracts in 2020-21 factored in? That's not FFP excludable- it was provided for but unsure if it was utilised, but was about £9m in any event.

Might it be £27m plus that- which accelerates some of it into that year and out of subsequent years.

Might the £27m be players only or football side only but not include the other Operating Costs and wages- similar to our potential debate between Club and Holdings.

Still no Stoke accounts but their local journo said wages down by half.

I suppose how it worked here was...

1) Do a huge write-down of £42-43m in 2019-20 and of that £30m was assigned to Covid. That's £30m in costs removed. The initial £12-13m seemed like regular impairment and may have been made prior to the Pandemic.

2) Think there was a further £3m in 2020-21- wasn't specified as a  Covid cost.

3) This enables a player to depart the club without incurring an Impairment loss or a genrtal loss on disposal provided of course that their departure is equal to that of the remaining book value- or to leave on a free should the departure not yield any fee. No impairment loss, impairment eliminated.

4) The £9m in onerous contracts would be included in costs but frontloaded presumably- and probably less than the costs of fulfilling it over the timeframe of the remaining contract. At minimum it brings it forward but presumably these or some of these would be relating to players that were under contract but who left in 2021-22 in particular summer 2021.

I now estimate bszed on the remainjng book vakue and subsequent additions, that their annual cost of amortisation (player registrations) to be maybe £5-6m as of last season. Wages who knows.

For context amortisation was £30m in 2019-20 and that didn't include the £30m in Covid and £12-13m in general player impairment.

It's definitely clever accounting but...

Edited November 23, 2022 by Mr Popodopolous

[Mr Popodopolous]

I know we're not so big on speculation now @Davefevs @chinapig @ExiledAjax

Still interesting to debate, do we actually believe Stoke cut wage bill that quickly? The reporter didn't put hard numbers out but as mentioned did say down by half though the precise period wasn't made clear either.

Edited November 23, 2022 by Mr Popodopolous

[Davefevs]

I’d go by what is in the accounts:

Stoke City FC Ltd:

19/20 - £52.663m (834 employees)

20/21 - £47.983m (662 employees) no crowds

I suspect employees numbers will be back up again when they submit last season’s accounts.

Looking quickly at Transfermarkt, I don’t see too many players leaving in the summer of 2021 to see a huge decrease for the period of last season (21/22), e.g. Wimmer

However a few players left in last summer that might reduce 22/23s wage bill, e.g. Afobe.

But I’d suggest this is journalistic license from the PL budget of £94m at end of 2018, rather than recent years halving!

I don’t read “onerous contracts” as wages being written off either, I think you’re leaping to the wrong conclusions there.  I read it as impairment, which they’ve already given detail on (whether you agree with it or not).

[Mr Popodopolous]

Thanks. I'll try and find the quote in question too, for context etc.

It's a huge claim isn't it- if they actually mean that now the wage bill is as low as £27m. Journalistic license or poor interpretation is also quite possible- not many local journos are financial pundits too! I'll reserve judgement until their actual accounrs ate out as there are too many missing pieces at this stage.

That would be a new one as onerous contracts has down the years been wage related- maybe Stoke are applying it differently but that's the wage side usually. Onerous contracts is impairment of amortisation or of wages?

Unlike us there seems not to be a several million gap in wages between club and Holdings. Less events maybe? No real idea.

[Mr Popodopolous]

Little bit of speculation I saw on Twitter but one Reading fan asked if they might have breached their Business Plan.

Relevant snippets below, from the Decision itself and from the Budget.

[Mr Popodopolous]

This is interesting, an interview with Rick Parry and it pertains to possible reform.

https://www.stokesentinel.co.uk/sport/football/transfer-news/stoke-city-parachute-payments-efl

Just on the Stoke stuff, for anyone from there lurking:

1) Some of my words were perhaps ott but is there a case to answer? I don't think that unusually large Covid numbers can just be waved through

2) It's not just Stoke I criticise, I have in the past been very critical of Derby, at times Sheffield Wednesday, fairly furious about Aston Villa and have not been afraid to speculate on my own club and their FFP compliance or what the add-backs might be and wherher they may be in accordance with FFP and even FRS 102 itself- so I'm not biased.

Edited November 23, 2022 by Mr Popodopolous

[Mr Popodopolous]

Well no I am biased I suppose. I am biased against clubs of any kind who either breach FFP or who use unusual means to try to achieve compliance.

My club aren't exempt from this but it's conjecture at this stage unlike past cases.

As it is with Stoke, Fulham, Nottingham Forest.

Edited November 23, 2022 by Mr Popodopolous

[Mr Popodopolous]

The relevance to P&S remains to be seen but the following clubs accounts- directly or otherwise, are due out by the end of 2022.

*Via Bet365, we should see Stoke City's numbers to end of March 2022 at least. The detail underpinning these possibly not so much.

*Millwall- made up to end of June 2022.

*Via Venkys London Limited, Blackburn's accounts to end of March 2022.

Edited November 24, 2022 by Mr Popodopolous

[Mr Popodopolous]

Just a thought too.

On one level I get the idea of giving everyone a 'Pass' owing to Covid and the transition between the old and new system across 2021-22 and 2022-23...but good Governance dictates that probably shouldn't happen. FFP objectives dictate that it probably shouldn't happen too- the objectives were iirc:

1) To punish those who infringe.

2) To maintain/restore confidence in the League etc.

3) To make sure that those who legitimately complied don't get penalised for doing so.

There may have been a fourth too. Wasn't worded this way of course but good Governance IMO dictates that where questions exist for periods ending 2021-22 (not us) and 2022-23 (potentially could be us and others) the EFL pursue the issue.

Am sure btw, that some of the IDCs and sanctioning sections are along these lines. I recall reading it but unsure which case!

Edited November 25, 2022 by Mr Popodopolous

[Mr Popodopolous]

I find this snippet of the Derby v EFL appeal last Spring ie 2021 quite interesting in relation to transfer add-backs.

Paragraph 76 seems to fly in the face of permitting potential transfer add-backs.

"No right to sell a player's registration, merely an expectation contingent on..."

The IDC 1 back in 2020 seemed to favour this treatment or Derby's argunent. The LAP however, it cut little ice for them disregarding as it did 'Appeal to common sense' 'Specifics of the Football transfer market' etc.

The question is therefore, are internal add-backs bound by FRS 102? I believe that under FRS 102 transfer add-backs well pretty dodgy ground for any clubs who did that but FRS 102 if it isn't applicable to internal P&S add-backs then it isn't  a relevant consideration here.

I believe it's up for debate. Not decided or settled one way or the other.

Edited November 25, 2022 by Mr Popodopolous

[Davefevs]

21 minutes ago, Mr Popodopolous said:

I find this snippet of the Derby v EFL appeal last Spring ie 2021 quite interesting in relation to transfer add-backs.

Paragraph 76 seems to fly in the face of permitting potential transfer add-backs.

"No right to sell a player's registration, merely an expectation contingent on..."

The IDC 1 back in 2020 seemed to favour this treatment or Derby's argunent. The LAP however, it cut little ice for them disregarding as it did 'Appeal to common sense' 'Specifics of the Football transfer market' etc.

The question is therefore, are internal add-backs bound by FRS 102? I believe that under FRS 102 transfer add-backs well pretty dodgy ground for any clubs who did that but FRS 102 if it isn't applicable to internal P&S add-backs then it isn't  a relevant consideration here.

I’m not sure I’m talking about the right / same thing here, but don’t forget Derby we’re trying to amortise differently, ie not straight line, nor to £0m, because they said they’d always sell before that point.  We’ve seen that isn’t the case, with players leaving Derby for free, e.g. Lawrence.

We've seen Stoke impair, which is fine from an FRS102 perspective.  The only question you have (imho) is whether they should be allowed to offset the loss for P&S.  it is written in their accounts (same in ours) that they can revalue downwards.  I think Derby were keen to value upwards too at some point!!!  Ultimately they were looking to “try it on”!

So I don’t think this is about add-backs per se, and if it is, it’s not the same (imho), there’s was about systematically trying to reduce their amount of amortisation in their books.  We don’t even know the scope of “add-backs” so we can’t be sure they are the same if you think this is referring to the same.

[Mr Popodopolous]

24 minutes ago, Davefevs said:

I’m not sure I’m talking about the right / same thing here, but don’t forget Derby we’re trying to amortise differently, ie not straight line, nor to £0m, because they said they’d always sell before that point.  We’ve seen that isn’t the case, with players leaving Derby for free, e.g. Lawrence.

We've seen Stoke impair, which is fine from an FRS102 perspective.  The only question you have (imho) is whether they should be allowed to offset the loss for P&S.  it is written in their accounts (same in ours) that they can revalue downwards.  I think Derby were keen to value upwards too at some point!!!  Ultimately they were looking to “try it on”!

So I don’t think this is about add-backs per se, and if it is, it’s not the same (imho), there’s was about systematically trying to reduce their amount of amortisation in their books.  We don’t even know the scope of “add-backs” so we can’t be sure they are the same if you think this is referring to the same.

This is fair, am seeking to cover all possibilities, bases and angles however. No accusations to any clubs at this point in time.

Yes Derby were clearly trying it on and non compliant with FRS 102. The way in which they amortised and am expectation that they would always sell by Year 3 at the latest.

We, Stoke and everyone else are straight line but my slight concern has come from the idea about expectation of sale, the possible common thread there. Wondering if that LAP paragraph could set a precedent, probably not.

Impairment fine as a concept (though strictly speaking there maybe criteria but we've seen many clubs disregard these and just use it to make upcoming FFP easier). Whenever a club relegated from the PL for example. It's subjective I guess but can be abused- see Aston Villa in 2015-16...To 2018-19.

1) Villa Park impaired along with some other Tangible assets and Intangible assets.

2) Absolutely fine but based on a strict  definition of Impairment, subsequent actions perhaps should not have been.

3) Villa Park and perhaps some others seemed to be reclassified as an Investment Property post relegation. This was at Fair Value which was commensurate with the Impairment of 2015-16.

4) Sometime in 2018 probably, it seemed to be reclassified back to Tangible Assets and presumably revalued upwards.

5) Even if we accept that the £56.7m valuation was fair, was not the Carrying Value too low- based on the 2015-16 write-down it was sold roughly in 2018-19 for its probable Carrying Value pre Impairment.

Dodgy as hell.

Back to more routine. Based on that, I wouldn't haul up Stoke or anyone for the mere act of impairment therefore but whether such items should be excluded from costs due to Covid well I dunno.

This is true we don't know for sure. Not talking about us specifically but ones where we have seen it listed include Aston Villa, Everton, Fulham, Nottingham Forest and Stoke. Some more transparently than others.

[Mr Popodopolous]

Talking of Everton, sounds like the PL have let them off big time if the Esk is right.

Given that P&S is across both divisions, does Everton seemingly getting off the hook set a precedent for the rest?

Edited November 25, 2022 by Mr Popodopolous

[Mr Popodopolous]

Pre tax losses- Everton FC

2018-19..£111.845m

2019-20 and 2020-21..£260.7m (rounded)- halved for Covid that'd be £130.35m.

2021-22..£72m (subject to the estimates of the Esk).

This is prior to FFP and Covid deductions but the challenge is to legitimately get this down to £105m!!

Pre tax losses once rounded etc, before all of this, £314.195m.

Would be rather perverse if the Football League started charging clubs for much lesser add-backs and or breaches.

(Everton claimed £170m across the 2 Covid years- potentially rising to £220m).

The quantifiable losses were about £81-82m iirc.

The rest they were arguing for in impairment, lost player sales and cost savings of these etc- speculative basically. They outlined some of the other items but not all.

Covid claims and add-backs- Everton FC

Edited November 25, 2022 by Mr Popodopolous

[Davefevs]

39 minutes ago, Mr Popodopolous said:

Impairment fine as a concept (though strictly speaking there maybe criteria but we've seen many clubs disregard these and just use it to make upcoming FFP easier). Whenever a club relegated from the PL for example. It's subjective I guess but can be abused- see Aston Villa in 2015-16...To 2018-19

Two sides to it though isn’t there?

Firstly, Relegation doesn’t necessarily mean a player’s value goes down, nor that it goes down greater than the amortised value either.

Secondly, club’s aren’t allowed to increase values for promotion, player improves, etc either.

So, I don’t think I’d accuse clubs of disregarding the criteria per se.

Plus, you’d start to see claims of players being impaired more in good P&L years to allow them to sell for a greater transfer profit in future years.

Think it’s one to accept the accounting principle for what it is…it’s well established.  It the what’s allowed for covid that creates the debate.

[Mr Popodopolous]

15 minutes ago, Davefevs said:

Two sides to it though isn’t there?

Firstly, Relegation doesn’t necessarily mean a player’s value goes down, nor that it goes down greater than the amortised value either.

Secondly, club’s aren’t allowed to increase values for promotion, player improves, etc either.

So, I don’t think I’d accuse clubs of disregarding the criteria per se.

Plus, you’d start to see claims of players being impaired more in good P&L years to allow them to sell for a greater transfer profit in future years.

Think it’s one to accept the accounting principle for what it is…it’s well established.  It the what’s allowed for covid that creates the debate.

Agreed but it is a nice convenient thing for a club relegated to big bath it into the year of relegation. Not uncommon and Intangibles cannot be revalued upwards unless they specifically have that policy. I suppose impairment can be reversed but that's quite rare.

Agreed. Although the Aston Villa impairment of Tangible Assets on relegation and how it came to be sold at a good profit is still quite dodgy, FFP wise at minimum.

That is a fairly unusual case though and we are going back years now.

Yeah agreed that largely speaking impairment of Intangibles is normal although the EFL bit seemed to specify some criteria. Agreement that Covid add-backs the big thing and what should or shouldn't count the debating point.

Edited November 25, 2022 by Mr Popodopolous

[Davefevs]

I don’t really care about the Tangible Assets at this point…that ship has sailed.

[Mr Popodopolous]

3 minutes ago, Davefevs said:

I don’t really care about the Tangible Assets at this point…that ship has sailed.

I fear it may have yes. All the same it's dubious the Aston Villa stuff.

[Mr Popodopolous]

What about the Everton stuff?

Two different governing bodies yes but same and in theory harmonised regs across both Leagues/divisions.

Any leverage for us or others at this level, to use Everton as a precedent?

My overall guess is 'Probably not' but then again...

Edited November 25, 2022 by Mr Popodopolous

[Mr Popodopolous]

PPS. Everton fans bleating about austerity don't make me laugh.

The Case for

1) Richarlison sold- yes. Though accounted for in 2021-22 surely.

2) Digne before that back in January.

3) Limited expenditure in summer 2021 which also saw James Rodriguez sold. Begovic, Townsend, Gray, Rondon, all on frees except for Gray who cost £1.5m.

4) Ancelotti compensation will have helped.

5) Loaned out Kean

The Case against

1) Benitez in will not have been cheap!

2) For all the outgoings during rh3 season, in January they:

a) Signed Patterson for £12m

b) Mykolenko for £17m

c) Alli on a free but with fee to rise based on conditions met, presumably picked up decent wages.

d) Loaned in El Ghazi from Aston Villa and Van de Beek from Man United.

3) Sacked Benitez- that costs!

4) Is Lampard cheap?

Then this summer:

Sold Allan and loaned some others. Kean remains in Turin. Possibly a sale to be triggered tnis season.

Otoh

1) Tarkowski- Free but decent wages?

2) McNeil- £20m

3) Onana- £33m

4) Maupay- £15m

5) Garner- £15.5m

6) Gueye- £2m

Loaned in Coady from Wolves and Vinagre from Sporting.

Are they aligned wirh FFP I wonder at all times? Let alone under a strict business plan to ensure compliance or have they been? Doesn't look like it to me!

This is kid gloves treatment.

If they are £105,000,001 they should be charged I believe.

Edited November 25, 2022 by Mr Popodopolous

[Mr Popodopolous]

Looking again at the PL and their version. In their handbook.

It surely can't be the case but maybe it is...that flies in the face of everything at UEFA and level if true but surely they don't snap back to  3 year monitoring again just like that.

The combined average, you can't just benefit from it and then just shelve it. PL handbook for 2022-23 does not make it clear though.

[Mr Popodopolous]

I'll keep my FFP related stuff on this thread I think while it is hypothetical.

Still don't see anything so far in FRC Covid-19 amendments that validates add-backs of that (transfer revenue) nature. Dont see anything that forbids it either.

Exclusion of costs for Covid 19 is an odd one, thinking Player Registration Impairment...seems dubious to me from an FFP perspective still.

The crux is, are internal requirements for club to League reporting bound by FRS 102 and other such regulations?

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

Take this scenario.

Club A are at £40m in P&S losses to 2022-23 before the impact of Covid-19 is factored in.

The EFL add-backs for all are £5m, £5m and £2.5m. This falls within that. P&S Loss to 2022-23 is £32.5m.

Club B are projected to be up at say £64.5m before the impact of Covid-19 is is factored in. A huge overspend.

Club B applies the League voted on limits of £5m x 2 and £2.5m applied. This therefore drops it down to £57m.

Club B then claim for £30m in lost transfer revenue across 3 years in addition.

£10m, £10m and £10m. Computes our at £20m.

Minus say £3m in appropriate levies, remaining book value etc. £18m when 2019-20 and 2020-21 averaged all adds up to £27m.

Their P&S return is therefore around £39m.

Club B have therefore been rewarded greatly, given a huge reprieve for speculation as to lost gains.

In no way is that equitable for the majority in general or Club A in particular.

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

I'm playing Devil's Advocate a bit here but the case in favour of Club B is?

Or even better, Club C are at or below £39m even prior to Covid add-backs

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

The other bit to add.

Club D have come down from the PL in 2017-18, first season back at the level in 2018-19 and have usual FFP allowable costs of £9m per season. The combined average etc takes it in...

2017-18- £30m pre-tax loss

2018-19- £15m pre-tax loss

2019-20 £88m pre-tax loss

2020-21 £9m pre-tax loss

Combined average of 2019-20 and 2020-21 therefore £48.5m.

£93.5m is the adjusted pre-tax loss.

2017-18.. £21m loss

2018-19..£6m loss

2019-20 and 2020-21..£39.5m loss (average)

£66.5m.

Typical Covid add-backs of applicable to 2019-20 and 2020-21 of £5m x 2 Averaged.

Falls to £61.5m.

However said club have argued £56m in the 2 seasons.

Is that fair on Clubs A and C especially? Or does it maintain confidence in the League?

Only fair solution is a Disciplinary Commission or Review Hearing for the principles underpinning B and D IMO.

Only an Independent body can adjudicate on this.

For Clubs A and C have cut their cloth accordingly and are not reliant on a potentially speculative add-back or cost allocation.

Clubs B and D were on course to breach- and in the case of B, might achieve compliance through hoped for but certainly unconfirmed hope. Club D get outrageously fortunate as they perhaps had no such plans in place...and are able to big bath or seek to big bath their losses in with Covid.

Possibly needs referral.

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

Last bit.

If Clubs B and D have a good and winning argument, then maybe they should welcome the transparency of a referral to adjudicate on the principle.

Justice needs to be seen to be done etc.

The sanctioning guidelines also serve a purpose should there be a case to answer:

1) They punish the overspending club(s) should any be found in breach.

2) They vindicate those who cut their cloth and stuck to or below the Upper Loss tariff. The majority I would expect.

(3) They serve to deter future breaches by clubs, as the punishments might be quite substantial.

(4) They maintain or restore confidence in the League.

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

One more note. Talk that FFP rules might change very quickly.

Plus found the 50 pct wage bill fall claim in a little more detail. Might be interested @Davefevs  ?

This presumably would be claimed as 50 pct down from when he took over.

He took over in 2019-20 and their wage bill that season was £54m.

Half of that is £27m...considering that we've been able to offload only £5m or £6.5-7m in a year depending on Holdings or Club is is one hell of a fall...and actually quite unprecedented in terms of any club seeking to bring back into line at this level.

Hell their wage bill in 2020-21 alone was £50m. Down by £23m either last season or this. That would explain a lot I guess.

The impairment however is very dodgy in an FFP context as it helped to achieve this.

I am still not convinced that we and Stoke are being treated equally under these regulations either. Or perhaps more accurately, Stoke and the majority.

Edited November 27, 2022 by Mr Popodopolous

[Davefevs]

I wouldn’t read that to mean O’Neill brought it down 50% from £47m…as I said before much more likely it’s the halving of the £94m, and the journo isn’t really clued up.  I will happily eat my hat if it’s now less than £25m!

Does signing Dwight Gayle on a free transfer, coupled with the other signings made look like a strategy to half the wage bill?

Here’s their current squad:

okay, it doesn’t look like a £47m wage bill, getting rid of Joe Allen, Benik Afobe, Steven Fletcher, etc will have helped for 22/23’s accounts, but I await their 21/22 accounts to see the baseline the journo is using.

 

[Mr Popodopolous]

3 hours ago, Davefevs said:

I wouldn’t read that to mean O’Neill brought it down 50% from £47m…as I said before much more likely it’s the halving of the £94m, and the journo isn’t really clued up.  I will happily eat my hat if it’s now less than £25m!

Does signing Dwight Gayle on a free transfer, coupled with the other signings made look like a strategy to half the wage bill?

Here’s their current squad:

okay, it doesn’t look like a £47m wage bill, getting rid of Joe Allen, Benik Afobe, Steven Fletcher, etc will have helped for 22/23’s accounts, but I await their 21/22 accounts to see the baseline the journo is using.

 

Agreed.

Seems a bit too good to be true doesn't it Dave. Because for one they let quite a few go in summer 2021 but some of these were already out on loan- surely they didn't forego wages in summer 2021 and the fact they were out on loan in 2020-21 several of them should have yielded wage coverage to some extent by the loaning club.

Then the players they signed:

Wilmot

Vrancic

Surridge

All permanent.

Then

Ostigard and Sima from Brighton summer 2021

Sawyers from WBA, although his wage may habe fallen with relegation.

Outbound activity in January helps...

Ostigard back to Brighton

Davies, Baath and Surridge all go.

Ince high earner out to Reading loan, Doughty loan to Luton probably not so much.

Otoh they loan in:

Harwood-Bellis- Man City

Bidace- Aston Villa

Maja- Bordeaux

Moore- Reading. £30k per week btw.

Buy Lewis Baker from Chelsea.

Yet they plead poverty, the fans cry about unfair spending rules.

In certain areas they do remind me of Derby. In other respects very different yes.

Edited November 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

I've had a certain negative slant towards them personally speaking since November/December 2019 when they publicly declared that the spending rules were not to their liking and that they think they should be changed or words to that effect.

If I was the League it can't be about biases but in an ideal world, I'd be quite keen to go at them over FFP.

Edited November 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

Had a quick look on FFP news and a Q&A with an Everton journo in the Liverpool Echo suggested that there was still a grey area in respect of FFP.

What linkage to us? None...save I woukd have thought for the possibility of the Governing bodies- be it PL and Football League, UEFA or whoever still scrutinising Covid season numbers.

On a side note, there certainly should be a grey area for Everton with respect to FFP given the size of their losses and the sheer scale of their add-backs, in particular the remainder net of the £82m in revenue and potentially Covid costs

Arguing for £41.6m in Covid impairment across the two seasons and £11.6m in provision for onerous contracts.

That Is another £53.2m.

Their final argued number was £170m, perhaps rising to £220m. That would be £88-138m in 2 seasons relating to the market etc.

Edited November 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

Misread a bit of our SwissRamble analysis. His basic numbers seem to indicate £7m per season for FFP allowances but then again he has a tendency- sensible for analysis, to round up and perhaps down.

Could be that the precise numbers fall somewhere between £6-7m per season.

Plus been doing some further reading on Everton. Can you just make up your own numbers for Covid or something??

Seen it suggested that:

A) The £170m in claimed losses etc goes across the 2 main seasons.

B) With £40m in 2021-22 and £10m this season.

C) Or alternatively that £50m solely into last season.

Remember all but £82m of this is very speculative. This is hugely egregious and the PL just seem fine with it.

I'd absolutely endorse referring Everton to a Disciplinary Commission. Premier League should have done so in summer 2021 in order to make a determination as to what the true Covid losses should be and then make a decision whether to charge or not.

Edited November 29, 2022 by Mr Popodopolous

[Mr Popodopolous]

On the other hand given the officiating failures against in the last few years maybe this is the bit of luck that we need.

They are two very different issues all told but imagine if we got the abysmal officiating and done for FFP. Wouldn't be many other unluckier clubs around.

Edited November 29, 2022 by Mr Popodopolous

[Mr Popodopolous]

Had another quick look at Fulham, nothing for last season yet of course.

Remember they are operating at £72m as their Upper Limit owing to their yoyo status. (£35m Upper Tariff PL, £13m this level- combined average of £35m x 2 and £13m x 2 /4 x 3 =£72m).

There are also Promotion Bonuses to consider. We also don't know if sticking £20.9m in Player Impairment as a Covid excludable is valid under FFP, which is what they did in 2020-21.

Pre tax losses

2017-18- Championship, £45,241,000

2018-19- PL, £20,180,000

2019-20- Championship, £48,112,000

2020-21- PL- £93,483,000

Is that £207m in 4 years??

Or adjusted for the 2 Covid years as 1, that's £136,218,500.

We already know they intend to include £20.9m in impairment as an excludable cost for Covid, wonder what else they have been arguing. They do though have a Category One academy- seen it suggested as being £5-10m per season.

IF stuck solely to £5m x 2 and £2.5m I think they would be in serious danger of a breach but again we have no idea what they are arguing for beyond the £20.9m in impairment.

Edited November 30, 2022 by Mr Popodopolous

[Davefevs]

6 minutes ago, Mr Popodopolous said:

Had another quick look at Fulham, nothing for last season yet of course.

Remember they are operating at £72m as their Upper Limit owing to their yoyo status. (£35m Upper Tariff PL, £13m this level- combined average of £35m x 2 and £13m x 2 /4 x 3 =£72m).

There are also Promotion Bonuses to consider. We also don't know if sticking £20.9m in Player Impairment as a Covid excludable is valid under FFP, which is what they did in 2020-21.

Pre tax losses

2017-18- Championship, £45,241,000

2018-19- PL, £20,180,000

2019-20- Championship, £48,112,000

2020-21- PL- £93,483,000

Is that £207m in 4 years??

Or adjusted for the 2 Covid years as 1, that's £136,218,500.

We already know they intend to include £20.9m in impairment as an excludable cost for Covid, wonder what else they have been arguing. They do though have a Category One academy- seen it suggested as being £5-10m per season.

*** promotion bonuses aren’t anywhere in the rules, although they used to be!  Maybe in some separate guidelines somewhere.

I find their accounts astonishing!

 

 

Didn’t exactly sell off their assets in the summer before 20/21!

Their accounts for 21/22 are likely to be very interesting!

[Mr Popodopolous]

Agreed on this and well highlighted for the key bits.

It is usually done on relegation, that kind of impairment- has been done by a lot of clubs but will check the accounts again but am sure they have sought to attribute it to the impact of Covid-19, however this strikes me as being very convenient

Promotion Bonuses I've always taken as red that these are excluded. If they were not then most sides would exceed P&S limits upon promotion. Plus the fact that they are only payable in the event of promotion being achieved- would be interesting to know for sure though.

Fulham and their 2021-22 accounts? A pre-tax loss of £60m or above wouldn't at all be surprising. Unsure if that's inclusive or exclusive of promotion bonuses.

Worth noting too that a bit of Parachute Year 1 was deferred into 2020-21 due to timing differences. Only clubs whose accounts ran until the end of July 2020 would account for it all in 2019-20. It all computes out in the end though.

[Mr Popodopolous]

https://www.independent.co.uk/sport/football/reading-players-staff-salary-delay-b2237177.html

Not FFP and I assume it's cash flow rather than anything but one maybe to keep an eye on. Says it'll be resolved imminently.

[Mr Popodopolous]

Interesting take from Ince. He accepts the punishment, says that if you overspend it rightly has consequences etc.

He also suggests that the underlying intent of the embargo and or Business Plan is to relegate a club. Not really heard it mentioned in those terms before.

We don't know what most clubs have stuck in for their Covid claims including Reading but do wonder how compliant Reading might be to this season?? £13m FFP Loss seems to be what they were limited to under the terms of their Business Plan, no notable sales so far this season.

They have lost a clutch of players such as Laurent, Rinhamota, Swift and Puscas has been loaned out.

Rahman return on loan was free of charge but they've also added on loan players such as:

Hendrick- Loan (Newcastle)

Loum- Loan (Porto)

Fornah- Loan (Nottingham Forest)

2nd is a fringe player, 3rd is young and Newcastle are reportedly covering two thirds of Hendrick's wages but it does make me wonder why we cannot tap into contacts and exploit some favourable deals.

Don't forget that Granovskaia and her friendship with Kia Joorabchian who was/is also friends with Dai Yongge got them Rahman x 2 loan spells for free and Drinkwater also free of charge last season.

Rafael left in January permanently and they have a full season rather than half of Puscas off the books this year which helps...

...Ince however would be permanent albeit surely lower wages than last season when he joined on loan from Stoke. Moore woukd be back- full wages whereas they offloaded him for several months last year and unlike the sale of Olise no transfer profit of note yet.

I expect that their turnover shouldn't exceed £20m.

EDIT: If they brought their losses dowm last year to below £13m, then by way of example say to £11m in FFP terms then they could lose that surplus this year- a £15m FFP loss.

Edited December 2, 2022 by Mr Popodopolous

[Mr Popodopolous]

Plus Arsenal's results out, for the club at least.

Have attributed £2m to Covid-19 for 21-22. Puts Everton and their £170-220m into perspective!! (£122m across the 3 years for Arsenal iirc).

Really am growing to dislike Everton, spineless Governing body and a club chancing their arm. Entitled fans too.

Edited December 2, 2022 by Mr Popodopolous

[Davefevs]

 

[Mr Popodopolous]

Interesting. I'd be surprised if it had reached EFL approval stage or near it given the lack of transparency- for example whoever wins the stadium still hasn't released the Birmingham City Stadium Ltd accounts for 2020-21 season (should be rent payable on the 2019 transaction).

That is a piece of the jigsaw. These accounts eere at best due at the end of June 2022- subject to Covid-19 extensions otherwise the end if March 2021.

Birmingham Sports Holdings- as per CH anyway- no longer own that company. 

Achiever Global Group Limited- whoever they are- are now listed as being in control.

Oh and the auditors quit in late August 2021. Although they'll have new ones.

Edited December 2, 2022 by Mr Popodopolous

[ExiledAjax]

2 hours ago, Davefevs said:

 

The statement is pretty clear:

"Following several months of due diligence at Birmingham City Football Club, Maxco has decided not to proceed with the purchase of the shareholding and stadium of BCFC at this time," the statement said.

"In light of the due diligence we attempted to renegotiate the terms of the original agreements to reflect our understanding of the current business status, but we could not agree revised terms with the current owners.

"We have been left with no alternative and are bitterly disappointed as we know what this club means to the community and the very loyal fanbase.

"We really hope that BCFC finds a owner who is as passionate about the club as we are."

In plainer English "it was even worse than we thought it might be and they wouldn't reduce the price"

[Davefevs]

Looks like Derby paid Boro £2.7m

 

[Mr Popodopolous]

Plus they lost £19.459m last season.

Fine for P&S to 2021-22 and the two sales this summer mean they'll be fine to 2022-23 IMO. Not looked in depth however.

That £2.7m seems par to me- at best they could have been guaranteed one play off semi final leg and at a push, TV money for 2 or 3 games too.

I don't understand the £40m claims that were in the press etc- PR from Quantuma or Gibson going in big to try and force a sensible negotiation? Or just rubbish basically.

Edited December 6, 2022 by Mr Popodopolous

[Mr Popodopolous]

Bet365 (which shows Stoke until 30th March 2022) should be out by the end of the year or early 2023. So too should Venkys London Limited (Blackburn- end of March 2022), Birmingham and Millwall. We already have a fair idea about Birmingham based on the HK results although a few differences probably.

Talking of Birmingham, still no sign of their Birmingham City Stadium Ltd accounts- that ran until June 30th 2021!! Covid extensions meant that went until June 30th 2022 due date wise but...

Under apparent new ownership too.

That last bit is old news of course but the stadium was:

1) 'Sold' in May 2019 to the Holding company. Think someone else who owned the club officially or vice versa. FFP solved, rent arrangement kicks in- Adams and Bellingham also go for FFP.

2) Rent and indeed sale and leaseback don't appear in the consolidated BSH results to 2019, neither would rent due on the sale and leaseback...all cancels out at the Hong Kong consolidated level of course but...

3)...Speculation is correct- stadium sold and leased back. All within the BSH group. Rent appears on the UK level but not the consolidator in Hong Kong. £22.8m sale price iirc, £1.25m per season rent.

4) In 2021 the stadium company was sold to the below. Speculation as to wherher it is via a proxy or truly different, nobody really knows. Club won't benefit save for maybe working capital which is irrelevant for FFP calcs.

Kang Ming Ming appears to own Achiever. Was 75 pct not 100 pct of the stadium company that was sold too apparently.

https://almajir.net/useful-information/others/achiever-global-group-ltd/

Oriental Rainbow Investments appear to own the other 25 percent. Vong Pech is the guy there.

Unbelievably on paper at least, Birmingham neither own their ground nor the stadium company. Same goes for BSH in Hong Kong, they own neither! What a mess??

Edited December 6, 2022 by Mr Popodopolous

[Mr Popodopolous]

£72m is the Upper Loss Limit for Bournemouth.

Their aggregated losses before Tax in 2018-19, 2019-20 and 2020-21 were before rounding £75m.

Clearly 2019-20 and 2020-21 aggregated and halved. Think that came to a pre tax loss of £32m and £21.5m.

This is before a) FFP allowances- they have a Category 3 Academy though and no major infrastructure- £4-5m per year maybe in allowables?

That £12m profit was inflated for 2 reasons- a) The delay to the season meant some TV income from PL was recognised in 2020-21 and b) £50m in profit on disposal of players.

Unlike say Fulham, no big claim of Covid Impairment. Losses may be £15m in 2 years? Hard to say.

Their 2021-22 accounts could be interesting albeit certainly not as much as Fulham.

On a side note, would make some sense from a Governing body if the real big pre tax losses by clubs were honed in on first and then work way through.

Wonder about Nottingham Forest too for their new starting point was a £25m pre tax loss in 2018-19!! Albeit they have stated their compliance with all financial regs.

Edited December 7, 2022 by Mr Popodopolous
Got it wrong- they made a profit of £17m in 2020-21!

[Mr Popodopolous]

I should also add that if some clubs have notably larger losses than others, the EFL might naturally hone in on their Covid numbers set against their loss limits.

For example, Stoke recorded pre tax losses of £142m to 2020-21 from 2017-18. 1 PL season, 3 Championship- that would be £96m if on a 4 u3sr period and with the Covid averaging that is £93.5m to 2020-21 vs an Upper Loss limit of £61m or maybe with the add 4 Upper Tariff up /4 x 3.

Alternatively to 2021-22, the position is:

£112m in 3 years and counting between 2018-19 and 2020-21.

Or £63.5m and counting to 2020-21 once the aggregation and halving kicked in, in the period of 2018-19 and 2020-21. Cannot be bothered to go in and round etc.

By way of comparison we were:

2017-18 to 2020-21

£63m in total pre tax losses.

Once the aggregation and halving kicks in, we were at £39m.

2018-19 to 2020-21 £38m.

Indeed to 2021-22 we were £66.5m in total and once aggregation and halving kicked in, £42.5m.

Better than Stoke on a great many metrics as a very basic starting point. We await their 2021-22 accounts with some interest..

City specific, if we come out again  for a 2nd year running post Covid with one of the worst sets of figures ie 2021-22 following on from 2020-21 where we were the worst and the 3rd worst for Operating Losses, the EFL would be quite entitled to ask why and pertaining to the validity of our Covid losses ie the transfer add-backs if indeed we have used them.

Edited December 7, 2022 by Mr Popodopolous

[Mr Popodopolous]

Having looked into it a bit further, a Bournemouth fan who has forecasted and does forecast their finances anticipated a pre tax loss of £40m last season.

That would be within P&S limits of £72m probably, he certainly thinks so and I think it might- rather depends on Covid and how much they truly lost.

Pre tax figures if he's right:

2018-19 -£32m

2019-20 -£60m

2020-21 £17m

2021-22 -£40m *Forecasted

£125m in pre tax losses but...

Adjusted for the Covid roll-up.

2018-19 -£32m

2019-20 and 2020-21 -£21.5m

2021-22- -£40m *Forecasted

£93.5m as a starting point but...

A) What are their usual allowances? Not so high IMO- remember that they don't have much in the way of infrastructure, didn't are much in the PL and have a Category C Academy.

Wouldn't surprise me if £4-5m per year only.

B) Covid losses and costs? £15m in 2 years perhaps? Plus the £2.5m in 2021-22. A rebate to the PL would be a factor, all PL clubs had to do this.

C) Would that forecast be inclusive of or before Promotion Bonuses? If indeed they were a factor!

Suggested too a while back that Parker basically managed to persuade a lot.of their players to take a 20 percent pay cut when he joined. That would help any club a lot...would free up some headroom for sure.

In conclusion, I think that they're probably within the £72m but it could be interesting.

[Davefevs]

22 hours ago, Mr Popodopolous said:

City specific, if we come out again  for a 2nd year running post Covid with one of the worst sets of figures ie 2021-22 following on from 2020-21 where we were the worst and the 3rd worst for Operating Losses, the EFL would be quite entitled to ask why and pertaining to the validity of our Covid losses ie the transfer add-backs if indeed we have used them.

Without projecting numbers for this year, it really shows two things:

1. our costs are way too high
2. we spent too much during boom time without any thought for boom time coming to an end

Ive spent some time compiling some basic numbers for some of the Champ clubs, those who’ve published 2022 accounts (us, Boro, Norwich), others who might be similar sized to us (Blackburn, Brum, QPR and Swansea plus Stoke…although they are bigger currently), or clubs we should aspire to (Coventry and Millwall), at least in the costs stakes!  I used just BCFC Ltd for us, because I’m really looking at the football cost side.  I know it’s not that straightforward, but I thought it was a better starting point.

Its quite painful to prepare and see the results.

Here’s what I’ve done so far.  Might need to zoom in.

 

[Davefevs]

Here you go Mr P.

Income v P&L

Costs v P&L:

Squad Value / Ins n Outs:

Most clubs (orange) are 2021, just 3 teams are 2022 accounts (blue). Wigan overdue.

Edited December 9, 2022 by Davefevs

[Davefevs]

Found Wigan - Phoenix 2021 Ltd, half year only.

[Mr Popodopolous]

Impressive stuff that @Davefevs

The higher cost base probably comes in part from higher event revenue and associated costs but then again if it's football only that perhaps cancels out a bit.

I still look at some clubs and wonder if all clubs are treated equally under the regs:

Stoke

Major losses yet no problem. Starting line-up today contains Delap who scored plus loanees in the form of Clarke (Arsenal), Fosu-Mensah (Brentford) and Smallbone (Southampton). Wilmot signed permanently from Watford in summer 2021 and Baker from Chelsea in January 2022 yet we cannot sign in January unless we sell first seemingly?

Reading

A side who failed FFP and are under a Business Plan with conditions and 6 points suspended are beating Coventry- scorer was a free transfer most recently at Metz, (Ligue 1) plus their line-up today contains Hendrick (Loan, Newcastle), Fornah (Loan Nottingham Forest) and the gift from Chelsea in Rahman.

I wonder about their compliance to this season and maybe even last. Selling Olise maybe did it but what of this season??

Edit- Loum off the bench, loanee from Porto..

They've made good efforts but absolute obligation, exact numbers etc.

We have debated and discussed this in various ways, at varied times but do you think we are getting equal treatment in the context of the regs. I believe it's an open question.

Edited December 10, 2022 by Mr Popodopolous