The Championship FFP Thread (Merged)

[Davefevs]

1 hour ago, Mr Popodopolous said:

Just don't see what else it could be, given EFL monitoring, sign-off on new additions etc.

Sorry, was referring to specific not selling someone….under the rules it could be revenues, expenditure not related to player sales or acquisitions.

[Mr Popodopolous]

Not City or Championship related but that's a bit mad!

Will need full accounts for a proper assessment but unless there is a typo, Aston Villa made a profit of £0.4m last sesson inclusive of the £100m Grealish sale??

https://www.bbc.co.uk/sport/articles/c4nz4npnrd8o

In a season with full attendance, no T.V. rebates etc..

Edited March 1, 2023 by Mr Popodopolous

[chinapig]

3 hours ago, Mr Popodopolous said:

Pure speculation on my part but maybe as I say £x in transfer profit expected.

From memory there was interest in Joao in the summer. He is still there...no profit on disposal of players, therefore a breach of one of the terms of Agreed Decision- suspended sanction attached, becomes live if any terms breached.

Paragraph 7 feels pertinent here.

https://www.theguardian.com/football/2023/mar/01/reading-facing-second-points-deduction-for-breaching-financial-rules

Reading are facing a second points deduction inside 18 months after failing to adhere to a business plan agreed between the Championship club and the English Football League.

The EFL imposed a six-point deduction on Reading in November 2021 for breaching financial rules and they were automatically placed under a transfer embargo. The club subsequently agreed to a business plan relating to revenue and expenditure, which is thought to stipulate a wage cap. A further six-point deduction was suspended until the end of this season.

However, it is understood they have broken rules within that plan and could be handed another six-point deduction if found guilty by an independent disciplinary commission. The EFL declined to comment on Wednesday.

[Mr Popodopolous]

The bit I don't understand about the Reading thing is that if a deduction is suspended as part of an Ageeed Decision, where does the IDC come into it?

[Mr Popodopolous]

Ah EFL statement has just dropped.

https://www.efl.com/news/2023/march/efl-statement-reading-fc/

Looks like it isn't as clearcut as the initial media reports but time will tell.

One other thing, QPR and their large losses wise. Some of their fans have been suggesting selling Loftus Road and moving to a new ground.

I see how the 2nd helps, but I thought that Fixed Asset sale profits were no longer included in P&S returns.

Edited March 1, 2023 by Mr Popodopolous

[Davefevs]

50 minutes ago, Mr Popodopolous said:

Ah EFL statement has just dropped.

https://www.efl.com/news/2023/march/efl-statement-reading-fc/

Looks like it isn't as clearcut as the initial media reports but time will tell.

One other thing, QPR and their large losses wise. Some of their fans have been suggesting selling Loftus Road and moving to a new ground.

I see how the 2nd helps, but I thought that Fixed Asset sale profits were no longer included in P&S returns.

I’d suggest the fact they’ve put out a statement means Reading have “broken their business plan”.

[ExiledAjax]

1 hour ago, Mr Popodopolous said:

Ah EFL statement has just dropped.

https://www.efl.com/news/2023/march/efl-statement-reading-fc/

Looks like it isn't as clearcut as the initial media reports but time will tell.

One other thing, QPR and their large losses wise. Some of their fans have been suggesting selling Loftus Road and moving to a new ground.

I see how the 2nd helps, but I thought that Fixed Asset sale profits were no longer included in P&S returns.

 

16 minutes ago, Davefevs said:

I’d suggest the fact they’ve put out a statement means Reading have “broken their business plan”.

Suspect it's a case of Reading say they've complied with the BP, EFL reckon there's a chance they have not. So there's a review.

[Mr Popodopolous]

Ziegler now suggests it could be up to 12.

Were it a suspended 6 for the Business Plan breach and 6 more for breaching the Upper Tariff to an amount equivalent to a 6 point deduction that does make perfect sense.

Were that the case I see them struggling to comply to 2022-23 as well although end of June etc to sell players.

Thank god we managed to steer clear.

Edited March 1, 2023 by Mr Popodopolous

[Mr Popodopolous]

Aston Villa fans seem to think that a £10m payment on behalf of Xia in laat years accounts shouldn't count towards FFP.

My first thought is entitled, insouciant...individuals- but is this correct?

Although this raises an interesting question about whether the club/owners payjng Lerner his promotion bonus of £30m as Xia couldn't should have been excluded from FFP?

If not, £20-25m overspend in the year of promotion.

Edited March 1, 2023 by Mr Popodopolous

[Jerseybean]

9 hours ago, Red Army 75 said:

John Percy now reporting Reading could be facing a possible points deduction. 

Reading points deduction

Reading face a six-point deduction for failing to cut their spending having failed to agree to an EFL business plan, according to the Mail. 

The Royals are currently in 14th place in the Championship – 13 points clear of the drop. It would send them down towards the drop zone and below City.

[Mr Popodopolous]

It is positive seeing the increased emphasis in governance but what of Fulham, and potentially Nottingham Forest and Stoke- their Projected Covid losses of £12m or so for last season seem well out in the case of Nottingham Forest, Fulham lost lots and lots of money and Stoke well their Covid losses at £38m, £18m and £2.5m we assume- £30.5m- still tiny vs Everton of course.

Edited March 1, 2023 by Mr Popodopolous

[Jerseybean]

1 hour ago, Mr Popodopolous said:

It is positive seeing the increased emphasis in governance but what of Fulham, and potentially Nottingham Forest and Stoke- their Projected Covid losses of £12m or so for last season seem well out in the case of Nottingham Forest, Fulham lost lots and lots of money and Stoke well their Covid losses at £38m, £18m and £2.5m we assume- £30.5m- still tiny vs Everton of course.

Re Stoke City - I’m still totally bemused by how they were able to do some dodgy looking deal involving their Bet 365 stadium. 

[Mr Popodopolous]

22 minutes ago, Jerseybean said:

Re Stoke City - I’m still totally bemused by how they were able to do some dodgy looking deal involving their Bet 365 stadium. 

That isn't the half of it.

Stoke City

May 2021- sold and leased back Bet365 Stadium to owners and the training ground, coincidentally Bet365, profit on disposal wss maybe £30m combined.

However this wasn't all. They sought to attribute some £30m in fees that would be amortised to Covid 19 in 2019-20, ie to write it down and exclude it from FFP entirely due to the impact of Covid 19 on the market.

Then £11m in transfer fees the following season ie transfer profit foregone in 2020-21- yes you've guessed it, blame Covid.

There wwe also something interesting on the Land Registry iirc, some kind of superficial similarity to Sheffield Wednesday and the Hillsborough transaction although could have been linked to post Covid backlog.

Edited March 2, 2023 by Mr Popodopolous

[Mr Popodopolous]

The other thing and this isn't just specific to Reading but they took it to certain levels.

Sellinf when it counted towards FFP is fine...until it isn't. You either have to go up within a year or 2 or cut back hugely and use that breathing space to truly restructure.

What happened with Reading was that they used that headroom to double oe quits although when you're in so deep...

2017-18, Stadium sold via club accounts- to new parent.

2018-19, stadium sold, training ground sold, land around Madjeski sold. Plus Aluko £3m loan fee!  (Owners Chinese club).

That yielded a £40m loss the following season, as they had run out of Fixed Assets to sell- talking Renhe Sports Management Limited plus the club. No promotion and the FFP breach was inevitable.

Edited March 2, 2023 by Mr Popodopolous

[Mr Popodopolous]

Technically Cardiff and Stoke are in breach of Regulation 16.3 so the League should embargo them until such time as their accounts are at CH.

I suppose that in practice, it can take a few days to come through and there is the bit about 2 Business days before the club appears on the Embargo service but...if it's still like that next week an embargo should follow.

Edited March 2, 2023 by Mr Popodopolous

[Rob26]

boro fan here, found your site by googling about FFP and just signed up to say this is an amazing topic with loads great information and discussion about FFP, really interesting stuff you got here 

I'm glad the EFL seem to have ramped things up a bit more since the last rule squeeze

keep up the good work

[Mr Popodopolous]

Small update on Reading, Mike Keegan of Daily Mail on Talksport.

If Reading were in breach, then Peterborough who were 4 points off safety could have a case.

Will try to listen later on catchup but an interesting Tweet too.

Moore, Ejaria, Joao, Puscas, Meite??

Edited March 2, 2023 by Mr Popodopolous

[Mr Popodopolous]

Statement by Reading.

https://www.readingfc.co.uk//news/2023/march/02/club-statement-efl-review

[Davefevs]

“…are not all easy quick fixes” suggests some doubt that they’ve complied, imho.

 

[Mr Popodopolous]

14 minutes ago, Davefevs said:

“…are not all easy quick fixes” suggests some doubt that they’ve complied, imho.

 

Agreed.

Might be a case of achieved x but needed to achieve y, close but no cigar.

I am liking this new faster pace from the League/CFRU however. Accounts and or projections went in, press report by midday that there was a problem, 5.30pm EFL statement!

Took the League weeks under Harvey! Weeks. Either that or in 2018 he was looking for compromises, bits of both probably.

Hopefully in the next year we'll see sanctions handed down based on a combination of Year 3 Projections and -2 year actuals.

Edited March 2, 2023 by Mr Popodopolous

[Davefevs]

Ince gearing himself up for 6 points deduction.

Stating historic reasons, which I guess is true as he picked up a shitfest initially as caretaker last season.

[Mr Popodopolous]

Historic issues is an interesting twist.

I don't quite understand it- I remember some complexities being referenced in September 2021...I wonder if it was linked to the calculations of FFP perhaps going:

Reading FC (2017-18)

Renhe Sports Management- thereafter.

Because in 2018-19 the stadium was sold from the latter but in 2017-18, Reading sold to Renhe- that is cake and eat it territory (and happened on Shaun Harvey's watch, would anyone believe).

Struggling to work out what else it would be, could be, they already a 12 point deduction worthy overspend.

I wonder if the profit may have been excludable from 2018-19 accounts given that it was a resale and this tips from compliance to 2021-22 into a points deduction. Pure speculation until Written Reasons.

Maybe the League under Parry having reviewed further did not appreciate a £3m loan fee from owners Chinese club for Aluko. Which also happened on Harvey's watch btw.

Meanwhile in Peterborough.

https://www.dailymail.co.uk/sport/football/article-11813437/Peterborough-explore-legal-avenues-Reading-set-hit-six-point-penalty.html

Edited March 2, 2023 by Mr Popodopolous

[Mr Popodopolous]

On 01/03/2023 at 12:53, ExiledAjax said:

Any club listed on a stock exchange will have to comply with local listing rules. Those rules will include strict requirements on the publication of accounts (and other "price sensitive" information). The consequences of missing those deadlines are severe, and in the age of computerised stock exchanges, often automatic. Suspension of trading, negative press, it's all quite serious.

The HKSE is also one of the most prescriptive of the major exchanges. It's no surprise that Birmingham are punctual.

Thanks, that makes some sense. Yes I can imagine that HKSE is major in terms of expected compliance.

Man United 2nd quarter results should be out by now according to a site...said they were projected for 28th February 2023.

Man United surely haven't missed an NYSE deadline?? Given what you outline and the automated nature of it now.

Talking of Man United, they of all clubs could be heading for FFP questions- £150m pre tax loss last season for one!

Edited March 2, 2023 by Mr Popodopolous

[ExiledAjax]

16 minutes ago, Mr Popodopolous said:

Thamks, that makes some sense. Yes I can imagine that HKSE is major!

Man United 2nd quarter results should be out by now according to a site...said they were projected for 28th January 2022.

Man United surely haven't missed an NYSE deadline?? Given what you outline and the automated nature of it  now.

That's interim results predicted to be on 28 Feb isn't it? 

Tbh Pop I don't know the NYSE listing rules at all. Given Man Utd's resources and advisers I'd be amazed if they've missed a formal deadline of any sort. I personally know some of their Cayman lawyers and they won't miss things like that.

[Mr Popodopolous]

5 minutes ago, ExiledAjax said:

That's interim results predicted to be on 28 Feb isn't it? 

Tbh Pop I don't know the NYSE listing rules at all. Given Man Utd's resources and advisers I'd be amazed if they've missed a formal deadline of any sort. I personally know some of their Cayman lawyers and they won't miss things like that.

It might be EA. Predicted by the site.

I know little about the corporate structure of Man United tbh, probably just some site extrapolating. Nothing to see here, am sure it's all compliant but the FFP situation there is still one to watch.

[Mr Popodopolous]

https://www.dailymail.co.uk/sport/football/article-11814603/Barcelona-BANNED-entering-transfer-market-unless-raise-178m-player-sales.html

This La Liga system possibly leans too far in the other direction- see upper mid ranking clubs like Real Betis, Real Sociedad and Sevilla who are probably reasonably financially stable unduly weakening themselves, in conjunction with mandatory buyout clauses but it does prevent costly and damaging disputes from arising and dragging on years after the event.

Edited March 3, 2023 by Mr Popodopolous

[Mr Popodopolous]

Gotta wonder if Cardiff in any way might be relying on some kind of favourable judgement or compensation in the Sala case, never mind a spending spree but to comply with FFP.

Parachute Payments ended last season ie 2020-21 was the final one, the Covid seasons drop off going into 2023-24.

Would their post Parachute Payments turnover fall to between £20-25m perhaps? The latter probably towards the higher end. Still no accounts out yet for last season, along with Stoke.

See also Aston Villa, Leicester, Wolves in the PL- for late accounts I mean, not necessarily FFP issues. Stoke too seem to be in the clear and Cardiff for now but all companies and associated/group companies for these 5 clubs are overdue.

Such conduct should be disincentivised.

Edited March 3, 2023 by Mr Popodopolous

[Rob26]

is that the claim against the insurers where they are trying to get a payout for sala but never told informed them of the purchase before the death so they argue he is not covered?

[Mr Popodopolous]

For context, in the 2nd Covid season owing to Parachute Payments and how they fell ie some of Year 1 deferred into 2, they had an income of £55.18m.

Despite that they lost £11,181,000!

[Mr Popodopolous]

56 minutes ago, Rob26 said:

is that the claim against the insurers where they are trying to get a payout for sala but never told informed them of the purchase before the death so they argue he is not covered?

Seems to be although their initial tactic was to argue that the transfer didn't go through properly and therefore wouldn't hold.

They already provided for the transfer in the form of a Provision think in 2018-19 or 2019-20- probably the latter.

Had they won that case they would perhaps have been able to reverse it, write it back to profit and loss and that would in effect be a third year of Parachute Payments! I'd argue it should for FFP certainly have gone in the year that it was incurred, not the year of a favourable verdict. 2019-20 then.

Now it is about the attempts for compensation, think they were threatening to sue Nantes too at one point??

Edited March 3, 2023 by Mr Popodopolous