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The Championship FFP Thread (Merged)


Mr Popodopolous

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Nottingham Forest

Interesting line in The Times. Marinakis has written off/converted £41m in debt to equity.

Which is great but it does raise the question as to a) How much they lost laat season and b) Did they stay within that all important £39m in adjusted losses.

Was 13 month accounts to June 2021, that'll snap back to 12 and was the Covid season but the Operating losses that year were £34.4m- Times snippet suggests that wages and transfer fees have risen, if it's risen on 2020-21?? Then again promotion bonuses may account for some of this but if not could P&S have been breached by a promoted side? See also Fulham with some huge losses going into 2021-22.

Is it actually possible that Nottingham Forest or Fulham could be found to have exceeded the adjusted 3 year loss limits in the year of promotion? Although Nottingham Forest said when promoted that they had complied with all FFP regulations.

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Cardiff at club level- unsure about Holdings yet, have submitted. Should all be about tomorrow or Wednesday. Likewise Stoke (Club, Holdings, Property Limited).

In PL, yes as I thought Aston Villa parent £0.4m profit only despite the huge sale of Grealish. While Wolves made a loss of about £5-6m- transfer profits and impairment influenced this either way.

As for Cardiff, Operating Expenses of about £67m in 2020-21...dunno if that includes or excludes Interest Payable, assuming the former. Stoke's was about £86m. No Interest Payable there of course.

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On 03/03/2023 at 13:57, Mr Popodopolous said:

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??

yeah I don't think they going to get the transfer reversed, but the insurance pay out is an interesting one, but hard to see what the terms of their insurance were to be if they were covered without notifying them or not.

bet they inform the insurance of a new player the minute the ink is dry on the contracts now though :laugh:

I do tend to think with them not informing the insurer of the new player how they expect to get paid out, but need to see the terms and conditions of the insurance how fast they need to inform them when a player signs to be in breach of the insurance conditions. but if says they need to inform them in a non specific amount of time and then they informed them when he went missing, that is potentially a little bit of a grey area, but think a case can be made that no one is insured until they are notified about them, epically if other documents or correspondence says no one is insured until they are added to the policy. I think if I was betting I'd back the insurance company, enough years has passed and if they had a case you think insurance under writers would have settled by now to keep costs down

 

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Reading between the lines, is it some dispute relating to compliance with the Business Plan?

https://footballleagueworld.co.uk/efl-insider-sends-warning-to-reading-fc-ahead-of-likely-points-deduction/

Ince talking about historic reasons muddied the waters further, perhaps he was referring to historic to his tenure- he joined about a year ago, but still relating to last season.

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2 minutes ago, Mr Popodopolous said:

Reading between the lines, is it some dispute relating to compliance with the Business Plan?

https://footballleagueworld.co.uk/efl-insider-sends-warning-to-reading-fc-ahead-of-likely-points-deduction/

Ince talking about historic reasons muddied the waters further, perhaps he was referring to historic to his tenure- he joined about a year ago, but still relating to last season.

That was my assumption.

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I misread the Wolves number, was actually a £46m pre tax loss there!?

For Cardiff, post Parachutes my best guess is that their income will not exceed £25m and perhaps will be closer to £20m.

As for Stoke, we have some idea but as I said months ago I'd be surprised based on a) Attendances and b) Analysis of 2018-19 income excluding T.V. money if their income isn't in the £25-30m bracket once likely T.V. and Solidarity money added back in.

Plus they seem to be pre empting any regulatory questions over FFP, Sala or solvency- CH glitch much! ?

Screenshot_20230306-134630_Chrome.thumb.jpg.5ef96dcbdea580250b3633bb0e3eec12.jpg

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1 hour ago, Mr Popodopolous said:

The often excellent Loft For Words on QPR.

https://www.fansnetwork.co.uk/football/queensparkrangers/news/59765/

The author estimates a £10m FFP hole moving towards next season ie when the Covid year drops off, the 3 year period ending in 2023-24.

Read it briefly earlier.  Think he’s very light on covid allowances in the 19/20 and 20/21, and hasn’t put in the £2.5m for 21/22 either.  Suspect they have more wiggle room than they anticipate.

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1 hour ago, Davefevs said:

Read it briefly earlier.  Think he’s very light on covid allowances in the 19/20 and 20/21, and hasn’t put in the £2.5m for 21/22 either.  Suspect they have more wiggle room than they anticipate.

Fine to 2021, more than fine to 2022...yeah you're right, they missed some things so okay to 2023..but once the decent Covid losse year drops off. ?

Also assuming that the rules haven't fully changed by next season- the League are taking their time to formally announce the 90-80-70 rule.

For QPR though, going into the 3 year cycle to 2023-24 as things stand...

2021-22...Pre-tax loss £24,667,000...-£4m, £2.5m. T-2, £18.167m P&S loss. Although I wonder if their FFP allowance might nof be £5m per year in which case £17.167m, or anything between £4-5m.

2022-23...No sales of note but surely costs down a bit? Compensation for Beale- say a pre tax loss of £21m. - £4-5m in allowable losses...£16-17m FFP loss.

Means the £10m for next year maybe a bit conservative. Or a bit high.

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Though they aren't a Championship relevant FFP issue at this second, quite a claim- Sheffield Wednesday wage bill down to £15m only for last season.

Still one of the highest at League One of course but leaves them with some room to breathe if true. Accounts not due until end of April or so but they look highly likely to be back up.

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Just now, Mr Popodopolous said:

Though they aren't a Championship relevant FFP issue at this second, quite a claim- Sheffield Wednesday wage bill down to £15m only for last season.

Still one of the highest at League One of course but leaves them with some room to breathe if true. Accounts not due until end of April or so but they look highly likely to be back up.

If a number of their players contracted had relegation releases I see no reason why it might not be considerably lower than in the Champ.

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2 minutes ago, Davefevs said:

If a number of their players contracted had relegation releases I see no reason why it might not be considerably lower than in the Champ.

Perhaps, they did sign quite a few loanees from higher divisions last season though- accounts will reveal all anyway, they seem to be acting more responsibly now too.

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Stoke. Just seen.

Obviously the £120m debt write off doesn't count towards Profit and Loss in an FFP context.

Their Covid attributed losses appear to be £60m or so over the period- EFL limit for last season was set at £2.5m but they argued approaching £4m.

With combined average etc, in an FFP context that is £32m or so.

Income £31m or thereabouts.  Wage bill £37m or thereabouts. Not had a chance to look in any meaningful way.

Ooh as part of that close to £4m in Covid add-backs for last season, they seem to be arguing that about £2m was due to the transfer market.  That is clearly suspect 

Aggregate pre tax losses from 2018-19 to last year, £130m I make it. Could have miscalculated...

I will concede, £13m down wages wise and the amortisation and impairment down is quite good tbh.

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Otoh this is all pointless in the context of the below.

€369m PSG apparently lost LAST SEASON alone and no meaningful sanctions yet. UEFA was a Settlement Agreement and fine, as for Le French League Governing body...

https://www.getfootballnewsfrance.com/2023/psg-marseille-and-monaco-will-not-be-sanctioned-for-ffp-at-the-end-of-the-season/

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1 hour ago, Mr Popodopolous said:

Stoke. Just seen.

Obviously the £120m debt write off doesn't count towards Profit and Loss in an FFP context.

Their Covid attributed losses appear to be £60m or so over the period- EFL limit for last season was set at £2.5m but they argued approaching £4m.

With combined average etc, in an FFP context that is £32m or so.

Income £31m or thereabouts.  Wage bill £37m or thereabouts. Not had a chance to look in any meaningful way.

Ooh as part of that close to £4m in Covid add-backs for last season, they seem to be arguing that about £2m was due to the transfer market.  That is clearly suspect 

Aggregate pre tax losses from 2018-19 to last year, £130m I make it. Could have miscalculated...

I will concede, £13m down wages wise and the amortisation and impairment down is quite good tbh.

Remember the good old “we’ve cut our wage bill by 50%” claim….as I suggested 50% of the £80m, not 50% of the £40m. ???

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6 minutes ago, Davefevs said:

Remember the good old “we’ve cut our wage bill by 50%” claim….as I suggested 50% of the £80m, not 50% of the £40m. ???

Yeah, it seemed hard to fathom but I took it as red for some reason! You were right. ?

If their Covid loss claims are upheld, then yes FFP is something that they should be clear of for a while under the 3 year rule. Interested ?️‍♂️ in what their Other Income of £4m or so was comprised of.

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For comparison and context, I've been banging this drum a lot. No judgement just comparison and context.

Pre tax losses- 2018/19 to present

Us v Stoke

2018-19

£10m Profit vs -£15m loss

2019-20

£10m loss v £88m loss

2020-21

£38m loss v £9m loss

2021-22

£28.5m loss v £18m loss

Total- Before combined averages

£66.5m loss v £130m loss

Total following combined average

£42.5m v £81.5m loss.

The number of PL loanees etc etc in the last two years is quite a contrast. Yes I know Parachute Payments etc. Stoke also turned a £32m profit on disposal of Stadium and Training Ground in 2020-21...(combined average makes that £16m)- included in the above figures.

Yes I also know that we were well clear of it to 2022, 2021. No standalone assessment for 2020 of course- had Covid not occurred Stoke would not have been abke to even consider offsetting £30m in Impairment to Covid and a huge level would have been left to amortise.

Minus Covid they would have probably been on course to fail in 2020 or 2021.

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On 06/03/2023 at 10:52, Rob26 said:

yeah I don't think they going to get the transfer reversed, but the insurance pay out is an interesting one, but hard to see what the terms of their insurance were to be if they were covered without notifying them or not.

bet they inform the insurance of a new player the minute the ink is dry on the contracts now though :laugh:

I do tend to think with them not informing the insurer of the new player how they expect to get paid out, but need to see the terms and conditions of the insurance how fast they need to inform them when a player signs to be in breach of the insurance conditions. but if says they need to inform them in a non specific amount of time and then they informed them when he went missing, that is potentially a little bit of a grey area, but think a case can be made that no one is insured until they are notified about them, epically if other documents or correspondence says no one is insured until they are added to the policy. I think if I was betting I'd back the insurance company, enough years has passed and if they had a case you think insurance under writers would have settled by now to keep costs down

 

Agreed on this.

From an FFP perspective, in terms of Sala their best bet would be either insurance or compensation from parties proven to have been negligent- reversal of Impairment ship has surely sailed.

Would have to check but sure I read somewhere a claim that Cardiff put in a claim to insure Sala the day after his death?? Am struggling to see what case they have at this juncture.

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Cardiff lost £30.419m last season!!

We have a winner for the 2021-22 loss League. I thought that costs had fallen by a bit more than they had, there seems to be some kind of Provision for Intercompany debt of £3-4m, dunno how Cardiff City Holdings will differ if at all. 

Income was a shade under £20m.

Screenshot_20230307-161441_OneDrive.thumb.jpg.69e03d91772f9543a7cf9c2a118157b2.jpg

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It's a bit odd though, Cardiff are bound by the same rules as the rest of the division ie £39m, unable to sell fixed assets as a profit for FFP offset etc but their fans don't talk about it much.

Given that they failed it in 2014-15 too...they should be fine to this season but when the starting point is the £30m pre tax loss minus FFP and Covid allowances...?

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3 minutes ago, Mr Popodopolous said:

It's a bit odd though, Cardiff are bound by the same rules as the rest of the division ie £39m, unable to sell fixed assets as a profit for FFP offset etc hut their fans don't talk about it much.

Given that they failed it in 2014-15 too...they should be fine to this season but when the starting point is the £30m pre tax loss.

I guess that’s £30m less covid allowances in 21/22 less other FFP allowances!

I haven’t read through the accounts, just looked at the numbers.  Nice to see someone lose more than us!  But it only shows how crap our accounts were.

 

image.png

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The only real additional observations I'd make on Stoke are that they seem to be fine and properly run now but their Covid losses are very dubious whej it comes to the so called transfer market related items.

I suppose a good hypothetical exercise is, how much headroom and margin for error would Stoke have if transfer market related Covid arguments are challenged.

To 2021- as per Stoke's audited accounts and rounding for simplicity purposes:

Upper aloss Tariff either £55.5m or £61m.

2017-18- £30m loss before tax, estimated £9m FFP allowances. £21m.

2018-19- £15m loss before tax, estimated £9m FFP allowances. £6m

2019-20 and 2020-21- £88m and £9m loss before tax. £56m in Covid argued costs and £9m x 2 in FFP allowances.

Averaging makes tbis £48.5m before £9m in FFP and £28m in Covid. Because I'm not using precise numbers it is something between £11.5-12m.

Margin for error and remaining headroom either £16.5m-22.5m.

To 2022- Upper Loss Limit now £39m.

2018-19, £6m adjusted FFP loss.

2019-20 and 2020-21- £11.5-12m adjusted FFP loss.

Therefore probably given an £18m pre tax loss but a good chunk of depreciation now removed- £6-7m in FFP and the League cited limit was £2.5m.

Therefore in the range of £8.5-9.5m.

3 year loss range adjusted from £26-27.5m.

Therefore a margin for error is probably £23-26m.

However if the transfer add-back crap was stripped out they would probably fail at least one period.

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Wigan accounts from promotion campaign. Unsure how much they lost in 2019-20 owing to admin and bankruptcy- accounts were not released.

Wages for Wigan last season were about 150 pct of turnover albeit a very low turnover.

Have they learnt nothing?? What sort of League Business Plan post admin is that?

Screenshot_20230307-224908_OneDrive.thumb.jpg.e2a3f838b8be9b192606e52f44ad6e52.jpg

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