The Championship FFP Thread (Merged)

[Mr Popodopolous]

Should add.

When Cardiff City Holdings are out, that could show some differences to the club ones that I posted- maybe much the same but we'll see.

Luton parent 2020 Holdings (England) likewise.

Dunno whether Sky Blue Sports and Leisure still applicable to Coventry for the final time.

[Mr Popodopolous]

QPR and FFP news. Will our friends over the Bridge be getting the same energy.

QPR reportedly at least as per one of their forums, it is claimed well they need to cut costs by 30 pct next year??

Whether it is solely FFP related or not who knows but I expect it is a factor.

[Mr Popodopolous]

Rotherham accounts submitted to CH. Should appear in the next day or two.

There's nothing really of note there tbh, save for how well they do on a budget! Wonder if Warne would have stayed had they added players such as Hjelde, Morrison, Fosu, Hugill and now temporarily Blackett under him.

They'll be miles and miles within FFP however.

Edited March 8, 2023 by Mr Popodopolous

[ExiledAjax]

10 minutes ago, Mr Popodopolous said:

Rotherham accounts submitted to CH. Should appear in the next day or two.

There's nothing really of note there tbh, save for how well they do on a budget! Wonder if Warne would have stayed had they added players such as Hjelde, Morrison, Fosu, Hugill and now temporarily Blackett under him.

They'll be miles and miles within FFP however.

I've always assumed that whatever league they are temporarily in, Rotherham must basically plan based on SCMP rather than P&S/FFP.

Edited March 8, 2023 by ExiledAjax

[Mr Popodopolous]

17 minutes ago, ExiledAjax said:

I've always assumed that whatever league they are temporarily in, Rotherham must basically plan based on SCMP rather than P&S/FFP.

Perhaps yeah, they're nowhere near breaching the latter.

How it carries over between the two divisions isn't entirely clear- seen one suggestion that owner gifts that bolster income for League One clubs are deducted for FFP purposes once back in the Championship- would make sense tbh subject to equity injections.

Edited March 8, 2023 by Mr Popodopolous

[Davefevs]

Makes total sense.

[Mr Popodopolous]

Plus slightly perplexed by some Cardiff fans talking about Tan needing to release the purse strings when the starting point- pre FFP, Covid allowances etc going into next season, is a pre tax loss of £30m or if the Holdings is a bit better, something approaching £30m.

He is a terrible owner but headroom wise?? That loss included a profit on player disposal of £4-5m btw.

Edited March 8, 2023 by Mr Popodopolous

[PHILINFRANCE]

57 minutes ago, Mr Popodopolous said:

Rotherham accounts submitted to CH. Should appear in the next day or two.

There's nothing really of note there tbh, save for how well they do on a budget! Wonder if Warne would have stayed had they added players such as Hjelde, Morrison, Fosu, Hugill and now temporarily Blackett under him.

They'll be miles and miles within FFP however.

A shame they gave up a winning position against Reading recently - 1-0 up with minutes to go and lost 2-1.

With Reading’s impending 6 point deduction, perhaps even 12?, it would have made things very interesting.

[Mr Popodopolous]

6 minutes ago, PHILINFRANCE said:

A shame they gave up a winning position against Reading recently - 1-0 up with minutes to go and lost 2-1.

With Reading’s impending 6 point deduction, perhaps even 12?, it would have made things very interesting.

It would indeed.

This has gone quiet for a few days now. The noises are that it'll be six, but is it possible that an Independent Panel could somehow exonerate Reading?

Maybe it'll be the case that:

1) Breach of Business Plan, suspended -6 activated but Ince seemed adamant that compliance was achieved.

2) FFP breach- for 2021-22 or the period ending that, the deduction for this- this plus suspended -6, usually this season.

3) Put on notice for a fail this season if compliance not achieved by end of June- that sanction if it became applicable surely would be next season or beyond, not this.

Edited March 8, 2023 by Mr Popodopolous

[Mr Popodopolous]

Excellent. About time PSG could feel some heat.

https://www.mirror.co.uk/sport/football/news/lionel-messi-kylian-mbappe-psg-29407245

[Mr Popodopolous]

@Davefevs @Hxj @ExiledAjax

Also @chinapig

What do we think to these calculations? Reading the Stoke forum if I've read it right they could spend £20m next season and have  a £35m wage bill- does make me wonder how we compare?? Our income seems to have been similar last season, in 2021-22.

We seem to have been cost cutting for some time now, no PL loanee since October 2020 and so on. Wonder how much we can spend by comparison.

What exactly am I missing- sounds like we are shopping in a very different pool despite FFP regs.

Their wage bill was £37m, ours was £30m- however our amortisation and impairment of players was £8.444m vs theirs of £6.426m.

They also had a multi million rent payment included in those Operating costs whereas we had Interest payable.

Is it just the Profit on Disposal that differs?

Yet with no sales this summer, we have perhaps only £4m left in headroom to strengthen the squad, including all fees, wages, agents fees etc- that's if all out of contract leave and maybe a little high given January dealings, extensions etc. Granted my figures are from before January dealings.

Edited March 8, 2023 by Mr Popodopolous

[Davefevs]

Based on us posting numbers in 22/23 akin to 21/22, but a less wages, less amortisation and adding in Semenyo, plus some guesswork on our Covid allowables, I reckon we have a budget of £10m.

You know as well as I do, that doesn’t mean we can spend £10m in fees…it ain’t as simple as that.

We could spend £10m on 4 players, give them all 4 year deals, and it only cost us £2.5m next season (and the following 3 years) plus wages of £2m p.a. (4 x £10k p.w), so still have £5.5m budget left over.

So it’s really difficult to start quoting war-chests and stuff like that, because it’s not how it works.  So I take anything like that with a pinch of salt, unless they start using amortised projections, wages etc.

[Mr Popodopolous]

1 minute ago, Davefevs said:

Based on us posting numbers in 22/23 akin to 21/22, but a less wages, less amortisation and adding in Semenyo, plus some guesswork on our Covid allowables, I reckon we have a budget of £10m.

You know as well as I do, that doesn’t mean we can spend £10m in fees…it ain’t as simple as that.

We could spend £10m on 4 players, give them all 4 year deals, and it only cost us £2.5m next season (and the following 3 years) plus wages of £2m p.a. (4 x £10k p.w), so still have £5.5m budget left over.

So it’s really difficult to start quoting war-chests and stuff like that, because it’s not how it works.  So I take anything like that with a pinch of salt, unless they start using amortised projections, wages etc.

Cheers Dave, that's a bit more promising.

Covid allowables for last season were £2.5m I thought, capped at that.

My estimates to date are based on a) The £28.5m loss laat year being £19m for FFP purposes and EA mentioning a £13m pre tax loss for this season potentially. I  believe our FFP allowances are some £7m per year.

I'm probably underestimating the headroom- and that's before any possible sale of Scott which would prove transformative in the market.

Reckon amortisation would be down to close to zero in the summer so down £6-7m from last season. BCFC Holdings wages? Ie inc. Tax, NI etc-, down to £20-25m all in? This is assuming Kalas, DaSilva, King all go and a full year minus Bentley, Klose, Massengo, Martin.

[Davefevs]

2 minutes ago, Mr Popodopolous said:

Cheers Dave, that's a bit more promising.

Covid allowables for last season were £2.5m I thought, capped at that.

My estimates to date are based on a) The £28.5m loss laat year being £19m for FFP purposes and EA mentioning a £13m pre tax loss for this season potentially. I  believe our FFP allowances are some £7m per year.

I'm probably underestimating the headroom- and that's before any possible sale of Scott which would prove transformative in the market.

Reckon amortisation would be down to close to zero in the summer so down £6-7m from last season. BCFC Holdings wages? Ie inc. Tax, NI etc-, down to £20-25m all in? This is assuming Kalas, DaSilva, King all go and a full year minus Bentley, Klose, Massengo, Martin.

The covid allowances are just one big unknown, both in terms of amount, and breakdown per year.

I’m at the point where I’m pretty much blasé about the current P&S numbers, and waiting for the new rules to be announced.

Re Stoke - £15m for Souttar (minus NBV, minus any sell-on to Ross County)

[Mr Popodopolous]

3 minutes ago, Davefevs said:

The covid allowances are just one big unknown, both in terms of amount, and breakdown per year.

I’m at the point where I’m pretty much blasé about the current P&S numbers, and waiting for the new rules to be announced.

Re Stoke - £15m for Souttar (minus NBV, minus any sell-on to Ross County)

Covid wise, I am consistent on this if perhaps outdated or simplifying but I still would quite like the idea of the League performing a review of all Covid losses vs their voted on limits and then if the gap pushes a side over an adjusted £39m, referral to ab IDC for adjudication- we'll be fine in any event but i wonder how many sides would end up having to defend their position??

That's fair, the League are very much taking their time though aren't they. In theory one more year of the current rules might be fair because there are undoubtedly sides who would be saved by a sudden termination halfway through the cycle.

Plus Stoke, mentioned proceeds of about £18.6m - book value of £0.6m in terms of profit on disposal this year. Thwy seem well in the clear if that's accurate, it's more to 2021 or maybe 2022 where I have the issue given Covid losses.

[Mr Popodopolous]

Finally been able to get some kind of figures for Wigan in their administration season.

The question is, should I use the exchange rate on June 30th 2020 or September 23rd 2020.

If it was the day that the accounts were made up to then it's the former, if it's release date at HKSE it's the latter!

Seems like a pre tax loss of either:

£20,192,998.80

Or

£20,730,682.20

[Mr Popodopolous]

A hypothetical world in which Covid aka add-backs and offsetting plus fixed asset sale and leasebacks had been made acceptable- I dread to think tbh. How many points deductions and rolling embargoes would have been handed out??

Birmingham, Derby, Reading, Sheffield Wednesday all fell foul as it was, intrigued to see the scale of their messes in this scenario.

Think Stoke either in 2020 or 2021 would have almost certainly fallen foul if not for Covid, perhaps both if the loopholes were not reopened briefly.

Aston Villa too- stadium sale and leaseback bolstered theit position by £36m, HS2 compensation a further £14.4m- although this may have counted anyway the latter, owing to the fact it was HS2 related.

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

For basics, the following benefits would not have accrued had this loophole never reopened- Reading is complex as it seems to go Reading-Renhe-Renhe

1) Aston Villa- £36-50.4m

2) Birmingham- £17m

3) Derby- around £40m

4) Reading- £6.518222m and then under the parent, some £29,929,818 in 2018-19, the first of these 2017-18.

5) Sheffield Wednesday- around £38m.

6) Stoke- £32m or thereabouts.

Clearly this is net of rental, which wouldn't be there if not for the Fixed Asset sales.

In terms of Covid-19, Stoke would have either had to amortise or impair in the regular manner some £30m or thereabouts of transfer fee amortisation.

Teams would not have been able to merge losses mind you we may have been adversely affected by this too! It helped us as it helped others.

Teams such as Birmingham, Derby, Reading, Sheffield Wednesday would have failed more than once. Potentially Stoke too- Aston Villa would have been much more restricted in 2018-19 as a fail already on track which may have meant either Grealish sold or no El Ghazi, Tammy to name two.

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

For basics, Stoke and their own numbers.

In 2019-20, their pre tax loss would have been around £50m- they wouldn't have impaired then falsely claimed Covid then they wouldn't have lost £8m in revenue either.

They made £32m on stadium and training ground sale- this would surely have been accelerated into 2019-20.

IRL they lost £9m pre tax in 2020-21, but this included both £7m in lost revenue but also £32m in profit on disposal- I expect that minus the impairment it would have added maybe £10m to their amortisation to the year. Rent about £4m iirc and on £39m before adjustments due to no merging.

Probably therefore in a non Covid, but fixed asset loophole world:

SCFC Holdings:

1) £15m pre tax loss 2019 (-£9m in FFP allowances). £6m

2) £18m pre tax loss (-£9m jn FFP allowances). £9m

What with the £30m pre tax loss in 2017-18 before the usual £9m in FFP allowances, that's £36m to 2020.

That £21m drops but to does the headroom.

2020-21. £9m loss but readd £7m in lost revenue- but subtract £32m in fixed asset profits then maybe add £10m in amortisation and potentially £4m in rent.

Pre tax loss might easily be in the range of £40-50m..couple of million drops off the depreciation on disposal of fixed assets.

£48-58m FFP loss quite possible!

Now if no fixed asset loophole, well I dread to think??

They were kicking off and moaning, publicly and privately in the run-up to Covid-19 as a club.

In a NON Covid-19, non fixed asset loophole world assuming that the non Covid impairment still occurred as usual.

2017-18- £30m pre tax loss, less £9m in FFP allowances.

2018-19- £15m pre tax loss, less £9m in FFP allowances.

2019-20- £50m pre tax loss, less £9m in FFP allowances.

FAIL by £7m, prior 2 years reset to £13m...£19m in prior FFP losses.

2020-21- £9m pre tax loss minus £9m in FFP allowances - £7m in lost revenue (Stoke's own numbers) but also minus £32m in fixed asset profits then maybe £5-10m more in amortisation from the prior impairment. 

Overspend- £5-15m!! 2nd offence, but then again a Business Plan would have restricted them so perhaps not.

Or perhaps they would have just stuck the £30m impairment into 2019-20 and taken a huge hit- would have a huge overspend however. Talking £30m+.

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

Non fixed asset loophole world

Aston Villa

I estimate using their own accounts too, that they would have had to find £30-45m from somewhere in the year of their promotion.

The reason for the variance is even in a non fixed asset loophole world, do you include the Training Ground compensation caused by HS2?

Birmingham

With reset, their prior years FFP figures were either £25m or £26m. Looking at a £6-7m overspend but then maybe Adams sold in time...which then leaves a hole for 2019-20!

Derby

This is even before the reworking of amortisation and should go on the figures as they were prior to the 2nd charge. Minus the stadium sale, think using the Sevco 5112 accounts it was a £20-25m hole to 2017-18!  Would have to read through IDC 1 again to extrapolate fully.

Then a forecast, kinda finalised loss in 2018-19 of £29m was mentioned but the accounts never came to light. Then amortisation was due to spike to about £25m in 2019-20...talking 3 successive 8 figure breaches minimum?? Though a Business Plan following breach one may have reined in subsequent years, probably a £15m hole in 2019 following the initial breach however, how then do you resolve the forecasted amortisation spike in 2020. That said rent we don't know what it was in the end, you subtract that.

Perhaps £5-10m less would have been spent/imposed upon in 2018-19 in a non Pride Park sale world so overspend two 'only' £6-11m...

...Still the massive spike in amortisation coming up in 2019-20 however.

Reading

As it was, they weren't in line anyway despite all the loopholes. Definite fail to 2019, possibly to 2018- do you then resolve to 2020, 2021 and perhaps even 2022? Reset or not, there were still huge deficits- otoh the EFL Business plan would have restricted Joao, Puscas etc...counterfactual should subtract some amortisation and some wage growth.

Sheffield Wednesday

£18m overspend to 2018 as we know. Reset leaves a target of £13m adjusted- take out £38m profit and it's maybe a £3-4m overspend in 2019. Reset again, another £4m overspend to 2020, reset again and similar to 2021. Maybe a bit more, maybe a bit less for the last two.

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

Decent article on the financial side of the Championship.

https://www.football365.com/news/opinion-championship-clubs-struggling-financially-not-only-issue

Interested to see that Stoke apparently are in favour of a Football Regulator though- would have thought a regulator would go hand in hand with tighter expenditure limits in line with redistribution of TV revenue.

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

Cardiff City Holdings accounts now submitted to CH. They probably are the FFP reporting entity, worth checking them tbh when they materialise.

https://www.bbc.com/sport/football/64896923.amp

BBC analysis is odd- it quotes the player wage bill only which Cardiff itemise separately in their accounts (rule of thumb for them, seems to be 75-80 pct of the total). It quotes that as the wage bill which is misleading. To a casual reader they may believe that the total wage bill was £22.2m when in fact it was about £29m all-in.

Will need to wait for the full Holdings accounts to be out but a couple of basic errors in there.

Operating loss is also generally before interest, profit on disposal and certain exceptional items. As I say when the accounts published in full...

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

In respect of Cardiff, assuming that the Holdings numbers don't make this obsolete.

My best estimate

2019-20 and 2020-21- Combined average after FFP and Covid add-backs. -£2m

2021-22 After FFP and Covid add-backs. -£20-24m. The reason for the differential is that the Intercompany debt provision, included in FFP or isn't it?? If yes then the lower figure, if not??

2022-23- Probably after FFP add-backs need to have cut their losses by £9m at best and £13m at worst. Which in practice means an accounting loss not exceeding £21m at best and £17m at worst.

Am assuming £4m per season in FFP allowances here and £5m x 2 in each of the main Covid seasons with the EFL £2.5m last season. Plus assuming they'll have made it to this season.

Unsure how to treat the Provision for Intercompany debt- any ideas @Hxj ?

Edit, there is also £0.5m of debt waiver, that should probably be subtracted thereby adding £0.5m to the loss before tax.

Either way they could be up against it next year if the same rules are in play.

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

https://inews.co.uk/sport/football/efl-watford-transfer-hassane-kamara-udinese-2198188

About time!! EFL set to examine under their Fair Value rules.

https://www.watfordfc.com/news/club-statement-hassane-kamara

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

As I understand it, if Watford found in breach it in itself wouldn't lead to a deduction, the issue would then be whether the restated profit was to materially impact upon their FFP returns. I expect a restated profit would not to 2023 or perhaps even 2024 if they're still down here but it would be interesting to see...

[Mr Popodopolous]

Meanwhile in terms of clubs doing it right.

Rotherham lost about £1.8-1.9m pre tax- had a wage bill several million lower than Champions Wigan.

Blackpool back in the Championship posted a profit before tax of £4-5k.

Edited March 9, 2023 by Mr Popodopolous

[Cidre Monita]

FFP considerations are not business considerations. It seems people think spending up to FFP allowances is okay when a business is still losing millions. What about a budget based on the financial viability of a club? FFP is not free money if an investor/owner does not want to spend it. We treat losses as if they are not real and part of a budget. Have a good look at what the income is for BCFC . We are still spending more than we earn, and anyn sale, like Scott, just means the club is viable, without spending one £ . 

 

In any case, FFP is changing and all of these discussions will need revisiting when the new rules are announced very soon. 

[Mr Popodopolous]

Oh this is very true, perfectly possible to be within FFP but insolvent and have sufficient owner support but inadequate FFP returns. In all but one case a club failed one but were fine with the other.

We all know that in one case the club was in such a mess that they breached both simultaneously or at least punished for both at the same time!

Yes the newer ones seem easier to follow- football wages, player amortisation and agents fee!

90 pct year 1

80 pct year 2

70 pct year 3, settles on this.

Transfer profits will add to headroom, don't know much about this aspect. Instalment based or an averaged profit? Annual profit.

Ultimately you're right, for most clubs at this level and perhaps others, when the owner or ownership group stop writing those cheques- through choice or otherwise then the club is in a huge hole.

Edited March 9, 2023 by Mr Popodopolous

[Mr Popodopolous]

We're back to worst pre tax losses in the division for laar season- Cardiff and their Intercompany debt provision seems not to be apppicable at the consolidated level- whixh makes sense.

Their FFP loss for last season probably remains at £20m.

[Mr Popodopolous]

I should add on Stoke.

I believe they are legitimately fine to 2023 and probably 2022. Have worked hard.

If there is a question it is looking backwards to 2021.

If anything is found it shouldn't be forgiven and forgotten, same goes for any club. I'd like to see Fulham and potentially Nottingham Forest, Aston Villa certainly all answer to the EFL FFP committee.

Any club going back to beginning of Championship P&S rules- as far as statutes allow, past allegations overlooked or missed before are not forgotten ones.

Premier League had the right idea going back with Man City, if you're right you're right. Or have the right anyway.

All the same they seem fine as of now, to 2022 yes, to 2023 no doubt. Because even if something was somehow found with regards to the period ending 2021, the reset to a £13m cap on priot years would see them fall within thereafter. Yes they can spend reasonably well this summer.

Edited March 10, 2023 by Mr Popodopolous