The Championship FFP Thread (Merged)

[cider11]

From the Burnley statement they’ve been put under a transfer embargo - https://www.burnleyfootballclub.com/content/club-statement-embargo

[Mr Popodopolous]

On the face of it, nothing to see here. The deadlines between EFL and CH don't always align.

Burnley accounts due at Companies House come the end of April- every club will either be end of April, March or February.

However the League expect the accounts for the prior season by 1st March of the existing season as well as the Projections for the existing season by the same date.

Future Financial Information, if applicable is needed by the end of March.

It is the internal submissions that Burnley will have missed although the League can hand down an embargo until rectified for missing CH deadlines but tend not to do this.

Finally, FFP. Not a chance Burnley will have broken the Upper Loss Limit. £105m for period ending last season, now down to £88.5m. Remember their huge player sales plus Parachute Payments- only theoretical loss limit problem I could think of is if zero equity and adjusted losses exceed £15m.

Edited March 12, 2023 by Mr Popodopolous

[Mr Popodopolous]

Dunno if this is of significance but seemingly both Calder Vale Holdings Limited and Kettering Capital Limited both overdue with their accounts. The former were due 1st October 2022.

Unsure where Kettering Capital fits in but CH says it is the controlling company. These were also due on 26th October 2022.

[Mr Popodopolous]

Rule 2.1.3 of course is the Projections for the existing season.

Edited March 13, 2023 by Mr Popodopolous

[Davefevs]

[Hxj]

Sounds like Burnley and their parent companies have got themselves in a bit of a mess!

[Mr Popodopolous]

1 hour ago, Hxj said:

Sounds like Burnley and their parent companies have got themselves in a bit of a mess!

I wonder if there is any kind of issue about undeclared money ie the source of or the true controlling party.

I read a Tweet that may have been a joke, probably was, about some secret Vietnamese investor.

[Mr Popodopolous]

Not City or Championship related strictly speaking but if Leicester drop this season they may well be coming down in a mess FFP wise. These figures do predate Fofana however. Mind you there will be no European revenue this year which chipped in £20m last season.

https://swissramble.substack.com/p/leicester-city-finances-202122

Their adjusted Upper Loss Limit to this season is £105m and it would drop to £83m if they drop-ie the period ending 2023-24.

January signings aside, their squad reportedly have no relegation wage reduction clauses.

Edited March 14, 2023 by Mr Popodopolous

[Mr Popodopolous]

Good piece. Just read it myself. As I expected Birmingham to squeak in probably for FFP this season.

https://almajir.net/2023/03/14/editorial-the-championship-financial-mess/

Edited March 14, 2023 by Mr Popodopolous

[phil_clevedon]

Reading's accounts have just dropped at Companies House if anyone with a bit more financial nouse than me (not difficult) wants to take a look. Don't know if this will impact their potential points deduction? 

 

[Rob26]

https://www.footballinsider247.com/huddersfield-town-administration-update-as-takeover-talks-go-on-sources/

[Mr Popodopolous]

Kieran Maguire Reading accounts thread. Remember the £2.5m Covid add-back and the Category One academy- these accounts look lime they've come in under the £39m...the problem here may well be whether tne individual items of the Business Plan have all bee complied wirh.

*Revenue

*Amortisation

*Profit on Disposal

*Player Remuneration

Have all of these been met? That for me is an open question.

While I'm at it, the Renhe Sports Management ones maybe the one.

Not yet looked in full but as far as I can tell they've been on the level with Covid losses too.

They've done well tbh...whether it is well enough remains to be seen.

[Mr Popodopolous]

When I say done well it's all relative and some of it is imposed by the League but even accounting for a few million rise in income, wages, amortisation down, profit on disposal up. Losses look much better.

Jury is out as to whether they've fallen foul IMO but perhaps. Doesn't look like it 3 year £39m adjusted limits wise.

Wages might be the issue to last year and there is one grey area in whether we include the Renhe or the club accounts for FFP.

If it's the former, Reading are clearly below £39m to 2022 but that doesn't preevt a possible fail in the Business Plan. Both 2018/19 and 2019/20 and 2020/21 are reset to £13m...which means that the combined average is £13m as the losses were sky high but Category One Academy- club accounts would be reset to £13m whereas the Renhe significantly lower.

Edited March 16, 2023 by Mr Popodopolous

[Rob26]

https://www.dailymail.co.uk/sport/football/article-11873261/Sheffield-United-introduce-extraordinary-cost-cutting-measures-avoid-going-administration.html

 

Edited March 18, 2023 by Rob26

[W-S-M Seagull]

Any truth in the Sheffield United administration rumours? Something about how that club absolutely stinks. I guess their plan is to get promoted and then they can easily pay back all the transfer fees etc. It feels like cheating to me.

[Rob26]

12 hours ago, W-S-M Seagull said:

Any truth in the Sheffield United administration rumours? Something about how that club absolutely stinks. I guess their plan is to get promoted and then they can easily pay back all the transfer fees etc. It feels like cheating to me.

makes no sense to me and think the have come out since I originally posted that and said its wide of the mark, I think may be click bait reporting more than anything, as think its a bit of a leap going from cutting costs (which I imagine is par for the course with their situation to manage cash flow) to going into administration.

for the cost of a couple million your risking devaluing the club by say tens of millions if dont go up due to your own fault, so not sure why you would risk that at all. at least you would just loan some money till next season or longer and leave the debt for the next owner to take over.

not convinced their take over is happening, its dragging on and the owner does not come across as 100% credible. but would think someone else be interested with them almost being in the premier league 

Edited March 18, 2023 by Rob26

[Mr Popodopolous]

Talking of Sheffield United and Huddersfield too for that matter I noticed the other day and double checked this morning.

I wasn't wrong, assuming Companies House hasn't got it wrong but given that their Reporting Period runs until the end of June it's 9 months on so they should be out at the end of March, that is:

Huddersfield Town Association Football Club Limited

The Sheffield United Football Club Limited

Blades Leisure Limited- the parent of Sheffield United.

All should be end of March, during Covid and maybe 2022 there was a 3 month extension but that is long gone...for some reason all are end of June.

Could be FFP related though unsure how, could be solvency- perhaps the auditors are not happy with something but I don't see how either couldve got into that position especially Sheffield United and Huddersfield have been slashing ever since the drop.

[Davefevs]

Reading likely to get 6 points deducted this week according to this chap:

Rotherham’s squeegee men played a blinder yesterday in retrospect!

[bcfc01]

Wrong time for Reading, they're 25% down on their seasons form.

Luckily for them, the bottom three are obviously still in poor form, but Huddersfield may be in better shape than Reading.

https://www.soccerstats.com/formtable.asp?league=england2

 

[Hxj]

3 hours ago, Davefevs said:

Reading likely to get 6 points deducted

It will be a greater penalty than 6 points.

There will be a penalty for the breach of the rules, plus the 6 points suspended penalty.

[bcfc01]

2 hours ago, Hxj said:

It will be a greater penalty than 6 points.

There will be a penalty for the breach of the rules, plus the 6 points suspended penalty.

So 12 points ?

Puts 'em rock bottom if so.

[Mr Popodopolous]

 

3 hours ago, Hxj said:

It will be a greater penalty than 6 points.

There will be a penalty for the breach of the rules, plus the 6 points suspended penalty.

In excess of 6 feels harsh to me.

Yes the Business Plan was failed but it seems to me that P&S was within the £39m. Some strong progress too in the year though whether they met the Business Plan is still unclear.

Yes I know absolute obligation, best endeavours are not second best endeavours etc but are Reading a bit of an easy target here in the context of:

Stoke City Holdings Pre Tax losses and this included Fixed Asset sales:

2017-18- £30m (PL)

2018-19-  £15m (Championship)

2019-20- £88m (Championship)

2020-21- £9m (Championship)

(Combined average £48.5m, Championship)

Upper Loss Limit was £55.5m.

Which fell to £39m last season and meant:

2018-19- £15m (Championship)

2019-20- £88m (Championship)

2020-21- £9m (Championship)

(Combined average £48.5m, Championship)

2021-22- £18m (Championship)

Of course they're all fine and dandy, crack on lads due to some £60m in 3 Covid seasons, £38m, £18m and £4m..averaged out then ending at £32m.

The controversies being £30m in player impairment, £11m in postal player profit and a further £2-3m in terms of the impact of Covid on the transfer market. All fine!! £22.5-23.5m all transfer market Covid stuff in FFP terms.

Fulham

2017-18 £45m (Championship)

2018-19- £20m (Premier League)

2019-20- £48m (Championship)

2020-21- £93m (Premier League)

(Combined average £70.5m across the 2)

2021-22- £?? (Championship)

Upper adjusted Loss Limit £72m to both 2021 and 2022. Promotion bonuses estimated at £20m in 2018 and £15m in 2020.

Covid losses £20m in impairment alone in 2020-21 and probably maybe £10-15m of more regular costs..all fine.

Nottingham Forest

£39m Upper Loss Limit all the way through

2017-18- £4m (Championship)

2018-19- £25m (Championship)

2019-20- £17m (Championship, remove debt cancellation and it's £22m).

2020-21- As above (Championship)

Fine to 2021 but...

2021-22- £?? (Championship). Big swing in starting point of £20m shrinking headroom. Covid losses look a bit sketchy.

Those losses were including decent player sales which is fine and no promotion bonuses which are excluded from FFP.

They also argued £8m, £8m and £12m in Covid which is £20m in FFP terms. All fine.

Edited March 19, 2023 by Mr Popodopolous

[Mr Popodopolous]

I should rephrase it, Reading seem to have breached the Business Plan but it's not nailed on IMO. Does NI and tax count towards the remuneration bill of £21.1m?

It appears to me too that the £39m to last season has been complied with. Category 1 Academy (though not this year) plus subtract the usual.

Quite possible that they could have missed one or two bits of the Business Plan but compiled with the 3 year limit. That of course is -6 but struggling to see where further deductions arise from.

Edited March 19, 2023 by Mr Popodopolous

[Mr Popodopolous]

While Paul Ince's interventions so far on this have been unclear and perhaps unhelpful he did say say something intriguing .

Thursday is apparently the cut off point for a points deduction though I query how well it holds for an FFP breach, a suspended breach etc. An article also referenced Birmingham, Wigan and Sheffield United. Macclesfield certainly were not spared when the EFL won on appeal in 2020.

https://www.getreading.co.uk/sport/football/football-news/ince-reading-efl-points-deduction-26508371

[Hxj]

13 hours ago, Mr Popodopolous said:

Quite possible that they could have missed one or two bits of the Business Plan but compiled with the 3 year limit. That of course is -6 but struggling to see where further deductions arise from.

I think you have mis-interpreted the Agreed Decision.  The -6 pts is for the original FFP breach, suspended with conditions.

If Reading have breached either the FFP limit, or the agreed budget then they get sanctioned for those offences.  Then you add the suspended sentence.

I don't have any sympathy for them, not one drop.  A six point penalty last season would have seen them relegated (based upon the final table).  They chose to agree a suspended sanction and then failed (allegedly) to keep to it.  How stupid or arrogant are they?

[Mr Popodopolous]

48 minutes ago, Hxj said:

I think you have mis-interpreted the Agreed Decision.  The -6 pts is for the original FFP breach, suspended with conditions.

If Reading have breached either the FFP limit, or the agreed budget then they get sanctioned for those offences.  Then you add the suspended sentence.

I don't have any sympathy for them, not one drop.  A six point penalty last season would have seen them relegated (based upon the final table).  They chose to agree a suspended sanction and then failed (allegedly) to keep to it.  How stupid or arrogant are they?

I very possibly have. Thank you as per. I have some knowledge of this stuff and increasingly so.

Ok right, so it's not say "Didn't get the wage bill down by quite enough, -6 for you"! I do stand by my view that the £39m aspect of it remains within limits to 2022. It's -6 plus sancton for the specifies of the Business Plan breach say.

Certainly would- Peterborough were talking about matters, as were Barnsley and reportedly briefly Derby back between say February and May 2022...Peterborough have again recently said they are monitoring matters etc, could be a Wycombe type case if the wage bill say was exceeded last season by the March 2022 assessment? I query them on profit on disposal of players too- yes Olise last year but Joao bid turned down in 2022-23.

For sure if transgressions have occurred...I still think are legitimate questions about any or all of Stoke to 2021, and then Fulham and maybe even Nottingham Forest to 2022. Maybe others too, time and accounts will reveal more.

Am questioning Everton as well, to 2021 and perhaps 2022 albeit they are PL!

Edited March 20, 2023 by Mr Popodopolous

[Leveller]

Wigan have just been docked three points for failing to pay wages.

[bcfc01]

6 minutes ago, Leveller said:

Wigan have just been docked three points for failing to pay wages.

They were probably down anyway, but that'll seal it.

[Cidre Monita]

Championship football is financially and sportingly broken. Wages far exceed income and PP makes a mockery of the competition. Until salary caps, youth player farming and income distribution are changed (Including prem), football is heading one way outside the top 5/6 clubs. It is a self inflicted implosion , where you cannot say there was not enough money. Greed and self interest have taken over and are out of control and unregulated. 

As an example, Leicester, turnover around £200M yet lose £95M. Complete madness. If you cannot make a club function with £200m to have say 30 players run around a kick a ball, then there is a complete detachment from reality and common sense going on. A Prem club should be a profit making enterprise , financially viable and stable. What exactly are these clubs chasing ? Madness. 

 

[Mr Popodopolous]

You're spot on. Leicester btw even with the sale of Fofana there could be some FFP qs to 2023 or 2024.

Although they're surely moot for anyone to 2021, 2022 and 2023 if you allow Everton to get away with £170m possibly rising to £220m in Covid claimed losses or add-backs when annualised say £85-135m...

£384m in pre tax losses to 2021, across 4 years...maybe £255m once FFP averaged, reportedly £70m last year which means £311-312m in FFP once annualised to 2022 if so which means £441-442m in total from 2018-19 to last season.

All that money and for what. 3 managers and bottom third, quarter of PL for 2 years now.

Anyway yes, spot on. I look arojnd at the solvency and for different reasons there are some clubs who are affected surprisingly badly. In no order other than alphabetical.

Huddersfield- A side with a relatively low cost base on promotion, hardly broke the bank and will have had Parachutes x 3, spent 1st two years offloading high earners sometimes accelerating losses and transfers profit in others...how the hell are they in trouble on the pitch what a decline and off the pitch with rumours of administration.

Sheffield United- Two PL seasons with large profits,  Year 1 and 2 Parachute Payments are major, sale of Ramsdale helps cssh flow and I assume that there were relegation reduction clauses built in, based on an annualised wage bill of £60m in PL which I'm sure was the lowest that year- relegation season maybe £40m, or more likely £30-35m. Waves are the biggest cost of a football club.

Oh plus playoff final, FA Cup semi final- missing a transfer instalment is inexcusable and inexplicable. They were hardly wild spenders so where has it all gone. Why on earth ate there reports which maybe overplayed that administration is even remotely possible.

West Brom- A club for so many years run along sensible lines and moreover who had the benefit of PL T.V. money or Parachute Payments from 2002-03 to present. Inexplicably they with their relegation clauses have had to take out a £20m secured loan via MSD.

Wigan- Worst of the lot in some ways. Yes much smaller income base but a club who were stuck into administration at the worst possible time and narrowly avoided a further 15 points should be under very strict monitoring for 2 years. For their own good as such as anything!

The reality? 156 pct of wages to turnover ratio last year and missing ie paying late the wages 4 times isn't it now.

What a broken landscape, what a depressing read and there are more, so many more but these 4 are quite shocking for differing reasons.

Edited March 20, 2023 by Mr Popodopolous