The Championship FFP Thread (Merged)

[Mr Popodopolous]

Swansea's accounts have arrived at CH! Although we know many of the headline figures and some of Kieran Maguire analysis it will he interesting to see the finer detail when they actually appear tomorrow or sometime this week I expect.

Edited May 9, 2023 by Mr Popodopolous

[Davefevs]

Wigan in the crap:

 

[Davefevs]

Swansea’s not available to view at CH.

As for Derby, says done, but nothing submitted?

[Mr Popodopolous]

The EFL oversight of Wigan post administration has been a disgrace although clubs and ownership are ultimately responsible for themselves. How on earth can a club exiting administration be permitted to lose 8 figures the very next season given the EFL Business Plan requirements?? That is what they lost in their promotion season, wages 156 pct of turnover??

Swansea accounts as expected, if anything they have potentially added a bit to their amortisation. Pre tax sans player sales probably remain in the £20-25m bracket to July 2023, Post Balance Sheet events implies nothing brought in as far as transfer profits go.

Swansea City 2002 Limited I assume to be the top co.

In respect of Derby, this seems to be that way because the company was set up last June the first accounts for it are this season made up to end of June 2023.

Which in effect means they will not have released accounts into the public domain for club, parent, consolidator and subsidiaries of consolidator for years!

April 2019 was the year the accounts for 2017-18 including the infamous but cleared stadium sale.

However then:

1) Spring 2020 saw no accounts for 2018-19.

2) Spring 2021 saw no accounts for 2019-20.

3) Spring 2022 saw no accounts for 2020-21. Possibly relieved by the obligation by going into administration.

4) Spring 2023 saw no accounts for 2021-22. Combination of going into administration and new company.

A concern of mine is that what the hell happened to all of the running costs. I know that wages and amortisation made up a good chunk but think they were £75-76m in 2017-18 as per the Sevco 5112. I know e.g. Depreciation post Pride Park 'sale' should be lower, they've retained a Category One Academy status which is odd to say the least given all of their financial travails. Academy expenditure is exempt in any event but the running costs of:

*Club DCFC

*Stadia DCFC

Plus the aforementioned Derby County Academy.

Revenue is gained from the first two in particular but you can't just bank the revenue and magic away running costs. These 3 ran at losses and the two commercial operations aren't FFP exempt for the most part.

Edited May 10, 2023 by Mr Popodopolous

[Mr Popodopolous]

Forgot to add, Spring 2024 will, should show the first year Post admin for accounts made up to end of June 2023.

[Mr Popodopolous]

One more thing.

Do Cardiff fans understand or get FFP.

Their Parachute Payments are over and have been from 2021-22 and their income was in the £19-20m bracket.

They lost £26m before tax in 2021-22 and their Academy is Category Two which maybe £1.5-2m a year spent on it. That is a decent rule of thumb.

The loss limit is £39m plus allowables.

They sold Moore and maybe a promotion bonus will have kicked in but unsure which season but nobody of note the season just gone and it wouldn't surprise me if they are on track to exceed £39m to 2023-24. Cutbacks sure but by enough??

That £26m loss was inclusive of £3-4m in profit on disposal of players btw.

That's exceed without and before any new additions.

I see very little mention or discussion of it on their social media or sites.

I remember Tan tried to get round it in 2015 or 2016 under the old system wirh some sort of debt write off only for it to be rejected.

Edited May 10, 2023 by Mr Popodopolous

[Davefevs]

45 minutes ago, Mr Popodopolous said:

One more thing.

Do Cardiff fans understand or get FFP.

No, they don’t, you should’ve just stopped there!

[Mr Popodopolous]

Talking of Derby, who were mentioned earlier.

Certain restrictions appear to have been eased, still have to submit a Business Plan or in the process of so doing but can seemingly pay modest fees and or loan fees.

[Mr Popodopolous]

They weren't actually on the EFL Embargo Reporting Service since the takeover but were under a Soft Embargo perhaps, I'm not altogether sure.

https://www.bbc.co.uk/sport/football/65543136

Probably have to break even, turn a profit or something. Maybe it's within the divisional rules who knows.

It's confusing, says not embargoed or restricted but monitored against their own Business Plan.

Edited May 10, 2023 by Mr Popodopolous

[ExiledAjax]

20 hours ago, Davefevs said:

Swansea’s not available to view at CH.

@Mr Popodopolous

Swansea's summary - £23m operating loss, £10m in from transfers, £16m of owner loans converted and a final loss of £12.5m. 

Very similar to what I expect us to report for this season.

[Mr Popodopolous]

2 hours ago, ExiledAjax said:

@Mr Popodopolous

Swansea's summary - £23m operating loss, £10m in from transfers, £16m of owner loans converted and a final loss of £12.5m. 

Very similar to what I expect us to report for this season.

Just had a skimread and yes £12.5m after tax, about £13m or so before. The latter being the FFP starting point.

Wages down by another £2-4m here do we think, when set against 2021-22? Obviously the Impairment in 2021-22 was probably a one off and I expect amortisation to have been down by maybe £1-1.5m. Semenyo pushes the profit on disposal up and I assume income broadly similar.

[Mr Popodopolous]

I do restate my case slightly about Cardiff, it does say the cost base has supposedly fallen majorly but those new signings made in 2022-23 even if cheaper will still subtract from the savings.

https://www.walesonline.co.uk/sport/football/football-news/whats-actually-happening-cardiff-city-26889722

Not a single mention of FFP in the article.

In 2021-22, Revenue £19-20m whereas total cost base around £50m.

When we consider the amount of sacrifice that we made and restraint that we showed. Possibly we were under informal restrictions too, but we'll never know for sure.

Let us say that their wage bill fell by £10m and revenue up by £1m.

That would still show and that's even before factoring in transfer profits a pre tax loss of say £15m. Maybe as much as £18-19m.

Their cost base pre any additions could have some way to fall. Where are the profitable player sales? Semenyo helped to save us. I assume that the below was mainly linked to Moore in 2021-22.

Edited May 11, 2023 by Mr Popodopolous

[Mr Popodopolous]

Cardiff aside, seen it suggested that Birmingham might be losing up to £25m this season. This is still subject to change ie they may sell players, in which period will Bellingham sell on fall. Essentially it is a bit worse than I thought.

Given that their Academy is back down to Category 2 when that new starting point becomes the £24m pre tax loss last year, their allowables probably £4-5m per season...to 2024 looks interesting! Their wage bill is still probably £30m or above although it should fall this summer.

Edited May 11, 2023 by Mr Popodopolous

[Mr Popodopolous]

I've gone a quick guesstimate and extrapolation of Birmingham.

Based on Cat 2 costs and other items e.g. the whole Community Trust, Deprecation etc I estimate their FFP allowances to be £4-5m per season.

They lost £24-25m in 2021-22 pre tax plus the £2.5m in Covid add-backs which everyone got. Actually their accounts said £25.028m last season!

Seem to have lost £11-12m and maybe more in first half of 2022-23. Via HK.

I am comfortable in my estimates of likely £45-50m in pre tax losses across this and last season subject to any activity that will kick in by end of June!

They seem narrowly fine until THIS summer but next season??

Possibly need to improve their financial position by £10-15m, could be more for the 2023-24 season. Did wonder if it could even be North of £15m.

Edited May 12, 2023 by Mr Popodopolous

[Davefevs]

 

[Mr Popodopolous]

Suspended two points is very weak.

There was reportedly a bigger serious investigation still into the true ownership of the club, hope that presses on regardless.

The EFL Written Reasons will be interesting to see.

Edited May 12, 2023 by Mr Popodopolous

[ScottishRed]

10 minutes ago, Mr Popodopolous said:

I've gone a quick guesstimate and extrapolation of Birmingham.

Based on Cat 2 costs and other items e.g. the whole Community Trust, Deprecation etc I estimate their FFP allowances to be £4-5m per season.

They lost £24-25m in 2021-22 pre tax plus the £2.5m in Covid add-backs which everyone got. Actually their accounts said £25.028m last season!

Seem to have lost £11-12m and maybe more in first half of 2022-23. Via HK.

I am comfortable in my estimates of likely £45-50m in pre tax losses across this and last season subject to any activity that will kick in by end of June!

They seem narrowly fine until THIS summer but next season??

Possibly need to improve their financial position by £10-15m, could be more for the 2023-24 season. Did wonder if it could even be North of £15m.

There are of course other issues for them but on the FFP side I would imagine that the sale of Bellingham Jnr and the probable sell-on element from his older brothers move will resolve that.

If I were a Brum supporter I would be keeping a keen eye on where those two,not insignificant sums of money go.

[Mr Popodopolous]

11 minutes ago, ScottishRed said:

There are of course other issues for them but on the FFP side I would imagine that the sale of Bellingham Jnr and the probable sell-on element from his older brothers move will resolve that.

If I were a Brum supporter I would be keeping a keen eye on where those two,not insignificant sums of money go.

Agreed. It will/should resolve it and leave them with a little to spend. 15 pct of profit for sell on seems to be an often quoted number.

[Mr Popodopolous]

Birmingham probably will sort itself out or kick the can down the road due to Bellingham tbh.

Cardiff I still think...hmm. Who are their saleable assets here? They have not in general been especially good sellers and an income of £19-20m vs a cost base of approaching £50m, granted this is last season's figures...How do they move towards compliance in 2023-24.

Seen it suggested that QPR have a £10m hole to fill as well. However arguably they have more saleable assets.

Edited May 12, 2023 by Mr Popodopolous

[Davefevs]

Some context that he is talking about playing budget only, and probably first team playing budget at that.

Heres their season before accounts for context.

 

[Mr Popodopolous]

Seems that QPR have a 25 percent sell on clause for Eze. Presumably that is profit related but either way it could save them from FFP trouble.

[Mr Popodopolous]

The one I've been waiting for! Or  key one anyway.

€30m in a 3 year or 4 year period with Covid is the UEFA loss limit. Plus usual add-backs and Covid costs.

Seen the first bits of his Substack, sadly mostly now behind a Paywall but PSG starting point last season was a €375.4m pre tax loss!?!

Not over 10 years, not over 3 or 4 with Covid adjusted times but in that the first pre Covid season though some countries had restrictions still.

The Settlement Agreement is weak as anything or was, in the circs. Them and Juventus deserved stricter UEFA sanctions without a doubt.

PSG"s total Operating Costs were over €1bn when we include amortisation etc.

Transition or not you have to take more of a stand with granted a profit in 2018-19 but...

2019-20 -€124m

2020-21 -€224m

(For FFP purposes the averaged pre tax, pre deduction loss it was -€174m).

2021-22 -€375.4m

That was the year they signed who they did, Donnarumma, Ramos, Messi albeit on frees et al. This coming after combined losses of -€348m in 2 seasons, granted the two Covid seasons.

Edited May 15, 2023 by Mr Popodopolous

[Mr Popodopolous]

Closer to home, the excellent Al Majir who has blogged about and sought to hold Birmingham's owners to account for years.

https://almajir.net/2023/05/15/bcfc-meeting-the-ps-challenge/

I think he is a bit on the negative side but the hole being £10-15m seems pretty plausible. He seems to be taking pre tax losses while not factoring in the likely deductions or the £2.5m in Covid add-backs that all clubs got in 2021-22.

Maybe the hole would even push a bit higher than £15m, it's difficult to say. A £21m swing is probably overstating it however.

Edited May 15, 2023 by Mr Popodopolous

[Leveller]

So, without reading the entire thread, can someone summarise which Championship clubs in 2023-4 are going to be seriously constrained by finances? By which I mean, needing to weaken their squad to cut wages/bring in capital to the extent it will harm performance on the field.

The ones that come to mind are Cardiff, Birmingham, West Brom and QPR. Does that sound right?

[Mr Popodopolous]

Swansea to some extent maybe too. I have to query Stoke and bow they reached their position.

If Nottingham Forest come down could they have questions to answer, Everton and Leicester the prior 2 years feeding into it could be difficult?

In terms of Cardiff however, there is very little discussion about their P&S position by their local media whatever.

Edited May 16, 2023 by Mr Popodopolous

[Mr Popodopolous]

West Brom by the way, have got a lot of coverage from their possible cash flow issues but not much from an FFP/P&S angle. Well this is the most recent accounts, inclusive of both a 1st year Parachute Payment and £16.9m in Profit on Disposal of Players 

What isn't altogether clear to me is whether the Loan Impairment charges should be excluded from FFP when it goes through Profit and Loss or what. That onnthe momey that Lai owes or has owed the club.

Anyway Parachute Payments x 2 then it is, was back onto Solidarity Payments and EFL TV money. I reckon that their income will fall from 2021-22 to the upcoming season, perhaps some £35m, maybe £40m.

 

Edited May 16, 2023 by Mr Popodopolous

[chinapig]

34 minutes ago, Mr Popodopolous said:

. I have to query Stoke and bow they reached their position.

Kieran Maguire had a dig at Stoke on yesterday's PoF podcast. You'll enjoy it if you listen.

[Mr Popodopolous]

9 minutes ago, chinapig said:

Kieran Maguire had a dig at Stoke on yesterday's PoF podcast. You'll enjoy it if you listen.

I have a lot of Podcasts to catch up on but this will be high on the list. Thank you.

If Everton are being brought to book or at least there is deemed to be a case to answer, Stoke have done something very similar but it is a matter of size and scale by the looks.

[Mr Popodopolous]

Listened to some of it. Kieran didn't fully mention the Covid losses so far, he mentioned the Stadium sale.and Leaseback was just in time, he mentioned the impairment on relegation, Covid sort of but not fully.

As a reminder the Covid aspect was:

*£30m in Player Impairment. Fine if they want to impair but to exclude it from costs entirely as a Covid cost is IMO a nonsense.

*Was it £10-11m in lost profits and or cost, amortisation foregone from Covid. Speculative! I believe that Nottingham Forest have some similar though no breakdown by category. We were speculated to have done something similar but no idea on numbers.

Add back £40-41m and then halve as the two were averaged.

£20-20.5m.

Fixed Asset element:

*The aforementioned £32-33m profit, was combined on both the Stadium and Training Ground though the latter only generated a few million IIRC. As above, if costs and losses are aggregated, halved and averaged then so too are gains. £16-16.5m.

Slightly later Covid losses.

Last season, EFL limits were £3-4m, iirc. Think their Player attributed loss section was £2.3m.

The other funny thing although I haven't looked for months was that the Land Registry deemed not to have shown it to be sold after the event. I wonder when it finally went through...at the Land Registry. I remember that it showed still some days after May 31st 2021 as not done yet.

Edited May 16, 2023 by Mr Popodopolous

[Mr Popodopolous]

Found some of it, make of it what you well. I posted this in 2022.

Accounts ended May 31st 2021.

This copy was taken June 2nd 2021 as per the Land Registry records.

The new EFL rule, though it mentioned July is possibly of interest in that it states the Accounting Reference Period covering 2021-22. That would be surely depending when accounts are made up to.

Anything after 31st May 2021 would surely be the accounting Reference Period covering 2021-22..this document states ownership by Stoke City Football Club although I also believed it was Stoke City Property Limited prior to sale.

Quite curious isn't it that it was included in the 2020-21 accounts when still showing ownership after this accounting period had finished.

Any argument that it should have been in 2021-22 accounts? Which of course might see it excluded entirely given the rule change.

Edited May 16, 2023 by Mr Popodopolous