The Championship FFP Thread (Merged)

[Mr Popodopolous]

A key test is then, well IMO anyway.

Part 1:

Are transfer market related add-backs and exclusions due to Covid permitted.

Perhaps an IDC could make an overarching call.

If so, leave it, if not- Proceed to Part 2:

Part 2:

Test whether an exclusion of Covid transfer market add-backs etc is material to compliance with P&S. That would be the periods ending 2021, 2022, 2023 and soon 2024.

Part 3:

If it is, and it tips any into overspend? Refer!

5 minutes ago, CityReds said:

Sorry for the off current topic question, Is there a calculation for inflation do teams adjust for it? I believe the limit for losses in EPL is £105m over 3 years which is the same since it came in almost 10 years ago? You chuck in COVID and 11% inflation that’s surely going to hit both footballing and non-footballing income unexpectedly and therefore clubs ability to keep within limits

Nope onus is on the club. Definitely no adjustment for inflation and nor should there be. Idea is to eventually try and dampen down costs or at least increase stability.

Onus on the clubs and btw Covid allowed costs and add-backs were permitted and years 2019-20 and 2020-21 were averaged and halved to help to negate the effects and offer a truer picture.

£105m plus allowables is generous anyway, very generous. EFL is £39m plus allowables and has been since 2016-17.

Edited November 21, 2023 by Mr Popodopolous

[CityReds]

4 minutes ago, Mr Popodopolous said:

Nope onus is on the club. Definitely no adjustment for inflation and nor should there be. Idea is to eventually try and dampen down costs or at least increase stability.

Onus on the clubs and btw Covid allowed costs and add-backs were permitted and years 2019-20 and 2020-21 were averaged and halved to help to negate the effects and offer a truer picture.

£105m plus allowables is generous anyway, very generous. EFL is £39m plus allowables and has been since 2016-17.

A stealth reduction you could call it then.

Sorry for the ignorance, allowables?

[Mr Popodopolous]

31 minutes ago, CityReds said:

A stealth reduction you could call it then.

Sorry for the ignorance, allowables?

Okay the thinking behind the averaging was two fold as far as I can see.

1) 2020-21 was pretty much a full impact season, a lot of 2019-20 was much closer to normal. E.g. if a club lost £5m in 2019-20 and £25m the next hear, £15m would smooth it over nicely.

2) For PL and I guess UEFA, because season was postponed and went until late July, some of the TV money for 2019-20 will appear in 2020-21. An average feels sensible here.

To answer your second point.. it isn't just the pre tax loss you take, you subtract expenditure for:

1) Youth Academy (most clubs don't publish this), however we can extrapolate by Academy Category as each requires a minimum level of expenditure.

2) Depreciation or Impairment of Tangible Fixed Assets. Obviously this is in the accounts.

3) Amortisation of Intangible Assets except for Player Registrations. Appears in the accounts, goes for Impairment too.

4) Community Expenditure- You go to the Club Charitable or Community Trust and you take the Charitable Expenditure bit. That is the relevant bit.

5) Women's Team Expenditure- Some are on Companies House, some are not. My question is do we include the total expenditure or just the Profit or Loss section.

I think our Allowable costs are £7m per season, if over 13 months perhaps pushing towards £7.5m for last season. Plus whatever in Covid.

Edited November 21, 2023 by Mr Popodopolous

[Davefevs]

4 hours ago, Mr Popodopolous said:

That is intriguing Dave, I wonder.

I would have hoped we would be analysing all accounts in the public domain either to use in our favour or to push back to the League abour other clubs and their creative at best Covid arguments. Ideally the latter really.

The thing is it makes no odds unless we are planning on a huge mega spree in January because the Covid allowances drop off after this season and even after the Scott sale, look at our new approach.

My belief is thst post the Semenyo sale we are aok to 2023 even if we use the bare minimum of £5m average and £2.5m.

Let alone 2022 or 2024.

I’m sure that’s exactly what RG did do.

[Mr Popodopolous]

8 minutes ago, Davefevs said:

I’m sure that’s exactly what RG did do.

The push back or?

Again I'd argue we fixed our own issues in the end and didn't spend great amounts anyway so it might be worth looking on certain clubs because those 2 and maybe some others if Cardiff and QPR get an easier than expected ride, it just isn't right, albeit Cardiff lucked out somewhat with an insurance payout for Sala (RIP). The insurer settled, assume it wasn't for the full £10m.

Everton case should spark a new review of years impacted by Covid, I make us fine irrespective of anything over £7.5m.

Edited November 21, 2023 by Mr Popodopolous

[Davefevs]

9 minutes ago, Mr Popodopolous said:

The push back or?

Again I'd argue we fixed our own issues in the end and didn't spend great amounts anyway so it might be worth looking on certain clubs because those 2 and maybe some others if Cardiff and QPR get an easier than expected ride, it just isn't right, albeit Cardiff lucked out somewhat with an insurance payout for Sala (RIP). The insurer settled, assume it wasn't for the full £10m.

Everton case should spark a new review of years impacted by Covid, I make us fine irrespective of anything over £7.5m.

As in - used it to help build City’s case.

[Mr Popodopolous]

31 minutes ago, Davefevs said:

As in - used it to help build City’s case.

Well fair enough then albeit I honestly am unsure we fail anyway even with the baseline but when the 2022-23 accounts out we may have to revisit.

[Rob26]

https://www.bbc.co.uk/sport/football/67490620 Premier League: Newcastle can sign players on loan from PIF-owned Saudi clubs after vote /

Tougher rules relating to sponsorship deals between 'associated parties' also failed to get the necessary support, with seven clubs voting against the amendment. They were understood to be the same clubs that opposed the ban on loans, with the exception of Burnley.

And in a further sign of a split between its clubs, league chiefs were also unable to get them to approve a £900m so-called 'New Deal' financial settlement with the English Football League, despite hopes a package could be announced. Insiders insisted there was "positive momentum" behind talks, but no vote took place after a continuing impasse over new cost control measures.

The Premier League has been under mounting pressure to agree improved level of support for the football pyramid. A report by the Culture, Media and Sport (CMS) Select Committee in June said if no funding plan is reached soon, the government should accelerate setting up an independent football regulator "to impose a deal".

 

Panel that docked Everton points will decide compensation claims

The same independent panel that docked Everton 10 points for breaching Premier League financial rules will decide on any financial compensation claims from rival clubs.

Leeds and Leicester - who were relegated to the Championship last season - along with Burnley - who were relegated in 2022 before returning - are weighing up whether to press ahead with a claim against the Toffees.

Had the 10-point deduction been applied in 2021-22, Burnley would have stayed up, as would Leicester last season if it had counted then. Leeds would have finished a place higher, but would still have gone down.

It has been reported Everton could potentially face claims for tens of millions of pounds.

The clubs have 28 days from the date of the ruling to decide.

If they do, barrister David Phillips KC, High Court judge His Honour Alan Greenwood, and chartered accountant Nick Igoe (former West Ham finance director), would hear their arguments.

In last week's ruling, Phillips KC referenced applications for financial compensation from a number of clubs, saying he was "satisfied" that they had "potential claims".

Everton have 14 days from the ruling to lodge an appeal.

Edited November 22, 2023 by Rob26

[Rob26]

im only a few pages in on that 40 page everton doc, but am I right in reading that both sides agreed their was a breach, BPL said 19m but everton said its more like 9m (probs to try and get it under a threshold of a smaller breach im guessing).

Quote

3. This is a complicated case.  We have been presented with a great quantity of documents, many witnesses of fact, and voluminous and detailed experts’ reports – which were revised and updated in the run up to and during the hearing.  It is to the credit of counsel that the case was presented with clarity, focussing on what was truly relevant.  But counsel would not have been able to achieve that were it not for the parties’ solicitors and other advisors who have worked on and contributed to the case.  We acknowledge the considerable work that has been done, and express our thanks to all those responsible for carrying it out.  

4. In the (lengthy) skeleton arguments and orally both parties have suggested to the Commission that it is not necessary to resolve all the potential issues that have been raised.  They have said (albeit from different standpoints) that many potential issues either do not need to be dealt with at all or can be resolved in a simple straightforward manner.  The Commission has attempted to follow that advice.  In this decision we deal with the matters that are necessary for the proper determination of the case.  We have, of course, considered everything that has been put before us but we have confined our reasoning to that which is required to resolve the issues.  The fact that something may not be dealt with specifically does not mean that it has not been considered. 

Maybe I'm reading it wrong but this bit comes across like there was so much put to them but they determined there was no point in assessing everything over it as could pick apart items which were more undisputable rather than those open to interpretation as there looks like there was enough breech in these to hit that 19m they needed to show they had crossed the line. i'm not far in tho reading so maybe something else shows its different to my assumption later in the document, but would explain why your all getting much higher numbers than they have done them for, because that's all they needed to prove to punish them for this (and maybe politically leave a few cans closed

[Davefevs]

14 minutes ago, Rob26 said:

im only a few pages in on that 40 page everton doc, but am I right in reading that both sides agreed their was a breach, BPL said 19m but everton said its more like 9m (probs to try and get it under a threshold of a smaller breach im guessing).

Maybe I'm reading it wrong but this bit comes across like there was so much put to them but they determined there was no point in assessing everything over it as could pick apart items which were more undisputable rather than those open to interpretation as there looks like there was enough breech in these to hit that 19m they needed to show they had crossed the line. i'm not far in tho reading so maybe something else shows its different to my assumption later in the document, but would explain why your all getting much higher numbers than they have done them for, because that's all they needed to prove to punish them for this (and maybe politically leave a few cans closed

I read most of it last week.  I think in essence there were some big numbers that weren’t worth scrutinising, so PL just took those as read (explanation from EFC seemed fair), e.g. match day revenues was an easy one to justify.

But some of the other stuff was Everton trying it on.

[Rob26]

51 minutes ago, Davefevs said:

I read most of it last week.  I think in essence there were some big numbers that weren’t worth scrutinising, so PL just took those as read (explanation from EFC seemed fair), e.g. match day revenues was an easy one to justify.

But some of the other stuff was Everton trying it on.

like this i just read haha

Quote

Second: Transfer Levy.  Clubs pay a 4% levy on transfer fees under A.1.5 of the Rules.  The sums are used to fund a footballers’ pension scheme.  Any surplus is distributed by the Premier League to the Professional Game Youth Fund.  Everton claims that that surplus falls within the category of Youth Development Expenditure, and should accordingly be excluded from the PSR calculation.  The Premier League asserts that neither Everton nor any other club had ever sought to exclude any part of the Transfer Levy from the PSR calculation.  The Premier League objected to the attempted exclusion as being both unprecedented and wrong in principle. 

Third: player termination loss.  Everton had dismissed Player X, leaving available to it (it asserted) a claim against that player for losses of £10 million.  However, it decided not to pursue that claim on grounds associated with the player’s welfare.  It sought to exclude the sum of £10 million from its PSR calculation.  The Premier League object to the proposed exclusion, both on grounds of principle and uncertainty. 

some reach trying that haha 

Quote

Fourth: Covid.  Everton claimed to exclude the sum of £43.9 million on the grounds of impact on player trading in the 2020 summer transfer window caused by Covid.  The Premier League objected, arguing that the proposed exclusion did not fall within its Covid provisions.  Moreover, in the Amended Complaint the Premier League asserts that a significant part of the sum sought to be excluded by Everton under this head related to the impact of failing to sell a particular player, Player Y.  The Premier League asserts that the factual reality is that Everton had made a decision not to sell Player Y, so that no Covid based deduction can properly be claimed. 

I'm glad they thought about it that way as it makes total sense that they never lost anything other than unrealised gains/losses, when you think about it - it's a have your cake and eat it situation 

 

 

[Mr Popodopolous]

https://archive.is/2023.11.22-131143/https://www.telegraph.co.uk/football/2023/11/22/reading-dai-yongge-efl-league-one-model-club-abyss/

Regular followers of this thread will know about the FFP and maybe the wider event but Reading really are badly run.

One of the latest thst they're linked with, frying pan and fire.  

(Ken Anderson!?) 

Mike Ashley is by far the safest bet.

Edited November 22, 2023 by Mr Popodopolous

[Rob26]

https://www.dailymail.co.uk/sport/football/article-12779925/Everton-Burnley-Leeds-Leicester.html

EXCLUSIVE: Everton are unhappy £300m compensation claim from Burnley, Leeds and Leicester will be heard by the SAME disciplinary panel that docked them 10 points

 

wonder if the fine comes out your ffp allowance and puts them in breech again, it must be an allowed expense or it could be never ending I suppose :laugh:, bound to be paid out over several years anyways

 

not sure why you have to pay off both leeds and Leicester, did the results Everton got vs both teams take the team that come 3rd last down? If so its surely a stretch to assume if everton did not overspend on ffp that they would of got 6 points off everton being they are relegated teams, at best I think you could argue they would get their average points per game they obtained from everyone else. but then you can't just afford the relegated teams that privilege (if they are) I feel you would have to allow every team in the league the same outcome and see how they all would stack up if that was the case, very messy way to look at things and you could have compensation cases all over the league :laugh:. 

I would think that one of them are relegated in Everton's place out of leeds and leiscter and only one of them should have a claim with burnley. 

Edited November 23, 2023 by Rob26

[downendcity]

2 hours ago, Rob26 said:

https://www.dailymail.co.uk/sport/football/article-12779925/Everton-Burnley-Leeds-Leicester.html

EXCLUSIVE: Everton are unhappy £300m compensation claim from Burnley, Leeds and Leicester will be heard by the SAME disciplinary panel that docked them 10 points

They wanted it reviewed by the VAR panel.

[Rob26]

https://www.wba.co.uk/news/west-bromwich-albion-group-limited-secures-additional-msd-funding last year wba borrowed another 20m from msd

[Mr Popodopolous]

On 27/11/2023 at 12:47, Rob26 said:

https://www.wba.co.uk/news/west-bromwich-albion-group-limited-secures-additional-msd-funding last year wba borrowed another 20m from msd

Renewal or additional I wonder?

It won't go towards revenue, don't see how it can but probably cash flow and subject to FFP may ease the pressure on selling players.

May buy time to find new investment too but again shouldn't impact upon FFP unless it is equity to take them up to the £39m plus allowables rather than below..

One thing for sure, special pleading that they should he looked on more favourably due to their owner being the cause of their woes if they go into administration should be totally ignored.

I gave that view short shrift when I saw it on Twitter, will try and find the Tweet.

Look at the squad they have maintained, all those years of Parachute and PL cash, and this either second or rolled over MSD loan.

[Mr Popodopolous]

Action4Albion

I wholly agree with them about the need for a Regulator, but part of their claims seem like leading into special pleading perhaps.

"Many clubs in its recent history have entered administration and been penalised with points deductions accordingly, which, while we accept and understand there needs to be punishments for breaking rules, ultimately harms the clubs and its fans".

Were they saying that when there were past administration? Plus what of many clubs who manage their affairs sufficiently so they don't fall into administration, or other financial breaches.

No dice sorry.  That is how it works and has worked, if you need to offload to remain financially afloat you need to offload.

Their wage bill could be anything between 100-125%, maybe 130-140% of turnover.

I've read two or three different articles and it isn't very clear. One says 130-140%, one says down by 16% but I dunno if that means 16% of 130-140% or 16% verbatim ie down to 114-124%.

Think their 100% figure is as of next season even if the out of contract leave.

Edited November 28, 2023 by Mr Popodopolous

[Rob26]

1 hour ago, Mr Popodopolous said:

Renewal or additional I wonder?

It won't go towards revenue, don't see how it can but probably cash flow and subject to FFP may ease the pressure on selling players.

May buy time to find new investment too but again shouldn't impact upon FFP unless it is equity to take them up to the £39m plus allowables rather than below..

One thing for sure, special pleading that they should he looked on more favourably due to their owner being the cause of their woes if they go into administration should be totally ignored.

I gave that view short shrift when I saw it on Twitter, will try and find the Tweet.

Look at the squad they have maintained, all those years of Parachute and PL cash, and this either second or rolled over MSD loan.

the fact he is able to and getting loans shows they wont go into administration as he can borrow to plug the cashflow while trying to find someone to give him some of his cash back with a sale, which must be the end goal. 

[Rob26]

56 minutes ago, Mr Popodopolous said:

Action4Albion

I wholly agree with them about the need for a Regulator, but part of their claims seem like leading into special pleading perhaps.

"Many clubs in its recent history have entered administration and been penalised with points deductions accordingly, which, while we accept and understand there needs to be punishments for breaking rules, ultimately harms the clubs and its fans".

Were they saying that when there were past administration? Plus what of many clubs who manage their affairs sufficiently so they don't fall into administration, or other financial breaches.

No dice sorry.  That is how it works and has worked, if you need to offload to remain financially afloat you need to offload.

Their wage bill could be anything between 100-125%, maybe 130-140% of turnover.

I've read two or three different articles and it isn't very clear. One says 130-140%, one says down by 16% but I dunno if that means 16% of 130-140% or 16% verbatim ie down to 114-124%.

Think their 100% figure is as of next season even if the out of contract leave.

yeah if you dont punish the club for breaching ffp or not paying their bills even if it is unfair for fans then breaches will happen more and more, people who knowingly break ffp will mostly welcome financial penalties for the owners, because they would probs pay to be allowed to put the money in. you can have to have consequences with points etc in addition to fines for cases that require it or they will just take the punishment personally so the club can carry on breaching what ever they wanted. clubs have to be punished even if hurts the fans

 

also on their other point i would like to see some numbers on how clubs outside of division one financially operated before the premier league, 

this statement makes out that there is a few teams at the top and all the clubs below are feeding them and not being properly compensated for this (no doubt because many clubs operate at a loss) but surely because of the premier league there is far more money around in these leagues below now than there has ever been.

watching old documentaries about football and finances the pre-premier league years do not strike me as being years where everyone outside of the top flight was making lots of money with their football clubs, it come across as the opposite and most clubs being badly run and not making money at all, and before the premier league clubs were a much bigger mess financially than they are now, even if the debt levels maybe are more, a lot of that is down to the owners operating the club at a loss 

you can pump more money into the clubs outside the premier league and its very naïve to believe that would make the clubs receiving the money solvent. it would just mean there is more money to pay wages/fee's for players and clubs will take advantage of it. the only way you will change that is by forcing clubs to not make significant losses, at the moment they basically saying it's fine for you to loose £10m+ a season which cumulatively is not fine in the long run as adds up.

of course you are limited to reforming this as other countries need to fall in line at the same time, so you probs have a never ending issue with this, as no one is probs going to agree to be limited by stricter rules (as I imagine it reduces the £ value of many clubs)

if it was for me I would look to slowly remove the allowed losses every year. maybe knock down annually allowed losses upper limit by 1m every few years. if you put it in place now for 3.5+ seasons time for the first 1m reduction (for championship) then there is more than enough time for clubs to make sure they are compliant, if it meant clubs could not spend as much on fee's and wages then I'm sure the figures paid would adjust accordingly, we all saw with covid how when there wasn't as much money around that transfer fee's for a short while took a hit and free agents didn't command the same money they used to. but good luck getting clubs to agree to being limited in what they can do, I imagine clubs that may want to sell up or invest will vote against and only those who want to reduce costs agree to try and bring others down while they do it :laugh:.

only thing that is making clubs get closer to being solvent each year is the goverment making the money worth less and less with inflation  so the amount they owe is worth less than ever :laugh:. would love to see our country be the first that would make efforts to slowly force clubs to become solvent, that 10m+ your allowed to lose every year must only be worth 7m now after the last few years we have had :laugh:

[Mr Popodopolous]

28 minutes ago, Rob26 said:

the fact he is able to and getting loans shows they wont go into administration as he can borrow to plug the cashflow while trying to find someone to give him some of his cash back with a sale, which must be the end goal. 

For now. Or it also could be an element of desperately plugging some holes, buying time.

Yeah the end goal is some of his money back albeit there are suggestions by A4A among others that Lai could just be the face of a consortium, perhaps he is putting a lot on black to get promoted this season  before the walls of FFP and cash flow close in simultaneously.

Edited November 28, 2023 by Mr Popodopolous

[Mr Popodopolous]

I've seen some suggestions on their forum that their wage bill could still be £40m or so but I honestly doubt that. £30m more like it? Surely not above £35m.

Edited November 28, 2023 by Mr Popodopolous

[Rob26]

I'm sure its for cash flow, which is plugging holes to buy time to sell it really like you say

he is taking a hit on his potential exit fee by adding to your liabilities rather than putting more in.

if you intended going into administration you would crush the money you have in the club, the administrators would just find a cheap deal and for the money he has put in that he is owed he would either get pennies on the pound or time limited repayments based on what league the club were in, which normally ends in the seller getting short changed.

getting loans kicks the can down the road and keeps you in control of your exit from the sale of your club.

[Rob26]

7 minutes ago, Mr Popodopolous said:

I've seen some suggestions on their forum that their wage bill could still be £40m or so but I honestly doubt that. £30m more like it? Surely not above £35m.

was pretty high on the accounts I just looked at they issued in april, would expect it to come down no doubt for sure, if not they are asking for it :laugh:

i believe they must be over the hump of being able to gamble on promotion

[Mr Popodopolous]

PSG eh. 

Income in a fairly unremarkable year just rises by €130m, no shock there ahem. Look at that cost base though from 2021-22, the income has found its way into the media, the overall accounts haven't..

€1,071,100,000

Perhaps depending on what the exceptional item was, rising to €1,078,000,000.

Hard to say even I'd resetting this and the combined Covid year average to say whether they made FFP or new FFP regs to 2023..the new regs changing were incredibly timely as I don't see how they fall into a 1 year €10m FFP loss in 2022-23.

[Mr Popodopolous]

Two model sides..perhaps no longer.

I'll try and keep it brief but Norwich and West Brom have been models for a while.

Have to wonder about both to next season if they are still Championship clubs.

Norwich

Will be exiting Parachute Payments, and going from £61m plus allowables to £39m and Allowables, and Year 2 Parachute Payments to Solidarity Payments.

(That goes for Watford too but some major sales post relegation albeit Kamara looks suspect- not a great model too).

West Brom

Onto £39m and post Parachutes now but I suspect will comply yo this season.

2022-23 and 2021-22 Year 1 Post relegation and Year 1 Post relegation respectively!

Just look at the cost base for each though!! 

Norwich

£101,614,000 and £6.824m in Interest!?

West Brom

£77,413,000 albeit much less interest but thst may change now with MSD and varied loans. Exceptional cost of £7m linked to owner not repaying loan.

Edited November 30, 2023 by Mr Popodopolous

[Davefevs]

 

[Mr Popodopolous]

Equity can cover up to 5 years, will take Middlesbrough up to the max £39m plus Covid plus allowables IMO.

Gibson could be tidying the balance sheet for a sale, or he could just fancy writing off some debt. If there is interest payments that would reduce their losses a bit moving forward.

Edited December 1, 2023 by Mr Popodopolous

[Mr Popodopolous]

QPR. Nothing new her but they have to be a question FFP wkae to this year.

They've done some downsizing, made some sales but a Category 2 Academy, surely their allowables aren't that much.

When we consider the pressure we were under for 2 years..

£24,667,000 before tax but minus what we know for sure.

Subsequent to this, they received compensation for Beale but Critchley will have needed some kinda payoff, Ainsworth some level of compensation to Wycombe, some level of compensation for sacking and some kind of compensation to Hammarby for Cifuentes.

Edited December 1, 2023 by Mr Popodopolous

[Mr Popodopolous]

Minus what we know for sure:

*Depreciation- £1,348,000

*Community Expenditure- £2,052,000

*Interest on FFP fine- £676,000

Unsure what they spend on Women's Team or Academy, possibly included in Community stuff.

Subtract £2.5m for the Covid allowed.

Possible P&S loss of £18,091,000..but that £2.5m Covid allowance is not to be repeated.

Category 2 Academy, maybe knock another £2m off.

Edited December 1, 2023 by Mr Popodopolous

[Mr Popodopolous]

Birmimgham probably need a pre tax loss of £9-10m otherwise they may breach. £50m across 2021-22 and 2022-23 before tax.. notably less pressure and restrictions on them than us?

Cardiff I wonder a bit too, post Parachutes.

£5-6m per year in Allowables plus of course £2.5m for Covid in 2021-22. Their £26m loss included £4m in Profit on Disposal of Players and £500,000 in RPT Write-off.

Again they seem to have been under less pressure than we were?