The Championship FFP Thread (Merged)

[Rob26]

On 10/01/2024 at 11:58, Mr Popodopolous said:

Interesting here.

Found the PL P&S/PSR form and it seems not to exclude costs of Promotion or Promotion Bonuses.

If Nottingham Forest fall foul and Promotion Bonuses are a factor or deemed too high..how many others would retrospectively fall could post the 3 year rule?? A lot I expect!

There is nothing about Promotion Bonuses or costs.

It also makes me wonder with the fast track system if a club could call foul of T and be referred ie literally the existing season. T means right now basically.

Maybe thst is why Wolves were so desperate in the summer..they're fine now btw.

There is also nothing in the brief PL P&S section about Profit on Disposal of Fixed Assets. Whereas as we know at our level..

wouldn't bonuses just be classed as wages? 

[Mr Popodopolous]

Just now, Rob26 said:

wouldn't bonuses just be classed as wages? 

Hard to say. Kieran Maguire has always said they're excluded from FFP returns ie Promotion Bonuses not regular Bonuses but there seem to be conflicting reports.

Without an exclusion, Nottingham Forest fail and I think Bournemouth, Fulham, going back Aston Villa, and maybe Leeds.and Wolves all breach.

Possible there are others too. I know under the one year rule they were definitely excluded.

[Mr Popodopolous]

Cardiff would've failed in 2018 without too, Fulham probably would've failed more than once.

Surely an excluded item.

[Mr Popodopolous]

I shouldn't laugh but some of the proposed FFP remedies elsewhere.

WBA..

*Sell the training ground to new owners and then lease it back.

Rule changed in 2021. 

Some seem to think there is a 2nd bonus in the offing which is that the rent would be excluded as Academy costs. That badly misaligns to the objectives and I don't see anything that would exclude it. Anyway the Profit on Disposal would be irrelevant for FFP. The rules expressly adjust it out.

*Interest payable on Academy excluded. Based on what?? Maybe if developed recently and borrowing expressly for that purpose but their payable Interest was £80-90k in 2021-22, barely material. Pre MSD but I doubt that is an excluded item.

They could be onto something with repayment of written off debts the owner or similar owe them but that could depend on the exact terms of the write off, accounting treatment etc.

By my Projections they could be easily making a £25-30m pre tax loss this year even pre impact of loan interest..higher than that is also plausible. Category One Academy is useful.

Some Birmingham fans moaning about lack of signings. Generally £50m pre tax aggregated losses across the prior 2 seasons hamstring a club!

I make their FFP losses across the 2 seasons £37.5m or thereabouts. Based on the Covid base 2021-22 number and the likely Allowables.

Daftest suggestion I've seen there is the sacking of Eustace they should try and classify as an exceptional cost of takeover.

Restructuring or integration of business, I can see an on paper case but it absolutely doesn't align to FFP regs.

Edited January 11 by Mr Popodopolous

[Mr Popodopolous]

https://theathletic.com/5194769/2024/01/11/ffp-premier-league-deadline-breaches-punishments/

More PL specific but there things can filter down a bit.

[Mr Popodopolous]

Ooh it mentions Fulham and Aston Villa as possibles..I thought Bournemouth would be candidates too but.

[phantom]

16 hours ago, Mr Popodopolous said:

Ooh it mentions Fulham and Aston Villa as possibles..I thought Bournemouth would be candidates too but.

What does it say?

It's behind a paywall

[Mr Popodopolous]

2 hours ago, phantom said:

What does it say?

It's behind a paywall

Could be for the UEFA regs which along with PL are applicable there, the whole 70% of income one..while the Grealish £100m remains pertinent I'd be surprised of they are threatening £105m plus allowables.

Just surprised about Bournemouth seemingly bring great and clear of it though..they haven't even made a substantial sale for 2 years. Younger players on lower wages maybe who knows...Not been shy of spending before.

[Mr Popodopolous]

This is also wrong.

https://www.themag.co.uk/2023/03/financial-fair-play-and-how-it-works-for-premier-league-clubs/

Yes you do get a £10m asset but the author has misinterpreted the explanation badly at least in part.

As soon as you add the amortisation begins..it does bolster your assets but save for Amortisation, Impairment, Profit, Loss or Breakeven on Disposal it doesn't impact FFP.

If you had a revaluation policy maybe but that could be kicking the can down the road too.

In any event the standard amortisation policy for Player purchase is straight line including that of Newcastle as of 2022-23...they unlike the overwhelming majority of clubs set out a 4-5 year amortisation of Player Schedule too.

Edited January 12 by Mr Popodopolous

[Mr Popodopolous]

Fulham fan page says they're relatively parsimonious, can someone tell them..

 

-£45m..PL 4th and final year at that time Parachutes included. Promotion Bonuses too.

-£20m PL

-£48m...first Covid year, perhaps a bit of deferred revenue plus Promotion Bonuses. Year 1 of Parachute Payments.

-£93m...PL. Probably included £20m in standard Covid and a controversial Player Impairment of an equal amount.

-£57m..1st year Parachute Payments, probably included a couple of million from remaining Covid issues, and Promotion Bonuses of course.

Where does the claim of relative parsimony come from though, it's mind boggling.

[Mr Popodopolous]

That aside, Bournemouth are the ones that get me a bit..the fact they aren't even on the radar is a bit of a surprise all things considered.

[Maltshoveller]

7 minutes ago, Mr Popodopolous said:

That aside, Bournemouth are the ones that get me a bit..the fact they aren't even on the radar is a bit of a surprise all things considered.

Didnt they get done a few years back when they first went up to the prem

blew FFP out of the water. Made man city look like saints and got a joke of a fine for it (£4m i think)

[Mr Popodopolous]

5 minutes ago, Maltshoveller said:

Didnt they get done a few years back when they first went up to the prem

blew FFP out of the water. Made man city look like saints and got a joke of a fine for it (£4m i think)

Indeed they did. Some Bournemouth fan on Twitter recently proclaimed it was 'Levelling the playing field'.

Albeit their overspend was much lower than QPR and possibly lower than Leicester.

My thinking is they don't have major add-backs have less revenue than Fulham and Nottingham Forest outside of T.V. money.

-£60m pre tax 2019-20

£17m profit pre tax 2020-21

Starting point average there-£21.5m

Loss of £55.5m in 2021-22.

Again pre tax, pre allowables etc.

Upper Loss limit £72m plus allowables and Covid.

Last pre Covid PL season saw them lose £32m before tax.

I'm a tad confused as to how and why isn't more analysis. Less Prize money than Fulham too which impacts on revenue.

Edited January 12 by Mr Popodopolous

[Mr Popodopolous]

Given there are new FFP rules coming by next season or after.. I don't have a huge amount of sympathy with this.

 

Some clubs have perhaps even gambling on next year TV money and or scrambling up before the mooted 70% rule arises.

We have worked hard to get into a position to be compliant with rules of both types at all times..Birmingham, maybe Blackburn, Coventry maybe, Hull, Stoke, Millwall and Preston probably too high for turnover. Cardiff?? Swansea.

Probably more too.

Edited January 12 by Mr Popodopolous

[Mr Popodopolous]

What do we think @Hxj @downendcity @Davefevs @chinapig @ExiledAjax

To me the onus is on the clubs somewhat, Special Pleading all told.

[Davefevs]

My view…if you’re in the PL, keep your house in order / within limits.

If you get relegated, I can see why some notion of moratorium on previously agreed contracts has merits for say a reason or two.

But that’s about it until all contract have a relegation release fee / wage reduction.

[chinapig]

19 minutes ago, Mr Popodopolous said:

What do we think @Hxj @downendcity @Davefevs @chinapig @ExiledAjax

To me the onus is on the clubs somewhat, Special Pleading all told.

I'm repeating myself perhaps but this is just another person who doesn't seem to know that the regs, old and new, were approved by the clubs.

The reason some clubs and supporters are panicking now is that they didn't think the rules would ever be applied. The Everton case and the prospect of the independent regulator seems to have concentrated minds.

Let them squirm I say!

 

[Mr Popodopolous]

1 minute ago, Davefevs said:

My view…if you’re in the PL, keep your house in order / within limits.

If you get relegated, I can see why some notion of moratorium on previously agreed contracts has merits for say a reason or two.

But that’s about it until all contract have a relegation release fee / wage reduction.

My idea would perhaps be to average two bits..if wage following a reduction clause post relegation exceeds a 70% averaged baseline put down to 70% for a year or 2, if at or 70% or remains there.

Clubs who fail to prepare prepare to fail but there is a financial chasm between the 2 divisions That has to be factored in.

[Davefevs]

4 minutes ago, chinapig said:

I'm repeating myself perhaps but this is just another person who doesn't seem to know that the regs, old and new, were approved by the clubs.

The reason some clubs and supporters are panicking now is that they didn't think the rules would ever be applied. The Everton case and the prospect of the independent regulator seems to have concentrated minds.

Let them squirm I say!

 

For info, Tim Keech works for Market Insight, the team that provide a recruitment consultancy service to clubs like Swansea (in the past), Plymouth (currently) and others.  Jay Socik (Luton) was with Markets.

In this case I think Tim’s Everton allegiance is clouding his judgement.

[chinapig]

5 minutes ago, Davefevs said:

For info, Tim Keech works for Market Insight, the team that provide a recruitment consultancy service to clubs like Swansea (in the past), Plymouth (currently) and others.  Jay Socik (Luton) was with Markets.

In this case I think Tim’s Everton allegiance is clouding his judgement.

Thanks Dave. It seems to me that this just makes his comments even more egregious since he ought to know better. Especially if he is involved with Plymouth, one of the best run clubs around. Perhaps they ought to be giving him advice instead of vice versa.

[Mr Popodopolous]

In respect of my past views on Stoke.

They are now fully compliant IMO. My issues are for the most part the Covid writeoffs relating to the transfer market which should if anything impact on the period ending 2021-22 or 2020-21.

[Mr Popodopolous]

Which should be investigated in full, as it should for all clubs who used transfer related issues given the Everton precedent of sorts.

Edited January 12 by Mr Popodopolous

[W-S-M Seagull]

On 10/01/2024 at 16:56, Davefevs said:

Haha, blame FFP for something that is Forest’s decision!

Bailey Wright has just been handed a 3 match suspension for this. 

[downendcity]

24 minutes ago, Mr Popodopolous said:

What do we think @Hxj @downendcity @Davefevs @chinapig @ExiledAjax

To me the onus is on the clubs somewhat, Special Pleading all told.

Heard a little bit of a discussion about FFP on Talksport this afternoon. I think it was on the back of Arsenal having to sell if they want to bring in a new transfer. They went on to speculate on whether financial rules should be scrapped and if owners had the money then they should be allowed to spend it. There was also the suggestion that the present financial rules enabled the "elite" clubs to maintain their position.

Whenever I hear this type of discussion it always feels as though those involved feel that FFP ( or the premier league derivation P&S) was designed to create a level playing field. However, the idea of ffp was originally introduced by UEFA around 2010 to make clubs live more within their means. 

It was introduced into the EFL in 2010/11 and the prem a couple of years later - during which time Pompey had become the first premier league club to go into admin, and 2 more admins later  ( the last to avoid liquidation) saw them do a Bristol City by getting to the 3rd division ( 4th division in old money) The trail of financial destruction this caused to the club's suppliers caused outrage at the time, especially as their highly paid premier league players were classed as preferred creditors. IIRC the club had something like £100m debt when it all went tits up and again, IIRC, their then owner basically stopped funding the club. No way was Benjani going to get them out of that hole!

Fast forward to post 2017(?) and we saw history repeating itself, as Mel Morris, who had been lauded a hero by Derby fans ( he's a lifelong Derby fan, so would never leave the club in the lurch, they said) for  having the EFL's pants down over the "sale" of Pride Park as a clever way of getting around ffp, also pulled the plug on Derby's financial backing with only administration and a nick of time sale saving the club from going out of business.

So the original financial rules were not about creating a level playing field, but more about protecting clubs from themselves- or more accurately from owners who would be prepared to risk the club's future in chasing the dream of top flight football. Judging by the Derby case and Everton's shambolic financial situation, and the Hans Christian Anderson accounting we've seen employed by numerous clubs to manipulate their accounts into a compliant form, football's regulators  just don;t seem able to enforce their own rules properly, so it would seem that something has to change.

The questing now being raised is whether that form of ffp is appropriate - or indeed fair on wealthy owners who have the financial resource that could benefit their club but are not allowed to spend it. One issue, of which we are only too aware , is the massive gulf between a club like ours, and those in the premier league, or those still benefitting from having been in the prem by way of parachute payments. Even within the prem there is a massive gulf between the wealth of clubs like Man City and Newcastle, both effectively being owned by nation states, and the likes of Luton, Sheff U and Burnley.

If competition is the aim, then financial rules that equalise what clubs can spend would seem the way to go. It's interesting that there are an increasing number of American owners, as I think I'm right in saying that the NFL operates in just such a way. However, would Man City and Newcastle's owners be happy to see their biggest advantage , i.e wealth, being neutered?

Perhaps some sort of hybrid financial rules are need, that balance the need to ensure that clubs are solvent and financially viable in the longer term, but with a degree of flexibility that allows clubs with greater financial resources to use more of that, but that limits that so that there is not too much  of  a gulf between the haves and the have nots.

FWIW I can easily see that any attempts to change financial  rules to help level the playing field will only hasten the creation of a super league. We've seen the lengths that Man City have (allegedly) gone to circumvent financial rules and enable their owners to utilise their financial advantage.

 

 

 

 

[Mr Popodopolous]

I'll get into the wider debate but Leicester again. Great post that btw @downendcity

 

I think Leicester may have a P&S issue to the existing season.

[downendcity]

25 minutes ago, downendcity said:

Heard a little bit of a discussion about FFP on Talksport this afternoon. I think it was on the back of Arsenal having to sell if they want to bring in a new transfer. They went on to speculate on whether financial rules should be scrapped and if owners had the money then they should be allowed to spend it. There was also the suggestion that the present financial rules enabled the "elite" clubs to maintain their position.

Whenever I hear this type of discussion it always feels as though those involved feel that FFP ( or the premier league derivation P&S) was designed to create a level playing field. However, the idea of ffp was originally introduced by UEFA around 2010 to make clubs live more within their means. 

It was introduced into the EFL in 2010/11 and the prem a couple of years later - during which time Pompey had become the first premier league club to go into admin, and 2 more admins later  ( the last to avoid liquidation) saw them do a Bristol City by getting to the 3rd division ( 4th division in old money) The trail of financial destruction this caused to the club's suppliers caused outrage at the time, especially as their highly paid premier league players were classed as preferred creditors. IIRC the club had something like £100m debt when it all went tits up and again, IIRC, their then owner basically stopped funding the club. No way was Benjani going to get them out of that hole!

Fast forward to post 2017(?) and we saw history repeating itself, as Mel Morris, who had been lauded a hero by Derby fans ( he's a lifelong Derby fan, so would never leave the club in the lurch, they said) for  having the EFL's pants down over the "sale" of Pride Park as a clever way of getting around ffp, also pulled the plug on Derby's financial backing with only administration and a nick of time sale saving the club from going out of business.

So the original financial rules were not about creating a level playing field, but more about protecting clubs from themselves- or more accurately from owners who would be prepared to risk the club's future in chasing the dream of top flight football. Judging by the Derby case and Everton's shambolic financial situation, and the Hans Christian Anderson accounting we've seen employed by numerous clubs to manipulate their accounts into a compliant form, football's regulators  just don;t seem able to enforce their own rules properly, so it would seem that something has to change.

The questing now being raised is whether that form of ffp is appropriate - or indeed fair on wealthy owners who have the financial resource that could benefit their club but are not allowed to spend it. One issue, of which we are only too aware , is the massive gulf between a club like ours, and those in the premier league, or those still benefitting from having been in the prem by way of parachute payments. Even within the prem there is a massive gulf between the wealth of clubs like Man City and Newcastle, both effectively being owned by nation states, and the likes of Luton, Sheff U and Burnley.

If competition is the aim, then financial rules that equalise what clubs can spend would seem the way to go. It's interesting that there are an increasing number of American owners, as I think I'm right in saying that the NFL operates in just such a way. However, would Man City and Newcastle's owners be happy to see their biggest advantage , i.e wealth, being neutered?

Perhaps some sort of hybrid financial rules are need, that balance the need to ensure that clubs are solvent and financially viable in the longer term, but with a degree of flexibility that allows clubs with greater financial resources to use more of that, but that limits that so that there is not too much  of  a gulf between the haves and the have nots.

FWIW I can easily see that any attempts to change financial  rules to help level the playing field will only hasten the creation of a super league. We've seen the lengths that Man City have (allegedly) gone to circumvent financial rules and enable their owners to utilise their financial advantage.

 

P.S. When I see the level of losses premier league clubs are racking up, despite the riches on offer in the top flight, I really start to wonder just why clubs are almost prepared to bankrupt themselves to get there!

I really worry that football is now unsustainable and will eat itself to death unless something changes. The seemingly inexorable rise in players wages that take the wage bill beyond many clubs total income is ludicrous, but just like the Emperor's new clothes, it seems that no one has the balls to stand up and say "this is madness".

Perhaps it needs a Super League, so that the most wealthy owners can take their play things away from everyone else , make their own rules, negotiate huge TV deals, pay players £1m per week, take proper fans out of the equation and bask in the glory that they can then buy. 

That would leave the rest of us to provide employment for the rest of the player pool, on wages that clubs can afford, perhaps then reasonable ticket pricing and without the need for an owner with enough resource to fill a £30m black hole every week. The great thing is that new scenario would not change everything. Fans can still moan about the owner and his son, team selection, whether the coach so go 3 at the back  and  fish puns on OTIB. It might just not cost as much!

Perhaps it's just my age and being able to remember when football seemed much simpler, and more enjoyable? Or perhaps my age just makes me indulge in more wishful thinking. I don't know, but it's time to put the kettle on for a cup of cocoa and a custard cream before bedtime.

Good night all.

 

 

Edited January 12 by downendcity

[Hxj]

3 hours ago, Mr Popodopolous said:

What do we think @Hxj @downendcity @Davefevs @chinapig @ExiledAjax

To me the onus is on the clubs somewhat, Special Pleading all told.

My previously stated view is that Derby and Everton have created the Epiphany moments for the EFL and the Premier League.

The problem with limits is that they become targets.  And once those targets were not considered serious they became irrelevant.

There are similarities on a behavioural basis with the 'Dieselgate' issues.

[Mr Popodopolous]

2 hours ago, downendcity said:

Heard a little bit of a discussion about FFP on Talksport this afternoon. I think it was on the back of Arsenal having to sell if they want to bring in a new transfer. They went on to speculate on whether financial rules should be scrapped and if owners had the money then they should be allowed to spend it. There was also the suggestion that the present financial rules enabled the "elite" clubs to maintain their position.

Whenever I hear this type of discussion it always feels as though those involved feel that FFP ( or the premier league derivation P&S) was designed to create a level playing field. However, the idea of ffp was originally introduced by UEFA around 2010 to make clubs live more within their means. 

It was introduced into the EFL in 2010/11 and the prem a couple of years later - during which time Pompey had become the first premier league club to go into admin, and 2 more admins later  ( the last to avoid liquidation) saw them do a Bristol City by getting to the 3rd division ( 4th division in old money) The trail of financial destruction this caused to the club's suppliers caused outrage at the time, especially as their highly paid premier league players were classed as preferred creditors. IIRC the club had something like £100m debt when it all went tits up and again, IIRC, their then owner basically stopped funding the club. No way was Benjani going to get them out of that hole!

Fast forward to post 2017(?) and we saw history repeating itself, as Mel Morris, who had been lauded a hero by Derby fans ( he's a lifelong Derby fan, so would never leave the club in the lurch, they said) for  having the EFL's pants down over the "sale" of Pride Park as a clever way of getting around ffp, also pulled the plug on Derby's financial backing with only administration and a nick of time sale saving the club from going out of business.

So the original financial rules were not about creating a level playing field, but more about protecting clubs from themselves- or more accurately from owners who would be prepared to risk the club's future in chasing the dream of top flight football. Judging by the Derby case and Everton's shambolic financial situation, and the Hans Christian Anderson accounting we've seen employed by numerous clubs to manipulate their accounts into a compliant form, football's regulators  just don;t seem able to enforce their own rules properly, so it would seem that something has to change.

The questing now being raised is whether that form of ffp is appropriate - or indeed fair on wealthy owners who have the financial resource that could benefit their club but are not allowed to spend it. One issue, of which we are only too aware , is the massive gulf between a club like ours, and those in the premier league, or those still benefitting from having been in the prem by way of parachute payments. Even within the prem there is a massive gulf between the wealth of clubs like Man City and Newcastle, both effectively being owned by nation states, and the likes of Luton, Sheff U and Burnley.

If competition is the aim, then financial rules that equalise what clubs can spend would seem the way to go. It's interesting that there are an increasing number of American owners, as I think I'm right in saying that the NFL operates in just such a way. However, would Man City and Newcastle's owners be happy to see their biggest advantage , i.e wealth, being neutered?

Perhaps some sort of hybrid financial rules are need, that balance the need to ensure that clubs are solvent and financially viable in the longer term, but with a degree of flexibility that allows clubs with greater financial resources to use more of that, but that limits that so that there is not too much  of  a gulf between the haves and the have nots.

FWIW I can easily see that any attempts to change financial  rules to help level the playing field will only hasten the creation of a super league. We've seen the lengths that Man City have (allegedly) gone to circumvent financial rules and enable their owners to utilise their financial advantage.

 

 

 

 

Agree with the bulk of this. All of it pretty much.

Things are getting much better. Nobody at the EFL spotted the Fixed Asset loophole until it was too late. Covid ones I believe are being reviewed or should be in certain areas..I'd query Fulham, Nottingham Forest and Stoke for a start and Everton with some of their arguments didn't find favour.

Imagine a counterfactual in which there is no Fixed Asset profits possible..Aston Villa would have run aground in 2018-19, Derby and Sheffield Wednesday in 2017-18 and beyond, Reading in 2017-18 or 2018-19..and the overspending being caught early may have left these clubs in less of a existential hole. Birmingham would've failed 2018-19 again and once more perhaps beyond, Blackburn to a few million possibly avoided an FFP breach.

It could have changed the dynamics at top

Stoke benefited to the tune of £16m in FFP terms in addition to Covid stuff from their one.

Likewise if Man United have sought to argue £40m expressly in Covid losses for 2021-22, that's suspect to me.

US owners will want tougher financial regs I assume yeah, irony in some ways given the sheer capitalism of USA but then again regulation of how they do their sports..

There are also checks on Associated and Related Parties now...Sheffield Wednesday e.g. used shell sponsors and may still do but they were deemed to be at a fair rate so the EFL were understood to be okay with it. About £1-1.5m per year all-in if memory serves.

The gulf at multiple levels is enormous yeah.

[Mr Popodopolous]

1 hour ago, Hxj said:

My previously stated view is that Derby and Everton have created the Epiphany moments for the EFL and the Premier League.

The problem with limits is that they become targets.  And once those targets were not considered serious they became irrelevant.

There are similarities on a behavioural basis with the 'Dieselgate' issues.

Agreed.

Yeah a target to hit,to aim at and maybe sneak past with bits of clever accounting (not piss taking just a little clever).

I mean Sheffield Wednesday and Birmfkhahm fell foul before at our level but Derby with the sheer scale and complexity..yeah. They seemed to have been the first to utilise the stadium loophole but definitely not the last.

Interesting, shall look at one up.

[Mr Popodopolous]

Just to look again at the whole Leicester thing..

£162,380,000 in unamortised Book Value.

Faes £15m

Souttar £15m

Kristansen £12m

£3m, £1.36m, £1.09m added respectively. Probably remains £70m accounting for the odd departure and lack of loan fee v removal of Lookman.

Who goes and how much..I assume Leicester amortise straight line and new contracts adjust the amortisation accordingly.

Fofana- £3.81m

Maddison- £3.6m

Both sold.

The released assuming Book Value etc. Annual Cost.

Soyuncu- £3.6-3.8m depending on exact fee.

Evans- £0.233m

Bertrand- joined on a free, £0/0.

Amartey- Perhaps £0.2m

Tielemans- £8-10m

Mendy- Maybe didn't have much left..signed a 4 year deal and then extended not long before end. £0.1m maybe?

Perez- £7.5m

Somewhere between £27.043-29.243m

Less the further £1.36m for Souttar,  £1.09 for Kristansen.

Then less..

Hermansen £5m

Coady £7.5m

Winks £7.5-10m

Mavdidi £6.9m

Cannon £7.5m

£34.4-36.9m added back. £8.88-9.71m. Plus the aforementioned £2.45m.

Probably amortisation in the £50-55m range.

I mentioned loan fees too. Tete inbound in 2022-23 less Lookman and then the loanees this year less Tete. They're all accounted for over 1 year.

Edited January 13 by Mr Popodopolous