The Championship FFP Thread (Merged)

[Mr Popodopolous]

Just for the sake of the old stuff, I estimated Aston Villa and amortisation the other day. Some ballpark figures had they stayed down..

-£68.884m...

-£30m (Paying Xia's debt)

-£15.808m (Promotion Bonuses)

Underlying loss of-£23.066m pre tax.

Despite and including

£36.374m Fixed Asset Profit on Disposal (Villa Park)

£14.494m HS2 compensation.

£10.598m Profit on Disposal of Players

Parachute Payments and EFL to EFL and Solidarity distributions. Probably down from £22.27m to £10-11m.

Changed items

Final tranche HS2 revenue, £2.881m down from the aforementioned.

Rent on Villa Park, £2.6m.

Net Interest swing from -£596k payable to £848k receivable.

Amortisation of Player Registrations probably down £5-10m having had a look.

FFP target would be £9m or £10m for that particular year. They lost £9-10m in FFP terms in 2018-19.

Assuming all other income streams the same...

Before inevitable wage falls with departures and sales I make it a nailed on swing of £60-65m. Maybe a bit more maybe a bit less.

Obviously wages come off the bill but an interesting position.

Edited January 22 by Mr Popodopolous

[Mr Popodopolous]

On FFP in the here and now.

Middlesbrough's solid position, which I reckon is £10-15m if not £15-20m above the limits means they can set a price, same for any club in that boat.

E.g. Morgan Rogers who Aston Villa are keen on would set them back £10m this January according to one report. No need to accept anything below their desired price atm.

Jack Clarke at Sunderland similarly would cost £20m as per recent reports.

Edited January 22 by Mr Popodopolous

[Mr Popodopolous]

Small Leicester update, at least possible that they could require further departure(s) before adding anyone.

https://archive.is/2024.01.22-085824/https://www.telegraph.co.uk/football/2024/01/22/enzo-maresca-methods-leicester-premier-league-return/

A little bit at the end of the article about it. What isn't clear is if some was written before Casadei was unexpectedly recalled.

When they release their accounts for last season- which the EFL already have- things will become clearer one way or another. They're due in the public domain by the end of March.

[Mr Popodopolous]

Smithies has retired due to rolling injuries.

He joined on a free so no amortisation or impairment to consider. Wonder if Leicester will honour his wages as we did with Baker.

[Mr Popodopolous]

It is causing some debates as to whether the P&S/FFP limits are too low. Barber very much isn't in favour of raising them.

I suppose his club have built up albeit Bloom did spend a lot for a time but they've spent very well and sell brilliantly.

As a concept encouraging rampant wage and fee inflation can't be a positive thing surely.

Edited January 22 by Mr Popodopolous

[Hxj]

3 hours ago, Mr Popodopolous said:

Wonder if Leicester will honour his wages as we did with Baker.

To avoid a charge from the relevant authority they have to, just as we had to with Baker.

[Mr Popodopolous]

8 minutes ago, Hxj said:

To avoid a charge from the relevant authority they have to, just as we had to with Baker.

Ah it's mandatory then is it?

If Smithies chose to waive it then I guess that would enable it.

Isn't material to their FFP position either IMO, I've made some various forecasts.

Would be intrigued at your forecast too for Leicester..I still have my doubts as to their compliance to the present season.

Edited January 22 by Mr Popodopolous

[Rob26]

On 18/01/2024 at 19:46, Mr Popodopolous said:

Still have to wonder if there isn't a scenario whereby Leicester are over 3 year limits to this ie the current season.

They certainly seem to be unable to add anyone without selling players atm.

yeah LC squad numbers are fully maxed out, but they are in a position I think with FFP where if they sell someone at a loss on the books that cooks their FFP problems further. 

On 19/01/2024 at 13:41, Mr Popodopolous said:

In theory the tools are there for a fully real-time system, the question for me is about the competence and will of all parties.

Clubs actually who lose between £x and £y over the 3 years have to submit their next 2 years worth of Projected Accounts and FFP returns by March 31st of the existing season so in theory the Leagues could go further and faster.

Could you have some kind of Business Plan wirh suspended points deductions attached over a future period? I'd say it is possible.

31sr December does offer clarity yes, the old one year EFL FFP regs had something similar but it moved to March for some reason. Only embargoes or fines possible then though.

There is an argument for that but then again does it actually fit with accounting stipulations? I'd argue not but then again is having to sell by end of June, let alone end of May if applicable conducive to Profitability and Sustainability?

Not that I have a great deal of sympathy with Nottingham Forest, not given their Covid arguments and the bids turned down for Brennan Johnson. Plus their wild spending of course.

Punishes the profligate and rewards the prudent.

ive heard the new uefa proposals are wanting to change it to calendar years rather than the period we use now, which makes far more sense and would remove the excuse of waiting until later in the window to sell someone. your windows are covered in full. 

a live system is where clubs should be I agree, I would propose of clubs submitting forecasts on a live system, and anytime the club want to bring in new players they should have to present their current numbers, show where this would place the club to demonstrate they are operating within FFP, if it does not fit then the club cannot sign off the new deal. Or if the club was to potentially breach with the new deal they should have to agree a business plan that shows that during the period they can turn it around, with a commitment on a level of sales etc, if they breach they face pre-agree penalties that are based on the level of breach. 

effectively putting anyone who was in breach of ffp in a purchase transfer embargo until they rectified the situation.

any clubs proven to show false information at the time to allow a deal go through should then be disqualified from using the player until they have turned their ffp around and face other sporting sanctions that are already written in black and white for the breach. they should be heavy punishments for this type of dishonesty. 

The player should also have some security that if they are suspended from playing for a set amount of time due to the club breaching FFP then they should have their player registration handed back to the player to play for someone else if they are unable to sort it say in 6 months. forcing the club to basically sell them before they can move for free (and still pocket their loss of earnings from the club that bought them).

 

 

any idea what Hull's business with FFP is looking at? they just agreed to sign Giles from Luton on a loan with a 4.5m obligation to buy in the summer, so that is a red flag that that they are max'ed out on FFP potentially or are intending to be by the end of the window

[AnAstonVillafan]

On 22/01/2024 at 00:48, Mr Popodopolous said:

Just for the sake of the old stuff, I estimated Aston Villa and amortisation the other day. Some ballpark figures had they stayed down..

-£68.884m...

-£30m (Paying Xia's debt)

-£15.808m (Promotion Bonuses)

Underlying loss of-£23.066m pre tax.

Despite and including

£36.374m Fixed Asset Profit on Disposal (Villa Park)

£14.494m HS2 compensation.

£10.598m Profit on Disposal of Players

Parachute Payments and EFL to EFL and Solidarity distributions. Probably down from £22.27m to £10-11m.

Changed items

Final tranche HS2 revenue, £2.881m down from the aforementioned.

Rent on Villa Park, £2.6m.

Net Interest swing from -£596k payable to £848k receivable.

Amortisation of Player Registrations probably down £5-10m having had a look.

FFP target would be £9m or £10m for that particular year. They lost £9-10m in FFP terms in 2018-19.

Assuming all other income streams the same...

Before inevitable wage falls with departures and sales I make it a nailed on swing of £60-65m. Maybe a bit more maybe a bit less.

Obviously wages come off the bill but an interesting position.

The £30million debt to Randy Lerner was only payable if the club were promoted within three years of relegation.

[Rob26]

On 22/01/2024 at 17:46, Mr Popodopolous said:

It is causing some debates as to whether the P&S/FFP limits are too low. Barber very much isn't in favour of raising them.

I suppose his club have built up albeit Bloom did spend a lot for a time but they've spent very well and sell brilliantly.

As a concept encouraging rampant wage and fee inflation can't be a positive thing surely.

they defs should not be increased, i'd be more in favour in bringing them down 1m every other year or so, or just keeping these as the max and let inflation do its job. so that losing these levels of money inst as bad in 20 years time as it is right now, due to increased revenue etc

but I do think owners should be allowed to donate without loans/strings attached to the clubs to boost the budgets. like you want to invest £100m in the club, but you cant setup any contracts that would push you over FFP without adding the cash into the bank to cover them all first. 

if uefa did the same then other clubs in europe could level up if they wanted, they just need to take away the risk of most clubs being in limited companies of people taking on too much debt and walking away or cutting off funding, so let people put these ridiculous amounts of investment into the clubs, but make them pay for everything up front and review every clubs FFP position when ever they want to give a player a new contract or buy/loan/sell someone.

if they are not in FFP (or wont deposit the extra cost to FFP into an EFL account to be frozen until its been paid for - or use that money to only pay for them) then do not let them complete the deal

[Mr Popodopolous]

4 hours ago, AnAstonVillafan said:

The £30million debt to Randy Lerner was only payable if the club were promoted within three years of relegation.

Thanks, I'll go back and put new batteries in my calculator.

Did think I'd already accounted for the £30m and excluded it from all scenarios.

[Mr Popodopolous]

23 hours ago, Rob26 said:

yeah LC squad numbers are fully maxed out, but they are in a position I think with FFP where if they sell someone at a loss on the books that cooks their FFP problems further.

I'm certainly leaning that way in respect of Leicester.

Souttar, Soumare and Daka e.g. were touted as possible sellables but as you say selling at a loss! Breakeven point as of summer, as of now. Soumare was loaned out and any loan fee, plus wage savings will help.

Based on reported fees and contracts.

Souttar- £13.63m then, £12.27m now.

Soumare- £10.2m then £8.5m now.

Daka- £13.8m then, £11.5m now.

23 hours ago, Rob26 said:

ive heard the new uefa proposals are wanting to change it to calendar years rather than the period we use now, which makes far more sense and would remove the excuse of waiting until later in the window to sell someone. your windows are covered in full. 

a live system is where clubs should be I agree, I would propose of clubs submitting forecasts on a live system, and anytime the club want to bring in new players they should have to present their current numbers, show where this would place the club to demonstrate they are operating within FFP, if it does not fit then the club cannot sign off the new deal. Or if the club was to potentially breach with the new deal they should have to agree a business plan that shows that during the period they can turn it around, with a commitment on a level of sales etc, if they breach they face pre-agree penalties that are based on the level of breach.

effectively putting anyone who was in breach of ffp in a purchase transfer embargo until they rectified the situation.

any clubs proven to show false information at the time to allow a deal go through should then be disqualified from using the player until they have turned their ffp around and face other sporting sanctions that are already written in black and white for the breach. they should be heavy punishments for this type of dishonesty. 

The player should also have some security that if they are suspended from playing for a set amount of time due to the club breaching FFP then they should have their player registration handed back to the player to play for someone else if they are unable to sort it say in 6 months. forcing the club to basically sell them before they can move for free (and still pocket their loss of earnings from the club that bought them).

Mostly agree wirh this. Not quite sure I like the calendar year idea though, completely messes with accounting periods or extrapolation of these, except for those clubs who for Reporting Requirements publicly produce 6 month or quarterly accounts to Stock Markets!

23 hours ago, Rob26 said:

any idea what Hull's business with FFP is looking at? they just agreed to sign Giles from Luton on a loan with a 4.5m obligation to buy in the summer, so that is a red flag that that they are max'ed out on FFP potentially or are intending to be by the end of the window

My view has for some time in respect of Hull been that give or take, 18 months to get up  before FFP hits the buffers or a change of course is required.

I assume for a start that their wage bill exceeds turnover..did some ballpark guesstimates based on their owner saying he had trebled the wage bill or average wage.

Wage Bill- £30-35m

Turnover- £20-25m

Amortisation up certainly.

The Keane Lewis-Potter sale, pure profit of £15-20m combined with a very low cost base or strong FFP position at time of takeover has given them a certain window to go at it.

Allams were basically taking money out of the club by the end, the final few years repaying their loans. Partly as relationship with fans went South and partly because they were perhaps priming for takeover.

Edited January 24 by Mr Popodopolous

[Mr Popodopolous]

In respect of one other bit in terms of Hull.

Could be the case that their rolling position peaks next season hence the structure of the possible Giles move. ie 2022-23 better than 2021-22 due to KLP.

Edited January 24 by Mr Popodopolous

[Mr Popodopolous]

Ooh Nottingham Forest may lack relegation clauses in a lot of their players deals. 

https://www.dailymail.co.uk/sport/football/article-13000255/A-significant-number-Nottingham-Forests-team-squad-NOT-relegation-clauses-contracts-Nuno-Espirito-Santos-potentially-facing-financial-problems.html

Relegation could bring further difficulties and still dunno whether the EFL would want a word about the Covid losses attributed to the third and final season ie the year they won the playoffs.

[Davefevs]

I see Watford have taken Emmanuel Dennis on loan - Fabrizio Romano says he’s taken a 70% wage cut.

So, has the player had really taken that, or is this Forest subbing that 70% and still paying Dennis his full-whack?

[Mr Popodopolous]

Maybe Watford are only paying 30% of the wages.

That's very generous if so, given how stingy PL loan deals can be and given FFP.

Plus the fact that Nottingham Forest paid £20m for him a year ago.

[Mr Popodopolous]

If true it would be akin to Bournemouth loaning us back Scott and covering 50-65% of the wages.

I'm extrapolating for fee vs fee range with both deals.

[Mr Popodopolous]

Talking of Bournemouth, them and Fulham really irk. Those two are really strong examples of modern football.

When I started following football late 1990s both were third tier, even had spells in the fourth..

In comes Al-Fayed with a modest goal, to make Fulham the Manchester United of the South.

No FFP or financial analysis and he gave it a good go. 13 PL seasons, manager like Tigana in 2nd tier in 2000 etc.

Did their fun end? No. Unlike Reading and Wigan he sold to an even richer guy. Who has poured loads in and taken full advantage of the Parachute plus FFP. He sold at the right time too.

15 years ago Bournemouth were bottom of League 2. They yoyoed a bit between the bottom 2 divisions, administration etc.

Eddie Howe two great spells there but Russian ownership after their fan owned phase. Breached FFP in 2014-15..something some of their fans call levelling the playing field then took advantage of the in-built advantages PL football gives.

Sold to a possibly richer owner with at least one other club in his stable but unlike Fulham a shit infrastructure to boot!

I remember we got Pitman from them in 2010! They were either third or fourth tier and going nowhere fast.

Edited January 24 by Mr Popodopolous

[Mr Popodopolous]

If reports are true, I'm a little surprised in some ways that Casadei going back saw Leicester the right side of the line again for Sensi.

Because when it comes to Profit on Disposal of Players it goes..

Fee

Minus remaining Unamortised Book Value

Minus Sell on Fee

=Profit on Disposal.

Both Fofana and Maddison, big sales though they were will have had this consideration to factor in.

Edited January 24 by Mr Popodopolous

[Mr Popodopolous]

Unless there is a player sale/are player sales on the way I still wonder about their position to this present season.

[Mr Popodopolous]

Reported fees - the relevant

2022-23

Fofana £70m - £19m - £6m=£45m

Maddison £40m - £3.6m - £2.4m=£34m

Schmeichel £1m..pure profit=£1m

2023-24

Barnes £39m..pure profit=£39m

Castagne £15m - £8.8m=£6.2m

Hirst £1-1.5m..,pure profit=£1-1.5m

They also got £1m loan fee for Thomas which is pure profit and £0.8m loan fee for Kristansen which offsets the amortisation. Presumably Sheffield United and Bologna also covered the wages.

However income is down a minimum of £100m from a high watermark of £214m in 2021-22. A year in which their pre tax loss was £92.4m despite and including a Profit on Disposal of £9.2m for players.

Not as if they are breaking the bank but absolute numbers are absolute numbers IMO. Player shouldn't be registered until a sale is made if one is needed.

[Rob26]

19 hours ago, Mr Popodopolous said:

Ooh Nottingham Forest may lack relegation clauses in a lot of their players deals. 

https://www.dailymail.co.uk/sport/football/article-13000255/A-significant-number-Nottingham-Forests-team-squad-NOT-relegation-clauses-contracts-Nuno-Espirito-Santos-potentially-facing-financial-problems.html

Relegation could bring further difficulties and still dunno whether the EFL would want a word about the Covid losses attributed to the third and final season ie the year they won the playoffs.

may well have relegation release clauses too if they have let the talents agents walk all over them

 

[Rob26]

the calandar year is how I think uefa do it now, and think we will just eventually make the uefa model applicable to all in the long run.

if you think about it the clubs in europe have to work to uefas tighter rules, they will want that cascading down the ladder as will strengthen their position. i'm sure there is votes coming up about it for the clubs at some point in the near futures.

it pushes for 70% of turn over to be spent on wages and fee's. which makes me think they may be a swing in players wages and values coming down if its passed down all the european leagues ladders

good for the long term but seems like it will cause clubs in our league some massive problems if it gets passed down 

[Mr Popodopolous]

2 hours ago, Rob26 said:

may well have relegation release clauses too if they have let the talents agents walk all over them

 

That would solve a number of issues and perhaps create some more!

[Mr Popodopolous]

2 hours ago, Rob26 said:

the calandar year is how I think uefa do it now, and think we will just eventually make the uefa model applicable to all in the long run.

if you think about it the clubs in europe have to work to uefas tighter rules, they will want that cascading down the ladder as will strengthen their position. i'm sure there is votes coming up about it for the clubs at some point in the near futures.

it pushes for 70% of turn over to be spent on wages and fee's. which makes me think they may be a swing in players wages and values coming down if its passed down all the european leagues ladders

good for the long term but seems like it will cause clubs in our league some massive problems if it gets passed down 

Eventually it will come in for all, and yes after for the long term wages and fees are bound to come down.

I still think Accounting Period over Calendar year makes more sense and yes specifically about this division..That aside.

1) The primary beneficiaries will sadly be freshly relegated clubs if it comes in as the PL hope. They want an 85% limit for freshly relegated clubs, an 80% limit thereafter and 70% thereafter iirc.

2) Talking of Parachute Payments, the talk is that they will remain but lower. Exact numbers remain to be seen and I expect the EFL to object strongly here.

3) The next beneficiaries will be those non Parachute clubs a with a higher income...

4)...Then depending on income, those with a good cost control.

5) Bristol City are actually one who I believe can align to both systems at shortish notice. Much of the League though?

6) The trade-off is that the Solidarity Payments will rise which will help some to adapt, some to spend a bit more but at the same time...some may have to rethink their Business models fundamentally medium term.

I take Birmingham, their fans are crowing about how much they'll spend in the summer. I don't see how they can go on a big spree under either system.  With sales sure.

Stoke are another good example, their football side wage bill alone exceeded turnover in 2021-22.

Norwich and Watford if still down will be out of Parachute Payments next year, West Brom year 2 without.

Blackburn, Hull, Millwall, Preston, QPR all have their challenges!

[Mr Popodopolous]

Interesting line from Leicester..

Could all be a bit of poker but...

One to (still) watch? Makes me wonder if Leicester actually have a deficit to clear like us and Stoke last January.

[Mr Popodopolous]

Very generous goings on at Derby, seems they only pay £750,000 in rent per annum...(Kieran Maguire).

Although if a paper market rent is inserted for P&S then nothing to see here.

Edited January 25 by Mr Popodopolous

[Mr Popodopolous]

Under Mel they were paying zero rent it seems, which is dodgy as hell...or 2021-22 anyway- albeit accounts vs paper adjustments for P&S Idk.

If we recall from the original figures they were £1.1m and then suggested £4m from the external valuer iirc.

Hopefully the EFL insist on some Fair Value rent for P&S purposes even if not reflected in the accounts. I assume that they did and will.

Edited January 25 by Mr Popodopolous

[Hxj]

50 minutes ago, Mr Popodopolous said:

Hopefully the EFL insist on some Fair Value rent for P&S purposes even if not reflected in the accounts. I assume that they did and will.

Currently the club is under the Salary Cap rules, so market value doesn't arise.

The Clowes group accounts to 31 March 2023 have just been published, contain some details on the acquisition.

[Mr Popodopolous]

13 minutes ago, Hxj said:

Currently the club is under the Salary Cap rules, so market value doesn't arise.

The Clowes group accounts to 31 March 2023 have just been published, contain some details on the acquisition.

Didn't realise that thanks..the bit about Fair Market Value in League One.

I'm sure the EFL have it all in hand anyway, some Derby fans are saying the ground and club should be reunited but I wonder if that could call the 2018 transaction into question...