The Championship FFP Thread (Merged)

[Hxj]

15 minutes ago, Mr Popodopolous said:

they could have their cake and eat it

I'm not sure how complying with the Regulations is anything other than complying with the Regulations?

[Mr Popodopolous]

[Mr Popodopolous]

3 minutes ago, Hxj said:

I'm not sure how complying with the Regulations is anything other than complying with the Regulations?

As in get promoted, but I suppose any possible deficit could follow a side up there days.

The fact Leicester were not allowed to add players in January did intrigue. Maresca said multiple times that they needed to sell first.

Edited February 6 by Mr Popodopolous

[Mr Popodopolous]

[Mr Popodopolous]

In other words I take a P&S calculation exceeding the Upper Loss limit to mean they can be referred to the CRFP in March. As well as the Embargo measures.

The EFL will have received Leicester's 2022-23 accounts at the end of December under the new Fast Track System. They were obviously compliant to 2022-23, but I really wonder about the 3 years to this year.

[Mr Popodopolous]

My gut feeling mixed with research is that Leicester have Allowables of £20-25m per season. Albeit SwissRamble has it at £15m or maybe a bit higher.

Leicester listed Covid losses as £1.4m in their Accounts for 2021-22.

[Hxj]

34 minutes ago, Mr Popodopolous said:

In other words I take a P&S calculation exceeding the Upper Loss limit to mean they can be referred to the CRFP in March.

So a club (A) which honestly and openly predicts breaching FFP in its March 2024 in year submission is given an in year sporting sanction of -5 points and is relegated from the Championship at the end of the season.

in July 2024 after the end of the season (and after the AGMs where membership for the next season is finalised) it receives a bid from an EPL team for its goalkeeper for £10 million, and therefore in the FFP reporting period to 31 July 2024 it does not breach FFP at all.

Another club (B) does not predict breaching FFP in March 2024.  It is struggling in the Championship.  It sacks the manager in April 2024 at a cost of £2 million.  It appoints a manager who saves the club from relegation by a single point and receives a £3 million bonus as Club A was relegated in its place.

In its FFP reporting period to 31 July 2024 it breaches FFP by £2 million, so receives a 3 point sporting sanction but in the 2024/25 season.

Discuss the ‘fairness’ of the ‘in-year’ sanction.

[Mr Popodopolous]

20 minutes ago, Hxj said:

So a club (A) which honestly and openly predicts breaching FFP in its March 2024 in year submission is given an in year sporting sanction of -5 points and is relegated from the Championship at the end of the season.

in July 2024 after the end of the season (and after the AGMs where membership for the next season is finalised) it receives a bid from an EPL team for its goalkeeper for £10 million, and therefore in the FFP reporting period to 31 July 2024 it does not breach FFP at all.

Another club (B) does not predict breaching FFP in March 2024.  It is struggling in the Championship.  It sacks the manager in April 2024 at a cost of £2 million.  It appoints a manager who saves the club from relegation by a single point and receives a £3 million bonus as Club A was relegated in its place.

In its FFP reporting period to 31 July 2024 it breaches FFP by £2 million, so receives a 3 point sporting sanction but in the 2024/25 season.

Discuss the ‘fairness’ of the ‘in-year’ sanction.

That is a very good post. I shall think about that one..I've taken a view for a few years that clubs should be compliant by March. As Wolves appear to be in the PL, when we sold Semenyo this made absolutely sure- perhaps even Stoke with Souttar.

Maybe there is a way to make it fair and yet in-season.

Aston Villa, Derby and Sheffield Wednesday back in 2018, 2019 fixing it via Stsfium sales and leasebacks sticks in the craw.

Ah avoiding a breach in March yet failing, does this become a matter of Utmost Good Faith? Aggravated breach? Very, very difficult to prove.

You could have a suspended deduction to align go the Reporting Deadline if a forefsdt deficit is shown, June 30th seems the outermost limit of that and Playoffs and or Promotion?

I suppose in theory could a side be docked under the current season in real time? Am struggling to align the Leicester compliance to their likely losses and failure to sell in January.

You could align a mix of past, present and future info on a regular basis which could have a combination of compliance, monitoring and suspended deductions.

Edited February 6 by Mr Popodopolous

[Mr Popodopolous]

A counterfactual I guess @Hxj would be us and Middlesbrough in 2019. You could even add by extension WBA and Leeds.

Derby

As it turned out via a historic restatement of the amortisation, they failed in 2017, 2019 and 2021.

Middlesbrough finishing 7th, Leeds losing in the semi final and Wycombe getting relegated would have the strong cases here. All clubs compliant at all times (albeit there was debate over a tax loss at Middlesbrough and did a sale of it pass them for 2016).

This isn't for a historic slating of Derby but if the ridiculous Fixed Asset loophole even disregarding the amortisation issue they fail by some well £20m plus or 8 figures anyway in 2017-18. That means a Business Plan and no transfer fees or loan fees in 2018-19 and I suggest no Tomori, Mount, Wilson, Marriott. Plus a deficit of some kind to make good in 2018-19.

Huge Sporting Advantage negated.

Aston Villa

EFL had them under some sort of Embargo in summer 2018. Shaun Harvey even went to see the club about issues in summer 2018 not just FFP by any means.

Even if we accept the HS2, no Stadium sale surely means either no fees and loan fees- no real issue with the McGinn signing, but El Ghazi, Tammy, was there a loan fee for Hause or Mings? Bolasie? Kalinic and Guilbert.

West Brom perennially are and have been within P&S. They lost to them in the playoffs. We have always been within P&S, we sold Flint, Bryan and Reid that year plus squad players albeit of use ie Magnússon and Djuric.

Or Aston Villa would have pressed on with such signings and the Projected Accounts would've shown a deficit as indeed was reported in late March 2019.

Should either of these have been docked points in 2019? Without the Fixed Asset Stadium loophole both would've been in a major mess..it would've vindicated too any or all of us, Leeds Middlesbrough, West Brom.

Edited February 7 by Mr Popodopolous

[Mr Popodopolous]

We can do the maths tbh as helpfully Aston Villa in their consolidator lay out their FFP Allowables.

-£68.884m

+£3.118m- Depreciation

+£1.538m- Impairment

+£843k- Community Expenditure

+£9.28m- Youth Expenditure

+£15.808m- Promotion Bonuses

+£30m- Settling a debt for Xia to Lerner.

However £36.774m was the Profit on Disposal of Villa Park..a loophole now firmly shut!!

Edited February 7 by Mr Popodopolous

[Mr Popodopolous]

Give or take, without that crazy loophole which Rick Parry hit out at recently, there would've been a deficit of around £30m in 2018-19 for Aston Villa.

A 2nd deficit would've arisen probably in 2019 or 2021 for Sheffield Wednesday.

Derby who the hell knows how many and how much.

Reading even more so.

Birmingham Che Adams case would've been a slam dunk for EFL. Absent the stadium sale and Che Adams in the correct time frame, they would've failed again in 2018-19 whereas an in-season breach probably would've seen then get successive deductions in 2018 and 2019. Or even 2 in 2019.

Could go on.. 

Edited February 7 by Mr Popodopolous

[Mr Popodopolous]

It's hard to unpack Derby, not least as they neglected to release accounts for several years under Mel Morris for a host of reasons.

Based on the audited accounts to 2018, the numbers in the EFL Written Reasons first case from 2020 and based on the principle of reset but forgetting the amortisation debacle a stadium sale less Derby would have posted losses of..

[Mr Popodopolous]

Adjusted P&S if no Stadium loophole existed, Derby but also no amortisation fuss

2015-16 -£15.271m

2016-17 -£13.948m

*2017-18 +£6.737m

2018-19- (Forecast) -£31.517m

Perhaps you can subtract £5-10m from 2018-19 given the fact that expensive additions like Tomori, Wilson, Mount and additions like Marriott etc wouldn't have occurred under a Business Plan.

*£39,940,837 was the Stadium profit.

You're talking a £20-25m overspend to 2018 without it.

However the past and present numbers seemed to move around a bit..

Because come March 2019 forecast both 2017 and 2018 shifted.

2016-17- £13.407m

2017-18 +£7.207m

Plus as above, 2018-19 (Forecast) -£31.517m

By summer 2019 the updated numbers were in!

It says that the managerial team compensation knocked the aggregate down to £37.1m, from a previously stated £37.717m.

In short there would have been breaches caught earlier but also early intervention and no Sporting Advantage conferred through a Stadium sale.

[Mr Popodopolous]

Without the stadium sale, Birmingham having just checked by £8-9m in 2019.

Even if you row the Che Adams sale back, it then adds maybe £10-11m to the 2019-20 season as it took place after that year.. albeit maybe wages and amortisation plus rent of course fall a bit more.

The period ending 2022 in which they made a 1 year loss of £25m pre-tax also would've been affected.

There would be significant knock-on effects across a range of years without the Stadium sale.

Sheffield Wednesday another, would likely have failed 2019, perhaps 2021 as well albeit by a small margin.

Aston Villa without it would have had a catastrophic swing into the red FFP wise. Promotion probably wouldn't have occurred and the subsequent crunch would've been enormous.

Apologies £36.374m was the Profit on Villa Park.

Edited February 7 by Mr Popodopolous

[Mr Popodopolous]

My conservative quick estimates before obvious cost and amortisation savings are £30m or thereabouts over in 2019 sans Villa Park transaction and a hole of £60-65m in 2019-20.

£55-60m at best.

Edited February 7 by Mr Popodopolous

[Mr Popodopolous]

-£68.884m

+£3.118m- Depreciation

+£1.538m- Impairment

+£843k- Community Expenditure

+£9.28m- Youth Expenditure

+£15.808m- Promotion Bonuses

+£30m- Settling a debt for Xia to Lerner.

However £36.374m was the Profit on Disposal of Villa Park..a loophole now firmly shut!!

That comes to -£44.671m P&S position for the year.

A 3 year position of £29-30m over.

Assuming the aforementioned fail you reset prior years to £13m apiece but...

Parachute Payments end. You can knock off £10-11m.

Profit on Disposal of Players was £10.598m. Re-add that to the hole until you work backwards with departures.

HS2 Revenue plummeted as per the Audited Accounts from £14.494m to £2.881m.

My £55-60m at best looks reasonable.

Edited February 7 by Mr Popodopolous

[Mr Popodopolous]

It's why it annoys me greatly when certain people in in the media, or sycophants in some cases laud Aston Villa for financial management.

They've spent a fortune and yes now there is credit due on many levels but some of them, they are or can be very very selective.

Edited February 7 by Mr Popodopolous

[Mr Popodopolous]

The other thing, I am confused as to if Promotion Bonuses are or aren't excluded from P&S.

Kieran Maguire and sensible wisdom says they are, should be but the PL PSR form has no slot for them. This was from 2019 so will capture a lot of clubs.

Nothing in the rules either that refers to Cost of Promotion..if they aren't excluded then in addition to Nottingham Forest, some or all of:

Wolves- 2018

Aston Villa- 2019

Leeds- 2020/21

Bournemouth- 2022

Fulham in one or more of 2018, 2020/21, 2022 would've failed.

Reason I mention is because Nottingham Forest are up before the beak and Promotion Bonuses was referenced.

[Davefevs]

43 minutes ago, Mr Popodopolous said:

The other thing, I am confused as to if Promotion Bonuses are or aren't excluded from P&S.

Kieran Maguire and sensible wisdom says they are, should be but the PL PSR form has no slot for them. This was from 2019 so will capture a lot of clubs.

Nothing in the rules either that refers to Cost of Promotion..if they aren't excluded then in addition to Nottingham Forest, some or all of:

Wolves- 2018

Aston Villa- 2019

Leeds- 2020/21

Bournemouth- 2022

Fulham in one or more of 2018, 2020/21, 2022 would've failed.

Reason I mention is because Nottingham Forest are up before the beak and Promotion Bonuses was referenced.

A few years back KM found another document from EFL / PL showing they can be allowed.

[AnAstonVillafan]

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

Why do you think it's not fit for purpose? 

Personally I think it needs to be harsher and the punishments more severe and over time keep reducing the allowed losses until eventually its at zero. 

Because at the moment its holding back ambitious clubs and sustaining a hegemony which means only the Sky Six clubs can afford to overhaul their squads. There is a trap-door effect where Chelsea and Man City found vast foreign investment and were able to advance themselves from average outfits to world superpowers, and now they have pulled up the drawbridge behind them.

I believe the limit amounts need to be increased slightly in line with inflation but the punishments harsher, clearer and carried out in season.

Sometimes and club has to spend money to move forward, not just on players but on infrastructure, facilities, stadiums, etc. 

Short term loss long term gains.

FFP isnt about football, its about turning the football clubs into sustainable business'. If a business can earn an income, and that income generates a profit that its helping the club become more sustainable. 

 

[Rob26]

On 06/02/2024 at 20:26, AnAstonVillafan said:

I'm not sure how a team trying to elevate, move forward a level sells its best players and somehow strengthens by not replacing them. Man City didn't sell Aguero at the peak of his powers to get better. Spurs didnt sell Kane until he broke their scoring record. They got the best out of their top players.

Villa are in the top as of four now. We arent going to stay there by selling Douglas Luiz to Arsenal, unless he is adequately replaced. Same goes for Newcastle. How are they going to compete at the sharp end while Chelsea, Arsenal and City simply bring more in.

Academy setup ? Villa ? Jesus Christ we have always done that. 14 million on youth developmement to May 2022. 8 millon going in just now at the new inner city academy. It is literally what this football does. Davis, O'Hare, Ramsey, Archer, Chukwuemeka, Grealish all products of the youth setup sold on at profit.

The club is trying to increase commerical revenue and sponsorship to close the gap, but its a glass ceiling. FFP is merely stopping the Sky SIx from being challenged.

but you do replace them, that's the point in selling them, you are using city as an example saying they don't do that citing ageuro, but fact is they sell players from their academy setup all the time and helps no end to keep them and other clubs within ffp, due to most of the costs being allowed outside your ffp budget and the profit from the sale due to the player having zero value as an asset in the accounts means you have a bigger amount of FFP budget to use, rather than selling players you have bought and make a modest to good profit on

ffp is stopping clubs have irresponsible owners who think success is easy and then when they get bored or don't like the look of the liabilities want to walk away from the clubs or cut off funding.

villa will be more than fine once they sell a few more players, its much a do about nothing like Newcastle as you have plenty of assets in your squad you can convert to money. sucks if you sell a player that the fans like but hard and smart decisions always need to be made to get to the top and stay there. man utd and chelsea are great examples how you can throw money at the sqaud and not get anywhere at all, quality management of the club from the board down to the coaching staff is what makes clubs successfull and is likely the reason you see a few clubs involved in the top end of the premier league which several years ago had little right to even think that would be possible.

yes i agree slightly that it does help the clubs that are already in that position, but to play devils advocate you seriously think villa would benefit from FFP just being taken off the table or slackened? these clubs would then be able to crush everyone in the transfer market 4x as much as they can right now. if you take the limits off things all that will do is increase the transfer value of average players and their wages even more and the gap will increase and likely we would even see some of these champions league clubs in our country end up like Barcelona or worse

in my opinion villa are in the position they are in because FFP is restricting these clubs and others from running at mental losses. think how much money chelsea would of spent in this window again if there was no limits. 

you can expand commercial revenue but lets face it for farming FFP allowances its probs one of the least effective options compared to being savy and smart in the transfer markets.

On 06/02/2024 at 20:34, AnAstonVillafan said:

This is the best Villa side I have seen in 28 years. I ain't crying.

But not many clubs can pull a £100m player out of their youth academy and sell him before he reaches his peak just to balance the books.

We will spend but we will also coach, drill and improve our players to progress.

I reckon FFP will be overhauled soon anyway. 

Its not fit for purpose.

your using grelish as the example, he is a once in a generation player and sale from your academy, theres no question that any team in this league can pull sales out their academy like that again and again

its all about the 10m-50m players that come from them that you move on and the money you get from loaning them out, that is what farms the FFP allowance.

it allows clubs to gamble if they think they have other sales they can make in future too (which many do, and I reckon Villa will as well)

like selling ramsay and archer for 30m+ that will of meant if you wanted you could of spent that 5x over a 5 year contract, although I do see it as kicking the can down the road as you need another 30m in each of them 5 years to keep the budget in your FFP allowance to maintain it for future seasons, but the clubs you want to compete with clearly do this every season 

I think particularly the archer deal was a great way to farm FFP allowance personally, sell for 18m, have a 18m buy back based on sheff utd going down (and probs the player not wanting to sign for a championship permantley after he had that amazing loan stint with us) means you had a 18m profit in this years accounts on him, and left yourself with (being generous to sheff utds chances) but an 80% chance he was getting bought back within a year, and then that 18m gets spread over 5 years again.

I wouldn't be surprised if more clubs who like to get creative with the numbers may also agree to similar deals in future as I think it is a smart way to bring in extra FFP budget. not that I'm saying that was a underhand tactic used by your club, but a nice side effect for a deal that was always setup to be more like a loan deal than anything else (which I personally think was more  preference by archer more than anything to make the deal happen, rather than just loan him out again).

your clubs in a great position and credit to those managing the club its working, but dont think relaxing the rules would really help anyone break into top 6 other than Newcastle, Chelsea and other teams who's owners just don't care about spending money  

personally I'd love owners to be able to donate as much money as they like to the clubs on the provision that they keep enough money in a league monitored account to cover the full transfer fee up front and have to keep an agreed amount of money in the account to cover the players contract if the league believed the deal to one that would breach FFP. and to not let clubs buy a player or give them a new contract without presenting current FFP numbers to see if the deal is allowed by the league and if it would cause a breach the clubs would need to up the funds in the account to cover it, and club has zero debt added to the books for this.

now I don't think they will go down that avenue, so if things get tighter and tighter every season forcing clubs to eventually make a profit that is a great place for all our clubs to be in. might seem impossible but all that will happen is average players fees and wages will fall in line with what the budgets dictate, or they will move to countries that don't have FFP caps in place to make more money. but we have seen how most these countries are not good at paying these contracts or giving the players enough sporting opportunities to satisfy elite players the players usually get sick and want out after they have had enough money 

[Mr Popodopolous]

3 hours ago, AnAstonVillafan said:

Because at the moment its holding back ambitious clubs and sustaining a hegemony which means only the Sky Six clubs can afford to overhaul their squads. There is a trap-door effect where Chelsea and Man City found vast foreign investment and were able to advance themselves from average outfits to world superpowers, and now they have pulled up the drawbridge behind them.

I believe the limit amounts need to be increased slightly in line with inflation but the punishments harsher, clearer and carried out in season.

Sometimes and club has to spend money to move forward, not just on players but on infrastructure, facilities, stadiums, etc. 

Short term loss long term gains.

FFP isnt about football, its about turning the football clubs into sustainable business'. If a business can earn an income, and that income generates a profit that its helping the club become more sustainable. 

 

A few weeks ago you said it wasn't too bad, which is it?

Maybe I am misrembering your posts, but if we look back in recent years your club and Stoke got fortunate in the extreme about the Fixed Asset loophole, your audited accounts show as much.

Others failed anyway.

Real time is good, harsher is also fine I agree..however a combination of real time and harsher would've shut the Stadium sale loophole, it has come on leaps and bounds in the last few years FFP.

Edited February 7 by Mr Popodopolous

[Davefevs]

Watford £24m profit

[Mr Popodopolous]

They for some reason decided or had to or I dunno what squeeze the Joao Pedro profit into 2022-23.

Unless there was an FFP crunch coming it seems odd that they would look to rush it in when like with us for Kelly, it would serve them better moving forward ie appear in 2023-24 than 2022-23.

Think it was confirmed 23rd June or similar.

[Mr Popodopolous]

Found the accounts..the big controversy I'd suggest is the Kamara transfer and loan back.

https://www.watfordfc.com/storage/163534/Accounts_30_06_2023.pdf

There was an Investigation mooted last Spring, unsure what became of it. Plenty of legitimate profit on Dennis and Pedro plus I expect on Sarr into this season too.

[Mr Popodopolous]

I'm all for punishing Everton, Nottingham Forest and anyone else but..

..Does FFP apply to Bournemouth at all? Another £20m (amortised sure) set to be added to their Cost Base. Sinisterra to be made permanent, sold nobody of note since 2020-21 or 2021-22 at best.

No huge Allowables, £72m to last season and £83m to this the Upper Loss limit.

3rd manager in 18 months.

Edited February 8 by Mr Popodopolous

[Markthehorn]

11 hours ago, Mr Popodopolous said:

Found the accounts..the big controversy I'd suggest is the Kamara transfer and loan back.

https://www.watfordfc.com/storage/163534/Accounts_30_06_2023.pdf

There was an Investigation mooted last Spring, unsure what became of it. Plenty of legitimate profit on Dennis and Pedro plus I expect on Sarr into this season too.

Suspect we might be selling a Ryan Andrews or Yasser Asprilla this summer to make sure ends meet too .

As some fans have pointed out our chairman getting well rewarded for recent “failings “ isn’t going to help the accounts.

Seems most of the debt is owned to Mr Pozzo so hopefully he won’t won’t  want that  back!

Not an expert on these things but we do take out a lot of loans which I guess isn’t a good thing as you have to pay them back eventually.

Edited February 8 by Markthehorn

[Markthehorn]

14 hours ago, Davefevs said:

Watford £24m profit

Basically down to selling Pedro .

https://www.watfordobserver.co.uk/sport/24107501.good-profit-plus-debt-reduced-watford-face-tricky-times/

[Mr Popodopolous]

14 minutes ago, Markthehorn said:

Suspect we might be selling a Ryan Andrews or Yasser Asprilla this summer to make sure ends meet too .

As some fans have pointed out our chairman getting well rewarded for recent “failings “ isn’t going to help the accounts.

Seems most of the debt is owned to Mr Pozzo so hopefully he won’t won’t  want that  back!

Not an expert on these things but we do take out a lot of loans which I guess isn’t a good thing as you have to pay them back eventually.

Yeah the interest is key for Profit and Loss with loans, Cash Flow shouldn't be an issue while you have the Pozzo backing?

Why was Pedro sold by 30th June? Would surely have made more sense to have it on 1st July unless there was a crunch which I can't see that there was.

The Gap between Parachute and EFL cash to Solidarity and EFL cash- that being next season if Watford stay down is £40m. Falls about £5-10m Year 1 to Year 2 Parachute Payments.

Watford should be fine for a but longer, Norwich however if they stay down..They face a possible double whammy.

Oh also Watford and Norwich both Adjusted Upper Loss limit to last year £72m, this year £61m, next year if still down- £39m.

Edited February 8 by Mr Popodopolous

[Mr Popodopolous]

Edit. Far too soon, far too many variables.

Edited February 8 by Mr Popodopolous