The Championship FFP Thread (Merged)

[W-S-M Seagull]

27 minutes ago, Mr Popodopolous said:

Some other interesting but possibly misleading points on the thread:

Some of the problems as I see it are:

*Brennan Johnson is an Academy Product so his Book Value is zero or near as dammit.

*A Revaluation Policy is one thing, but it has to be applied consistently to the same class of Assets. As far as I am aware, Nottingham Forest amortise and account for Player Registrations straight line like the rest of us..which may not even be so applicable here.

*A Revaluation Policy for Player Registrations may not be possible anyway but it is very unorthodox. You can Impair and reverse this but again, it's barely material with an Academy Product.

Player Valuations are wholly subjective anyway, I recall some importance being placed on the Active Market in the EFL Appeal v Derby too.

Not sure you could class a Player Registration- an Intangible Asset- as an Inventory either.

I'm not going to pretend to know what all that means. 

But all sounds like complete horse shit to me. The cut off is 30th June. 

The reality is this player could have got injured so before the 30th of June there were no guarantees they would be able to sell him. 

Now this may seem a totally bizarre concept to them but maybe they shouldn't have overspent and then they'd not be relying on some frivolous claim about selling a player months later. The transfer window opened on the 14th June so they had 2 weeks or so to sell some players to see them fall in line. They didn't do say. They continued using him. He played in their win against Sheffield Utd so they've gained a competitive advantage. 

They need to just shut up and accept they cheated and accept the punishment. 

Edited February 21 by W-S-M Seagull

[Mr Popodopolous]

32 minutes ago, W-S-M Seagull said:

I'm not going to pretend to know what all that means. 

But all sounds like complete horse shit to me. The cut off is 30th June. 

The reality is this player could have got injured so before the 30th of June there were no guarantees they would be able to sell him. 

Now this may seem a totally bizarre concept to them but maybe they shouldn't have overspent and then they'd not be relying on some frivolous claim about selling a player months later. The transfer window opened on the 14th June so they had 2 weeks or so to sell some players to see them fall in line. They didn't do say. They continued using him. He played in their win against Sheffield Utd so they've gained a competitive advantage. 

They need to just shut up and accept they cheated and accept the punishment. 

Broadly speaking I tend to agree. Just trying to weigh up the arguments for and against but I'm struggling badly to see a coherent argument that a post Balance Sheet sale of player is compatible with the Deadline applicable to all clubs.

June 30th or last day of Reporting Period seems to be it..albeit I wonder about if we could have faced issues had Semenyo not left in January 2023, see Reading and their 2nd Business Plan, the punishment happened In-Season.

However Nottingham Forest turned down a bid from Brentford for £30m before June 30th, it maybe was more.

Edited February 21 by Mr Popodopolous

[W-S-M Seagull]

3 minutes ago, Mr Popodopolous said:

Broadly speaking I tend to agree. Just trying to weigh up the arguments for and against but I'm struggling badly to see a coherent argument that a post Balance Sheet sale of player is compatible with the Deadline applicable to all clubs.

June 30th or last day of Reporting Period seems to be it..albeit I wonder about if we could have faced issues had Semenyo not left in January 2023, see Reading and their 2nd Business Plan, the punishment happened In-Season.

However Nottingham Forest turned down a bid from Brentford for £30m before June 30th, it maybe was more.

That's it. I don't care if they could have got more months later. There was no guarantee of that. 

They got themselves into that position of needing to sell by overspending. So what if it meant out on losing money further down the line, by selling early they would have ensured they complied. For me rather than this being a mitigating factor I consider it an aggravating factor. 

As it is now, they are likely to be docked points and relegated and therefore miss out on the prem money. Should have just taken the cut price transfer fee is the lesson here. 

[SimonD]

6 hours ago, Mr Popodopolous said:

Don't have time to post a load of screenshots but yes..

*1st March- Actual and Projected.

**31st March- FFI, next 2 years.

I would also add that clubs who miss 1st March deadline, should get an automatic points deduction in addition to anything that FFP may uncover. This is my view only.

Some clubs were late with it in prior years, that should be a strict liability offence, -12 maybe.

Because if you are late with it beyond a few days, that de facto pushes any possible In-Season assessment into the following Season and could be seen as a way to game the system.

*If Losses exceed £15m after adjustments in 3 years.

Thanks for this. 1st March makes more sense as it give the EFL more time to act, although that is not their specialty. 

I did think that I'd read/heard that they were looking to move the date to 31st Dec, but that can't be right. it has to be after the transfer window closes.

To reply to a couple or so comments over the last couple of days (I was quite busy!)

"This bit for example, smacks of the formation of an excuse. It seems weak with respect. Blaming the Covid impact upon the market is a bit rear view mirror"

I disagree, but this is me purely commenting on how I see the terrain, not an official QPR line. There were very few transfers between Championship clubs in the Covid aftermath.

 

"Not that impressive in all honesty."

Nor me! Letting Beale dictate transfer policy was stupid. One sale in that summer (assuming there were any offers for our players) would have have allowed us some breathing space this season.

 

"The original piece last February did have a bullish estimate about the loss falling by £5.5m in one year"

Sadly true. I was just looking for a scenario which matched the stated position (as I'm sure you guessed)

 

 

 

 

 

 

[Mr Popodopolous]

30 minutes ago, SimonD said:

Thanks for this. 1st March makes more sense as it give the EFL more time to act, although that is not their specialty. 

I did think that I'd read/heard that they were looking to move the date to 31st Dec, but that can't be right. it has to be after the transfer window closes.

To reply to a couple or so comments over the last couple of days (I was quite busy!)

"This bit for example, smacks of the formation of an excuse. It seems weak with respect. Blaming the Covid impact upon the market is a bit rear view mirror"

I disagree, but this is me purely commenting on how I see the terrain, not an official QPR line. There were very few transfers between Championship clubs in the Covid aftermath.

 

"Not that impressive in all honesty."

Nor me! Letting Beale dictate transfer policy was stupid. One sale in that summer (assuming there were any offers for our players) would have have allowed us some breathing space this season.

 

"The original piece last February did have a bullish estimate about the loss falling by £5.5m in one year"

Sadly true. I was just looking for a scenario which matched the stated position (as I'm sure you guessed)

 

 

 

 

 

 

February 1st could be a good one, post the January window and to set up a solid timeframe for in-season. December 31st could in theory in conjunction with Future Financial Info and In-Season Projections provide the basis for a full Real-time Rolling Assessment, monitored on a continual basis.

As in club may have a hole of X, need to do Y by March mostly in January Window to avoid sanctions in the Spring.

Some strong words by me, I thought about it again and perhaps QPR have slid into line tbh. However I think it feels like it could be tight.

I did assume that the loss or especially the wage bill would've fallen by more with the shrinking headroom, best to plan in advance, or as far as possible.

I will be most interested in Birmingham, Cardiff and Leicester too plus if still applicable Birmingham 6 months to December 2023.

Leicester sold big but their income fell last year and by perhaps minimum further £60m this plus budgeting for £83m v prior for years £105m Upper Loss limit...hmm.

Oh yeah the bit I forgot, between Championship clubs is one thing and I suppose but we eventually had to sell quite big. £30-35m all-in for Scott and Semenyo so my wider view is sceptical especially when it comes to the 3 years ending 2024. For all clubs.

Edited February 21 by Mr Popodopolous

[Mr Popodopolous]

Leicester Income vs Loss vs Likely FFP Allowables

2021-22

Income

£214.95m

Plus £0.7m in Other Operating Income

Plus £0.431m in Interest Receivable etc.

Loss

-£92.496m

Likely FFP Allowance

£25m

Plus (2021-22 only)

£1.36m stated in Covid Losses.

P&S Loss therefore likely -£66.136m in 2021-22.

There was also a Player sales Profit on Disposal of some £9.206m in 2021-22 plus a Player Impairment of £2.593m.

Total TV money came in at:

£129.814m

European money came in at £21.513m.

Although the Profit on Disposal was bumped up massively in 2022-23, it is worth noting that:

1) Leicester finishing 18th vs 8th is an undoubted hit to income. SwissRamble showed at £114m for their PL TV income.

2) Not qualifying for Europe should mean minimal or zero European Revenue. 

Plus

Neither the Deloitte Money League or UEFA Benchmarking seemed to show Leicester for 2023. Everton were €198m and Fulham, Leeds among others all finished in the top 30. Possibly Leicester fell below.

A 13th month of accounts which there was, can add costs but also crucially perhaps revenue. Transfer Profit (Maddison).

£83m Adjusted Earnings Before Tax is the 3 year Upper Loss limit..and unable to add even Sensi or anyone in Janaury without sales.

Edited February 22 by Mr Popodopolous

[Mr Popodopolous]

Hi @Hxj

You maybe able to help on tbis one.

I've looked at the regs again including the Call-In Review bit. Is it the case e.g. that the Call-in Review must be during the season or can it be down the line as well?

There do seem to be possible deadlines but I hope it isn't a case of Use it or Lose it because certain matters can only arise down the line.

Edited February 22 by Mr Popodopolous

[Hxj]

1 hour ago, Mr Popodopolous said:

Hi @Hxj

I've looked at the regs again including the Call-In Review bit. Is it the case e.g. that the Call-in Review must be during the season or can it be down the line as well?

The call in review is intended to be an in-season back stop.  However the EFL note that it can be used at a later date.

[Mr Popodopolous]

2 minutes ago, Hxj said:

The call in review is intended to be an in-season back stop.  However the EFL note that it can be used at a later date.

Thank you.

That makes sense and can keep all parties honest I guess.

Does sound like we could be moving to actual In-Season enforcement as the system develops.

[Hxj]

1 minute ago, Mr Popodopolous said:

Thank you.

That makes sense and can keep all parties honest I guess.

Does sound like we could be moving to actual In-Season enforcement as the system develops.

I meant ‘in-season’ as in ‘in the season in which the accounts are submitted’. Sorry

[Mr Popodopolous]

Just now, Hxj said:

I meant ‘in-season’ as in ‘in the season in which the accounts are submitted’. Sorry

 My hopes dashes again, thanks also.

Still if they can analyse the P&S submissions I do think In-Season is still possible eventually. Especially in conjunction with Future Financial Info, forward looking Business Plans etc. You could set forward looking targets, suspend deductions etc.

[Hxj]

4 minutes ago, Mr Popodopolous said:

I do think In-Season is still possible eventually.

If you move to an SCMP system then in year is definitely a possibility, in fact it is an integral part of such a system.  If you overspend on your budget you get penalised.

[Mr Popodopolous]

1 minute ago, Hxj said:

If you move to an SCMP system then in year is definitely a possibility, in fact it is an integral part of such a system.  If you overspend on your budget you get penalised.

Agreed. Think it could be done with P&S.

I've a funny feeling Leicester could be set to exceed the current rules this year.

Sensi could not join in January owing to a need to offload ie sell and their Limit to last year at £105m looks fine but £83m...hmm.

Imagine if they went up exceeding limits.

[Hxj]

21 hours ago, Mr Popodopolous said:

Some other interesting but possibly misleading points on the thread:

The main problem with the analysis is that it is wrong.

Wrong as in wrong, not as in 'might be right if I imagine this and look at that.'

For a start the old UK-GAAP passed away gracefully about 20 years ago, why anyone thinks that it is still useful is beyond me.

For unquoted companies they can use IFRS or the appropriate FRS, usually 102.

No accounting standards allow a revaluation of intangible assets to more than cost, you can only impair an asset if you can demonstrate that it is devalued.

To be open and as I have said before I have some sympathy with Nottingham Forest's position, and not just because I know a lot of season ticket holders.

They have accepted the breach.  In mitigation they state that they have a necessity to sell their players at the best possible price to enable them to compete in the EPL, and that the transaction they entered into as resolved their FFP issues going forward.  I think that it is a good, proper and meaningful argument.  There are counter-arguments along the lines of why did you buy 250 players on huge salaries in your first year in the EPL.  I also know that not everyone on here has the same view as I do.

 

[Mr Popodopolous]

10 minutes ago, Hxj said:

The main problem with the analysis is that it is wrong.

Wrong as in wrong, not as in 'might be right if I imagine this and look at that.'

For a start the old UK-GAAP passed away gracefully about 20 years ago, why anyone thinks that it is still useful is beyond me.

For unquoted companies they can use IFRS or the appropriate FRS, usually 102.

No accounting standards allow a revaluation of intangible assets to more than cost, you can only impair an asset if you can demonstrate that it is devalued.

To be open and as I have said before I have some sympathy with Nottingham Forest's position, and not just because I know a lot of season ticket holders.

They have accepted the breach.  In mitigation they state that they have a necessity to sell their players at the best possible price to enable them to compete in the EPL, and that the transaction they entered into as resolved their FFP issues going forward.  I think that it is a good, proper and meaningful argument.  There are counter-arguments along the lines of why did you buy 250 players on huge salaries in your first year in the EPL.  I also know that not everyone on here has the same view as I do.

 

Thank you for the analysis and corrections of my points.

Based on what you say about GAAP and IFRS vs FRS 102 I'm struggling to see their argument in line with P&S and FRS 102.

If it (compliance) is dependent on the Johnson sale being rowed back I am struggling to see it.

Mitigation arguments feel like a reduction of penalty territory rather than removal.

Revaluation seems to be implied as possible based on a quick search. However squaring that with Fair Value obtained via an Active Market seems to be clutching at best for Player sales.

Edited February 22 by Mr Popodopolous

[Hxj]

2 minutes ago, Mr Popodopolous said:

Mitigation arguments feel like a reduction of penalty territory rather than removal.

Agreed.  Forest have always accepted that they are in default.

[Mr Popodopolous]

QPR club specific accounts are out.

I assume Holdings is the standard for P&S but @SimonD and anyone else?

The Management Charge?

Edited February 22 by Mr Popodopolous

[Davefevs]

11 minutes ago, Mr Popodopolous said:

QPR club specific accounts are out.

I assume Holdings is the standard for P&S but @SimonD and anyone else?

The Management Charge?

Holdings transfer pricing?

[Mr Popodopolous]

35 minutes ago, Davefevs said:

Holdings transfer pricing?

Could be. Seems different though, the junior company having an income £10-15m than the consolidator/top co.

Edited February 22 by Mr Popodopolous

[Hxj]

11 hours ago, Mr Popodopolous said:

the junior company having an income £10-15m than the consolidator/top co.

You need to compare like with like, you have picked up the consolidated figures which be net of the intra-group transactions.

[Mr Popodopolous]

2 hours ago, Hxj said:

You need to compare like with like, you have picked up the consolidated figures which be net of the intra-group transactions.

I just took the Revenue and Revenue categories of each. ie QPR Holdings and Queens Park Rangers Football and Athletic.

I'm assuming QPR Holdings is the benchmark for P&S which is my main bit.

[Mr Popodopolous]

So few clubs are in a hurry to release their Accounts tbh. Bits of info slip out of course but so few...

This time next week we should have..

1) Arsenal and Associated Companies

2) Aston Villa and Associated Companies

3) Wolves and WW 1990 Limited

4) Cardiff City and any Associated Companies

5) Coventry City and Associated Companies

6) Barnsley

7) HKSE- Football segment of Birmingham Sports Holdings, 6 months to December 31st.

So few.

Even ones that surely released internally to the PL by December 31st- could release now but aren't.

Everton and Nottingham Forest charged. I posted elsewhere in December that Everton and their best proof of a Pass would be to release compliant Accounts.

Bournemouth and Fulham I wonder about but they seemed to pass but again seem in no hurry.

Edited February 23 by Mr Popodopolous

[Mr Popodopolous]

One more note on Aston Villa.

UEFA Benchmarking Report says their wage bill €223m last year.

The Grealish Profit of £100m can cover a lot but thereafter? Could be intriguing if the rules stay the same for another year or 2.

F9r avoidance of doubt tbis being a UEFA Report, the figures are in € not £.

 

Edited February 23 by Mr Popodopolous

[Mr Popodopolous]

Another piece in the jigsaw. Leicester City Community Trust out..shall post what we know as I have no doubt they were fine to 2022-23, and shall post what feeds into 2023-24 Test.

Leicester City 2021-22

Pre Tax Loss

-£92.496m

Less:

*Depreciation £7.153m

*Amortisation of Intangibles Excluding Players:  £125,000

*Stated Covid Losses: £1.36m

Women's Team- Cost of Sales, £2.326m, Admin Expenses, £810k, Stadium Expenses £151k.

Charitable Expenditure listed as £1,543,228.

I would hazard a guess that their Academy has an Annual Expenditure in the £10-15m bracket?

Charitable Expenditure in 2022-23 Stated as £1,791,691.

[Mr Popodopolous]

A little more Aston Villa.

Their Accounts for 2022-23 will be rather interesting but this was what they had to Amortise and it dispose of as of 31st May 2022. May already account for some transfers made before 31st May 2022 but won't for those thereafter. 

Unsure it it included e.g. Compensation to Rangers for Gerrard.

£287.502m to amortise??

[SimonD]

On 22/02/2024 at 21:44, Mr Popodopolous said:

QPR club specific accounts are out.

I assume Holdings is the standard for P&S but @SimonD and anyone else?

The Management Charge?

Yes, definitely the Holdings accounts.

We'd have no problems with FFP on the other set......

 

[Mr Popodopolous]

17 minutes ago, SimonD said:

Yes, definitely the Holdings accounts.

We'd have no problems with FFP on the other set......

 

Thought so and agreed.

[Mr Popodopolous]

Aston Villa have spent a fortune on and off, does anyone else find their whining a bit rich??

Not least given the loophole that helped them escape this League in no small part.

Edited February 24 by Mr Popodopolous

[Mr Popodopolous]

Changing the policy now the PSR/FFP could wind up being very favourable to them, as the Grealish driven profit will be replaced as the new starting point by whatever the loss was last year.

Whichever way you spin it, Aston Villa and Leicester..that story was £ for £ truly remarkable. Aston Villa? Harder to say.

When I say their whining I'm not referring to Emery here but their fans, such as that page. Especially when not long ago they were crowing about their compliance etc.

Edited February 24 by Mr Popodopolous

[Mr Popodopolous]

Some funny Tweets from this account.

Clearly not grasping the necessity of a Stadium sale from the P&S Angle in 2019 

Or how the system works on a rolling 3 year cycle. One of the highest wage bills at 2nd tier level ever that year.

Edited February 24 by Mr Popodopolous