The Championship FFP Thread (Merged)

[Mr Popodopolous]

Although I would point to Stoke in particular as a contrast, surely Reading loaning Rahman (yes I know), then Hendrick (Newcastle, Reading covering 1/3 of his wages) and a loanee apiece from Porto and Nottingham Forest albeit both fringe is incongruous with their likely income and FFP compliance? Plus unable to offload Liam Moore so that's £30k per week back on the books.

Wonder a little about Birmingham too and their loanees without any major sales post Bellingham, their half-year accounts in February via HKSE will tell us a lot.

Edited October 17, 2022 by Mr Popodopolous

[Davefevs]

Here we go again:

 

[chinapig]

17 minutes ago, Davefevs said:

Here we go again:

 

I expressed surprise at some of the signings they made in League 1 so soon after Admin, Whatmough for instance, who could not have been cheap wages wise. Can't say I'm shocked at this news then.

[chinapig]

12 minutes ago, billywedlock said:

The research was commissioned by EFL chairman Rick Parry as negotiations continue with the Premier League over reforming the parachute payment system, with Dr Rob Wilson and Dr Daniel Plumley asked to look at the impact on Championship clubs between 2017 and 2021, compared to previous research covering 2006 to 2017. 

• Clubs with parachute payments were three times more likely to get promoted over the past four seasons, (a 22 per cent chance of going up versus 7.3 per cent for those without the extra funding), compared to twice as likely from 2006 to 2017

• Non-parachute clubs are three times more likely to be relegated to League One (15.9 per cent vs 4.9 per cent), a change from being one-and-half times more likely over the previous period.

• The average value of parachute payments for each club per season has increased significantly from £12.8m between 2006 and 2015 to £29.5m over the last five years.

• The average points gap between parachute and non-parachute clubs increased from +5 in 2017 to +8.6 over the last four seasons

The increased impact of parachute payments on the Championship has been attributed to their rise in value. 

The precise size of parachute payments given to each club varies depending on when they were relegated from the Premier League, but last season a total of £233million was given to seven clubs, averaging out at £33m per club. 

The average revenue of clubs with parachute payments was £53m compared to £14.5m for those without, with Dr Wilson arguing that they are damaging the competitiveness of the Championship.

'Despite what the Premier League say there is clear evidence of parachute payments distorting the competitive balance of the Championship,' Wilson told Sportsmail. 

To compound this the payments force other clubs over-stretching themselves to try to keep up, which leads to financial instability and the danger of them going bust. 

'The whole system is broken. The parachute money should be ring-fenced and redistributed more equally across the whole of the EFL.'

The EFL want parachute payments to be abolished as part of a fundamental reset of the game's finances, with EFL chairman Parry calling on the Premier League to redistribute 25 per cent of their £3.3billion-a-year TV revenues and impose stricter controls on clubs' spending. 

Thanks for this. Depressingly, Parry was quoted last week as saying that there are no current negotiations over parachute payments.

In the absence of an independent regulator I doubt anything will change.

[chinapig]

5 minutes ago, billywedlock said:

There needs to be a legal challenge, and the government not to give the PL an exception ( they have in the past on tv rights) to bypass competition law. Parry is scared the PL will run off and leave the EFL without money. A regulator needs to be appointed as the FA are not fit for purpose. Without European competition it would be easier to do, but the European money pot limits legislation that would be accepted by the fat pigs at the top of our game who eye Euro glory and competing with the other big players. Though it is hilarious that Juve did not get out of the group stages this year. It is all about financial greed not sporting ethics nor glory. 

The question is whether this month's government* is committed to the fan led review. I know nothing about the new Culture Secretary Michelle Donelan but at best I suspect it will be a very low priority, especially when the Premier League starts lobbying her.

*another one may be along shortly.

[ExiledAjax]

34 minutes ago, chinapig said:

The question is whether this month's government* is committed to the fan led review. I know nothing about the new Culture Secretary Michelle Donelan but at best I suspect it will be a very low priority, especially when the Premier League starts lobbying her.

*another one may be along shortly.

The governmental turmoil of the last 6 months has not helped things. However, the FLR has not entirely fallen off of the table. Donelan is at least more informed and more competent than Dorries. She seems slightly more interested in the culture and media rather than the sport part of her portfolio, but she is at least willing to talk. Crouch is also continuing her very good work and not abandoning her pet project at all.

I'm speaking to Fair Game again next week, and expect to hear that the white paper (which has been written but unpublished for months now) will finally be published before Christmas.

Sunak is pretty anti-regulation, but not to the extent that Truss was. Sunak may also see intervention in football as a potential vote winner, but that's a bit esoteric.

It's not dead yet. Lots of people have been continuing to pressure and speak to the politicians even whilst the zeitgeist has been about bigger picture economic issues.

We live in hope and we go again!

Edited October 26, 2022 by ExiledAjax

[Mr Popodopolous]

Seems wages have been sorted now but a red flag all the same.

[Mr Popodopolous]

FFP wise, I did read the regs again and in respect of Covid...

Edited October 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

In short, from what we know Stoke are a serious outlier, as too are Nottingham Forest and arguably Fulham although the waters are muddied by EFL 2019-20, PL 2020-21, EFL 2021-22.

Don't see how you can just accept the word of auditors just like that, otherwise Derby and Sheffield Wednesday wouldn't have been brought to account in the way that they were. Actually it sounds like the League would review it or the new Independent body.

Retrospective and retroactive effect and it indeed being their express intention gives scope for review...the £5m upwards but also for some of the above, a challenge in respect of how much they have put in for!

Edited October 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

If FFP exists anymore, a slightly odd story in Ahead of the Game.

Suggests that WBA are set to borrow £25m from MSD, for January transfers?? MSD loans aren't revenue as such, unless it's a case of taking it beyween lower and higher levels, or maybe the cash flow side of things with ample FFP headroom for the present ie to 2022-23.

[1960maaan]

I'm guessing FFP doesn't translate into French.

[Mr Popodopolous]

Posted about this a little while ago, it seems to be rising all the time- €300m was referenced.

Usually when you fail FFP at UEFA level for the first time, there is a fine but more strictly a Settlement Agreement that contains a breakeven requirement..Failing that can and rightly should lead to further punishment. 

...Errr???

Maybe it's different due to a transition to new regulations but errr???

Edited October 30, 2022 by Mr Popodopolous

[chinapig]

A predictably feeble response from UEFA as at 3 September :

UEFA announced its Financial Fair Play (FFP) overview for the 2021-22 campaign and eight clubs were found to have breached the regulations.

PSG were found to be the biggest offenders when it came to FFP breaches. They have been hit with a staggering €65m bill, which is almost double that of the next greatest offender.

They are forced to pay €10m of that up front while the other €55m is conditional, depending on whether they are able to comply with the target they have been set by UEFA.

https://www.goal.com/en-au/lists/65m-psg-35m-mourinho-roma-uefa-ffp-fines-listed/blt73e44b5e4205117c#csad4c174bcf600c10

[Mr Popodopolous]

Given that they also breached in 2014, they should have escalated to an attempted ban.

What isn't clear to me is, does the fine cover the period to 2020-21 or 2021-22?

If it is the latter, it's pathetic. If it's the former then further sanctions must follow and the same for Juventus. I mentioned the breakeven clause after a breach.

[chinapig]

4 minutes ago, Mr Popodopolous said:

Given that they also breached in 2014, they should have escalated to an attempted ban.

What isn't clear to me is, does the fine cover the period to 2020-21 or 2021-22?

If it is the latter, it's pathetic. If it's the former then further sanctions must follow and the same for Juventus. I mentioned the breakeven clause after a breach.

I should have been clear that it's 2020-21 but given how weak the punishment was (€10m up front for a state owned club is laughable) I don't expect that any further sanctions will be draconian.

[Mr Popodopolous]

46 minutes ago, chinapig said:

I should have been clear that it's 2020-21 but given how weak the punishment was (€10m up front for a state owned club is laughable) I don't expect that any further sanctions will be draconian.

Thanks.

Hmm even with a breakeven requirement ie the principle of reset in T-1 and T-2 like in the EFL, that strikes me as a HUGE breach of this on the face of it.

€30m in losses, losses exceeding reset to zero, profit added to allowable in 2021-22. Well them and Juventus seem in major breach to me, will get Swiss Ramble's analysis to 2020-21 up.

EDIT: €10m was set in stone, further €55m was conditional but a state owned club ffs .

Edited October 30, 2022 by Mr Popodopolous

[Mr Popodopolous]

https://mobile.twitter.com/SwissRamble/status/1524633384584204288/

@chinapig

Strikes me that any FFP loss and this is at the most generous estimate in 2021-22 is a second successive breach, and a major one.

Edited October 30, 2022 by Mr Popodopolous

[Mr Popodopolous]

Been looking again at West Brom.

This looks very reasonable for Covid losses in the 2 years of 2019-20 and 2020-21. Certainly paints sides such as Stoke, Nottingham Forest, Fulham is perhaps another good comparable in a very different light. Both went up and down in the same period, Fulham and West Brom that is.

Think Fulham tried to claim £20.9m in Player Impairment alone in 2020-21 although they haven't broken down their Covid costs more broadly.

Edited October 31, 2022 by Mr Popodopolous

[Mr Popodopolous]

Sure you've seen this already @Davefevs but an excellent article in the Spring about Fulham and their potential P&S position.

https://cottageanalytica.com/2022/04/04/ffc-2020-21-ffp-assessment/

£43-44m in claimed costs, rounding up to £47m what with the Covid protocol costs ie testing etc. That is inclusive of the £21m in Impairment which they may have sought to claim as a Covid cost.

About 3 x what WBA were claiming despite it being Champ-then PL relegation just like them. SwissRamble hasn't done his assessment of the P&S position to 2021 afaik.

I would argue against some of that though, that they (Fulham) had no intention of selling Adarabioyo and Mitrovic to name 2 in any case.

Edited October 31, 2022 by Mr Popodopolous

[Mr Popodopolous]

It's not FFP but...

https://www.dailymail.co.uk/sport/sportsnews/article-11374577/Birmingham-City-charged-rule-breach-unapproved-funding-prospective-buyers.html

The URL is a little misleading, because as it stands they could be charged.

Edited October 31, 2022 by Mr Popodopolous

[Mr Popodopolous]

I should also add for the sake of balance, that Birmingham fans don't seem particularly concerned about this.

Could easily morph into some sort of stalemate where the EFL cannot prove their case(s) ie about possible funders acting as Relevant People on the one hand, plus the possible involvement of someone named Wang Yaohui but a takeover or new relevant people won't be approved until such time as everything disclosed correctly and if required, Disciplinary measures handed down.

Edited November 1, 2022 by Mr Popodopolous

[Mr Popodopolous]

What's the general thinking then about squaring the circle of a £28m reported loss and apparently being on course to avoid a points deduction..

1) I wonder if we have accelerated costs, for example a BIG impairment in 2021-22 which means naturally a drop to the cost base this coming season and indeed helps us moving forward.

2) Or perhaps we have done a provision for Onerous contracts, for unwanted players. Thereby accelerating some of their wages to 2021-22.

3) Or a mix.

4) Clearly there are Covid add-backs but ones that ate large enough to fill the hole in terms of the transfer market would be controversial and I would have thought open to challenge especially down the line.

5) We have our position and the EFL haven't fully ie unequivocally signed it off! Sure they will have ratified the raw numbers but the process by which they are reached?? Well this can be analysed further down the track, FFP isn't an instant assessment necessarily- perhaps an IDC could adjudicate on the validity of the methods used by us and others.

Edited November 9, 2022 by Mr Popodopolous

[WarksRobin]

9 hours ago, Mr Popodopolous said:

What's the general thinking then about squaring the circle of a £28m reported loss and apparently being on course to avoid a points deduction..

1) I wonder if we have accelerated costs, for example a BIG impairment in 2021-22 which means naturally a drop to the cost base this coming season and indeed helps us moving forward.

2) Or perhaps we have done a provision for Onerous contracts, for unwanted players. Thereby accelerating some of their wages to 2021-22.

3) Or a mix.

4) Clearly there are Covid add-backs but ones that ate large enough to fill the hole in terms of the transfer market would be controversial and I would have thought open to challenge especially down the line.

5) We have our position and the EFL haven't fully ie unequivocally signed it off! Sure they will have ratified the raw numbers but the process by which they are reached?? Well this can be analysed further down the track, FFP isn't an instant assessment necessarily- perhaps an IDC could adjudicate on the validity of the methods used by us and others.

It’s a good question and I’m sure we’ll find out in due course. I said before and I’m more convinced now that we are already in breach, the question is by how much

[ExiledAjax]

1 hour ago, WarksRobin said:

It’s a good question and I’m sure we’ll find out in due course. I said before and I’m more convinced now that we are already in breach, the question is by how much

Watch the Fans Forum from about 05:40 in. Gould directly addresses FFP and says as follows:

"Financial fair play has been an issue for all the clubs in the Championship particularly when they're looking at the COVID losses. We were well within limits for the end of season for the end of last season and for this season we're not forecasting any problems either, so a positive report on that one. There were a number of, [well] it's a very complicated calculation that's beyond me, but there were a lot of COVID add-backs that the football league allowed to be taken into consideration. The most important one being the collapse of the transfer market because you'll be aware that you know transfer and sales have been very important to the club in the past and the transfer market effectively died during COVID so that's an add-back that's been allowed through the EFL and therefore the good news is that we are not anticipating any problems this season."

So unless our CEO has lied in public and on video, I think we are fine and you can rest easy.

 

[Mr Popodopolous]

2 hours ago, WarksRobin said:

It’s a good question and I’m sure we’ll find out in due course. I said before and I’m more convinced now that we are already in breach, the question is by how much

I also believe that we are set to exceed limits to this season, based on the £39m, allowable costs, combination of the two seasons and the EFL voted on Covid limits- by how much is the question.

56 minutes ago, ExiledAjax said:

Watch the Fans Forum from about 05:40 in. Gould directly addresses FFP and says as follows:

"Financial fair play has been an issue for all the clubs in the Championship particularly when they're looking at the COVID losses. We were well within limits for the end of season for the end of last season and for this season we're not forecasting any problems either, so a positive report on that one. There were a number of, [well] it's a very complicated calculation that's beyond me, but there were a lot of COVID add-backs that the football league allowed to be taken into consideration. The most important one being the collapse of the transfer market because you'll be aware that you know transfer and sales have been very important to the club in the past and the transfer market effectively died during COVID so that's an add-back that's been allowed through the EFL and therefore the good news is that we are not anticipating any problems this season."

So unless our CEO has lied in public and on video, I think we are fine and you can rest easy.

 

Certainly don't think that anyone is lying as such but possibly different stances or interpretations on each side?

It seems a fairly strange thing to allow given that this was by no means a model that was widely used. 'Investments can fall as well as rise'.

This goes for Stoke and their mix of transfer add-backs plus Impairment, Nottingham Forest and the transfer add-back portion of their FFP and Fulham too given that they seem to (in the PL) have lost £90m!! Albeit £21m of Impairment perhaps allocated to Covid.

Seems open to challenge to me, if just a few clubs are doing it. Hire Independent experts of your own if you are the Football League and see where things go.

Not a short process but I can see (provided that it isn't widespread) these practices from a few clubs raising the hackles of the majority.

I totally get adding back lost season ticket revenue, lost ticket revenue, lost matchday revenue, lost corporate revenue and varied other categories...

Anyway today should be accounts day? Sure it was stated that they would be out in the next couple of weeks!

Edited November 10, 2022 by Mr Popodopolous

[ExiledAjax]

3 minutes ago, Mr Popodopolous said:

It seems a fairly strange thing to allow given that this was by no means a model that was widely used.

But a club-by-club analysis is exactly what happens per the EFL Regulations. You know the Regs well but I'll repeat it here:

For any claim for COVID-19 Costs which in aggregate has an impact of more than £7,500,000 on the Club’s P&S Calculation (acknowledging the combination and averaging of Season 2019/20 and Season 2020/21) The League shall assess whether in order to be excluded from the calculation of Adjusted Earnings Before Tax, any part or all of the claim needs to be separately disclosed:

  (d)  by way of notes to the Annual Accounts; or

  (e)  by way of supplementary information which has been identified and calculated in accordance with such guidance as issued by The League and reconciles to the Annual Accounts or agreed upon procedures and which has been subject to independent audit.

So we will have submitted information under (e) above - Stoke did it under (d) as they expressly included it in their accounts. The EFL then assess it all on a case-by-case basis. You have no idea how many of the 72 EFL clubs have or have not submitted information privately to the EFL under limb (e) above. 

3 minutes ago, Mr Popodopolous said:

Anyway today should be accounts day, sure it was stated that they would be out in the next couple of weeks!

Mate you're like a kid waiting for Christmas aren't you! They should be sometime this week yes. Fans Forum was 13 days ago and Gould said "...accounts are being sorted this week and they'll be logged with Companies House sometime in the next couple of weeks." So yes watch out today or tomorrow.

[Mr Popodopolous]

3 minutes ago, ExiledAjax said:

But a club-by-club analysis is exactly what happens per the EFL Regulations. You know the Regs well but I'll repeat it here:

For any claim for COVID-19 Costs which in aggregate has an impact of more than £7,500,000 on the Club’s P&S Calculation (acknowledging the combination and averaging of Season 2019/20 and Season 2020/21) The League shall assess whether in order to be excluded from the calculation of Adjusted Earnings Before Tax, any part or all of the claim needs to be separately disclosed:

  (d)  by way of notes to the Annual Accounts; or

  (e)  by way of supplementary information which has been identified and calculated in accordance with such guidance as issued by The League and reconciles to the Annual Accounts or agreed upon procedures and which has been subject to independent audit.

So we will have submitted information under (e) above - Stoke did it under (d) as they expressly included it in their accounts. The EFL then assess it all on a case-by-case basis. You have no idea how many of the 72 EFL clubs have or have not submitted information privately to the EFL under limb (e) above.

Ah okay, thanks so limb (e) then. In other words we might or might not know how big our claims, in particular the transfer market related ones, are.

Aware about the club-by-club analysis but unusual methods used by a few seem subject to challenge. How compliance is achieved has proved important down the line...the word of the auditor is and cannot be final in the context of FFP either, one of the cases upheld this principle.

You're right of course, perhaps all clubs are doing it or a lot of clubs...seems the kind of add-back that would be a contentious issue if not though!

9 minutes ago, ExiledAjax said:

Mate you're like a kid waiting for Christmas aren't you! They should be sometime this week yes. Fans Forum was 13 days ago and Gould said "...accounts are being sorted this week and they'll be logged with Companies House sometime in the next couple of weeks." So yes watch out today or tomorrow.

Ha I am a little yes! Been checking it daily a few times a day...

[ExiledAjax]

Just now, Mr Popodopolous said:

Ha I am a little yes! Been checking it daily a few times a day...

Did you know you can set up an email alert from Companies House?

Find BCH Ltd on CH. Click the first green button below - it will say "Follow this company".

You might need to set up an account with CH, but that's really easy.

You'll then get email notifications for all the filings that Company makes.

[Mr Popodopolous]

6 minutes ago, ExiledAjax said:

Did you know you can set up an email alert from Companies House?

Find BCH Ltd on CH. Click the first green button below - it will say "Follow this company".

You might need to set up an account with CH, but that's really easy.

You'll then get email notifications for all the filings that Company makes.

 Cheers will set one up today.

My other contention is, some people (not saying you) say the wage bill is down to £20m this, halved that but I just don't see how at this stage personally. Some players have left and some cutbacks have occured but that seems wildly optimistic to me...or conflating basic wage for playing side perhaps with total remuneration for BCFC Holdings. Accounts should shed some light...

[ExiledAjax]

9 minutes ago, billywedlock said:

It was the owner that said it live on radio Bristol as I have told you numerous times. So the "some people" is Steve Lansdown.  Of course he might have been wrong, probably is if the losses are still at £28m. 

I suspect that as @Mr Popodopolous says, it may be that SL was talking purely about players' wages. Wages in the accounts will cover all staff from Gould and Wells down to the media team intern. That could well account for some disparity in what SL says and the accounts show.

All will be revealed soon enough.