The Championship FFP Thread (Merged)

[Mr Popodopolous]

40 minutes ago, ExiledAjax said:

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.

You beat me to it!

Was making a long post explaining but there was and is definitely a several million gap between Holdings and the Club in isolation...additonally, was SL talking about wages solely or including NI and the other extras?

If we had indeed got the Bristol City HOLDINGS final wage bill down to £20m, or halved I wouldn't be posting about FFP for us as I know that we would be clear without doubt.

It is in the same way that I am questioning whether Stoke truly cut their wage bill as was implied last season to £27m in 2021-22 (their group wage bill was £50m in 2020-21 once NI etc included).

Edited November 10, 2022 by Mr Popodopolous

[Mr Popodopolous]

The other aspect is, I touched upon in my post yesterday.

Acceleration of wages, amortisation or whatever. The latter would make it easier to offload THIS season as costs already front loaded, only the accounts will tell.

I'll give it a go, using baseline calculations and baseline EFL permitted add-backs and assuming no big ticket exceptional items last season or indeed any revision to our accounts for 2020-21 or even 2019-20!

T-2...(2019-20 and 2020-21 averaged) £14m P&S Loss (£38m and £10m losses added and halved to £24m, minus £5m in allowable and £5m in Covid).

T-1...£20.5m P&S Loss. (£28m accounting loss minus £5m in allowable, minus £2.5m in Covid).

Therefore T...

We require a £4.5m P&S Loss THIS season. No more Covid allowances, so basically an accounting loss not exceeding £9.5m if the £5m in allowables is the same.

Or put another way, an improvement of £18.5m once we factor out the inability to offset vs Covid this year.

That's all baseline and contains some assumptions of course.

Edited November 10, 2022 by Mr Popodopolous

[Davefevs]

2 hours ago, Mr Popodopolous said:

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!

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

We might use (d), I,e. Specify in the accounts, but it will be either method or both.

1 hour ago, Mr Popodopolous said:

The other aspect is, I touched upon in my post yesterday.

Acceleration of wages, amortisation or whatever. The latter would make it easier to offload THIS season as costs already front loaded, only the accounts will tell.

I'll give it a go, using baseline calculations and baseline EFL permitted add-backs and assuming no big ticket exceptional items last season or indeed any revision to our accounts for 2020-21 or even 2019-20!

T-2...(2019-20 and 2020-21 averaged) £14m P&S Loss (£38m and £10m losses added and halved to £24m, minus £5m in allowable and £5m in Covid).

T-1...£20.5m P&S Loss. (£28m accounting loss minus £5m in allowable, minus £2.5m in Covid).

Therefore T...

We require a £4.5m P&S Loss THIS season. No more Covid allowances, so basically an accounting loss not exceeding £9.5m if the £5m in allowables is the same.

Or put another way, an improvement of £18.5m once we factor out the inability to offset vs Covid this year.

That's all baseline and contains some assumptions of course.

Yep, £9.5m(ish) loss in 22/23’s accounts +/- “add backs”.  If we’ve put £10m of add-backs in to either this or previous years, then we could lose £19.5m(ish) this season.

Until we know the size of “add-backs” it’s like nailing jelly to a wall.

[Mr Popodopolous]

4 minutes ago, Davefevs said:

We might use (d), I,e. Specify in the accounts, but it will be either method or both.

Hopefully with this new emphasis on transparency, (d) will be the method of choice.

4 minutes ago, Davefevs said:

Yep, £9.5m(ish) loss in 22/23’s accounts +/- “add backs”.  If we’ve put £10m of add-backs in to either this or previous years, then we could lose £19.5m(ish) this season.

Until we know the size of “add-backs” it’s like nailing jelly to a wall.

Agreed on both counts although if it's only an additional £10m in say the Covid years then averaged out then that would give us £5m or so extra to play with this season.

I am still banking on a bit of a 'safety in numbers' approach as if only a few clubs have done it...well I would suggest the EFL would have grounds to commission their own research and thereafter the chips will fall where they may. It's not as if there has been any outright or cast iron confirmation that this method has been accepted as a concept (not talking club specific), hinted at yes...

[Mr Popodopolous]

On the Reading front, sounds like they are complying and that they anticipate that their embargo/Business Plan will be lifted in the summer.

Interesting line by Bowen, proves what I said about favours in the Loan market!!

https://www.getreading.co.uk/sport/football/transfer-news/reading-fc-summer-transfer-window-25350909

Sounds like clubs or agents are being quite accommodating. When are we going to call in some favours in the loan market?

For they are under embargo/Business Plan and have been since summer 2021 yet...

2021-22

Rahman and Drinkwater- Chelsea loan (hugely or wholly subsidised)

Dele-Bashiru- Watford loan

Loaned some young keeper from Arsenal in January too although tbh probably cheaper than Rafael.

2022-23

Rahman- Chelsea (Hugely or wholly subsidised)

Hendrick- Newcastle (Read Newcastle covering 2/3 of his wages).

Some young midfielder, Fornah- Nottingham Forest

Some young or fringe midfielder, Loum- Porto

Last two won't be especially costly.

Edited November 10, 2022 by Mr Popodopolous

[Mr Popodopolous]

Two other observations.

1) When Gould referred to a decline in loss of £10m, I wonder if he was referring to the Club or Bristol City Holdings. I assume it was the latter but if it was the former maybe that loss would be lower than £28m. (Bristol City Holdings is the relevant entity for P&S).

2) I wonder what type of approval we got. Because if it came to a dispute down the track, that could be crucial as Procedural Defences got example Estoppel of various types, Legitimate Expectation among others were thrown out at IDCs which involved Derby and Sheffield Wednesday.

Unsure which ones Birmingham used, without checking.

Edited November 10, 2022 by Mr Popodopolous

[Davefevs]

2 hours ago, Mr Popodopolous said:

Two other observations.

1) When Gould referred to a decline in loss of £10m, I wonder if he was referring to the Club or Bristol City Holdings. I assume it was the latter but if it was the former maybe that loss would be lower than £28m. (Bristol City Holdings is the relevant entity for P&S).

2) I wonder what type of approval we got. Because if it came to a dispute down the track, that could be crucial as Procedural Defences got example Estoppel of various types, Legitimate Expectation among others were thrown out at IDCs which involved Derby and Sheffield Wednesday.

Unsure which ones Birmingham used, without checking.

£38m down to £28m (Holdings) or £33m down to £23m (BCFC) (P&L before tax).  AGL was a loss of £3.6m.

 

[Mr Popodopolous]

26 minutes ago, Davefevs said:

£38m down to £28m (Holdings) or £33m down to £23m (BCFC) (P&L before tax).  AGL was a loss of £3.6m.

 

Thanks. The interesting thing about it is, though the Revenue is undoubtedly higher with the Bristol City Holdings, so too are the losses! Cost base must be higher in the case of Bristol City Holdings than the extra revenue, if that makes sense.

[Mr Popodopolous]

Well forget complicated calculations, Nixon has said he doesn't see it as a great issue for us!!

Until the accounts are out, I might focus ON the pitch for a bit..I assumed they would have been out today however.

Edited November 10, 2022 by Mr Popodopolous

[Mr Popodopolous]

The other bit which I forgot to add, the exact wording by Gould could he interesting or it could just be couching in diplomatic language. Interested to know what we all think.

Certainly not accusing anyone of mistruths but it's not unequivocal or a crystal clear green light either. Carefully chosen words?

"For this season we're not forecasting."

Not forecasting sounds like a bit of a prediction albeit following presumably extensive talks with the EFL.

"Aren't anticipating any problems this season."

Can be taken in at least two ways. Again a bit of a prediction, belief rather than statement of outright fact.

This season could also be taken, though appears not to be in respect of an attempt to deduct in-season or for numbers ending last season.

'We don't believe we've got a points deduction hanging over us."

Again, "don't believe" is not we don't have or haven't got. An element of prediction or forecasting to this.

"We are very confident there will not be a points deduction this year".

"Very confident" and certainty are not the same. Further though it is theoretically possible to dock in the Spring of the existing season, what we are over £39m by the end of May 2023?

What of next year? Ie 2023-24 and a deduction if we exceed limits to 2022-23. Wonder how big the lost transfer revenue that a) We put in is and b) That will be deemed acceptable is?

Edited November 10, 2022 by Mr Popodopolous

[Davefevs]

Mr P, forecasts are forecasts.  They’re made on projections (probably several scenarios to form a likely case) of what is gonna happen in the future…the unknown.  He can’t say “we are definitely ok”.  What if attendances plummeted and revenues drop as a result?  What if a supplier or sponsor or whatever go bust owing us money, we’d have to write it off.

Thats why he’s using the words he is.

[Mr Popodopolous]

That's fair Dave, best to be cautious.

I suppose my angle is, maybe it wouldn't go down well, but why he doesnt just say beyond alluding to it..

"The EFL have signed off these P&S Covid add-backs, both in a numerical and a methodological sense".

I understand words matter of course..what sort of final green light that cannot be reviewed later if any, are we awaiting.

Possibly if a supplier or sponsor went bust we may get some leeway. The forecast v definitive answer I'm looking for is a cast iron claim by us of EFL approval of our methods and numbers albeit perhaps unrealistic?

I suppose the EFL don't really publicly comment but Gould possibly could confirm that the EFL are unequivocally satisfied.

Edited November 11, 2022 by Mr Popodopolous

[Mr Popodopolous]

On a side note, I've just finished reading the Accounts thread from last year when 2020-21 Accounts were released. All 29 pages!

Was quite interesting to note that contrary to say Waconda and their posts we actually posted the biggest losses in 2020-21 of all those at our level that season who released accounts for the year. One or two were close of course but...various reasons for it of course.

[Davefevs]

6 minutes ago, Mr Popodopolous said:

On a side note, I've just finished reading the Accounts thread from last year when 2020-21 Accounts were released. All 29 pages!

Was quite interesting to note that contrary to say Waconda and their posts we actually posted the biggest losses in 2020-21 of all those at our level that season who released accounts for the year. One or two were close of course but...various reasons for it of course.

Yep…but there is still a view that there are many clubs in the same boat as us re FFP.  There aren’t.  That’s not to say others weren’t impacted by covid, but clubs like Cardiff who looked like basket cases, weren’t when I reviewed several years account, e.g we forget they were getting PPs and that meant they were fine.  Clubs like Cov have Cashflow issues, not FFP issues.

I put us in a small group of Us, Reading and Stoke.  Reading of course under embargo anyway.  Add- backs look like they saved us!

Edited November 11, 2022 by Davefevs

[Mr Popodopolous]

31 minutes ago, Davefevs said:

Yep…but there is still a view that there are many clubs in the same boat as us re FFP.  There aren’t.  That’s not to say others weren’t impacted by covid, but clubs like Cardiff who looked like basket cases, weren’t when I reviewed several years account, e.g we forget they were getting PPs and that meant they were fine.  Clubs like Cov have Cashflow issues, not FFP issues.

I put us in a small group of Us, Reading and Stoke.  Reading of course under embargo anyway.  Add- backs look like they saved us!

Agreed on this bit too.

We are one of the worst hit without a doubt, one of the riskiest strategies too. At one stage it was mooted that 7-8 were in the same boat of course...Fulham and Nottingham Forest, maybe even Bournemouth going up helped some or all of these without doubt!

Cardiff and Birmingham depending on how the rules change could be of interest going into next season i.e a full 3 year cycle post Parachutes and just generally post Bellingham and Adams big sales in Birmingham'a case.

Reading it sounds like they are on course to comply but surely a good sale necessary? Ongoing I guess. Stoke? Ongoing!

I'm still a little more cautious with us and other clubs using certain add-backs, not so much for this moment but say the EFL assess all clubs in the Covid period, notice some major outliers and hire Independent Transfer experts to estimate the true hit to the market.

They might come up with a different figure to ours, in the fullness of time and other clubs who tried it. That gap for some clubs could be one between compliance and a 'deemed breach', talking down the line tbh.

Of course the fact we haven't signed any PL or indeed any loanees in 2 years would surely stand us in better stead, our subsequent conduct than say Fulham, Nottingham Forest or Stoke.

[Mr Popodopolous]

Another issue arguably for our defence, I think we ran out of players who could command the top or even medium to top range fees (by our standards at our level).

Summer 2020

Bellingham, Cash, Eze, Benrahma and Watkins. 

Just checked and am still checking and you can add Ramsdale, Ake and Wilson but tbh they were PL players who just had just dropped a division.

Godfrey another but again as above!

Estuapen, Doucoure and Pererya but again PL players who happened to play in a relegated side and Udinese in the case of Pererya.

Summer 2021

Collins and Armstrong.

All went for 8 figure fees, probably more than these did too? If we want to go a little lower Olise?

What did Bogle go for in summer 2020 too?

Edited November 11, 2022 by Mr Popodopolous

[Mr Popodopolous]

Others include Ramsdale summer 2021 (relegated again, big money again), Buendia just ahead of promotion.

Unsure but maybe one or both of Danjuma from Bournemouth and Pereira from West Brom went for 8 figure fees but arguably all of these again PL players who happened to play for Championship sides, especially Ramsdale and Pereira .

Plus January 2021, Rodon to Tottenham, Grant to West Brom for 8 figure fees.

Edited November 11, 2022 by Mr Popodopolous

[Mr Popodopolous]

Putting aside my theories and occasional predictions of doom.

Surely today is accounts day?? Fortnight from Fans Forum or just over. 

Granted technically not needed until end of February 2023 but end of the week...would be strange to submit on weekend??

If all is well and all is signed off as far as possible in respect of our P&S claims I'd be rushing them out.

Edited November 11, 2022 by Mr Popodopolous

[Port Said Red]

16 hours ago, Mr Popodopolous said:

Putting aside my theories and occasional predictions of doom.

Surely today is accounts day?? Fortnight from Fans Forum or just over. 

Granted technically not needed until end of February 2023 but end of the week...would be strange to submit on weekend??

If all is well and all is signed off as far as possible in respect of our P&S claims I'd be rushing them out.

[ExiledAjax]

16 hours ago, Mr Popodopolous said:

Putting aside my theories and occasional predictions of doom.

Surely today is accounts day?? Fortnight from Fans Forum or just over. 

Granted technically not needed until end of February 2023 but end of the week...would be strange to submit on weekend??

If all is well and all is signed off as far as possible in respect of our P&S claims I'd be rushing them out.

Pop, I know you're keen to get your teeth into the accounts. However consider that it is very possible that they're just waiting to see what happens in the match today. I'm not saying that the result today determines Pearson's future, and I'm not saying that no accounts means he's on death row. 

But, I am saying that I think the club would want to deal with each bad story one at a time. The last scenario they want is to publish a £28m loss in all its glory detail on Friday and then sack the manager on Saturday afternoon after a 0-5 home loss for example.

Equally likely is that they just didn't fancy it this week. As you say, technically they have until 28 February next year.

Edited November 12, 2022 by ExiledAjax

[Port Said Red]

48 minutes ago, ExiledAjax said:

Pop, I know you're keen to get your teeth into the accounts. However consider that it is very possible that they're just waiting to see what happens in the match today. I'm not saying that the result today determines Pearson's future, and I'm not saying that no accounts means he's on death row. 

But, I am saying that I think the club would want to deal with each bad story one at a time. The last scenario they want is to publish a £28m loss in all its glory detail on Friday and then sack the manager on Saturday afternoon after a 0-5 home loss for example.

Equally likely is that they just didn't fancy it this week. As you say, technically they have until 28 February next year.

It's true, you wouldn't want any additional distractions from today's game. Monday could be either a day to give us something to brighten our day or to bury bad news.

[Mr Popodopolous]

I'm still highly interested in how the transfer add-back argument as I really doubt it.

Us, and some others: "We believe that the collapse of the transfer market has cost us £x. We ate into and offset losses through profits on disposal which enables us to spend more".

EFL: "Markets go down as well as up".

Us, and some others: "But Covid..."

EFL: "A risky strategy to be relied on- manager of one of the sides even labelled it as 'bonkers'.

"Why should it be, or Impairment to be excluded from that and subsequently the amortisation that was assigned to Covid from future years, be included in P&S calculations.

"Profits on disposal of fixed assets are not anymore. Neither are revaluation reserves- so why should although football related, the hypothetical 'add-back' of lost profits in the transfer market be'?

Objectively it should go to a IDC to determine the validity of the issue. We and perhaps others present our numbers WITH transfer add-backs, the EFL without and it should be determined there.

Either that or the EFL charge us and others with excess losses if excluded add-backs of transfer revenue take us over.

For example if our losses without showed a £10m overspend it's a 'deemed breach' and you charge on that basis. IDC etc can determine the actual issue.

Edited November 12, 2022 by Mr Popodopolous

[Davefevs]

9 minutes ago, Mr Popodopolous said:

I'm still highly interested in how the transfer add-back argument as I really doubt it.

Us, and some others: "We believe that the collapse of the transfer market has cost us £x. We ate into and offset losses through profits on disposal which enables us to spend more".

EFL: "Markets go down as well as up".

Us, and some others: "But Covid..."

EFL: "A risky strategy to be relied on- manager of one of the sides even labelled it as 'bonkers'.

"Why should it be, or Impairment to be excluded from that and subsequently the amortisation that was assigned to Covid from future years, be included in P&S calculations.

"Profits on disposal of fixed assets are not anymore. Neither are revaluation reserves- so why should although football related, the hypothetical 'add-back' of lost profits in the transfer market be'?

Objectively it should go to a IDC to determine the validity of the issue. We and perhaps others present our numbers WITH transfer add-backs, the EFL without and it should be determined there.

Either that or the EFL charge us and others with excess losses if excluded add-backs of transfer revenue take us over.

For example if our losses without showed a £10m overspend it's a 'deemed breach' and you charge on that basis. IDC etc can determine the actual issue.

I agree with all of that, but…

…you may recall right back at the start there was certainly talk at EFL level about Covid Allowances not just being lost income for lost Gate income and the like, but also if clubs could prove they’d lost out on transfer revenue then that might also be allowed.

I remember writing about Diedhiou at the time and how covid might’ve stopped us selling him, and therefore by the time we got past covid and fabs returning, clubs no longer had the cash to buy him, meaning we lost out.

Personally, like you, I find it flaky, but there at least is an argument for “lost transfer profit”.  I don’t think it should be the same levels of Stoke’s £40m, but there is some reality to it.

[Mr Popodopolous]

Just now, Davefevs said:

I agree with all of that, but…

…you may recall right back at the start there was certainly talk at EFL level about Covid Allowances not just being lost income for lost Gate income and the like, but also if clubs could prove they’d lost out on transfer revenue then that might also be allowed.

I remember writing about Diedhiou at the time and how covid might’ve stopped us selling him, and therefore by the time we got past covid and fabs returning, clubs no longer had the cash to buy him, meaning we lost out.

Personally, like you, I find it flaky, but there at least is an argument for “lost transfer profit”.  I don’t think it should be the same levels of Stoke’s £40m, but there is some reality to it.

It's never been confirmed crystal clear whether it's been allowed or not and this is part of the problem really.

£30m in 2 or 3 seasons feels toppy, Stoke's is off the charts and surely if that flies then so does ours, Fulham Impairment, Nottingham Forest etc.

There was an article in March the day that Nottingham Forest posted £30-35m in losses for 2020-21 that said the EFL were considering it.

Funng how it said they were considering it when Nottingham Forest posted similar...had it been just us I wonder??

[Mr Popodopolous]

I don't see what would be wrong with a list of some kind on EFL website, detailing criteria:

*Gate receipts foregone and refunded

*Season ticket revenue foregone and refunded

*Matchday revenue foregone

*Commercial revenue foregone and refunded

*Corporate revenue foregone

*Events revenue foregone and refunded.

Anything else?

[Davefevs]

It’s worth remembering that “transfer profit” is part of the P&L before tax figure:

and therefore the club will budget for making some money here.  Or at least they will’ve done pre-Covid.  As part of the FFP submissions some of those years T, (and maybe T+1 and T+2) will include estimates of overall P&L, which in City’s case, maybe included a slug of Transfer Profit.

I think there us a huge difference between City estimating for transfer profit and then covid wrecking it (even though I agree the strategy for City was too high a risk) and someone like Birmingham who projected a sale of Che Adams and then didn’t sell him.

I think it’s time to just wait for the accounts to come out.  Then, we can work out for ourselves how lenient the EFL have been.

[Mr Popodopolous]

This is a very good spot @Davefevs 

Yes we may have included it in our estimates for FFI. Definitely not the same as Birmingham with Che Adams.

I remember debates over Derby and the mooted Revaluation Reserve being added to the profit for 2017-18 though and this same sheet was cited.

There is no box for 'added-back' transfer profits as there wasn't for Revaluation Reserve. I think it's still debatable as to inclusion for us and others. Come to that, Profit or Loss on Fixed asset is also appearing in Profit or Loss before tax.

Neither are recurring or can be guaranteed. I'm open minded as to this issue though.

[Mr Popodopolous]

Checked the site and CH just now.

We still have another 106 days but no movement as yet. I definitely won't update daily but kinda starting to give up on seeing them this side of December.

I rather assumed that they would have been out within a fortnight of the Fans Forum (which was on Thursday 27th October 2022).

In a truly idealistic scenario, before the Fans Forum so that fans could in fact have raised more specific points but there are limits.

Edited November 14, 2022 by Mr Popodopolous

[Mr Popodopolous]

I restate my case, if all is well and all is signed off definitively or at least as far as possible with the Football League.

For want of a better term, publish and be damned. Can't be that bad, have an idea of the losses and have an idea of our argument pertaining to transfer market add-backs.

Edited November 14, 2022 by Mr Popodopolous

[Davefevs]

7 minutes ago, Mr Popodopolous said:

I restate my case, if all is well and all is signed off definitively with the Football League.

For want of a better term, publish and be damned.

Don’t forget we can publish accounts at any point until the 28th Feb 2023, FFP Reporting for cycle ending 22/23 will be based on projections submitted in March 2023.

So even if we publish tomorrow, EFL can’t really confirm anything until March, apart from if 21/22s are so bad we are retrospectively busting the cycle that ended last season, which we know a £28m loss won’t do.  So don’t expect our accounts to be issued with any statement from the EFL, the cycles aren’t aligned.