The Championship FFP Thread (Merged)

[Mr Popodopolous]

Looking again at the PL and their version. In their handbook.

It surely can't be the case but maybe it is...that flies in the face of everything at UEFA and level if true but surely they don't snap back to  3 year monitoring again just like that.

The combined average, you can't just benefit from it and then just shelve it. PL handbook for 2022-23 does not make it clear though.

[Mr Popodopolous]

I'll keep my FFP related stuff on this thread I think while it is hypothetical.

Still don't see anything so far in FRC Covid-19 amendments that validates add-backs of that (transfer revenue) nature. Dont see anything that forbids it either.

Exclusion of costs for Covid 19 is an odd one, thinking Player Registration Impairment...seems dubious to me from an FFP perspective still.

The crux is, are internal requirements for club to League reporting bound by FRS 102 and other such regulations?

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

Take this scenario.

Club A are at £40m in P&S losses to 2022-23 before the impact of Covid-19 is factored in.

The EFL add-backs for all are £5m, £5m and £2.5m. This falls within that. P&S Loss to 2022-23 is £32.5m.

Club B are projected to be up at say £64.5m before the impact of Covid-19 is is factored in. A huge overspend.

Club B applies the League voted on limits of £5m x 2 and £2.5m applied. This therefore drops it down to £57m.

Club B then claim for £30m in lost transfer revenue across 3 years in addition.

£10m, £10m and £10m. Computes our at £20m.

Minus say £3m in appropriate levies, remaining book value etc. £18m when 2019-20 and 2020-21 averaged all adds up to £27m.

Their P&S return is therefore around £39m.

Club B have therefore been rewarded greatly, given a huge reprieve for speculation as to lost gains.

In no way is that equitable for the majority in general or Club A in particular.

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

I'm playing Devil's Advocate a bit here but the case in favour of Club B is?

Or even better, Club C are at or below £39m even prior to Covid add-backs

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

The other bit to add.

Club D have come down from the PL in 2017-18, first season back at the level in 2018-19 and have usual FFP allowable costs of £9m per season. The combined average etc takes it in...

2017-18- £30m pre-tax loss

2018-19- £15m pre-tax loss

2019-20 £88m pre-tax loss

2020-21 £9m pre-tax loss

Combined average of 2019-20 and 2020-21 therefore £48.5m.

£93.5m is the adjusted pre-tax loss.

2017-18.. £21m loss

2018-19..£6m loss

2019-20 and 2020-21..£39.5m loss (average)

£66.5m.

Typical Covid add-backs of applicable to 2019-20 and 2020-21 of £5m x 2 Averaged.

Falls to £61.5m.

However said club have argued £56m in the 2 seasons.

Is that fair on Clubs A and C especially? Or does it maintain confidence in the League?

Only fair solution is a Disciplinary Commission or Review Hearing for the principles underpinning B and D IMO.

Only an Independent body can adjudicate on this.

For Clubs A and C have cut their cloth accordingly and are not reliant on a potentially speculative add-back or cost allocation.

Clubs B and D were on course to breach- and in the case of B, might achieve compliance through hoped for but certainly unconfirmed hope. Club D get outrageously fortunate as they perhaps had no such plans in place...and are able to big bath or seek to big bath their losses in with Covid.

Possibly needs referral.

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

Last bit.

If Clubs B and D have a good and winning argument, then maybe they should welcome the transparency of a referral to adjudicate on the principle.

Justice needs to be seen to be done etc.

The sanctioning guidelines also serve a purpose should there be a case to answer:

1) They punish the overspending club(s) should any be found in breach.

2) They vindicate those who cut their cloth and stuck to or below the Upper Loss tariff. The majority I would expect.

(3) They serve to deter future breaches by clubs, as the punishments might be quite substantial.

(4) They maintain or restore confidence in the League.

Edited November 26, 2022 by Mr Popodopolous

[Mr Popodopolous]

One more note. Talk that FFP rules might change very quickly.

Plus found the 50 pct wage bill fall claim in a little more detail. Might be interested @Davefevs  ?

This presumably would be claimed as 50 pct down from when he took over.

He took over in 2019-20 and their wage bill that season was £54m.

Half of that is £27m...considering that we've been able to offload only £5m or £6.5-7m in a year depending on Holdings or Club is is one hell of a fall...and actually quite unprecedented in terms of any club seeking to bring back into line at this level.

Hell their wage bill in 2020-21 alone was £50m. Down by £23m either last season or this. That would explain a lot I guess.

The impairment however is very dodgy in an FFP context as it helped to achieve this.

I am still not convinced that we and Stoke are being treated equally under these regulations either. Or perhaps more accurately, Stoke and the majority.

Edited November 27, 2022 by Mr Popodopolous

[Davefevs]

I wouldn’t read that to mean O’Neill brought it down 50% from £47m…as I said before much more likely it’s the halving of the £94m, and the journo isn’t really clued up.  I will happily eat my hat if it’s now less than £25m!

Does signing Dwight Gayle on a free transfer, coupled with the other signings made look like a strategy to half the wage bill?

Here’s their current squad:

okay, it doesn’t look like a £47m wage bill, getting rid of Joe Allen, Benik Afobe, Steven Fletcher, etc will have helped for 22/23’s accounts, but I await their 21/22 accounts to see the baseline the journo is using.

 

[Mr Popodopolous]

3 hours ago, Davefevs said:

I wouldn’t read that to mean O’Neill brought it down 50% from £47m…as I said before much more likely it’s the halving of the £94m, and the journo isn’t really clued up.  I will happily eat my hat if it’s now less than £25m!

Does signing Dwight Gayle on a free transfer, coupled with the other signings made look like a strategy to half the wage bill?

Here’s their current squad:

okay, it doesn’t look like a £47m wage bill, getting rid of Joe Allen, Benik Afobe, Steven Fletcher, etc will have helped for 22/23’s accounts, but I await their 21/22 accounts to see the baseline the journo is using.

 

Agreed.

Seems a bit too good to be true doesn't it Dave. Because for one they let quite a few go in summer 2021 but some of these were already out on loan- surely they didn't forego wages in summer 2021 and the fact they were out on loan in 2020-21 several of them should have yielded wage coverage to some extent by the loaning club.

Then the players they signed:

Wilmot

Vrancic

Surridge

All permanent.

Then

Ostigard and Sima from Brighton summer 2021

Sawyers from WBA, although his wage may habe fallen with relegation.

Outbound activity in January helps...

Ostigard back to Brighton

Davies, Baath and Surridge all go.

Ince high earner out to Reading loan, Doughty loan to Luton probably not so much.

Otoh they loan in:

Harwood-Bellis- Man City

Bidace- Aston Villa

Maja- Bordeaux

Moore- Reading. £30k per week btw.

Buy Lewis Baker from Chelsea.

Yet they plead poverty, the fans cry about unfair spending rules.

In certain areas they do remind me of Derby. In other respects very different yes.

Edited November 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

I've had a certain negative slant towards them personally speaking since November/December 2019 when they publicly declared that the spending rules were not to their liking and that they think they should be changed or words to that effect.

If I was the League it can't be about biases but in an ideal world, I'd be quite keen to go at them over FFP.

Edited November 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

Had a quick look on FFP news and a Q&A with an Everton journo in the Liverpool Echo suggested that there was still a grey area in respect of FFP.

What linkage to us? None...save I woukd have thought for the possibility of the Governing bodies- be it PL and Football League, UEFA or whoever still scrutinising Covid season numbers.

On a side note, there certainly should be a grey area for Everton with respect to FFP given the size of their losses and the sheer scale of their add-backs, in particular the remainder net of the £82m in revenue and potentially Covid costs

Arguing for £41.6m in Covid impairment across the two seasons and £11.6m in provision for onerous contracts.

That Is another £53.2m.

Their final argued number was £170m, perhaps rising to £220m. That would be £88-138m in 2 seasons relating to the market etc.

Edited November 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

Misread a bit of our SwissRamble analysis. His basic numbers seem to indicate £7m per season for FFP allowances but then again he has a tendency- sensible for analysis, to round up and perhaps down.

Could be that the precise numbers fall somewhere between £6-7m per season.

Plus been doing some further reading on Everton. Can you just make up your own numbers for Covid or something??

Seen it suggested that:

A) The £170m in claimed losses etc goes across the 2 main seasons.

B) With £40m in 2021-22 and £10m this season.

C) Or alternatively that £50m solely into last season.

Remember all but £82m of this is very speculative. This is hugely egregious and the PL just seem fine with it.

I'd absolutely endorse referring Everton to a Disciplinary Commission. Premier League should have done so in summer 2021 in order to make a determination as to what the true Covid losses should be and then make a decision whether to charge or not.

Edited November 29, 2022 by Mr Popodopolous

[Mr Popodopolous]

On the other hand given the officiating failures against in the last few years maybe this is the bit of luck that we need.

They are two very different issues all told but imagine if we got the abysmal officiating and done for FFP. Wouldn't be many other unluckier clubs around.

Edited November 29, 2022 by Mr Popodopolous

[Mr Popodopolous]

Had another quick look at Fulham, nothing for last season yet of course.

Remember they are operating at £72m as their Upper Limit owing to their yoyo status. (£35m Upper Tariff PL, £13m this level- combined average of £35m x 2 and £13m x 2 /4 x 3 =£72m).

There are also Promotion Bonuses to consider. We also don't know if sticking £20.9m in Player Impairment as a Covid excludable is valid under FFP, which is what they did in 2020-21.

Pre tax losses

2017-18- Championship, £45,241,000

2018-19- PL, £20,180,000

2019-20- Championship, £48,112,000

2020-21- PL- £93,483,000

Is that £207m in 4 years??

Or adjusted for the 2 Covid years as 1, that's £136,218,500.

We already know they intend to include £20.9m in impairment as an excludable cost for Covid, wonder what else they have been arguing. They do though have a Category One academy- seen it suggested as being £5-10m per season.

IF stuck solely to £5m x 2 and £2.5m I think they would be in serious danger of a breach but again we have no idea what they are arguing for beyond the £20.9m in impairment.

Edited November 30, 2022 by Mr Popodopolous

[Davefevs]

6 minutes ago, Mr Popodopolous said:

Had another quick look at Fulham, nothing for last season yet of course.

Remember they are operating at £72m as their Upper Limit owing to their yoyo status. (£35m Upper Tariff PL, £13m this level- combined average of £35m x 2 and £13m x 2 /4 x 3 =£72m).

There are also Promotion Bonuses to consider. We also don't know if sticking £20.9m in Player Impairment as a Covid excludable is valid under FFP, which is what they did in 2020-21.

Pre tax losses

2017-18- Championship, £45,241,000

2018-19- PL, £20,180,000

2019-20- Championship, £48,112,000

2020-21- PL- £93,483,000

Is that £207m in 4 years??

Or adjusted for the 2 Covid years as 1, that's £136,218,500.

We already know they intend to include £20.9m in impairment as an excludable cost for Covid, wonder what else they have been arguing. They do though have a Category One academy- seen it suggested as being £5-10m per season.

*** promotion bonuses aren’t anywhere in the rules, although they used to be!  Maybe in some separate guidelines somewhere.

I find their accounts astonishing!

 

 

Didn’t exactly sell off their assets in the summer before 20/21!

Their accounts for 21/22 are likely to be very interesting!

[Mr Popodopolous]

Agreed on this and well highlighted for the key bits.

It is usually done on relegation, that kind of impairment- has been done by a lot of clubs but will check the accounts again but am sure they have sought to attribute it to the impact of Covid-19, however this strikes me as being very convenient

Promotion Bonuses I've always taken as red that these are excluded. If they were not then most sides would exceed P&S limits upon promotion. Plus the fact that they are only payable in the event of promotion being achieved- would be interesting to know for sure though.

Fulham and their 2021-22 accounts? A pre-tax loss of £60m or above wouldn't at all be surprising. Unsure if that's inclusive or exclusive of promotion bonuses.

Worth noting too that a bit of Parachute Year 1 was deferred into 2020-21 due to timing differences. Only clubs whose accounts ran until the end of July 2020 would account for it all in 2019-20. It all computes out in the end though.

[Mr Popodopolous]

https://www.independent.co.uk/sport/football/reading-players-staff-salary-delay-b2237177.html

Not FFP and I assume it's cash flow rather than anything but one maybe to keep an eye on. Says it'll be resolved imminently.

[Mr Popodopolous]

Interesting take from Ince. He accepts the punishment, says that if you overspend it rightly has consequences etc.

He also suggests that the underlying intent of the embargo and or Business Plan is to relegate a club. Not really heard it mentioned in those terms before.

We don't know what most clubs have stuck in for their Covid claims including Reading but do wonder how compliant Reading might be to this season?? £13m FFP Loss seems to be what they were limited to under the terms of their Business Plan, no notable sales so far this season.

They have lost a clutch of players such as Laurent, Rinhamota, Swift and Puscas has been loaned out.

Rahman return on loan was free of charge but they've also added on loan players such as:

Hendrick- Loan (Newcastle)

Loum- Loan (Porto)

Fornah- Loan (Nottingham Forest)

2nd is a fringe player, 3rd is young and Newcastle are reportedly covering two thirds of Hendrick's wages but it does make me wonder why we cannot tap into contacts and exploit some favourable deals.

Don't forget that Granovskaia and her friendship with Kia Joorabchian who was/is also friends with Dai Yongge got them Rahman x 2 loan spells for free and Drinkwater also free of charge last season.

Rafael left in January permanently and they have a full season rather than half of Puscas off the books this year which helps...

...Ince however would be permanent albeit surely lower wages than last season when he joined on loan from Stoke. Moore woukd be back- full wages whereas they offloaded him for several months last year and unlike the sale of Olise no transfer profit of note yet.

I expect that their turnover shouldn't exceed £20m.

EDIT: If they brought their losses dowm last year to below £13m, then by way of example say to £11m in FFP terms then they could lose that surplus this year- a £15m FFP loss.

Edited December 2, 2022 by Mr Popodopolous

[Mr Popodopolous]

Plus Arsenal's results out, for the club at least.

Have attributed £2m to Covid-19 for 21-22. Puts Everton and their £170-220m into perspective!! (£122m across the 3 years for Arsenal iirc).

Really am growing to dislike Everton, spineless Governing body and a club chancing their arm. Entitled fans too.

Edited December 2, 2022 by Mr Popodopolous

[Davefevs]

 

[Mr Popodopolous]

Interesting. I'd be surprised if it had reached EFL approval stage or near it given the lack of transparency- for example whoever wins the stadium still hasn't released the Birmingham City Stadium Ltd accounts for 2020-21 season (should be rent payable on the 2019 transaction).

That is a piece of the jigsaw. These accounts eere at best due at the end of June 2022- subject to Covid-19 extensions otherwise the end if March 2021.

Birmingham Sports Holdings- as per CH anyway- no longer own that company. 

Achiever Global Group Limited- whoever they are- are now listed as being in control.

Oh and the auditors quit in late August 2021. Although they'll have new ones.

Edited December 2, 2022 by Mr Popodopolous

[ExiledAjax]

2 hours ago, Davefevs said:

 

The statement is pretty clear:

"Following several months of due diligence at Birmingham City Football Club, Maxco has decided not to proceed with the purchase of the shareholding and stadium of BCFC at this time," the statement said.

"In light of the due diligence we attempted to renegotiate the terms of the original agreements to reflect our understanding of the current business status, but we could not agree revised terms with the current owners.

"We have been left with no alternative and are bitterly disappointed as we know what this club means to the community and the very loyal fanbase.

"We really hope that BCFC finds a owner who is as passionate about the club as we are."

In plainer English "it was even worse than we thought it might be and they wouldn't reduce the price"

[Davefevs]

Looks like Derby paid Boro £2.7m

 

[Mr Popodopolous]

Plus they lost £19.459m last season.

Fine for P&S to 2021-22 and the two sales this summer mean they'll be fine to 2022-23 IMO. Not looked in depth however.

That £2.7m seems par to me- at best they could have been guaranteed one play off semi final leg and at a push, TV money for 2 or 3 games too.

I don't understand the £40m claims that were in the press etc- PR from Quantuma or Gibson going in big to try and force a sensible negotiation? Or just rubbish basically.

Edited December 6, 2022 by Mr Popodopolous

[Mr Popodopolous]

Bet365 (which shows Stoke until 30th March 2022) should be out by the end of the year or early 2023. So too should Venkys London Limited (Blackburn- end of March 2022), Birmingham and Millwall. We already have a fair idea about Birmingham based on the HK results although a few differences probably.

Talking of Birmingham, still no sign of their Birmingham City Stadium Ltd accounts- that ran until June 30th 2021!! Covid extensions meant that went until June 30th 2022 due date wise but...

Under apparent new ownership too.

That last bit is old news of course but the stadium was:

1) 'Sold' in May 2019 to the Holding company. Think someone else who owned the club officially or vice versa. FFP solved, rent arrangement kicks in- Adams and Bellingham also go for FFP.

2) Rent and indeed sale and leaseback don't appear in the consolidated BSH results to 2019, neither would rent due on the sale and leaseback...all cancels out at the Hong Kong consolidated level of course but...

3)...Speculation is correct- stadium sold and leased back. All within the BSH group. Rent appears on the UK level but not the consolidator in Hong Kong. £22.8m sale price iirc, £1.25m per season rent.

4) In 2021 the stadium company was sold to the below. Speculation as to wherher it is via a proxy or truly different, nobody really knows. Club won't benefit save for maybe working capital which is irrelevant for FFP calcs.

Kang Ming Ming appears to own Achiever. Was 75 pct not 100 pct of the stadium company that was sold too apparently.

https://almajir.net/useful-information/others/achiever-global-group-ltd/

Oriental Rainbow Investments appear to own the other 25 percent. Vong Pech is the guy there.

Unbelievably on paper at least, Birmingham neither own their ground nor the stadium company. Same goes for BSH in Hong Kong, they own neither! What a mess??

Edited December 6, 2022 by Mr Popodopolous

[Mr Popodopolous]

£72m is the Upper Loss Limit for Bournemouth.

Their aggregated losses before Tax in 2018-19, 2019-20 and 2020-21 were before rounding £75m.

Clearly 2019-20 and 2020-21 aggregated and halved. Think that came to a pre tax loss of £32m and £21.5m.

This is before a) FFP allowances- they have a Category 3 Academy though and no major infrastructure- £4-5m per year maybe in allowables?

That £12m profit was inflated for 2 reasons- a) The delay to the season meant some TV income from PL was recognised in 2020-21 and b) £50m in profit on disposal of players.

Unlike say Fulham, no big claim of Covid Impairment. Losses may be £15m in 2 years? Hard to say.

Their 2021-22 accounts could be interesting albeit certainly not as much as Fulham.

On a side note, would make some sense from a Governing body if the real big pre tax losses by clubs were honed in on first and then work way through.

Wonder about Nottingham Forest too for their new starting point was a £25m pre tax loss in 2018-19!! Albeit they have stated their compliance with all financial regs.

Edited December 7, 2022 by Mr Popodopolous
Got it wrong- they made a profit of £17m in 2020-21!

[Mr Popodopolous]

I should also add that if some clubs have notably larger losses than others, the EFL might naturally hone in on their Covid numbers set against their loss limits.

For example, Stoke recorded pre tax losses of £142m to 2020-21 from 2017-18. 1 PL season, 3 Championship- that would be £96m if on a 4 u3sr period and with the Covid averaging that is £93.5m to 2020-21 vs an Upper Loss limit of £61m or maybe with the add 4 Upper Tariff up /4 x 3.

Alternatively to 2021-22, the position is:

£112m in 3 years and counting between 2018-19 and 2020-21.

Or £63.5m and counting to 2020-21 once the aggregation and halving kicked in, in the period of 2018-19 and 2020-21. Cannot be bothered to go in and round etc.

By way of comparison we were:

2017-18 to 2020-21

£63m in total pre tax losses.

Once the aggregation and halving kicks in, we were at £39m.

2018-19 to 2020-21 £38m.

Indeed to 2021-22 we were £66.5m in total and once aggregation and halving kicked in, £42.5m.

Better than Stoke on a great many metrics as a very basic starting point. We await their 2021-22 accounts with some interest..

City specific, if we come out again  for a 2nd year running post Covid with one of the worst sets of figures ie 2021-22 following on from 2020-21 where we were the worst and the 3rd worst for Operating Losses, the EFL would be quite entitled to ask why and pertaining to the validity of our Covid losses ie the transfer add-backs if indeed we have used them.

Edited December 7, 2022 by Mr Popodopolous

[Mr Popodopolous]

Having looked into it a bit further, a Bournemouth fan who has forecasted and does forecast their finances anticipated a pre tax loss of £40m last season.

That would be within P&S limits of £72m probably, he certainly thinks so and I think it might- rather depends on Covid and how much they truly lost.

Pre tax figures if he's right:

2018-19 -£32m

2019-20 -£60m

2020-21 £17m

2021-22 -£40m *Forecasted

£125m in pre tax losses but...

Adjusted for the Covid roll-up.

2018-19 -£32m

2019-20 and 2020-21 -£21.5m

2021-22- -£40m *Forecasted

£93.5m as a starting point but...

A) What are their usual allowances? Not so high IMO- remember that they don't have much in the way of infrastructure, didn't are much in the PL and have a Category C Academy.

Wouldn't surprise me if £4-5m per year only.

B) Covid losses and costs? £15m in 2 years perhaps? Plus the £2.5m in 2021-22. A rebate to the PL would be a factor, all PL clubs had to do this.

C) Would that forecast be inclusive of or before Promotion Bonuses? If indeed they were a factor!

Suggested too a while back that Parker basically managed to persuade a lot.of their players to take a 20 percent pay cut when he joined. That would help any club a lot...would free up some headroom for sure.

In conclusion, I think that they're probably within the £72m but it could be interesting.

[Davefevs]

22 hours ago, Mr Popodopolous said:

City specific, if we come out again  for a 2nd year running post Covid with one of the worst sets of figures ie 2021-22 following on from 2020-21 where we were the worst and the 3rd worst for Operating Losses, the EFL would be quite entitled to ask why and pertaining to the validity of our Covid losses ie the transfer add-backs if indeed we have used them.

Without projecting numbers for this year, it really shows two things:

1. our costs are way too high
2. we spent too much during boom time without any thought for boom time coming to an end

Ive spent some time compiling some basic numbers for some of the Champ clubs, those who’ve published 2022 accounts (us, Boro, Norwich), others who might be similar sized to us (Blackburn, Brum, QPR and Swansea plus Stoke…although they are bigger currently), or clubs we should aspire to (Coventry and Millwall), at least in the costs stakes!  I used just BCFC Ltd for us, because I’m really looking at the football cost side.  I know it’s not that straightforward, but I thought it was a better starting point.

Its quite painful to prepare and see the results.

Here’s what I’ve done so far.  Might need to zoom in.

 

[Davefevs]

Here you go Mr P.

Income v P&L

Costs v P&L:

Squad Value / Ins n Outs:

Most clubs (orange) are 2021, just 3 teams are 2022 accounts (blue). Wigan overdue.

Edited December 9, 2022 by Davefevs