The Championship FFP Thread (Merged)

[Mr Popodopolous]

18 minutes ago, downendcity said:

Yet, when the latest incarnation of ffp came into being wasn't this one of the big issues i.e. by requiring clubs to provide projected accounts by the deadline (March?) any club breaching could be penalised during the same season. This would the prevent a club benefitting from throwing financial caution to the wind and gaining promotion or a play off place by overspending beyond financial limits, thereby gaining an advantage over their rivals.

Of course, we now know that Derby's situation drove a coach and horses through the EFL's pretty inept set of financial rules, even though, thanks to Mel Morris,  they went on to prove exactly why the financial rules were there in the first place.

It's interesting to note that Juventus have just been given a 15 point deduction half way through the season, notwithstanding that the club might mount a legal challenge. I'd hoped that following the Derby fiasco the EFL might have grown some balls , so, if the Stoke situation pans out badly for them, it will be interesting to see if they have!

I remember that well. That was the plan.

Derby did drive a horse and cart through what I would argue more was a case of how they were upheld. Not being docked points for the act of refusal to submit is a weak point without doubt, pretty sure they refused to submit in 2021 and definitely to CH for a good 2 or 3 years. Plus the League had to prove the accounts were incorrect after the previous executive didn't bother to particularly bother with challenging the amortisation etc. That took some nailing down!

I'd like to see a process whereby if a club are set to breach then the deduction is applied there and then, and then the club can appeal- if it goes to an LAP then that can be sorted by the summer probably. Perhaps the reasonable opinion of the League should be the basis for sanctioning followed by appeal to LAP.

The Stoke situation will be one to watch, possibly Reading too given the suspended deduction linked to a few conditions. The Juventus sanctions approach I do like.

The problem there is that if that applies to Stoke (nothing in the public domain that suggests it does) then maybe it applies to a clutch of clubs and depending on what is and isn't accepted, maybe our arguments about the post Covid market will also be open to challenge!

[Hxj]

4 hours ago, Mr Popodopolous said:

I'd like to see a process whereby if a club are set to breach then the deduction is applied there and then, and then the club can appeal- if it goes to an LAP then that can be sorted by the summer probably. Perhaps the reasonable opinion of the League should be the basis for sanctioning followed by appeal to LAP.

I think that that would be a recipe for chaos.

 

[Mr Popodopolous]

8 minutes ago, Hxj said:

I think that that would be a recipe for chaos.

 

Seemed to happen with Juventus?

Either way I take thst point but if a club gambles and gets up, even if a deduction follows them up at worst it's £100m of TV money, plus 2 years of Parachute Payments- £80-90m? Plus an extra £22m in FFP headroom.

The League I thought have the theoretical right to hand down a deduction for an in-season breach based on Projections, Future info etc?

Edited January 22, 2023 by Mr Popodopolous

[Mr Popodopolous]

Will expand on my point a bit.

1) Using past precedent the sliding scale can give a guide.

2) Projections in March can tell whether over, compliant or under.

3) Problem I guess is, whether a club may rectify by end of May/end of June- they are bound to have something to tell the League in March.

4) Future Financial Information and or motoring requirements can be a gamechanger.

5) E.g. in T-2 for a club, an aggregate adjusted loss projected within 2 years of £49.1m...that's a £10.1m overspend and an 8 point deduction iirc. Possibly up a bit or down a bit based on conduct and the trajectory of losses.

6) It is therefore incumbent on the club to get their ducks in a row by T+2 when the Projections go in- any kind of suspended deduction to kick in by T+2 if financials still remain over.

It's not perfect but there is an appeal system and surely it is largely the clubs fault if they fall foul in March.

It would throw a League table into disarray of course.

Edited January 23, 2023 by Mr Popodopolous

[Mr Popodopolous]

Good article about the Juventus 15 point deduction for financial irregularities.

https://www.espn.co.uk/football/blog-marcottis-musings/story/4858715/explaining-juventus-mess-what-they-did-wrong-and-what-it-means

I think it is fair to say that transfer add-backs for FFP would be deemed ropey in Italian football but then again Juventus is a listed company over there which brings a while new level of scrutiny as it would here.

[Mr Popodopolous]

Little bit more. Reading are set to meet the terms of their Business Plan apparently.

Signed loanees, yet player remuneration successfully restricted to £16m?

Targets on wages, FFP losses, amortisation and player sales- who have they sold of note since summer 2021? (Olise granted).

https://t.co/9ItHx2uRbE

If Reading have cut player remuneration down to £16m how does this compare to our efforts? Because that is where they have to hit for this season.

Consolidated wage bill granted but £33.5m in 2020-21. Pre tax loss was about £39,217,107m on a turnover of £15m.

Covid period reset to £13m under FFP as they exceeded but adjusted losses falling to or below £26m across last and this season? Let alone the targets on transfer profit, player wages, amortisation etc.

If it's the club then it's £13m, £13m or if less that figure then £13m plus any surplus from last season. Though if it's Renhe Sports Management that makes it more complex for last and this season.

One more thing, seemingly the plan is to move from punishments after the season to in-season punishments under the new system. Quite right too, real-time monitoring will help a lot.

That is the plan under the terms of Independent Regulation.

Edited January 24, 2023 by Mr Popodopolous

[Mr Popodopolous]

Oh and @PHILINFRANCE

https://www.dailymail.co.uk/sport/football/article-11668493/UEFA-close-loophole-wake-Chelseas-record-spending-complaints-rival-clubs.html

Just tonight, suspect this will interest you! I still don't see a problem provided terms of contract are fair and not under duress etc- club's own risk.

[Mr Popodopolous]

I've raised the issue before but.

Supposing that this new body come in, look at the accounts, Projections and methodology of us and a few others and call into question FFP compliance by dint of transfer add-backs or player Impairment excluded from Covid how would a club rectify the situation?

What do this new body approve, hold fire on, what powers to change tack or reject do they have- how much have the CFRP already approved for club a?

[Davefevs]

7 minutes ago, Mr Popodopolous said:

I've raised the issue before but.

Supposing that this new body come in, look at the accounts, Projections and methodology of us and a few others and call into question FFP compliance by dint of transfer add-backs or player Impairment excluded from Covid how would a club rectify the situation?

What do this new body approve, hold fire on, what powers to change tack or reject do they have- how much have the CFRP already approved for club a?

It really isn’t worth worrying about.  If it happens, we will find out then.  I don’t think it will.

[Mr Popodopolous]

12 minutes ago, Davefevs said:

It really isn’t worth worrying about.  If it happens, we will find out then.  I don’t think it will.

Also a fair take, but I suppose it's unknowable (for us anyway) at this stage. Unless the body have in fact signed off existing arrangements before being appointed then there is an unknown factor at play.

I wonder if the new body will assess after the January window has shut.

Edited January 24, 2023 by Mr Popodopolous

[luke_bristol]

20 hours ago, Mr Popodopolous said:

Oh and @PHILINFRANCE

https://www.dailymail.co.uk/sport/football/article-11668493/UEFA-close-loophole-wake-Chelseas-record-spending-complaints-rival-clubs.html

Just tonight, suspect this will interest you! I still don't see a problem provided terms of contract are fair and not under duress etc- club's own risk.

Someone should warn them about the danger of 8 year contracts

[Mr Popodopolous]

Tbh us aside I'm quite interested as to how Reading have complied wirh the terms of their Businsss Plan.

Would require the Player remuneration to drop to £21.2m last season and £16m this.

Plus they lost £39.217m before tax in the Covid behind closed doors season. Seen an estimate of £9-10m in FFP allowances, but this was on an income of £15.634m. Yet they are apparently on course to comply.

[Mr Popodopolous]

One analysis I have seen is that Reading, have in effect cut their wage bill from £32.2m in 2021, to £21.1m last season to £16m this.

Credible given PL loanees?

Edited January 24, 2023 by Mr Popodopolous

[Davefevs]

We need to be careful when looking at wage bill vs qualifying players wage bill as per the business plan.

[Mr Popodopolous]

We do. There seem to be a range of overlapping criteria there though, on one hand x in Player wages but Renhe Sports Management has higher wages than the club e.g., then £13m x 3...how are they getting this down, meeting amortisation targets probably yes, profit on transfer harder to say.

Given that their total revenue will probably be not much more than £20m, say £21-22m how quickly they are getting down costs will be interesting to see.

On a lower income than us, compliance with FFP and the Business Plan while signing PL loanees seem fairly divergent.

Edited January 24, 2023 by Mr Popodopolous

[Mr Popodopolous]

Suffice to say though, were it me this is what I would consider doing on a general note for big Covid claims with FFP.

1) Take the £39m adjusted loss after FFP allowances.

2) Then the combined average for 2019-20 and 2020-21 with the £5m and £5m. Plus the £2.5m in 2021-22.

3) In effect adjusted loss to 2021-22 now £46.5m and the same again to 2022-23, that's before the usual FFP exclusions.

Next steps:

1) If within £39m in any event to 2019-20 and 2020-21, to 2021-22 or to 2022-23 no further action- higher or lower aside, talking about the Upper Threshold here, usual monitoring still applies to >£15m but <£39m. Whether that's before or after usual FFP allowances.

2) If up to £46.5m before Covid add-backs but the usual £39m or below after the £5m, £5m (average £5m).and £2.5m then no further action save for the monitoring requirements between higher and lower limits.

3) IF a club have say £50m in FFP losses to 2021-22 before the £5m x 2 average 2 and £2.5m in 2021-22 that still leaves them on £3.5m over. Then the onus is on that club to prove their losses and I expect they in a lot of cases can prove they losses ie us and corporate, hospitality, ticket revenue etc will certainly exceed the £5m x 2 and £2.5m. No problem if they can.

4) If however a club are filling the gap with the help of an unusual method and were not selling players, rejecting bids that could help to fill that gap and these bids remaining rejected well I'd look on it less favourably personally.

I would also perhaps assess clubs after the January window to see grounds of mitigation or otherwise.

If the club cannot prove the unusual method idea in point 4 or the losing greater revenue in general terms than point 3 then yes it would or the principle underpinning the potentially compliant returns would I expect need adjudication. Adjudication not necessarily sanctions but adjudication to determine the issue.

Question is, especially on Point 4 what constitutes proof? It's subjective or can be.

[Davefevs]

1 hour ago, Mr Popodopolous said:

4) If however a club are filling the gap with the help of an unusual method and were not selling players, rejecting bids that could help to fill that gap and these bids remaining rejected well I'd look on it less favourably personally.

I’m sure that’s what some clubs are doing:

• City - Towler out, Pearson out (no, calm down you lot!), Low out, Bentley out - shows willing
• Stoke - Bursik out, Delap, Clarke, Fosu, loans returned - shows willing

 

[Slack]

This may have already been covered but how do we survive, come out of FFP say if we didn't sell any players for big money? 

I kinda understand the wages situ and selling for nominal amounts to get them off the books, but say we didn't have an amazing academy surely we'd be screwed? Right?! As surely every year teams make a loss unless they sell? 

 

[Mr Popodopolous]

11 hours ago, Davefevs said:

I’m sure that’s what some clubs are doing:

• City - Towler out, Pearson out (no, calm down you lot!), Low out, Bentley out - shows willing
• Stoke - Bursik out, Delap, Clarke, Fosu, loans returned - shows willing

 

Is good mitigation certainly..maybe showing willing and in our case no PL loans since summer 2020, no transfer fees paid iirc since summer 2021 that all helps.

[Davefevs]

45 minutes ago, Mr Popodopolous said:

Is good mitigation certainly..maybe showing willing and in our case no PL loans since summer 2020, no transfer fees paid iirc since summer 2021 that all helps.

As a couple of us have said countless times, we pay our players on time, we pay the HMRC on time, we pay our suppliers on time.  I think you can hypothesise over all kinds of scenarios how ever much you like.  We’ve done our best at explaining the numbers, potential shortfall, what might be covid allowances, etc , but anything beyond that is futile, especially trying to predict how a new body might look at the clubs.

[Mr Popodopolous]

52 minutes ago, Davefevs said:

As a couple of us have said countless times, we pay our players on time, we pay the HMRC on time, we pay our suppliers on time.  I think you can hypothesise over all kinds of scenarios how ever much you like.  We’ve done our best at explaining the numbers, potential shortfall, what might be covid allowances, etc , but anything beyond that is futile, especially trying to predict how a new body might look at the clubs.

Ultimately true, nobody can or will know for sure how a new body will look at the returns of all clubs. Ultimately no issues impacting us this season IMO.

A lot counts in our favour though as you say.

Edited January 25, 2023 by Mr Popodopolous

[Mr Popodopolous]

On a wider legal football finance into law note, for those who are interested in the 2nd Birmingham case this offers a bit more detail on implied terms or similar.

https://www.burges-salmon.com/news-and-insight/legal-updates/understanding-endeavours-clauses-best-reasonable-and-all-reasonable#:~:text=Best endeavours,-Best endeavours is&text=It is an obligation to,means subordinating its own interests.

[Mr Popodopolous]

Just to say.

IF it is the case that Semenyo is sold in January then irrespective of different views about what the League may or may not accept, if he goes then we are clear of FFP come what may IMO.

Just my view, possibly excessively cautious anyway but come what may and then if our doubtless prior compliant submissions and projections are accepted anyway then it's a double win in a sense as we have an extra £9-10m of headroom or however much the final fee is.

[Davefevs]

12 minutes ago, Mr Popodopolous said:

Just to say.

IF it is the case that Semenyo is sold in January then irrespective of different views about what the League may or may not accept, if he goes then we are clear of FFP come what may IMO.

Just my view, possibly excessively cautious anyway but come what may and then if our doubtless prior compliant submissions and projections are accepted anyway then it's a double win in a sense as we have an extra £9-10m of headroom or however much the final fee is.

[Mr Popodopolous]

19 minutes ago, Davefevs said:

Same for me! I can for now put our financials to the back of the mind and enjoy the remaining football- and fret that the loanee or whoever replaces may weaken us ON the pitch! 

Nice to finally be worrying about solely on pitch matters again. That said it's a shame to lose him now and not the summer- was enjoying seeing him coming back to form again.

Edited January 26, 2023 by Mr Popodopolous

[Mr Popodopolous]

Stoke- just because I dont worry about us doesn't  mean I don't monitor others!

Alex Neil is inistent according to a quick summary I saw that they don't have to sell for FFP.

Their January activity reads as follows:

Quote

In:

Sarkic- loan- Wolves

Defender- loan -Wolves

Celina- loan Dijon

Quote

Out:

Bursik- sold- Brugge (their local paper says around £500,000).

Flint- loan -Sheffield Wednesday

Loans ended for Clarke, Fosu, Delap.

They lost £97m in pre tax across 2019-20 and 2020-21 the starting point for this- this on revenues of £40m in 2021 and £50m in 2020- as in the seasons ending those periods.

They also banked a profit of £32m on Fixed assets and £3-4m maybe in total across the 2 years on transfers.

(A combined average of £48.5m-49m in pre tax loss, inclusive of years 2 and 3 of Parachutes, inclusive of £19-20m in disposal of tangible assets plus players).

On the flipside their claimed Covid add-backs for the period as high as £28m, that's the average..SwissRamble believes their allowable costs to be £9m per year and rounding probably takes it to £12m in FFP losses.

The cap on Covid add-backs for last season seems to be £2.5m and the cap seems to be £0 onwards.

They made a profit on disposal of players of £11m last season but I estimate their income to be down to £30m and maybe less. Would depreciation still factor in after assets sold? It can vary! Who knows how much this season but probably less than £11m in profit.

Their amortisation will be down to £5-6m probably and maybe less, their wages who knows- that £26m loss to March was a guide but that's all it was as it included 2 months of 2020-21.

Their wage bill and potentially amortisation will be lower once more this season- but then again so is their transfer profit probably and the Covid add-back isn't a thing now.

Once again the question of equality of treatment is a quite valid one IMO.

Edited January 27, 2023 by Mr Popodopolous

[Mr Popodopolous]

Not FFP related but fancy a football club for £1? Well Huddersfield Town appear to be up for sale for this!

(Granted debt etc would be included).. One to watch?

[Mr Popodopolous]

In theory if it drags Sheffield United could get an extended ban, this article says 30 days to pay  up or the next two windows! Punishment could even carry into the PL or see points deductions.

https://www.thestar.co.uk/sport/football/sheffield-united/the-range-of-punishments-sheffield-united-might-face-after-being-hit-with-transfer-embargo-4002575

This all seems quite new when you consider Cardiff and Derby and their embargoes for a myriad of reasons.

Or indeed, would Villa"s reported soft embargo for FFP in May 2019 which was reported then (think the order was for clubs possibly in breach in March 2019) put it right by summer, say July 2019 or in their case perhaps June, or face punishment! Article or two at the time alluded to this.

Had the stadium sale been problematic say, could they have faced an embargo and investigation, maybe more carrying over into the PL.

Edited January 28, 2023 by Mr Popodopolous

[Mr Popodopolous]

Last thought on Stoke and the exhaustive analysis there.

IF Covid losses accepted in full (big if as they're huge for the level), and if as expected or SwissRamble suggests they are their allowances for FFP and they stay at £9m a year, it's late so let's assume yes for both.

Their challenge to remain compliant is to post losses not exceeding an aggregate of £47.5m this is pre tax, pre adjustments not exceeding this in the period.

Sold Collins so I think that this is a goer. Hence I guess the Souttar FFP remark. The other unknown is what happens to the depreciation post disposal of the Fixed Assets, this is removed as a cost but would also remove the allowances for said Depreciation FFP wise, or alternatively type of lease means that it stays on.

Edited January 28, 2023 by Mr Popodopolous

[Mr Popodopolous]

Possibly linked to the Sheffield United embargo, possibly unrelated but talk of Berge to Fulham for £20m.

He has tbh been linked with varied PL clubs and European top flight clubs for a while but whether it's linked to their embargo or not it would I am sure resolve all outstanding issues there.