The Championship FFP Thread (Merged)

[PHILINFRANCE]

1 hour ago, Mr Popodopolous said:

One bit of GOOD news. Better late than never and it's about 2 years too late, in fact it's a loophole that should never have been opened, it's still unclear as to why it was- odd typo by Kieran Maguire.

I do recall Stoke were mooted to be selling it or looking at it...the Land Registry still shows nothing.

Wouldn't it be hilarious if they were planning to do it this season and found that it was now not permitted for P&S. 

I would also add, Training Facilities should also be on the list of Profits on Fixed Assets excluded for P&S- maybe all Fixed Assets should be- and furthermore, there should be a strictly stated method for Amortisation for P&S purposes.

There was another loophole that pissed me off as well, but I cannot now recall- it needs closing and indeed should have been some time ago.

I must say that’s quite impressive.

There is another loophole that pisses you off.

You can’t recall what it is, but it should be closed anyway.

Excellent .

[Davefevs]

10 hours ago, downendcity said:

Deft bit of Malapropism by Kieren there - I'm guessing he meant circumvent.  

Then again, it’s no skin off my nose if he got the word wrong!  

 

 

I’m sure he did it on purpose.

He used to hide messages in the first letter of each paragraph to read things along the lines of: D A R R E L L C L A R K E I S A D O G N O N C E

 

[downendcity]

36 minutes ago, Davefevs said:

I’m sure he did it on purpose.

He used to hide messages in the first letter of each paragraph to read things along the lines of: D A R R E L L C L A R K E I S A D O G N O N C E

 

A long time ago I remember reading somewhere that Magellan was the first man to circumcise the world! 

Not sure whether he needed a big boat or a big knife. 

[Mr Popodopolous]

Amusing Freudian slip by Maguire, although could have as @Davefevs says done it on purpose.

Notice both returned to the Board in recent days- may as well ask @AnotherDerbyFan and @AnAstonVillafan what they think about this vote to ban Stadium Sale Profits from P&S outcomes? You and a few others would have been screwed had the EFL not botched it in 2016 when transferring the old Rules across- either that or Harvey was relaxed about such a loophole.

Possible the other loophole was in terms of Sponsorship @PHILINFRANCE .

Edited July 5, 2021 by Mr Popodopolous

[Mr Popodopolous]

On a general FFP note, this- first reported by Nixon and basically rehashed from there- is good news.

https://www.mirror.co.uk/sport/football/news/derby-sheffield-wednesday-efl-crackdown-24461074

"Hawkish chairmen"- well Gibson will certainly be one, SL? Barnsley chairman surely, Luton have been outspoken at times about FFP too, Nottingham Forest? Swansea owners seem to stick to it and are American so probably quite litigious, could be another- QPR were pretty angry about the Stadium loophole in 2019. Millwall are another candidate.

If these reports do follow through then combined with the story I posted a few days back, it is a welcome change of tack.

I believe that an idea behind these Embargoes can be to keep Clubs who are on a bad trajectory from breaching, or to seek to- if they have lost £X in the past two seasons then setting certain budget parameters can keep them within the Regulations for the next season or 2. It's pre-emptive, in a sense saving clubs from themselves, though Points Deductions should remain very much on the table, and they should step up to the plate in terms of joining up Past Results, In-Season Monitoring and the Future Financial Information better...still a way to go.

Edited July 5, 2021 by Mr Popodopolous

[AnotherDerbyFan]

2 hours ago, Mr Popodopolous said:

Amusing Freudian slip by Maguire, although could have as @Davefevs says done it on purpose.

Notice both returned to the Board in recent days- may as well ask @AnotherDerbyFan and @AnAstonVillafan what they think about this vote to ban Stadium Sale Profits from P&S outcomes? You and a few others would have been screwed had the EFL not botched it in 2016 when transferring the old Rules across- either that or Harvey was relaxed about such a loophole.

Possible the other loophole was in terms of Sponsorship @PHILINFRANCE .

I feel indifferent about it.. didn't bother me if it remained allowable or not. If it was still permitted under the rules and a club sold their stadium I wouldn't care.

You cant exactly say we would have failed if it wasn't allowed... we would have done something to stay within the limits, whether player sales or something else.

[Mr Popodopolous]

33 minutes ago, AnotherDerbyFan said:

I feel indifferent about it.. didn't bother me if it remained allowable or not. If it was still permitted under the rules and a club sold their stadium I wouldn't care.

You cant exactly say we would have failed if it wasn't allowed... we would have done something to stay within the limits, whether player sales or something else.

That's fair, though doubtless without that Profit the expenditure allowable would have been less- for all the Clubs who did it, even if not necessarily a hard fail, case by case basis etc.

You might have sold players and that would have helped though disposal with the Residual Values- at that time- could have created a bit of a double problem in some cases. According to your 2017/18 Accounts, there was- this was pre any case- a loss of Disposal in 2018/19, £11.7m fees vs £12.8m in Book Value which oddly is an argument in support of your policy as it implies a degree of consistency.

Sheffield Wednesday definitely would have breached again without, Birmingham quite possibly though maybe Adams would have been rushed over the line into 2018/19 for around the price he was, Reading- yes they might well have had issues- surprised no charges have arisen for them, Aston Villa spending at the rate they did, well I believe a £25-30m overspend to 2018/19 without that Sale and Leaseback all things being equal.

Stoke were mooted to have sold but nothing confirmed yet, and some wild rumour about Middlesbrough and Gibson of all sides having done so!? Which may or may not have been serious.

Edited July 5, 2021 by Mr Popodopolous

[AnAstonVillafan]

3 hours ago, Mr Popodopolous said:

Amusing Freudian slip by Maguire, although could have as @Davefevs says done it on purpose.

Notice both returned to the Board in recent days- may as well ask @AnotherDerbyFan and @AnAstonVillafan what they think about this vote to ban Stadium Sale Profits from P&S outcomes? You and a few others would have been screwed had the EFL not botched it in 2016 when transferring the old Rules across- either that or Harvey was relaxed about such a loophole.

Possible the other loophole was in terms of Sponsorship @PHILINFRANCE .

I don't like what we did, because it papers over cracks and hides a problem or a lack of funds.

 I am happy its being banned as P&S needs to be made less complex.

 

[Mr Popodopolous]

Sheffield Wednesday have published Accounts!

https://www.swfc.co.uk/siteassets/pdf-links/july-2021/swfc-accounts-year-end-31-july-2020---signed.pdf

£24m loss despite £6m in Profit on disposal of Players/Employees...

Wow, their wage bill in 2019/20 was still- once you take into account tax and Pension obligations, talking I assume Club not just Players, was still £33.5m despite their apparent Austerity.

Amortisation was still £6m.

Auditor who was involved in the Hillsborough debacle, ie the sign-off is still the Auditor- both company and individual.

Lost about £2m to Covid in 2019/20.

On the face of it, no FFP issue but that's not a certainty for a few reasons:

1. Is £60m definitively the price of Hillsborough? Feels rather toppy to me! Although can argue for Rent yield validating it.
2. How will the prior two seasons be treated? If the cash is there, then significant headroom for a one off hit- but then how will 2017/18 loss and 2018/19 Profit be treated- and working back, 2016/17 and 2017/18 losses? Was suggested in the Birmingham case that reset to £13m x 3, but this case is somewhat different.
3. Rolling a Stadium sale forwards as was in the wrong year. Fine strictly speaking probably Accounts wise, but for FFP? How will the EFL view that.
4. This is a very long shot so I'll say no, but is it theoretically possible that Sheffield 3 and Sheffield 5 Limited are bundled up within SWFC Holdings? Remember it goes SWFC Limited-SWFC Holdings-S2 Limited...but it only states this at the bottom of the Accounts, not in the Confirmation Statement or the Person of Significant Control bit so who knows that those two- and Sheffield 2 Limited- might show when those Accounts out.

There is the question too of Sheffield 4 Limited- what was all that about...wound up fairly quickly, was the original controlling party of Sheffield 3 Limited to be replaced by Sheffield 5 Limited.

PS, material uncertainty to Going Concern but I guess that'll be common place in these times. Nothing surprising there and Chansiri has now paid wages present and past....

As it stands, no FFP issue but I wonder about Points 1-3 especially.

Blackburn have submitted, they're in transit- better late than never!

Maybe within the next few days eh.

As finally have Fulham- Club, parent and Topco- again next few days?

Charlton have moved their Reporting Period back by a day so not due for a few months and Wigan, well bust- though one of the companies in Liquidation suggests they're overdue but guess that's an error.

Edited July 6, 2021 by Mr Popodopolous

[Mr Popodopolous]

21 hours ago, AnAstonVillafan said:

I don't like what we did, because it papers over cracks and hides a problem or a lack of funds.

 I am happy its being banned as P&S needs to be made less complex.

 

Fair enough, yeah it certainly can do- paper over cracks, it can buy a club time for a final season or two of gambling, but it can also buy a club time to restructure and set onto a more sustainable path by righting the past wrongs and then spending a lot less and selling players as a baseline- not many who did this seemed to have that intention though, if any. Though Birmingham selling Bellingham and Adams after their moderate gain on St Andrews will have helped them somewhat- P&S wise anyway.

Agreed. Hard to understand why it was lifted or how it slipped through the net in the first place tbh, this particular loophole has caused nothing but trouble- the mad thing was that up to 2015/16, the Profit on Disposal of Fixed Assets was adjusted out of the returns. I'd also add Training Grounds ie existing ones being excluded wouldn't be a bad idea, other items e.g. Club Shops or Car Parks- these are more general asset types, not unique so easier to compare and spot obvious inflated values but all Tangible Fixed Assets would be much simpler.

Edited July 6, 2021 by Mr Popodopolous

[chinapig]

3 minutes ago, Mr Popodopolous said:

Hard to understand why it was lifted or how it slipped through the net in the first place tbh, this particular loophole has caused nothing but trouble

Assuming it did slip through. Alternatively maybe it was engineered for certain favoured clubs who wanted to go on squandering money without penalty and regardless of the potential long term damage.

[Mr Popodopolous]

9 minutes ago, chinapig said:

Assuming it did slip through. Alternatively maybe it was engineered for certain favoured clubs who wanted to go on squandering money without penalty and regardless of the potential long term damage.

I don't think Birmingham are/were a favoured club, but there are a few who would fit the category- Birmingham got their -9, perhaps should have been more and a 2nd charge- sold St Andrews for a £17m Profit IIRC, well £15m and something about a Grant while in tandem steadily cutting and then big sales- Bellingham, Adams, Jota although maybe not so much he was a higher earner gone, Morrison the captain- gone, Harding and some Spanish striker also turned a profit. They possibly in some ways have changed their ways.

They got a 2nd charge as well.

I think I know the Clubs you're referring to though- plus bizarrely Reading, sold Stadium in 2017/18, again from Club Parent to Owners Chinese Company in 2018/19 for a higher price, £10m higher- sold Old Training Ground and Land around Madjeski Stadium both to the owner- plus a £3m loan fee for Sone Aluko from owners Chinese Club in 2018/19. Totally masked a huge loss in 2018/19 that, as was borne out in 2019/20!

Edited July 6, 2021 by Mr Popodopolous

[Davefevs]

Mr Pop….Wednesdays overall costs / budget less than our own!

[BLRed]

Reading finally being forced to sell a player, only due to release clause, but 8 mill for loose should help them with ffp issues, or would it not even scratch the surface?

[Mr Popodopolous]

That's a good step for Reading albeit if there's a Release Clause, one they likely didn't have much choice in. More to do I expect as the combined average of 2019/20 and 2020/21. Also unclear as to which were used in 2017/18 and beyond, Club or Consolidated- my guess would be Club in 2017/18 and consolidated beyond this point but £8m and some wage savings help but more needs to be done IMO.

Then there's the question of future projections into 2021/22, using 2018/19 then the combined average of the last two seasons as the base.

As an aside, he's seemingly a very talented young player. Only £8m, surprised more clubs weren't in for him! Release Clause was rumoured for some time.

[Mr Popodopolous]

Fulham's results are out.

SwissRamble tends to have their FFP Allowances at £7m per season.

Lost £48,112,000- however do bear in mind that this includes Promotion Bonuses- these are often in the range of £15-20m? Nothing though in the Accounts.

Mentions £7,966,000 deferred income to 2020/21 owing to Covid.

No specifics on Covid losses- £2-3m maybe?

That said, had they stayed down they certainly would have had an FFP issue on the horizon- because that loss was despite and inclusive of a £25,310,000 Profit on Disposal of Transfers.

Had they lost to Brentford last August, well I think they would have been in a tight spot. The strange thing there is that for some time now, Brentford have had an excellent recent record v Fulham- beat them twice in the League, beat them in 17/18 and drew the other, beat them in Carabao Cup last season...but lost the game that mattered most.

The importance of promotion here was not just the revenue but also from an FFP perspective, the Upper loss limit- going up meant it was £72m to last season once the post Covid combined averages kick in, whereas had they stayed down it would have been £55.5m.

The same going into next season as well- 2 x PL and 2 x Championship=£72m, while that combined average remains on the books...though if they stay down it drops back to £55.5m.

Edited July 7, 2021 by Mr Popodopolous

[Mr Popodopolous]

Reading in breach- Confirmed!

https://www.efl.com/-more/governance/embargoes

Derby also under Embargo for multiple reasons, but intriguingly not yet P&S/FFP.

Stoke, Blackburn, Sheffield Wednesday all seem to be in the clear...

Derby's rap sheet! 

Edited July 7, 2021 by Mr Popodopolous

[Davefevs]

Derby can’t be under P&S….they’ve yet to re-state their accounts!!!

[chinapig]

3 minutes ago, Davefevs said:

Derby can’t be under P&S….they’ve yet to re-state their accounts!!!

If they are found not to be compliant the Commission will get tough and increase the fine to £110k then.

[BLRed]

Although only three clubs listed, how many others are under scrutiny and likely to be added? Could have sworn I read up to 12 clubs could be in trouble 

[Hxj]

50 minutes ago, BOSRed said:

Although only three clubs listed, how many others are under scrutiny and likely to be added? Could have sworn I read up to 12 clubs could be in trouble 

No one further at this point.  Once the 2021 accounts are supplied along with the final P&S figures then other clubs might be brought into the net.

[Davefevs]

1 hour ago, BOSRed said:

Although only three clubs listed, how many others are under scrutiny and likely to be added? Could have sworn I read up to 12 clubs could be in trouble 

Most of the 10 clubs under sanction were for late reporting.  Those have been resolved in the main.

[Davefevs]

Blackburn must be pushing it close?

 

[AnotherDerbyFan]

14 hours ago, Mr Popodopolous said:

Reading in breach- Confirmed!

https://www.efl.com/-more/governance/embargoes

Derby also under Embargo for multiple reasons, but intriguingly not yet P&S/FFP.

Stoke, Blackburn, Sheffield Wednesday all seem to be in the clear...

Derby's rap sheet! 

3 are clearly due to the charge and appeal. It won't be long for those to be cleared off the list.

Transfer fee installment supposedly due to the failed takeover in December, causing Marriott's contract extension to be revoked, and us being in discussions with the EFL about it since. I assume it's still on the list as it hasn't been paid (am I right in saying that?), so i'm surprised we didn't pay in when Mel freed up the cash to continue covering club losses in Jan.

The HMRC one is odd.

[Hxj]

5 minutes ago, AnotherDerbyFan said:

The HMRC one is odd.

More than likely PAYE/NIC, a bit of a strain on cash flow when you keep having to put your hand in your pocket.

[Mr Popodopolous]

2 hours ago, AnotherDerbyFan said:

3 are clearly due to the charge and appeal. It won't be long for those to be cleared off the list.

Transfer fee installment supposedly due to the failed takeover in December, causing Marriott's contract extension to be revoked, and us being in discussions with the EFL about it since. I assume it's still on the list as it hasn't been paid (am I right in saying that?), so i'm surprised we didn't pay in when Mel freed up the cash to continue covering club losses in Jan.

The HMRC one is odd.

Whichever way you try to spin it, it's an outstandingly bad track record. In general, I'm actually surprised that some of these offences don't lead to Discplinary Charges in their own right.

Those 3 will see it lifted subject to what is in the Accounts. For example, if as Stephen Pearce claims you try to claim a significant additional profit on Pride Park, that won't wash. Then there's the question of the Restatement, Straight Line (or that with Contract extensions) is all I see the EFL accepting. 

Plus the extra evidence about a significant Impairment in Gellaw Newco 203 draft Accounts. Any attempt to obscure Player Amortisation/Impairment by bundling it up with Impairment of Goodwill I can't see being accepted.

Talking of Stephen Pearce, though more blame on Mel Morris, he's got a cheek. Cynical slimey bastard!

Talking about 'Building Bridges' after 3 years of issues, a year after your owner said he was seen as an 'enemy of the EFL state' and two years on from Morris gloating on Talksport, and a year and a half on from Derby openly declaring charges as 'unlawful' and throwing that word around at various intervals since. Indeed a month at most after mentioning that potential additional Profit in the Disciplinary Commission.

Coming out with it during the Restatement of Accounts part of the Disciplinary stage is also interesting timing. Shouldn't sway either the EFL or IDC of course, certainly hasn't materially changed my view.

Thereafter, better case for it but right now, the hierarchy can go forth and multiply.

As an aside, signing Jozwiak for a rumoured £3m given the lack of hard info was rather generous of the EFL.

[Mr Popodopolous]

Forgot to add earlier, I think Blackburn probably fine for FFP at this time. Tight, absolutely it's tight but not quite there. They aren't under an Embargo for one.

Swiss Ramble has Allowable Costs at £5m per year.

Says a decrease in turnover largely due to Covid of £3.2m in 2019/20, but a decrease in Operating Expenses of £1.4m.

Is it the Gross or the Net figure we take for Covid Allowances?

Further complicated by the fact that in 2017/18 they were in League One- how do we treat a Club in Season X in the Championship, in Season Y League One then Season Z back at this level- plus the fact that last and this season give a combined average. Plus the fact that Venkys London Limited listed as a parent despite the fact it runs on 12 month periods to the end of March.

Quote

In simple terms...

2017/18- £16,833,501 LOSS

2018/19- £18,218,597 LOSS

2019/20- £21,950,707 LOSS- Halved for Covid in the following Scenario but not this one.

3 year loss=£56,642,805.

Minus £15m (est) FFP- ie £5m per year.

£41,642,805.

Minus...well depends which, is it Total Revenue hit or Total Revenue hit-Savings.

£41,642,805-£3,200,000=£38,642,805.

Or.

£40,442,805.

Quote

Then there's the halving of 2019/20 and 2020/21 once aggregated.

2017/18 £16,833,501- LOSS - £5m, FFP=£11,833,501.

2018/19 £18,218,597 LOSS- £5M, FFP=£13,218,597

How to calculate this 3rd year combined loss is the problem...is it Loss/2 then minus FFP and Covid or Loss-FFP and Covid and then halve? Either way I think Blackburn have a combined allowable Upper FFP loss of £30m across 2019/20 and 2020/21, averaged out at around £15m per year.

Edited July 8, 2021 by Mr Popodopolous

[Mr Popodopolous]

As an aside, I have to applaud the EFL for the more transparent approach they appear to be working towards.

Well done to the EFL and any Clubs who voted for it- even those I am strong critics of, if indeed they voted for it. Stadium Sale loophole ban that's been mooted too, hats off!

@AnotherDerbyFan do you think Mel and Pearce voted for it, either the Stadium one but especially the greater transparency bit? Poachers and Gamekeepers spring to mind if yes!

Edited July 8, 2021 by Mr Popodopolous

[BLRed]

Cardiff now been added to the embargo list

[Davefevs]

Sala