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The Championship FFP Thread (Merged)


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Posted
15 minutes ago, Mr Popodopolous said:

Interesting @Phantom can you expand?

I know they seem to have India based issues with Venkys funding and such requirements. 

Their Accounts for Venkys London Limited didn't look too bad in some ways from a Solvency issue but some concerning elements too..

Real concerns about the cash flow from Venkys / India etc not happening anymore and that the only reason things are just about OK now are due to a number of players sales

I was told that there are real concerns that there is no cash incoming 

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Posted (edited)
45 minutes ago, Phantom said:

Real concerns about the cash flow from Venkys / India etc not happening anymore and that the only reason things are just about OK now are due to a number of players sales

I was told that there are real concerns that there is no cash incoming 

Thanks.

I think they have to make Personal Guarantees atm Venkys to match pound for pound money put in.

Szmodics going in the summer will help medium term- the Cash Flow seemed to indicate thst this upcoming ie present year had a big Cash Hole though, thereafter not so much.

If Clubs had to run on a Cash Breakeven basis or hold minimum one year of average Cash Flow input by Owners in positive Reserves that would clearly alleviate it but may restrict ambition too, tough balancing act.

Edited by Mr Popodopolous
Posted
1 hour ago, Mr Popodopolous said:

think they have to make Personal Guarantees atm Venkys to match pound for pound money put in.

Yep - The Indian Courts, will only authorise transfers out of India by the family and company's on the condition that the same amount is deposited into court.  Simply put from a cashflow point of view it costs the family £2 million to transfer £1 million.  Makes funding Birmingham expensive, but there are no indications that the funds will not be provided in the short term. 

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Posted
On 01/11/2024 at 11:22, redsquirrel said:

mr pops, i see sheff weds are under embargo again, for money owed to inland revenue.  are players self employed, ie have to do their own tax or will they have paye as well as vat and all the other taxes associated with business?

they are now employed, the goverment changed the laws regarding people working for fixed employers but billing them as sub contractors. must have cost them a lot of money taxwise :laugh:

On 13/11/2024 at 12:48, Mr Popodopolous said:

Parry briefly mentioned the jurisdictional challenges in his interview  ie by Man City. Given that the PL failed to have a charge of Leicester approved in September, that means that they wwre technically an EFL Club by June 30th 2023- Golden Share Transfer mid June iirc. The EFL will likely charge them or seek to with a breach to 2023 if they return to tbis League.

It does beg the question too as to how well both bodies understood the Rules last year. The EFL..why on earth didn't they grasp this and charge them to 2023??  They sought to bypass 2023 entirely almost and get them under a Business Plan in-Season to 2024 and seemed to just let the PL charge them in mid to late March 2024.

What a mess. The updated EFL Rules capture all scenarios but..It strikes me that the PL and EFL fundamentally misunderstood something.

madness they can't just write the rules up to allow both parties to have authority to bring a case against a team no longer in their league for conduct while they were in the league, you would imagine enough clubs would sign it off on a vote. 

On 14/11/2024 at 17:28, Mr Popodopolous said:

Other snippet of news.

Sheffield United takeover seems ok  but questions about Future Financial Info. Although conflicting claims.

this is a zero news story for me, its basically saying someone wants to buy a club but will have to pass the tests required to buy a club, yeah no shit nixon, seriously always wonder why people pay him on patereon 🤣

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Posted (edited)
1 hour ago, Rob26 said:

madness they can't just write the rules up to allow both parties to have authority to bring a case against a team no longer in their league for conduct while they were in the league, you would imagine enough clubs would sign it off on a vote.

Well it can't be retroactively applied but the EFL made a range of updates in the Summer. A lot of bases are now covered.

1 hour ago, Rob26 said:

this is a zero news story for me, its basically saying someone wants to buy a club but will have to pass the tests required to buy a club, yeah no shit nixon, seriously always wonder why people pay him on patereon 🤣

Well Idk, the Owners and Directors Test has evolved significantly in the last 5 years or so but especially from the height of Covid.

I think a lot of fans don't appreciate at all that FFP is present let alone future looking, irrespective of fans of Club(s), it isn't that widely understood or covered.

Sounds like the prospective Owners may not have factored it in either!  Find Nixon okay with Northern especially North West and some Scottish stuff, that aside..he once had a good source at the EFL judging by his pasg breaking and coverage if FFP stories but not these days clearly.

Edited by Mr Popodopolous
Posted
On 20/11/2024 at 14:49, Mr Popodopolous said:

Well it can't be retroactively applied but the EFL made a range of updates in the Summer. A lot of bases are now covered.

Well Idk, the Owners and Directors Test has evolved significantly in the last 5 years or so but especially from the height of Covid.

I think a lot of fans don't appreciate at all that FFP is present let alone future looking, irrespective of fans of Club(s), it isn't that widely understood or covered.

Sounds like the prospective Owners may not have factored it in either!  Find Nixon okay with Northern especially North West and some Scottish stuff, that aside..he once had a good source at the EFL judging by his pasg breaking and coverage if FFP stories but not these days clearly.

it's mad some of the take overs you hear happening, people putting down millions and then not taking the deal past the test, makes me wonder how they got the money in the first place.

like Dozy at Sheffield united, gave them cheque after cheque to keep the cash flow up and couldn't get passed the test.

I think if I was taking somewhere over I'd be in discussions with the league maybe even before I put the money down on a club just to get an idea of what commitments they are going to expect from me once I had an idea how much I would roughly pay to buy them out.

do these people not use good legal teams? you think you would need a specialist legal team for taking over a club that would know all this and let you know if you have next to no chance of things going through, or want to see the proof themselves before they move things forward

makes me wonder if some of these just outright lie to everyone and then get held up at the point of show me the money then because they don't have it yet :laugh:, I can't imagine Dozy ended up making any money on his loans, I'm certain there was reports where he lost a signification amount of money that was a deposit for the exclusive period, I always thought maybe the sheff utd owners were just using him and knew it was never happening. strange they still haven't sold their club, how could you not sell it in the summer after you were promoted and he was out the picture, either have to be greedy, there be something horrific in the accounts, as you would think there would be plenty of people want them in the premier league and you would of got more than your getting now

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Posted

In respect of Birmingham I wonder, how is this circle squared.

£50m or thereabouts in aggregated Losses Before Tax across 2021-22 and 2022-23, Wage Bill seemingly rose as well as Amortisation last year.

As we know Income up £5-6m and £11-12m in Profit on Disposal due to Bellingham but other costs.. it seemed to infer HK$283m Segmented Loss, which is £27-27.5m..that Segmented Loss based on past years may have included the Bellingham cash??

What am I missing as this looks like an 8 figure FFP breach or if not 8 figures close to but below £10m. May even be £15m+ in the worse case.

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Posted (edited)

Just on the updates to the P&S rules, regular readers of them will know already but T, T+1 and T+2 become bigger factors. The Football media have barely covered this and let's be fair trawling through Regulations is boring. Clubs themselves haven't eagerly rushed out to transparently explain to fans the new changes.

Key changes...

Screenshot_20241125-124849_OneDrive.thumb.jpg.aa7f7f7ac99302438126d5674dd7cdb0.jpg

1.1.9, 1.1.12 at least in respect of a clear definition and set of guidance, 1.1.14 and possibly 1.1.18 are all new.

Screenshot_20241125-125119_OneDrive.thumb.jpg.3a5bb1908ac2072d485ba7ec8c5c34d5.jpg

There is your definition of 'Forecast Annual Accounts', it basically means the present season.

Screenshot_20241125-125140_OneDrive.thumb.jpg.7fd0553d87737ab79318fbc010ea9645.jpg

We know this already, anything over £15m but below the 3 Year Upper Loss Limit means the Club provide by 31st March, the FFI to T+2.

Screenshot_20241125-125152_OneDrive.thumb.jpg.32a2abcd8ba7e8197ff8c7df4b41736b.jpg

I've touched upon this but the monitoring and Powers are very new and further evolved from 2023.

Screenshot_20241125-125231_OneDrive.thumb.jpg.9fe2bb6179dbcda6da44bcb0eb163c75.jpg

You lose I dunno let's pick some numbers out of the air..following adjustments for FFP Allowables you lose £5m, £8m, Then a forecast of £9m to the present season. That is -£22m and happy days but you have lost or are set to lose £22m to the present year.

That £5m falls away, by 31st March let's say 2025 so the present season you have lost-£17m, you must demonstrate that you will lose no more than £22m in 2025-26 and a slash and burn to £8m in 2026-27. That is what your Forecasts must show or the League can intervene up to 2 years ahead of time. Well add £2.5m as well due to the Cost of Living uplift.

ARP+2 is less alarming for all parties but if your losses are accelerating..hmm.

Essentially you can go to £22m the next year but if you don't go up that year, there will in all likelihood be an 8 figure hole to fill 2 years hence.

Edited by Mr Popodopolous
Posted

Thanks Mr P for copying and pasting.  I’ve not really looked at in any detail before.

I think it’s sensible stuff, avoids the “well we knew we’d have to sell next summer, but when that came around, we didn’t get a good enough bid, it’s not our fault…” type bleating, like Brum did with Adams.

It should stop a bit of buying before selling.  And for those clubs (as you say) with increasing losses year on year, a bit of an earlier reining in.

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Posted
16 minutes ago, Davefevs said:

Thanks Mr P for copying and pasting.  I’ve not really looked at in any detail before.

I think it’s sensible stuff, avoids the “well we knew we’d have to sell next summer, but when that came around, we didn’t get a good enough bid, it’s not our fault…” type bleating, like Brum did with Adams.

It should stop a bit of buying before selling.  And for those clubs (as you say) with increasing losses year on year, a bit of an earlier reining in.

I thought it was worth everyone seeing it laid out and drawing their own conclusions Dave.

There was a bit of a landmark in this respect when Reading got their suspended -6 instantly. That was new and unprecedented, and still fwiw they have not released their 2022-23 Accounts so I wonder if there could be more to come. EFL site says they are still under Embargo for this.

How the League handled the Birmingham case was bizarre. The final year of Shaun Harvey.

Okay the breach and Business Plan post June 2018 was a job well done but they knew there was a clear expectation to raise transfer fees by the end of January 2019 or at latest given you can sell overseas by March 1st 2019.

There should've been some suspended penalty for the March 2019 assessment as there was for Reading- based on the Forecast breach. Suppose trial  and error, first club charged under the 3 Year Rule but they sent through the charge in mid May 2019 which was bizarre.

They didn't sent it through in February post the updated numbers and nor did they send it through post June 30th when a breach would've been confirmed. I still don't fully get it.

Buy before Sell yes a risky strategy that will be averted a bit, these new Rules could've helped to guide Burnley and their mini firesale in August to make sure they independently stay ahead of it, well and their MSD stuff.

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Posted

Screenshot_20241126-123959_Chrome.thumb.jpg.c0b30d9b266649358c679503a1796d66.jpg

Man United first quarter, won't include their managerial change but the swing in Finance Income and Costs is intriguing.

Otherwise Income year on year down Costs a bit up but Profit on Disposal of Players also up.

Posted

Thanks for posting.

That is pretty early too! I didn't quite expect it this early...as we know Mel just stopped bothering to release them after a while, mix of FFP and Going Concern. Still they are the first after Norwich and of course Birmingham released early via the HK Consolidator due to Stock Exchange Regs.

Posted

am I right in thinking (or read it and understood it right) that there's been a change at the premier league level rules (only there level at moment)

on the directors loans to clubs, after January 11th the league can assess what the fair interest rate the club will be charged if they keep it as debt for their PSR allowances?

that could be good for fans if clubs that like to inject money either have to give it to the club for equity to avoid losing PSR allowances or pay a cost on their PSR spends for the fictitious interest they should be charging themselves.

wonder how many clubs will have massive loans converted, it was a recent everton one where the current owner has said this will happened before the dead line if the take over hasnt happened, as its going to happen on completion anyways. he obv has no slack given 2 years worth of breach so far

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Posted

Depends is it retrospective or, how far back. It was never made fully clear.

Everton are most vulnerable, some huge Profits for Brighton post Covid shoukd mean they are fine, they were the main 2 mentioned.

Others may already pay X%..unsure the Handbook has yet changed to reflect. Bournemouth, Leicester and Wolves maybe 3 to look at- Full conversion to equity would definitely help clubs.

Arsenal perhaps but UEFA already charge this inserted Rate of Interest on RPT Loans iirc and if they're compliant with UEFA Regs they surely comply with PL ones.

Posted
5 minutes ago, Mr Popodopolous said:

Depends is it retrospective or, how far back. It was never made fully clear.

Everton are most vulnerable, some huge Profits for Brighton post Covid shoukd mean they are fine, they were the main 2 mentioned.

Others may already pay X%..unsure the Handbook has yet changed to reflect. Bournemouth, Leicester and Wolves maybe 3 to look at- Full conversion to equity would definitely help clubs.

Arsenal perhaps but UEFA already charge this inserted Rate of Interest on RPT Loans iirc and if they're compliant with UEFA Regs they surely comply with PL ones.

what was actually voted on that got accepted by the teams

I'd imagine the fair way to do it is set a date when the interest is valued, and do it from that date. no retrospective, but if you have the loan on the books you either start paying for it from the date or convert it by the date to avoid that. if thats how its done at least it will unload a few clubs of their debt earlier than later

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Posted
On 01/11/2024 at 12:07, Mr Popodopolous said:

Thanks for pointing that out @redsquirrel first I've heard of this.

Last year, Chansiri after a disastrous start and resultant criticism, said fans should pay that months PAYE etc themselves- he eventually paid it, brinkmanship maybe.

Don't see why it wouldn't be the responsibility of the club, their 2023 Accounts showed a section for PAYE etc.

Screenshot_20241101-120252_OneDrive.jpg.1a4bf4f26f4d909652ee13ef25efcef7.jpg

Now they've basically said that the issue is due to money due to Chansiri that hasn't materialised. Players and staff paid, it is the tax, PAYE etc on the wages that hasn't yet arisen.

https://www.thestar.co.uk/sport/football/sheffield-wednesday/sheffield-wednesday-release-statement-on-transfer-embargo-update-on-player-wages-4848610

:D

Posted (edited)

How he a Stoke journo seems to know before any National Media or whoever have reported on it is unclear but rumours of the First Draft of the proposed replacement to P&S are out.

Mentions 85% as the ratio.

The timing seems less than beneficial to us as usual, as 2025-26 would be our most opportune moment probably under the present rules although this season moreso from a divisional strength position.

Just like the changing Rules in 2015-16 may have hindered is a big on paper post Promotion, it just didn't quite align to the full Margin for Error and Upgrade of 3 Year a vs 1.

Edited by Mr Popodopolous
Posted

Was initially mooted at 70%, as per the UEFA Regulations but the 85% is a PL preference and there was talk that Relegated Clubs could get that falling to 80% if they stayed down a 2nd Year.

Lots still up in the air I imagine but.

Posted (edited)

Again this is right on one level but misleading because when Birmingham return most of that input in League One surely won't count towards Income and they'll be judged on P&S to 2024, perhaps 2025 and if the Rules don't change, 2026.

https://www.stokesentinel.co.uk/sport/football/football-news/stoke-city-financial-fair-play-9759904

They can always go down to League One if they wish to spend spend spend. Birmingham attendances and seemingly Matchday Commercial Revenue rising post Relegation certainly helps too.

Edited by Mr Popodopolous
Posted

Good news, sounds like the EFL will act if Leicester come down.

They don't let things go the EFL! Ask Derby while they were in Administration as the EFL were still pursuing reductions for historic P&S breaches.

Think they pursued QPR for 4 Years too.

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