The Championship FFP Thread (Merged)

[Mr Popodopolous]

This week could be an interesting one. This month in fact.

Due out this week

Cardiff, results for last season.

Birmingham and their 6 month results to the end of December 2021.

Perhaps due out- should be

Stoke, although there is some uncertainty as to whether it is this week or May 28th 2022. Bet365 could show it, that'd be the end of March 2022.

Due end of March or so

Middlesbrough and Nottingham Forest.

Blackburn and Derby too although Blackburn we have a fair idea about, and the June Order says Derby need to a) Submit to CH within the deadline if out of administration or b) Otherwise publish if still in.

Edited February 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

May as well have a small look.

In respect of Stoke, this EFL £5m and £5m..

Well, they sought to claim £38m in 2019/20 alone! 2020/21, we have no idea yet but can guess, but £8m in normal and £30m in Covid Impairment for 2019/20 in isolation.

£43m FFP loss- that's £88m- est. £7m in usual FFP, £30m in Covid Impairment and £8m in regular Covid costs, all broken down.

They'll have to pick and choose which costs they try to allocate but assuming £5m/£5m in regular Covid costs, that £3m needs to be added back and then that extra £30m needs to be a) Put through as a regular Impairment- transforming the FFP loss into a £76m one for 2019/20 or b) Reallocated back to the Intangible Asset Registrations..so that's £46m FFP loss and then amortised straight line up to the point of disposal- the latter feels a fairly complex exercise.

If added back to normal Impairment then I expect Stoke would look like this- this is after lopping off £7m per year in FFP costs:

2017/18- £23m- PL relegation/£35m limit.

2018/19- £8m/£13m limit

2019/20- £76m loss/£13m limit

Those are FFP and Covid adjusted losses not Accounting losses as such.

£29m adjusted Profit last season maybe?? Trying to calculate it is a mess due to the 2 year average with Covid and reallocation of the Impairment.

Perhaps recalculated another way..

FFP Upper Loss Tariff

£55.5m

£23m + £8m used in 2017/18 and 2018/19.

A further aggregated £49m of FFP losses allowed, averaged at £24.5m per season.

£73m in accounting losses once we add back £7m per year in FFP and £5m per year of Covid.

Of that £73m, and inclusive of FFP and Covid, the losses in 2019/20 once readjusted my way were £76m.

Yep £27m required profit feels accurate from that angle- when I say profit I mean adjusted for a) Covid and b) FFP, £15m in absolute terms.

How on earth do we go about reallocation over term until disposal given we don't know which players were Impaired.

Edited February 27, 2022 by Mr Popodopolous

[Mr Popodopolous]

Birmingham's Interim accounts are out. Can't post the link as on phone but will try it later.

One bit that I read and have had to read a few times is "Profit and Loss Sharing Arrangement".

£11-11.5m half season loss without it, maybe £2-3m with..how this works with FFP/P&S I'm unsure but the Football Club Segment appear to have been compensated to the tune of £8-9m under this on first glance.

Also Birmingham appear to have Rental income- can only assume it's from Coventry, early lease termination?? Back at the Ricoh now of course.

Edited February 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0228/2022022801419.pdf

Found the link, if that £8-9m income/offset is allowed to stand as income for FFP, that is a very interesting development.

It's complex, linked to the external company who purchased the Stadium company, not looked into it for a while.

Should add, think they comply to 2021, 2022 and maybe 2023 in any event but that arrangement could have big ramifications.

Edited February 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

I read it again, the Rental bit is fairly insignificant and may not be Football Club- or as per HK report Football Club Segment income in any event...

..The Profit and Loss Sharing bit however, that could be significant! Not so much a boost to turnover as a potentially major loss off setter.

In theory could boost their spending power or headroom at least by £8-9m if a one off..think of it as akin to Profit on Transfers, not turnover but enabling a club to spend more- can't be right though!

Edited February 28, 2022 by Mr Popodopolous

[Davefevs]

HKD:GBP roughly 10:1

So £4m loss or £13m loss with support from Parent.

[Mr Popodopolous]

Ah yeah that's the BSH results as a group/consolidator, it's the segmented results I looked at.

Segmented show the club, the huge grey area is does the Profit and Loss Sharing count towards FFP. Certainly shouldn't.

[Davefevs]

6 minutes ago, Mr Popodopolous said:

Ah yeah that's the BSH results as a group/consolidator, it's the segmented results I looked at.

Segmented show the club, the huge grey area is does the Profit and Loss Sharing count towards FFP. Certainly shouldn't.

Out of interest what about the 6 months to June 2021, where are they?

[Mr Popodopolous]

14 minutes ago, Davefevs said:

Out of interest what about the 6 months to June 2021, where are they?

I think it works like this.

12 month accounts to June 30, come in at the end of September that year.

6 month accounts to the end of December, out at the end of February.

Will dig out the link to the docs uploaded etc soon.

[Davefevs]

19 minutes ago, Mr Popodopolous said:

I think it works like this.

12 month accounts to June 30, come in at the end of September that year.

6 month accounts to the end of December, out at the end of February.

Will dig out the link to the docs uploaded etc soon.

Ah, being stoopid, I read it as December 2020, not 2021….so from a published accounts perspective they are the club with the most up to date accounts…albeit unaudited.

Would be good to see the 12 month ones to June 2021….that covers the equivalent 20-21 season I guess?

[Mr Popodopolous]

1 hour ago, Davefevs said:

Ah, being stoopid, I read it as December 2020, not 2021….so from a published accounts perspective they are the club with the most up to date accounts…albeit unaudited.

Would be good to see the 12 month ones to June 2021….that covers the equivalent 20-21 season I guess?

https://www1.hkexnews.hk/search/titlesearch.xhtml

There's a list...will pull out the last few 12 month and interim ones. Indeed they are the most up to date for FFP.

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0228/2022022801419.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0930/2021093002012.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0226/2021022601723.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0930/2020093001616.pdf

[Mr Popodopolous]

Aaaah, I think I see now having read it a few more times...

It isn't- or may well not be the club- who get the compensation, but the owners- BSH from the other company with whom there is a link. Still find it hard to reconcile a £2.9m loss in the 6 months to the end of December but if it's cancelling it out at net loss to the Parent then the gain shouldn't be reflected in the club accounts?

[Davefevs]

21 minutes ago, Mr Popodopolous said:

https://www1.hkexnews.hk/search/titlesearch.xhtml

There's a list...will pull out the last few 12 month and interim ones. Indeed they are the most up to date for FFP.

https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0228/2022022801419.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0930/2021093002012.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0226/2021022601723.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0930/2020093001616.pdf

Legend
 

My quick and dirty summary of 21/22….£13m loss in first 6 months, reduced by £9m from group investment to £4m.  So expect another £13m in the second 6 months, therefore about £17m in total.  Something like that?

[Mr Popodopolous]

3 minutes ago, Davefevs said:

Legend
 

My quick and dirty summary of 21/22….£13m loss in first 6 months, reduced by £9m from group investment to £4m.  So expect another £13m in the second 6 months, therefore about £17m in total.  Something like that?

Haha thanks..club structures these days eh, I dunno...

Something like that, although the Group Investment- well whether it counts within FFP is a whole different issue- and on closer inspection may go to the consolidated- ie the UBO of BSH, but not the club.

[NcnsBcfc]

On 25/02/2022 at 23:58, Davefevs said:

Coventry showing how it can be done!

Where's their playing budget in that Dave?

Is it the  £15.7m administrative expenses?

[NcnsBcfc]

18 hours ago, Mr Popodopolous said:

Haha thanks..club structures these days eh, I dunno...

Something like that, although the Group Investment- well whether it counts within FFP is a whole different issue- and on closer inspection may go to the consolidated- ie the UBO of BSH, but not the club.

So the saga continues over creative accounting by some clubs to stay with FFP.

As we were talking about before, the premise of potentially punishing a club that has been open & transparent about it's finances; whilst getting outmanouvered again by others leaves a bitter taste.

This Birmingham scenario is similar in my eyes to the Forest owner moving money/players between Olympiakos & Forest at higher than their actual worth to manipulate P&S.

[Davefevs]

2 minutes ago, NcnsBcfc said:

Where's their playing budget in that Dave?

Is it the  £15.7m administrative expenses?

I don’t ever look at it as a “playing budget” per se, I just look simply at “what are the costs of the whole operation”.

So, I add:

• cost of sales
• admin expenses (which in Cov’s case will be wages and amortisation amongst other things)
• interest payable and others

Total circa £19m (compared to our £60m+).

[NcnsBcfc]

9 minutes ago, Davefevs said:

I don’t ever look at it as a “playing budget” per se, I just look simply at “what are the costs of the whole operation”.

So, I add:

• cost of sales
• admin expenses (which in Cov’s case will be wages and amortisation amongst other things)
• interest payable and others

Total circa £19m (compared to our £60m+).

Jesus, this is what we were talking about on the phone.

Even with player sales, and a lower playing budget; the unspecified "operating costs" of Bristol City are like a giant millstone around our neck.

There must be a need within the club to address this issue. Either by once again creative accountancy; or by other means?

Do we have any idea what the approx £25m operating costs of City, that exclude the playing budget actually involve?

And of course why are they double, or even more; than reciprocal clubs in the same division?

What are the costs of repaying Lansdown's loan each season as well?

Edited March 1, 2022 by NcnsBcfc

[Davefevs]

1 hour ago, NcnsBcfc said:

Jesus, this is what we were talking about on the phone.

Even with player sales, and a lower playing budget; the unspecified "operating costs" of Bristol City are like a giant millstone around our neck.

There must be a need within the club to address this issue. Either by once again creative accountancy; or by other means?

Do we have any idea what the approx £25m operating costs of City, that exclude the playing budget actually involve?

At its simplest level:

Football Club

Amortisation £12.358m

Depreciatiom £0.474m

Other Costs £10.431m (rent to Ashton Gate, services from Bristol Sport, etc, etc)

Total £53.516m costs from football out of £61.562m Holdings

And of course why are they double, or even more; than reciprocal clubs in the same division?

I reckon Nige has got rid of £12-13m of that cost in the summer, more to come too.

What are the costs of repaying Lansdown's loan each season as well?

Here’s Ashton Gate Ltd.  Cost of interest and depreciation is £3.8m

Comments above  

[Mr Popodopolous]

4 hours ago, NcnsBcfc said:

So the saga continues over creative accounting by some clubs to stay with FFP.

As we were talking about before, the premise of potentially punishing a club that has been open & transparent about it's finances; whilst getting outmanouvered again by others leaves a bitter taste.

This Birmingham scenario is similar in my eyes to the Forest owner moving money/players between Olympiakos & Forest at higher than their actual worth to manipulate P&S.

I had a read back and I think I may have jumped the gun- the offset appears that it might go to the owners ie their chunk of the losses as opposed to the club itself- if that makes sense and it probably doesn't!

The structure from a loose look was complex enough in the first instance even before this...I dunno how to do a graphic on here, perhaps I might make one later and copy it over or similar but anyway...

Quote

Birmingham City FC PLC (Not actually a PLC here, a hangover from Gold and Sullivan if not before but they never bothered to change it).

Sits under

Birmingham City PLC

Until 2010, this was it unless there was a Gold and Sullivan parent that was a parent but ultimately unconnected but since 2010 this sat under...

Birmingham Sports Holdings based in Hong Kong or listed on the HKSE- also known as Birmingham International among other things. That said the Person of control appears to be directly the owner!

Birmingham Sports Holdings although not sure when it moved into this also includes a) A property company in Cambodia b) A lottery of some kind is mentioned- again Asia, not football and I believe that some other items exist too. That's it right? Nope- not since 2019 anyway! Based in Hong Kong, registered in the Cayman Islands- Birmingham Sports Holdings that is.

In 2019, Birmingham sold and leased back the ground- fair price, fair rent and that should be the end of it. Hence where Birmingham City Stadium Limited comes in.

Birmingham City Stadium Limited is separate to the Football Group- ie Club PLC, PLC and BSH- but still under the overall Birmingham Sports Holdings Group. Indeed seems to sit under there whereas Birmingham City PLC sits under the owner.

Is that it? Nope there is more!

In 2020 or 2021, 25% of the Birmingham City Stadium Limited company- the company who now owns St Andrews- was purchased by Oriental Rainbow Investments.

Think the Profit and Loss Sharing benefits a) Birmingham Sports Holdings and b) When applicable that company...the club nope! The club even pay for their own repairs I think, as well as the £1.25m in rent to Birmingham City Stadium Limited.

There's more to it still probably but I lose the will...

Some quick points...if possible with this structure! Hope it helps.

1. Birmingham City Stadium Limited- Still sits within Birmingham Sports Holdings at the HK level but not the UK level...
2. Obviously due to the- in my eyes unlike some other sale and leasebacks, reasonable looking transaction the two are as they have to be separate at the UK level. It's a subsidiary of BSH but not part of the FFP group- ie Birmingham City FC PLC and Birmingham City PLC.
3. This Profit and Loss Sharing arrangement- may well benefit the owners over in Hong Kong, not the club.
4. Not a favourable deal for the club- £1.25m rent per season on a £22.25m transaction is reasonable commercially speaking as well as having to pay own repairs.
5. FWIW, I think that the repairs- and possibly loss of revenue from having to shut stands during said repairs- should be exempt from FFP. May not be much but it seems a fair exemption to me. Infrastructure expenditure and loss of earnings due to it surely? Provided it is probably analysed and audited- by the EFL too- of course. Anymore than a couple of million to a few million and that would be suspect.

Now Nottingham Forest- different kettle of fish although a lot of the transactions look quite cost neutral- my big issue is the Carvalho one as it stands.

Edited March 1, 2022 by Mr Popodopolous

[Mr Popodopolous]

Okay accounts wise. We have Barnsley- or at least it appeared today and will be up tomorrow or Thursday I expect.

We have Blackpool!

Seems okay...about £7m loss over the 2 Covid seasons, both in League 1 at that! While their turnover will have risen on promotion, Costs too but I reckon just fine for P&S- and doing very well with their resources too, Bloomfield Road while not quite a fortress definitely difficult.

Will have increased of course...assume it doesn't include Promotion Bonuses but they did go up so maybe. Either way they must be one of the lowest budget in the League?

Then again, I never did expect them or Barnsley to have FFP issues- not now, not for some long time, until who knows when.

Cardiff- Theirs are due this week, not showing as overdue at CH so give it a few days probably...not showing as in yet.

Stoke the real interesting one- as I said before, they have it is confirmed managed to get it delayed by 3 months. I wonder why they would do that...?

 

 

Even the topco- Parent...

As @Hxj rightly said, push back the date by one day and 9 months can become 12...although it seems to be one forward in this case. Sits above and also what sits on the Bet365 Balance sheet is...maybe it won't this time around but certainly has!

If you scroll down far enough you can also see- e.g. Impairments perhaps but certainly if any assets have been disposed of! As they appear on the Bet365 one too.

Bet365 surely did great during Covid, all the online stuff with the football ongoing- why would they specifically delay their accounts.

[Davefevs]

Re the “footballing” part of Stoke / Bet365, aren’t they just aligning the end of year to 31st May across each company?  And then subsequently asking for an extension of 3 (9 to 12) months to get their accounts in order.

Re Bet365, that looks a bit shifty, granted.

Very bullish re their 19/20 impairment, saying in accordance with EFL guidance published…they may well have completely misinterpreted the guidance.  Appx5 rule 1.6, says revenues lost or exceptional costs.  The fact that player impairment (and amortisation) is mentioned earlier in the rules as not being exempt….and that impairment is part of the accounting policy where players are deemed to be no longer worth their current value, seems to be a leap of faith by Stoke.

Compare that to other clubs like Millwall, who don’t pay large fees and have little amortisation.  How might they feel if Stoke were allowed to count £30m of 19/20’s £43m impairment as £0?  I wonder what they put the other £13m down to (and what players form part of that)?

I do think impairment is better than RG’s suggestion, as at least it’s an accounting solution, but it hugely benefits clubs who’ve spent a shedload on transfers and not mitigated in any way.  I wouldn’t vote for it, even though it would help City.

Interesting to see how this plays out.

[Mr Popodopolous]

Yeah, agreed- think that might be happening in respect of Bet365- but they do publish the football financials, albeit not in detail but enough to form a picture- should have been out by end of December 2021 or so given that the Covid 3 month extension has now gone- but the shifting of Reporting Period date can move the due date.

I totally agree- Millwall and you can probably go lower still even, it just cannot align with the guidance as laid out...in accounting terms maybe but absolutely not the accounting terms in the context of the FFP regs. Might be that Stoke put X in their stated accounts and there are adjustments for FFP purposes- I laid out two possible ways, reclassify the Impairment to regular ie add it to the regular £13m in 2019/20 or reallocate straight line over the term to the point of disposal.

Gould's solution I dunno...no way of proving is there, Impairment yeah but accounted for correctly not excluded for FFP.

Might depend on weight of numbers- I said as soon as I saw it, it should be forensically examined and challenged if required- the fact that they of the 23 to release accounts for 2019/20 are the only ones to have done it feels quite telling- and it completely smashes the reported numbers allowed for Covid losses in any event.

I thought e.g. Reading might have done it- "We breached anyway, let's make it a big breach as we're over the £15m 12 point limit anyway, and reduce the pressure in later years"- as regular not Covid Impairment I mean. They slightly surprisingly in 2020/21 have not.

Different example, I thought Birmingham might have given reasonable headroom- to reduce the pressure on e.g. 2023/24 in a period in which the impact would be halved due to the aggregate and averaging bit- they appear not to have done for 2020/21, let alone 2019/20!

Edited March 2, 2022 by Mr Popodopolous

[martnewts]

On 26/02/2022 at 00:04, Hxj said:

If you shorten the accounting period of a company, your filing date is the later of the original date and three months from the date that you tell Companies House of the change.  You have to tell them on or before the original filing date, so if you time it correctly you get another three months.

It is also currently still possible to get a 3 month Covid filing deadline extension no questions asked simply by logging in to Companies House and requesting one although I dont think it is widely known it has saved my ass a few times recently!!

[Mr Popodopolous]

11 minutes ago, martnewts said:

It is also currently still possible to get a 3 month Covid filing deadline extension no questions asked simply by logging in to Companies House and requesting one although I dont think it is widely known it has saved my ass a few times recently!!

Very interesting that, thanks.

Honestly thought it was only applicable to last year and was business as usual now. Certainly not many clubs seem to have done so..might also square the circle of Stoke not reducing Reporting Period to get the extra 3 months.

[Davefevs]

Barnsley’s accounts out.  Nothing to see…

…apart from how to achieve a one-season playoff on a tinsy-winsy budget.  Back to Lg1 (again) a likely scenario this season though.

 

[Mr Popodopolous]

Barnsley did exceptionally well last season, with all that in mind.

4 weeks to 2 months in the summer were a major sliding doors moment for them in the short and perhaps the long term.

1) Ismael- Manager who transformed them, to West Brom.

2) Mowatt the talisman, went with.

That's bad enough but there is more.

Dane Murphy the CEO- to Nottingham Forest. Didn't see Mark Ashton getting headhunted by Forest.

Post playoffs their morale would have high and with financial headroom due to prudence- they were linked with Marcondes who would have been a very good addition IMO. Marcondes and Mowatt in their system? Very good! Had CEO, Mowatt and Ismael stayed Marcondes joining not so inconceivable I reckon.

Granted they lost Dike and smell others but a month or two in the summer really changed their trajectory.

They could yet stay up this season, crucially they still have Peterborough and Reading to play at Oakwell. Real 6 pointers with home advantage too.

2 games in hand on Derby, 1 on Reading. Home games v sides who are neither going up or down might help too- Blackpool, us and Stoke they would target most if not all of these as winnable.

Blackpool post Autumn seem good at home, competitive v everyone but sketchy on the road as an example. Bit like us in some ways!

Edited March 2, 2022 by Mr Popodopolous

[Davefevs]

11 minutes ago, Mr Popodopolous said:

Barnsley did exceptionally well last season, with all that in mind.

4 weeks to 2 months in the summer were a major sliding doors moment for them in the short and perhaps the long term.

1) Ismael- Manager who transformed them, to West Brom.

2) Mowatt the talisman, went with.

That's bad enough but there is more.

Dane Murphy the CEO- to Nottingham Forest. Didn't see Mark Ashton getting headhunted by Forest.

Post playoffs their morale would have high and with financial headroom due to prudence- they were linked with Marcondes who would have been a very good addition IMO. Marcondes and Mowatt in their system? Very good! Had CEO, Mowatt and Ismael stayed Marcondes joining not so inconceivable I reckon.

Granted they lost Dike and smell others but a month or two in the summer really changed their trajectory.

They could yet stay up this season, crucially they still have Peterborough and Reading to play at Oakwell. Real 6 pointers with home advantage too.

2 games in hand on Derby, 1 on Reading. Home games v sides who are neither going up or down might help too- Blackpool, us and Stoke they would target most if not all of these as winnable.

Blackpool post Autumn seem good at home, competitive v everyone but sketchy on the road as an example. Bit like us in some ways!

Yep, good summary…shows how a few players (sold, injured, whatever) can make a big difference, even if they don’t appear to be stellar players:

Mowatt and Dike (as you said)

Chaplin (to Ipswich)

Sollbauer (went home I think)

Anderson (injured)

Couple that with the impact of CEO going, who’d been part of good recruitment, makes Barnsley go back to being a potential yo-yo club again.

 

[Ska Junkie]

Reading the last few pages of this thread, is it just us that is going to fail miserably then? 

[Davefevs]

1 hour ago, Ska Junkie said:

Reading the last few pages of this thread, is it just us that is going to fail miserably then? 

I said at the start of the season you’ve probably got 4 brackets of teams (think I said 3 brackets but hey-ho):

- the low cost / efficient / house in order teams - Coventry, Luton, Millwall, Preston, Barnsley, Blackpool, Peterborough, Hull, QPR, Blackburn -

- the PP clubs - Fulham, Bournemouth, Sheffield Utd, West Brom -

- the ex-PP clubs who haven’t gone mad - Swansea, Huddersfield - okay for now / next season too probably

- the cost juggernauts - City, Boro, Stoke (ex-PPs), Forest, Cardiff (ex-PPs), Reading (Pts), Derby (Pts), Birmingham

okay, not all the ones in the final category are in trouble, but they are the ones at risk if they don’t sort themselves out.  We’ve started to get our house in order.

But what can be seen is that it’s not a Championship wide issue, probably 6-8 clubs either already “caught” by FFP, or worried about being caught.