FFP amendments - covid allowances

[CyderInACan]

 

[Bristol Rob]

I have no idea if this is good or bad news Reg, I thought we lost a lot more due to the 'vids.

[ExiledAjax]

COVID

As a result of a number of Clubs highlighting that the pandemic continues to have an adverse financial effect despite a return to full capacity stadiums, Clubs have opted to reintroduce COVID add backs into the P&S calculation for season 2021/22.  The impact is that Clubs will be able to claim lost revenues or exceptional costs directly relating to the pandemic up to a value of £2.5m for the reporting period 2021/22. Clubs can claim up to £5m for seasons 2019/20 and 2020/21.

Accounting for Player Registrations

Clubs are now required to provide a Player Registration schedule that will ensure greater transparency in respect of information that includes but is not limited to players wages, sell-on rights, registration costs and amortisation.  These new requirements follow the principles of the UEFA Club Financial Fair Play Regulations.

In addition, EFL Clubs have agreed that a mandatory requirement for the amortisation of Player Registrations on a straight-line basis should be included.

Introduction of Monitoring for Forecasted Breaches

With a priority to ensure future compliance with the P&S rules, Clubs have agreed that where a breach is forecasted in future years then the League should have the ability to impose a business plan or appropriate monitoring requirements.

Edited February 17, 2022 by ExiledAjax

[054123]

Just now, Bristol Rob said:

I have no idea if this is good or bad news Reg, I thought we lost a lot more due to the 'vids.

That’s what I thought, but it does say ‘up to’ so not just a case that clubs can allow a flat 5m for Covid losses.

Despite suffering some slings and arrows, I actually think the club have done the right thing in being upfront and open with our accounts.

[Mr Popodopolous]

9 minutes ago, ExiledAjax said:

Introduction of Monitoring for Forecasted Breaches

With a priority to ensure future compliance with the P&S rules, Clubs have agreed that where a breach is forecasted in future years then the League should have the ability to impose a business plan or appropriate monitoring requirements.

This bit is something I wondered about a few days ago- it seems that now they can, unlike in past cases where most were punished and some had got away!! Had this and the stadium rule been in place with Aston Villa, they absolutely would have failed or been Embargoed- this means we and varied others, could be in a business plan or appropriate monitoring requirements as soon as Summer 2022, it's a gamechanger- but not necessarily in a good way!

Aston Villa fans would doubtless say "Compliant in every respect" but had it been in place back then we would have seen some quite different outcomes probably- but ironically perhaps less points deductions.

Edited February 17, 2022 by Mr Popodopolous

[ExiledAjax]

Just now, Mr Popodopolous said:

This bit is something I wondered about a few days ago- it seems that now they can, unlike in past cases where most were punished and some had got away!! Had this and the stadium rule been in place with Aston Villa, they absolutely would have failed or been Embargoed- this means we and varied others, could be in a business plan or appropriate monitoring requirements as soon as Summer 2022, it's a gamechanger.

It is, but it's good I think. Means that you can no longer as effectively speculate in the hope that you get promoted before reality bites. It's good to try and make some of this stuff less reactionary. And yeh, I think we could potentially be under some sort of 'enhanced monitoring' unless we get that one big sale to show future compliance. Interesting it doesn't say at what point the forecast is made. Is it ongoing? monthly? quarterly? just when accounts are published?

Nothing around Parachute Payments though, so that elephant is still very much in the room.

[Mr Popodopolous]

2 minutes ago, ExiledAjax said:

It is, but it's good I think. Means that you can no longer as effectively speculate in the hope that you get promoted before reality bites. It's good to try and make some of this stuff less reactionary. And yeh, I think we could potentially be under some sort of 'enhanced monitoring' unless we get that one big sale to show future compliance. Interesting it doesn't say at what point the forecast is made. Is it ongoing? monthly? quarterly? just when accounts are published?

Nothing around Parachute Payments though, so that elephant is still very much in the room.

Agreed but in the sense of freedom to move this summer, it could bite quicker than we think.

Not read the EFL statement in full yet, only the snippets on here but to the best of my knowledge, it is T-2 and T-1 and then Projections for T...and then if that figure or if T exceeds a certain number, clubs have to submit T+1 and possibly T+2 to the EFL. Presumably T+1 and T+2 can be future monitoring and in theory or where appropriate, enhanced monitoring or a Business Plan can kick in.

Edited February 17, 2022 by Mr Popodopolous

[Mr Popodopolous]

As for the £5m bit...that's not good news for us, unless it is again being poorly reported a £5m cap- but many others in good company- would not help us much. A further £2.5m for this season is alright but nothing amazing but helps us a bit more than some of my worst case scenario modelling.

Having said that, a reasonable number of clubs could also face issues.

Edited February 17, 2022 by Mr Popodopolous

[ExiledAjax]

3 minutes ago, Mr Popodopolous said:

Agreed but in the sense of freedom to move this summer, it could bite quicker than we think.

Not read the EFL statement in full yet, only the snippets on here but to the best of my knowledge, it is T-2 and T-1 and then Projections for T...and then if that figure or if T exceeds a certain number, clubs have to submit T+1 and possibly T+2 to the EFL. Presumably T+1 and T+2 can be future monitoring and in theory or where appropriate, enhanced monitoring or a Business Plan can kick in.

Well I hope they've agreed a proper way to estimate the value of player sales in future years.

[Mr Popodopolous]

Interesting to see- Stoke for example have put £30m in Player Impairment and £8m in other Covid costs in the 2019/20 accounts alone.

The big one there is of course £30m in Impairment- the contentious one. The other claimed costs frankly look normal and reasonable.

Edited February 17, 2022 by Mr Popodopolous

[ExiledAjax]

1 minute ago, Mr Popodopolous said:

The big one there is of course £30m in Impairment- the contentious one. The other claimed costs frankly look normal and reasonable.

Can you see that getting through in light of this attitude from the EFL and its clubs? I'd say that if allowed it rather flies in the face of the kind of stuff they are setting out here. Nice try by Stoke, but I'll be surprised if it's allowed.

[Mr Popodopolous]

12 minutes ago, ExiledAjax said:

Can you see that getting through in light of this attitude from the EFL and its clubs? I'd say that if allowed it rather flies in the face of the kind of stuff they are setting out here. Nice try by Stoke, but I'll be surprised if it's allowed.

I struggle to see how- if that is disallowed then surely they have a problem to 2021, let alone 2022 and beyond.

Derby are another, they seem to have argued £20m in Covid costs in the administrators reports, a world away from £5m allowance and £2.5m allowance this year- something about £30m in Player Valuations too but would have to look again- but with no actual Published Accounts for just under 3 years...this will benefit some of the lower income clubs who usually also have a lower cost base as a result- these had less to lose so will have less to offset. I cannot find the bit about Derby but am convinced I read it somewhere, the £30m bit.

This kind of number was pushing towards my worst case scenario- I'd say we could be in trouble! Still working on several projections- to be clear, trouble isn't to 2022 let alone 2021, it's to 2023!

Edited February 17, 2022 by Mr Popodopolous

[ExiledAjax]

1 minute ago, Mr Popodopolous said:

I struggle to see how- if that is disallowed then surely they have a problem to 2021, let alone 2022 and beyond.

Derby are another, they seem to have argued £20m in Covid costs in the administrators reports, a world away from £5m allowance and £2.5m allowance this year- something about £30m in Player Valuations too but with no actual Published Accounts...

We said £12m(ish) right? Do I remember that correctly?

[Mr Popodopolous]

Just now, ExiledAjax said:

We said £12m(ish) right? Do I remember that correctly?

Think £11m in 2020/21 and I guess you could say £2-3m for the drop from peak in 2018/19 to 2019/20.

[1960maaan]

I won't pretend to have a handle on this, and how it might alter what we can and can't do.

What I have enjoyed is looking at the reply on Twitter. Seems every Derby fan has come out and demanded their points and money back.
One is repeating this and ignoring anyone that mentions it's for Admin points deduction. Great fun though.

If I've read it right though, would we be a little further away from any FFP risk of penalty ?

[Mr Popodopolous]

6 minutes ago, 1960maaan said:

If I've read it right though, would we be a little further away from any FFP risk of penalty ?

I fear the opposite- £48m in losses in the combined period, halved- then lop off £5m per year in allowances and then lop off a further £5m over the 2 years for Covid allowances and that leaves a loss of £16.5m- okay a lot of rounding there, for P&S purposes.

Passed to 2021, passed to 2022...but to 2023 I fear big problems albeit the £2.5m this season will be welcome but no it doesn't feel like good news on the face of it. That said I can be a bit pessimistic/cautious/conservative/risk averse when it comes to FFP.

Gregor and the good news bit...the only bit I can see is if people were expecting a) No Covid allowance at all and b) Nothing for 2021/22. Other than that, I don't understand his argument.

Edited February 17, 2022 by Mr Popodopolous

[Mr Popodopolous]

Suppose a crucial question that has not necessarily been covered- as a result of these amendments will the EFL still be seeking points deductions for breaches?

Past and recent precedent suggests yes, and I can see some clubs kicking off if not but it is a question worth asking...I still think yes FWIW.

[Davefevs]

1 hour ago, Mr Popodopolous said:

Interesting to see- Stoke for example have put £30m in Player Impairment and £8m in other Covid costs in the 2019/20 accounts alone.

The big one there is of course £30m in Impairment- the contentious one. The other claimed costs frankly look normal and reasonable.

1 hour ago, ExiledAjax said:

Can you see that getting through in light of this attitude from the EFL and its clubs? I'd say that if allowed it rather flies in the face of the kind of stuff they are setting out here. Nice try by Stoke, but I'll be surprised if it's allowed.

Yep, as I suspected (hoped?) putting an impairment in your company accounts doesn’t mean it’s gonna count for P&S!!  We will see how this is factored in.

Assuming it’s £5m for 19/20 and £5m for 20/21, I’m assuming it’s only those limits if you lost that much, I.e. if you only lost £2m in 19/20 you can only offset £2m.

The £2.5m is a bit of a bonus though, now the two years are set at a max of £5m.

Putting the following figs into my xls (£2.4m 19/20, £5.0m max 20/21, £2.5m max (21/22), it actually has little impact.  I’d initially put the same for 19/20 and £10.4m in for 20/21, but because it’s halved it’s really only £6.4m excluded.

Now we get £2.4m + £5.0m = £7.4m halved is £3.7m plus the new £2.5m equals £6.2m.  So we are about £0.2m worse off.

So still over next year, but still not much by my reckoning.

Edited February 17, 2022 by Davefevs

[ExiledAjax]

44 minutes ago, Davefevs said:

Yep, as I suspected (hoped?) putting an impairment in your company accounts doesn’t mean it’s gonna count for P&S!!  We will see how this is factored in.

Assuming it’s £5m for 19/20 and £5m for 20/21, I’m assuming it’s only those limits if you lost that much, I.e. if you only lost £2m in 19/20 you can only offset £2m.

The £2.5m is a bit of a bonus though, now the two years are set at a max of £5m.

Putting the following figs into my xls (£2.4m 19/20, £5.0m max 20/21, £2.5m max (21/22), it actually has little impact.  I’d initially put the same for 19/20 and £10.4m in for 20/21, but because it’s halved it’s really only £6.4m excluded.

Now we get £2.4m + £5.0m = £7.4m halved is £3.7m plus the new £2.5m equals £6.2m.  So we are about £0.2m worse off.

So still over next year, but still not much by my reckoning.

So we still need a bit of transfer income to make sure we stay within the limits. 

[Davefevs]

Just now, ExiledAjax said:

So we still need a bit of transfer income to make sure we stay within the limits. 

Or cut costs, e.g. wages, smooth amortisation, etc, etc.

We have 2 windows and 15th months to sort!

Edited February 17, 2022 by Davefevs

[Mr Popodopolous]

Am I misinterpreting something quite big here?

I take/took the £5m allowance over 2 years to be the max Covid allowance- so £48m-£5m-usual allowances (£5m x 2)=£33m.

£33m/2=£16,5m. That knocks the claims of £10-15m, perhaps £15-the lower end of £20m out of the park if so.

[GrahamC]

2 hours ago, 1960maaan said:

I won't pretend to have a handle on this, and how it might alter what we can and can't do.

What I have enjoyed is looking at the reply on Twitter. Seems every Derby fan has come out and demanded their points and money back.
One is repeating this and ignoring anyone that mentions it's for Admin points deduction. Great fun though.

If I've read it right though, would we be a little further away from any FFP risk of penalty ?

Yep, everyone & his dog is also saying we are losing £412k a week (very old news, we’ve reduced our wage bill by a third since then & of course actually have income this season, unlike back then) plus are saying we’ll get a points deduction, when Gould actually said it was “possible” in future, not definite.

Not going to waste time arguing with them as it would take the rest of my life.

[Mr Popodopolous]

The £412k per week is our average over 20 years IIRC, although probably before Transfer Profits ie Operating Losses most likely.

15 minutes ago, GrahamC said:

we’ve reduced our wage bill by a third since then

This would move the dial somewhat but what's the source? Main figure that's been floated is £6m- if it's £10-10.5m down on last season in addition to the amortisation decrease that's a big swing.

[054123]

21 minutes ago, GrahamC said:

Yep, everyone & his dog is also saying we are losing £412k a week (very old news, we’ve reduced our wage bill by a third since then & of course actually have income this season, unlike back then) plus are saying we’ll get a points deduction, when Gould actually said it was “possible” in future, not definite.

Not going to waste time arguing with them as it would take the rest of my life.

Agreed. 

We’ve been upfront and honest and merely said things might be difficult at the of 22/23.

We published all accounts in a timely fashion and haven’t tried to mis represent or hide anything (ahem…Mel Morris).

Lots can happen over the next 18/24 months.

Lets see where we are then.

we won’t be alone.

Edited February 17, 2022 by 054123

[GrahamC]

10 minutes ago, Mr Popodopolous said:

The £412k per week is our average over 20 years IIRC, although probably before Transfer Profits ie Operating Losses most likely.

This would move the dial somewhat but what's the source? Main figure that's been floated is £6m- if it's £10-10.5m down on last season in addition to the amortisation decrease that's a big swing.

Pretty sure that was a Nige quote after the release of a dozen players last summer, might have been during that interview that he said he did “wearing civvies” a t-shirt & shorts.

[Mr Popodopolous]

If we've cut the wage bill by £6m as per a couple of reports and I've interpreted the Covid figures correctly I fear an 8-figure hole to 2022/23. Equivalent in terms of tariff to an 8-9 point deduction for the period ending 2022/23.

Certainly won't be alone though it's notable reading other Championship forums the lack of concern and debate about the issue so far.

Just now, GrahamC said:

Pretty sure that was a Nige quote after the release of a dozen players last summer, might have been during that interview that he said he did “wearing civvies” a t-shirt & shorts.

Thanks, will have a look back. Most reported  figure I've seen is £6m per season however and does it account for the new additions?

[Mr Popodopolous]

One interpretation from the Stoke forum too.

If you forecast a breach and are up front, work with EFL does this avoid a points deduction?

Again my guess would be no but it is an interpretation.

[GrahamC]

7 minutes ago, Mr Popodopolous said:

Thanks, will have a look back. Most reported  figure I've seen is £6m per season however and does it account for the new additions?

Honestly don’t know.

Those departures will have included some big earners, such as Diedhiou, Hunt, Paterson, Watkins, Lansbury & Walsh. Plus probable lower end earners like Rowe, Adelakun, Gilmartin & Mariappa.

Mawson will have been on big money as a loan signing, too.

We also shed Nagy, Wollacott, Nurse, Opi Edwards, Hinds from the wage bill & presumably Hearts have made a significant contribution to Moore’s wages.

If you look at those we brought in only James is probably on a decent amount, Weimann & Baker took rumoured 50% pay cuts to stay & Simpson, King, Atkinson & Tanner will be on relatively low wages.

[Mr Popodopolous]

On a side note, Page 804 and beyond of the Administration thread on Dcfcfans worth a look- fuming!!

They are speculating about legal action, points back- 2 or 3 points is the ballpark figure I am seeing. Suggesting that this £5m allowance is to let us, Middlesbrough, Stoke and likely more off the hook!

Edited February 17, 2022 by Mr Popodopolous

[RUSSEL85]

I think we will sell one of young prospects to a prem club in the summer, I feel we will have no choice.

[Davefevs]

4 hours ago, Mr Popodopolous said:

Am I misinterpreting something quite big here?

I take/took the £5m allowance over 2 years to be the max Covid allowance- so £48m-£5m-usual allowances (£5m x 2)=£33m.

£33m/2=£16,5m. That knocks the claims of £10-15m, perhaps £15-the lower end of £20m out of the park if so.

3 hours ago, Mr Popodopolous said:

If we've cut the wage bill by £6m as per a couple of reports and I've interpreted the Covid figures correctly I fear an 8-figure hole to 2022/23. Equivalent in terms of tariff to an 8-9 point deduction for the period ending 2022/23.

Certainly won't be alone though it's notable reading other Championship forums the lack of concern and debate about the issue so far.

Thanks, will have a look back. Most reported  figure I've seen is £6m per season however and does it account for the new additions?

Would you be able to give me your simple:

Income and Costs for each year for the period ending this year, and ditto for next year.  Obviously numbers up to 20/21 are factual.

Then how much your knocking off for covid and standard FFP exclusions (£5m p.a Academy, Depreciation etc).

[ExiledAjax]

3 hours ago, Mr Popodopolous said:

One interpretation from the Stoke forum too.

If you forecast a breach and are up front, work with EFL does this avoid a points deduction?

Again my guess would be no but it is an interpretation.

I'd guess that you'd get some leniency - fewer points deducted, more suspended, thanking of thing. Like Reading did this season iirc.

[Waconda]

3 hours ago, Mr Popodopolous said:

One interpretation from the Stoke forum too.

If you forecast a breach and are up front, work with EFL does this avoid a points deduction?

Again my guess would be no but it is an interpretation.

This is the sort of thing that is going to have to happen, there will be several clubs as bad if not worse than us you would think.

I'm guessing suspended points deductions due to COVID impairment or something like that.

Edited February 18, 2022 by VT05763

[Mr Popodopolous]

8 minutes ago, VT05763 said:

This is the sort of thing that is going to have to happen, there will be several clubs as bad if not worse than us you would think.

I'm guessing suspended points deductions due to COVID impairment or something like that.

Not so sure, because once a precedent is set...

Maybe it would be the case of the Business Plans with points deduction attached in the same season if failed- see Reading and the 6 + 6...as in you'd have Summer 2022 and January 2023 (plus any sales to foreign clubs when window shut and theirs open) to put it right. By Spring 2023 basically!

[Mr Popodopolous]

18 minutes ago, ExiledAjax said:

I'd guess that you'd get some leniency - fewer points deducted, more suspended, thanking of thing. Like Reading did this season iirc.

Reading got 6 but that 6 comes with serious strings attached. 6 + 6- can rise to 12 this or next year for a range of reasons, metrics that they're measured by, the suspended 6 being activated doesn't preclude separate charges for the specifics of the breach itself whatever it may be.

Granted their breach was £18.5m IIRC overspend but the principle is that even cooperation and perhaps a lower initial deduction can come with strings attached.

Edited February 18, 2022 by Mr Popodopolous

[Mr Popodopolous]

29 minutes ago, Davefevs said:

Would you be able to give me your simple:

Income and Costs for each year for the period ending this year, and ditto for next year.  Obviously numbers up to 20/21 are factual.

Then how much your knocking off for covid and standard FFP exclusions (£5m p.a Academy, Depreciation etc).

Yes, although I am actually working on multiple scenarios. Computer acting up but that aside perhaps we share notes Friday.

Covid I'm knocking off £5m over 2 seasons as per the EFL statement today, usual allowances £5m per season.

[Davefevs]

19 minutes ago, Mr Popodopolous said:

Yes, although I am actually working on multiple scenarios. Computer acting up but that aside perhaps we share notes Friday.

Covid I'm knocking off £5m over 2 seasons as per the EFL statement today, usual allowances £5m per season.

I’ll DM you a screenshot of my latest estimates.  

[Davefevs]

9 minutes ago, Tafkarmlf said:

With this being confirmed  im reading that in the 2021 accounts IE  this next season, we can deduct 12.5 million total. 

But, we can also write off players values due to amortisation and losses in the transfer market too

Ergo, We're well in the clear here  this is awesome news from where I'm looking 

No, not quite right.

We can only claim against lost revenues….and I doubt we lost as much as £5m in 19/20 (£2.4m by my estimates).  20/21 we will claim the full £5m.

But don’t forget those two years losses are added together and halved….so feels more like £3.7m (£7.4m divided by 2).

Then we get £2.5m lost revenue this season.  Attendances 10% down, so we will claim the whole lot.

I reckon we are slightly worse off following this announcement.

Re player values - nope, that was posturing from RG/JL to try to get reform….what we got was today’s announcement, so no we can’t remove those costs either.

So next season, we are currently looking to be over the £39m allowed.

[Waconda]

6 hours ago, Mr Popodopolous said:

Not so sure, because once a precedent is set...

Maybe it would be the case of the Business Plans with points deduction attached in the same season if failed- see Reading and the 6 + 6...as in you'd have Summer 2022 and January 2023 (plus any sales to foreign clubs when window shut and theirs open) to put it right. By Spring 2023 basically!

COVID though, can surely be described as a once in a life time business disrupter.

[AnotherDerbyFan]

12 hours ago, Mr Popodopolous said:

On a side note, Page 804 and beyond of the Administration thread on Dcfcfans worth a look- fuming!!

They are speculating about legal action, points back- 2 or 3 points is the ballpark figure I am seeing. Suggesting that this £5m allowance is to let us, Middlesbrough, Stoke and likely more off the hook!

I think that's a misunderstanding of how the new rule is implemented. The instinctive reaction of a few is that it's an additional £5m allowance in 19/20 and 20/21 which didn't apply previously when the penalty was applied. 

The reality is the £5m cap is the reason we failed the 2021 period by £1.96m. I understand why they decided on a cap as it prevents clubs like Stoke included a massive chunk due to Covid impairment. However, I'm surprised they didn't come up with a basic rule to only allow match receipts and commercial losses. In our case, that's at least £13m and a net £4m impact on the 2021 period. The difference being a failed 2021 period or not (18% of our points deduction), and a Wycombe claim disappearing.

There is no logic to a max £5m allowance.

[AnotherDerbyFan]

29 minutes ago, Tafkarmlf said:

Ooh, cheers. 

Just re read the EFL statement 

As a result of a number of Clubs highlighting that the pandemic continues to have an adverse financial effect despite a return to full capacity stadiums, Clubs have opted to reintroduce COVID add backs into the P&S calculation for season 2021/22.  The impact is that Clubs will be able to claim lost revenues or exceptional costs directly relating to the pandemic up to a value of £2.5m for the reporting period 2021/22. Clubs can claim up to £5m for seasons 2019/20 and 2020/21.

The Covid add backs read from that they can be put in in this seasons accounts. 

To me it still seems we can claim 12.5 million from that wording in this seasons accounts. 

I'm also not seeing the added together and halved in calculations on P&S  1.10 onwards on the EFL site makes no reference to it https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/appendix-5-financial-fair-play-regulations/

But if you can show me where that is would be most appreciated. 

 

Players, ok that's on me. 

 

For P&S calculations,19/20 and 20/21 P&S losses are averaged. 

P&S for to 4 years to 2022 = 18/19 + (19/20 + 20/21)/2 + 21/22
The max allowance applied for the 2022 period is therefore... 0 + (5+5)/2 + 2.5 = 7.5

[Monkeh]

No doubt covid had a massive effect but if covid hadn't of happened we would of still lost 20 million plus imo

[Davefevs]

1 hour ago, Tafkarmlf said:

Ooh, cheers. 

Just re read the EFL statement 

As a result of a number of Clubs highlighting that the pandemic continues to have an adverse financial effect despite a return to full capacity stadiums, Clubs have opted to reintroduce COVID add backs into the P&S calculation for season 2021/22.  The impact is that Clubs will be able to claim lost revenues or exceptional costs directly relating to the pandemic up to a value of £2.5m for the reporting period 2021/22. Clubs can claim up to £5m for seasons 2019/20 and 2020/21.

The Covid add backs read from that they can be put in in this seasons accounts. 

To me it still seems we can claim 12.5 million from that wording in this seasons accounts. 

I'm also not seeing the added together and halved in calculations on P&S  1.10 onwards on the EFL site makes no reference to it https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/appendix-5-financial-fair-play-regulations/

But if you can show me where that is would be most appreciated. 

 

Players, ok that's on me. 

 

[Davefevs]

28 minutes ago, Tafkarmlf said:

Brill, thanks muchly 

So, fag packet style maths here

Roughly

10 (18/19) - 24 (19/20+20/21/2) - 7 (my guesstimate for 21/22)

= - 21

So with 7.5 ish as a Maximum off that 

That's - 14 and well inside FFP

If losses this season are much larger say 15

As would be - 28 then maximum of 7.5 which would be 21.5 over that time. 

Its still okay based on that

Rolling three / four year period once 18/19 drops off 

-24 - 7 + next years accounts before Covid deductions of 7.5  would mean that unless we posted another massive loss then we'd be fine on that too. 

If this years accounts show losses of 20 plus losses, then we're knackered, but given crowds are back, weve lost several high earners and will have stadium income from the NHS too as one of the vaccine supersites, I can't see how that would be the case, hence the 7 guesstimate. 

Works for me, others may disagree, or come up with better maths. 

For info, assuming no transfer profit this season (currently £0!!!) I estimate we will lose £22m this season (21/22).

But on top of Covid allowance of £2.5m we also have FFP excludables - Academy, Women’s, Depreciation, etc.

That is about £5m p.a.  So 21/22’s FFP losses will be roughly £22m minus £2.5m, minus £5m totalling £14.5m.

[BTRFTG]

1 hour ago, AnotherDerbyFan said:

I think that's a misunderstanding of how the new rule is implemented. The instinctive reaction of a few is that it's an additional £5m allowance in 19/20 and 20/21 which didn't apply previously when the penalty was applied. 

The reality is the £5m cap is the reason we failed the 2021 period by £1.96m. I understand why they decided on a cap as it prevents clubs like Stoke included a massive chunk due to Covid impairment. However, I'm surprised they didn't come up with a basic rule to only allow match receipts and commercial losses. In our case, that's at least £13m and a net £4m impact on the 2021 period. The difference being a failed 2021 period or not (18% of our points deduction), and a Wycombe claim disappearing.

There is no logic to a max £5m allowance.

How do you know this when the last accounts openly published were for the year ending 2018 and elements of those were called into question?

Are you privy to the revised accounts supposedly filed with the EFL at the end of January or like the Gibson accord is that not subject to public scrutiny?

[BCFCGav]

14 hours ago, Mr Popodopolous said:

On a side note, Page 804 and beyond of the Administration thread on Dcfcfans worth a look- fuming!!

They are speculating about legal action, points back- 2 or 3 points is the ballpark figure I am seeing. Suggesting that this £5m allowance is to let us, Middlesbrough, Stoke and likely more off the hook!

I know seeing football clubs struggle financially isn't good, but it is very funny reading that Derby forum. Seeing them all send error strewn e-mails to people who will never read it to try and get some points back. Bless them.

[Davefevs]

43 minutes ago, Tafkarmlf said:

Cheers Dave,  interesting stats you have there,  I dont think the losses will be that crazy, but appreciate your stats have been near as damnit thus far. 

Still wondering how UEFA changes run into this as the UEFA site is a nightmare to navigate and as we've discussed that owners can cover larger portions etc. 

I'm still relatively sure that we're okay and that we've reported what we have as we have as part of transparency and some due diligence. 

I may be the only one though, as per 

We are 100% fine this year end 2022 (seasons up to and inc 21/22 in effect), but with a bunch of assumptions / caveats we bust the £39m for the cycle ending 2023 (seasons up to and inc 22/23).

I basically expect some cost savings (players leaving) and a bit of revenue uplift….and £0 transfer profit (that is the game changer if we sell certain players, or we get something from Kelly, Brownhill, Webster).  Based on that I make us about £2.0m-2.5m over the £39m.

I shared my estimate (at summary level) with Mr Pops last night.  Waiting to see his equivalents!

Edited February 18, 2022 by Davefevs

[AnotherDerbyFan]

2 hours ago, BTRFTG said:

How do you know this when the last accounts openly published were for the year ending 2018 and elements of those were called into question?

Are you privy to the revised accounts supposedly filed with the EFL at the end of January or like the Gibson accord is that not subject to public scrutiny?

The EFL kindly shared the figures...

Nixon has kindly shed a bit of light on the 2021 overspend too...

 

Translated into English: "the breakdown of the 9 points was never worked out, so no-one will ever know if the deduction for the 2021 period was 1, 2,3 or more points out of the total 9."
Proportionally, it would be 2 points.

 

[BTRFTG]

7 minutes ago, AnotherDerbyFan said:

The EFL kindly shared the figures...

Nixon has kindly shed a bit of light on the 2021 overspend too...

 

Translated into English: "the breakdown of the 9 points was never worked out, so no-one will ever know if the deduction for the 2021 period was 1, 2,3 or more points out of the total 9."
Proportionally, it would be 2 points.

 

Thanks, were the full accounts disclosed?

[AnotherDerbyFan]

6 minutes ago, BTRFTG said:

Thanks, were the full accounts disclosed?

Not yet

[Mr Popodopolous]

38 minutes ago, AnotherDerbyFan said:

The EFL kindly shared the figures...

Nixon has kindly shed a bit of light on the 2021 overspend too...

 

Translated into English: "the breakdown of the 9 points was never worked out, so no-one will ever know if the deduction for the 2021 period was 1, 2,3 or more points out of the total 9."
Proportionally, it would be 2 points.

 

I'm unsure about the argument that Derby were stitched up.

Because we don't know what the Sevco 5112 aggregated losses for those two years were ie before Covid allowances. For all we know, there might have been some Covid allowance in there up to £5m in 2 years. As I have posted elsewhere, Derby claimed £20m losses in the Covid period attributed to Covid.

For all we know, maybe they are setting the limits for everyone else at the limits that Derby and Reading were allowed.

Because as we know before any amortisation adjustment, Sevco 5112 made an operating loss of £46m (£38-39m with usual P&S allowances) was it in 2017/18. Granted amortisation increasing earlier means it decreases later but the stitch up idea is suspect at this stage certainly IMO.

Can work backwards using your amortisation schedules under different methods that you have posted in the past but I'm unconvinced by the stitch up claim.

We've debated before on which accounts to be used too but IDC 1 showed the Sevco 5112 as the standard so that is it I believe. The consolidated seem like the sensible choice, possibly even Gellaw Newco 203?

Edited February 18, 2022 by Mr Popodopolous

[Davefevs]

37 minutes ago, Mr Popodopolous said:

I'm unsure about the argument that Derby were stitched up.

Because we don't know what the Sevco 5112 aggregated losses for those two years were ie before Covid allowances. For all we know, there might have been some Covid allowance in there up to £5m in 2 years. As I have posted elsewhere, Derby claimed £20m losses in the Covid period attributed to Covid.

Yep, my thoughts too….they might’ve already accounted for them!

[BTRFTG]

2 hours ago, AnotherDerbyFan said:

Not yet

Intrigued by the phrase:'....which will show.....' 

[old_eastender]

4 hours ago, Mr Popodopolous said:

 

Please could you summarise our position, i.e. is it likely we may fail FFP  and face a pts deduction next season, or the season after, or not?

[AnotherDerbyFan]

4 hours ago, Mr Popodopolous said:

I'm unsure about the argument that Derby were stitched up.

Because we don't know what the Sevco 5112 aggregated losses for those two years were ie before Covid allowances. For all we know, there might have been some Covid allowance in there up to £5m in 2 years. As I have posted elsewhere, Derby claimed £20m losses in the Covid period attributed to Covid.

For all we know, maybe they are setting the limits for everyone else at the limits that Derby and Reading were allowed.

That's kind if the issue here. If £5m was the figure set, there's still a significant amount of income lost due to Covid that isn't accounted for. £9m match receipts in a normal season, resulting in a minimum of £2m deficit in the P&S calculations. Coincidentally, that would have been enough to avoid a penalty in the 2021 period.

4 hours ago, Mr Popodopolous said:

Because as we know before any amortisation adjustment, Sevco 5112 made an operating loss of £46m (£38-39m with usual P&S allowances) was it in 2017/18. Granted amortisation increasing earlier means it decreases later but the stitch up idea is suspect at this stage certainly IMO.

Can work backwards using your amortisation schedules under different methods that you have posted in the past but I'm unconvinced by the stitch up claim.

We've debated before on which accounts to be used too but IDC 1 showed the Sevco 5112 as the standard so that is it I believe. The consolidated seem like the sensible choice, possibly even Gellaw Newco 203?

It doesn't matter which accounts us common folk use to play around with the numbers as long as the correct additions/deductions are made to get a reliable estimate. P&S calculations will have been using the ultimate parent company though.

[Mr Popodopolous]

36 minutes ago, old_eastender said:

Please could you summarise our position, i.e. is it likely we may fail FFP  and face a pts deduction next season, or the season after, or not?

Me and Dave will try between us!

I would say yes there will be a deficit next year, the size of which is quite important. If we breach it's a deduction, bigger the deficit the harder to fill, played sales and cutbacks with small bits like Revenue and cost improvements seem the most likely way to fill it.

I've said it before but what with the possibility of a Business Plan for Projected Breaches maybe a scenario whereby we (and others) have the appropriate points deduction attached to it if we fail with the clubs job to become compliant by March 2023 is agreed or imposed this summer.

[Mr Popodopolous]

1 hour ago, AnotherDerbyFan said:

That's kind if the issue here. If £5m was the figure set, there's still a significant amount of income lost due to Covid that isn't accounted for. £9m match receipts in a normal season, resulting in a minimum of £2m deficit in the P&S calculations. Coincidentally, that would have been enough to avoid a penalty in the 2021 period.

If Derby propose a reduction in the Agreed Decision, I suggest the other clubs will politely tell them to get stuffed, no offence. It ain't happening. QPR a year ago made a proposal to reduce the FFP fine, guess what it wasn't.

That aside, would be surprised were Quantuma to have made zero provision for Covid losses when negotiations with the EFL were ongoing. You are assuming that the losses that Quantuma put to the EFL were as if Covid never happened.

It's neither here nor there, it matters not in this context whether Derby (or us or a lot of clubs) lost £9m in gate receipts let alone commercial revenue, the cap is £5m for all? Although I do wonder if the number is actually the right one for Covid. I'm quite sure Bristol City Holdings lost more than £5m in those 2 years due to the impact of Covid, but we have to suck it up along with everyone else.

If Quantuma put eg £10m in Covid losses as estimate to EFL and there was a cap of £5m as we now know can we revisit and revise upwards? Could add another 2-3 pts!

The best estimates I've seen for Derby, both Quantuma's report and club statement last September were £20m.

1 hour ago, AnotherDerbyFan said:

It doesn't matter which accounts us common folk use to play around with the numbers as long as the correct additions/deductions are made to get a reliable estimate. P&S calculations will have been using the ultimate parent company though.

Agreed to a point, although the IDC1 was quite clear, showed both pre tax losses and P&S adjusted losses for 2016, 2017, 2018 and 2019. Pretty sure always in the ballpark of £7-8m a season for P&S exclusions.

It's something useful to work with although only the club and EFL will know for sure, same with all clubs.

Edited February 18, 2022 by Mr Popodopolous

[Davefevs]

18 minutes ago, Mr Popodopolous said:

Me and Dave will try between us!

I would say yes there will be a deficit next year, the size of which is quite important. If we breach it's a deduction, bigger the deficit the harder to fill, played sales and cutbacks with small bits like Revenue and cost improvements seem the most likely way to fill it.

I've said it before but what with the possibility of a Business Plan for Projected Breaches maybe a scenario whereby we (and others) have the appropriate points deduction attached to it if we fail with the clubs job to become compliant by March 2023 is agreed or imposed this summer.

If we basically did nothing about our costs then we’d fail ffp next season (not this). But we have 15 months and 2 transfer windows to address the gap which I don’t believe is that big!

@oldeastender

[054123]

59 minutes ago, Davefevs said:

If we basically did nothing about our costs then we’d fail ffp next season (not this). But we have 15 months and 2 transfer windows to address the gap which I don’t believe is that big!

@oldeastender

This.

I get the impression that third party observers are rather misinterpreting are openness and willingness for a candid conversation (Derby take note).

There is a chance that by the summer of 2023 we could be in breach of FFP rules. However if we reduce our wage bill, sell some players etc. there is no problem.

Richard Gould and Steve Lansdown are doing a fantastic preemptive job on the wider issue whilst also presenting the club in a positive light.  

Its absolutely right that we are planning for the future and all eventualities, but lots of observers creaming their pants over nothing.

Edited February 18, 2022 by 054123

[Mr Popodopolous]

Although Gould and Lansdown could be a bit more candid still ie point out the potential aspects of a Business Plan, possible squad size limits or perhaps even a preemptive Business Plan, a change that I highlighted Thursday.

All that said, there is no doubt (to date) that we are being a lot more transparent than a lot of other clubs who might have problems now or in the near future.

If they want to level with us over the possible downsides, then they need to do so in full...or as far as possible anyway.

I think next March is a likely deadline to fix things, two windows. If you can forecast a breach ahead of time, then it stands to reason that you can dock points during the season of the breach if not in line by then.

Edited February 18, 2022 by Mr Popodopolous

[Davefevs]

1 hour ago, Mr Popodopolous said:

Although Gould and Lansdown could be a bit more candid still ie point out the potential aspects of a Business Plan, possible squad size limits or perhaps even a preemptive Business Plan, a change that I highlighted Thursday.

All that said, there is no doubt (to date) that we are being a lot more transparent than a lot of other clubs who might have problems now or in the near future.

If they want to level with us over the possible downsides, then they need to do so in full...or as far as possible anyway.

I think next March is a likely deadline to fix things, two windows. If you can forecast a breach ahead of time, then it stands to reason that you can dock points during the season of the breach if not in line by then.

I’m guessing end of summer window (ins and outs) we’d know where we are.

If we were to just let O’Dowda, Martin, Simpson, Cundy, Klose, King go as OOC, that’s probably £1.5m saved off the bat.

Tying Massengo down til 2025, spreads his amortisation over 3 years and saves £0.5m next season, less any wage increase he gets.

Tying Kalas down til 2025, spreads his amortisation over 3 years and save £1.3m next season, plus we probably reduce his wages too.

By the summer we will know the situation with both of these two.  We have either clawed back somewhere between £1.5m-£2.0m…or they’re leaving and with their transfer fees, FFP disappears.

[Mr Popodopolous]

5 minutes ago, Davefevs said:

I’m guessing end of summer window (ins and outs) we’d know where we are.

If we were to just let O’Dowda, Martin, Simpson, Cundy, Klose, King go as OOC, that’s probably £1.5m saved off the bat.

Tying Massengo down til 2025, spreads his amortisation over 3 years and saves £0.5m next season, less any wage increase he gets.

Tying Kalas down til 2025, spreads his amortisation over 3 years and save £1.3m next season, plus we probably reduce his wages too.

By the summer we will know the situation with both of these two.  We have either clawed back somewhere between £1.5m-£2.0m…or they’re leaving and with their transfer fees, FFP disappears.

Yeah, although I always thought the amortisation fell by £4-5m not £7m and the real big surge in savings would be summer 2023.

The only problem with extensions and smoothing is that if not done soon, then it theoretically could be too late- as @AnotherDerbyFan can confirm, Marriott was extended possibly with amortisation in mind...until he wasn't. In short, if their wage now comes in above a Business Plan allowance by the time that Business Plan arises then it might be too late. See also Richards at Reading- not so much his initial contract but what he was worth, he went to Bayern on a free. Chances are that Olise would have yielded a bigger fee if not for his buyout clause- an extension to protect his value either through a raised or removed buyout clause and then a relatively quick sale would have been one way to go there but again was at odds with the Business Plan I expect., Pretty sure the EFL in fact blocked the Marriott extension and fresh terms could not be agreed.

Edited February 18, 2022 by Mr Popodopolous

[Davefevs]

1 minute ago, Mr Popodopolous said:

Yeah, although I always thought the amortisation fell by £4-5m not £7m and the real big surge in savings would be summer 2023.

The only problem with extensions and smoothing is that if not done soon, then it theoretically could be too late- as @AnotherDerbyFan can confirm, Marriott was extended possibly with amortisation in mind...until he wasn't. In short, if their wage now comes in above a Business Plan allowance by the time that Business Plan arises then it might be too late. See also Richards at Reading- not so much his initial contract but what he was worth, he went to Bayern on a free. Chances are that Olise would have yielded a bigger fee if not for his buyout clause- an extension to protect his value either through a raised or removed buyout clause and then a relatively quick sale would have been one way to go there but again was at odds with the Business Plan I expect., Pretty sure the EFL in fact blocked the Marriott extension and fresh terms could not be agreed.

I honestly don’t feel we will be on a restrictive business plan, more likely close monitoring.  Don’t forget Derby might pass FFP, but they had a shed load of historic debt they couldn’t service, including staged payments to Arsenal, £26m to HMRC etc…their issue was more serious, it was real, there and then, not like our projected position in 15 months time…which I’m sure might even be projected to be within £39m because of this summer’s plan.  We can easily prove how contract extensions for Kalas or Massengo improve our position.  We are paying people on time, etc.

[Mr Popodopolous]

9 minutes ago, Davefevs said:

I honestly don’t feel we will be on a restrictive business plan, more likely close monitoring.  Don’t forget Derby might pass FFP, but they had a shed load of historic debt they couldn’t service, including staged payments to Arsenal, £26m to HMRC etc…their issue was more serious, it was real, there and then, not like our projected position in 15 months time…which I’m sure might even be projected to be within £39m because of this summer’s plan.  We can easily prove how contract extensions for Kalas or Massengo improve our position.  We are paying people on time, etc.

I hope so...possible that all of the external issues played a role but our position might be closer to Reading (not in terms of breach but in terms of cooperation etc) so you know I'm shall we say risk averse in that area.

The other issue that's just come to mind, although that's for another day is that if we had a theoretical hole of £x to fill after releasing players going into 2022/23, then were allowed to sign say 6 players on a cap of £6k per week per player, and we did on 12 month deals then that without bothering not to round, is another £1.8m added to a theoretical hole. Could it be a case of sell someone before freedom to move on contracts, in the market etc?

Edited February 18, 2022 by Mr Popodopolous

[Davefevs]

3 minutes ago, Mr Popodopolous said:

I hope so...possible that all of the external issues played a role but our position might be closer to Reading (not in terms of breach but in terms of cooperation etc) so you know I'm shall we say risk averse in that area.

The other issue that's just come to mind, although that's for another day is that if we had a theoretical hole of £x to fill after releasing players, then were allowed to sign say 6 players on a cap of £6k per week per player, and we did on 12 month deals then that without bothering not to round, is another £1.8m added to a theoretical hole. Could it be sell someone before freedom to move on contracts, in the market etc?

Reading were £18.8m over for period ending 20/21.  We are nothing like in that ballpark.  Assume their unaudited projections included some element of exclusions for covid losses.  I wonder how they’re doing this season too.

17/28 21m loss (less say £6m allowance) £15m loss

18/19 30m loss (ditto) £24m loss

19/20 42m loss (ditto) £36m loss halved = £18m loss

20/21 ???

Without covid allowances they could only suffered a £6m loss last season (£0 after £6m allowance)…so they must’ve claimed some form of covid adjustment?

[Mr Popodopolous]

2 minutes ago, Davefevs said:

Reading were £18.8m over for period ending 20/21.  We are nothing like in that ballpark.  Assume their unaudited projections included some element of exclusions for covid losses.  I wonder how they’re doing this season too.

17/28 21m loss (less say £6m allowance) £15m loss

18/19 30m loss (ditto) £24m loss

19/20 42m loss (ditto) £36m loss halved = £18m loss

20/21 ???

Without covid allowances they could only suffered a £6m loss last season (£0 after £6m allowance)…so they must’ve claimed some form of covid adjustment?

Ah with Reading, my understanding is that from 2018/19 onwards, it's Renhe Sports Management that we use for their P&S results- their accounts will be very interesting to see, from the Covid adjustment perspective.

Their calculations for this season could be complex, based on the principle of reset- to me it's far better to reset the aggregate 2 prior years if they exceed or are equal to £26m but it seems that the EFL do it for each individual year...which can throw up some very strange results. SwissRamble reckons £5m per season on allowables, but principle of reset could mean a theoretical £19-20m P&S loss allowed for this season, but of course if they hit that they make it very difficult for themselves next year as they'd need to get down to a £6-7m loss in 2022/23.

[Davefevs]

7 minutes ago, Mr Popodopolous said:

Ah with Reading, my understanding is that from 2018/19 onwards, it's Renhe Sports Management that we use for their P&S results- their accounts will be very interesting to see, from the Covid adjustment perspective.

Their calculations for this season could be complex, based on the principle of reset- to me it's far better to reset the aggregate 2 prior years if they exceed or are equal to £26m but it seems that the EFL do it for each individual year...which can throw up some very strange results. SwissRamble reckons £5m per season on allowables, but principle of reset could mean a theoretical £19-20m P&S loss allowed for this season, but of course if they hit that they make it very difficult for themselves next year as they'd need to get down to a £6-7m loss in 2022/23.

Ah ok….ta.

2018 £30m loss

So not sure it’s any better really!

[BLRed]

Surely now we have had good income this season (Match day Income etc) compared to previous two seasons, we could see revenue streams hit the highs again of pre-covid (I believe they were in the region of 30mill)
 

add to that, there will be a number of players that will be dropped from the wage bill:

simpson - released

odowda - year option not extended and released.
palmer - moved out on a permanent

baker - possible retirement

 

add to that the possible big sales of:

bentley - likeliest to go imo

massengo - think we should keep but contract new dependant

semenyo - will stay

scott - will stay

 

i think there are numerous ways in which we avoid the failings of ffp
 

 

 

 

 

[Mr Popodopolous]

12 minutes ago, Davefevs said:

Ah ok….ta.

2018 £30m loss

So not sure it’s any better really!

According to what I read, it was 2017/18 as club and then Renhe thereafter...but I don't know if it is correct- if it is either one all the way through then a £13m cap it is!

[Mr Popodopolous]

8 minutes ago, BLRed said:

Surely now we have had good income this season (Match day Income etc) compared to previous two seasons, we could see revenue streams hit the highs again of pre-covid (I believe they were in the region of 30mill)
 

add to that, there will be a number of players that will be dropped from the wage bill:

simpson - released

odowda - year option not extended and released.
palmer - moved out on a permanent

baker - possible retirement

 

add to that the possible big sales of:

bentley - likeliest to go imo

massengo - think we should keep but contract new dependant

semenyo - will stay

scott - will stay

 

i think there are numerous ways in which we avoid the failings of ffp
 

 

 

 

 

There was Omicron and a steady reopening so I dunno about that- remember too that the financial year 2018/19 included a) 2 Concerts and b) The World Cup Fan Village in full flow...switching betweeen WfH and the office will have hit corporate events too- not just here but across the board.

Oh it's no lost cause, could just be a problem but not guaranteed yet- all of the above will help certainly.