FFP amendments - covid allowances

[Mr Popodopolous]

23 minutes ago, Davefevs said:

As you know I don’t do a range, just a single, regularly updates set of “guesses”!

Under the old method - fully claim revenues lost, I had £2.400m and £10.435m (both halved) - I guess I could add £2.500m to this now?  I reckon we are pretty much on the £39m with that.

Under the new (5/5/2.5) method I have £2.400m, £5.000m (both halved) and £2.500m.  Under this method we are £2.5m over the £39m.

The devil seems to be in the detail a bit still doesn't it, in terms of exactly what the clubs have voted for.

Oh okay with you now, I was looking in isolation at the 2019/20 and 2020/21 combined average, the 2021/22 £2.5m limit should take care of itself a bit really.

I'm yet to try and extrapolate from these two, it's also worth asking if say a bounceback to £26m is with or without furlough. Of course it'd be counted but is the revenue bounceback inclusive or net of furlough which obviously drops back off this season.

Let's say £16.6m for a club includes £1.6m of furlough for last season, a bounce back to £26m could be either a £9.4m or an £11m rebound. Maybe I'm double counting though.

My starting point of late has been the average loss plus expected revenue up from average revenue, expected wage and amortisation again from across the 2 years and strip out the average transfer profit.

[Davefevs]

26 minutes ago, Mr Popodopolous said:

The devil seems to be in the detail a bit still doesn't it, in terms of exactly what the clubs have voted for.

Oh okay with you now, I was looking in isolation at the 2019/20 and 2020/21 combined average, the 2021/22 £2.5m limit should take care of itself a bit really.

I'm yet to try and extrapolate from these two, it's also worth asking if say a bounceback to £26m is with or without furlough. Of course it'd be counted but is the revenue bounceback inclusive or net of furlough which obviously drops back off this season.

Let's say £16.6m for a club includes £1.6m of furlough for last season, a bounce back to £26m could be either a £9.4m or an £11m rebound. Maybe I'm double counting though.

My starting point of late has been the average loss plus expected revenue up from average revenue, expected wage and amortisation again from across the 2 years and strip out the average transfer profit.

It is a question I’ve pondered too.  I’ve played it ultra-safe and removed it from the covid allowance in my estimates.

You could argue that a revenue decrease from £20m to £15m, ought to mean £5m “allowance”.   But if you’ve claimed £1m furlough, you could argue you’ve lost £6m of revenue, but supplemented it with £1m from the covid scheme.  I doubt that would wash with the EFL.

There is a further view that lost income might’ve also meant reduced costs, e.g. lost match day income offset to an extent by not having to pay casual staff, etc, so costs down too. Therefore I’ve removed a bit more, rather than look purely at income levels.

[Mr Popodopolous]

I've has a little look at things again. Not so much the current cycle and I am rounding here so precise estimates won't be a thing. This is longer term, not as I say for the cycle to next season.

Safe levels for key numbers- and where we need to get to

This is for FFP, not breakeven or cash flow neutral anything like that. Assuming loss limits remain the same, near future income ranges also similar.

Assumed BCFC Holdings Income

£25-26m- up £9-10m from the Covid hit 2020/21 which was around £16m IIRC?

Assumed safe wage bill

£20-25m- or a fall of £10-15m from last season. Again rounding etc. Wages consolidated £35m pre rounding?

Assumed safe annual amortisation charge

£6m? Is about £5m down from 2020/21. Seem to recall £11m at least.

Assumed other costs

This covers everything else apart from Wages- ie total wage bill and amortisation. I think it was without bothering to look at precise numbers £14m last season?

Assumed Transfer Profit

As a starting point it has to be £0? They offset yes but it can't be regularly viewed as counted on as turnover or revenue. Same, perhaps even more so with sell on clauses.

Assumed FFP allowances

£5m per season.

I make that a £14-19m gap between total costs and revenue if it's £26m in a year, £15-20m but with the £5m in estimated FFP allowances it can be certainly be made to compute out down to £13m per year average, especially in a 3 year period.

Shows how far off track we got in the last 2-3 seasons.

Edited March 3, 2022 by Mr Popodopolous

[Davefevs]

21 minutes ago, Mr Popodopolous said:

I've has a little look at things again. Not so much the current cycle and I am rounding here so precise estimates won't be a thing. This is longer term, not as I say for the cycle to next season.

Safe levels for key numbers- and where we need to get to

This is for FFP, not breakeven or cash flow neutral anything like that. Assuming loss limits remain the same, near future income ranges also similar.

Assumed BCFC Holdings Income

£25-26m- up £9-10m from the Covid hit 2020/21 which was around £16m IIRC?

My estimate is £26m for this year

Assumed safe wage bill

£20-25m- or a fall of £10-15m from last season. Again rounding etc. Wages consolidated £35m pre rounding?

My estimate is £7m less - reduced through OOC leaving, Mawson and Sessegnon returning to Fulham and Baker and Weimann on big wage reductions.

So, £28m wage bill this season.

Assumed safe annual amortisation charge

£6m? Is about £5m down from 2020/21. Seem to recall £11m at least.

£6.7m (down from £12.8m), but add £2.5m AG depreciation.

Assumed other costs

This covers everything else apart from Wages- ie total wage bill and amortisation. I think it was without bothering to look at precise numbers £14m last season?

Was £10.993m.

Assumed Transfer Profit

As a starting point it has to be £0? They offset yes but it can't be regularly viewed as counted on as turnover or revenue. Same, perhaps even more so with sell on clauses.

yep, I assume £0m.

Assumed FFP allowances

£5m per season.

yep.

I make that a £14-19m gap between total costs and revenue if it's £26m in a year, £15-20m but with the £5m in estimated FFP allowances it can be certainly be made to compute out down to £13m per year average, especially in a 3 year period.

So, £26m income.

Costs: Wages £28m, Amortisation and Depreciation £9.2m, Other Costs £11m - Total £48.2m

Loss of £22.2m (£16.2m better - RG / NP deserve credit if this manifests)…less £2.5m covid, less £5m FFP = £14.7m in terms of P&S for 21/22.

Shows how far off track we got in the last 2-3 seasons.

[Mr Popodopolous]

14 hours ago, Davefevs said:

I think we may have been slightly cross purposes on bits of it. Agree on £26m for this season and in general terms a lot of the numbers.

I think my calculations were a bit crude. Quite simply Operating Loss + Interest Payment - wages and amortisation and I guess impairment=Remaining costs. Had also separated the amortisation and depreciation Didn't do anything more precise than rounding up and down etc...but that can wait as there is an interesting story!

Edited March 4, 2022 by Mr Popodopolous

[Mr Popodopolous]

https://www.bristolpost.co.uk/sport/football/exclusive-bristol-citys-ffp-reform-6753159

It's being considered, the transfer addback. I don't agree with it as I've said since it was first mooted. I think it is opportunist, contains elements of special pleading and an attempt to mask some past shortcomings but it sounds like we have included them in our P&S returns??

Rare exclusive of this kind for the Bristol Post.

[chinapig]

1 hour ago, Mr Popodopolous said:

https://www.bristolpost.co.uk/sport/football/exclusive-bristol-citys-ffp-reform-6753159

It's being considered, the transfer addback. I don't agree with it as I've said since it was first mooted. I think it is opportunist, contains elements of special pleading and an attempt to mask some past shortcomings but it sounds like we have included them in our P&S returns??

Rare exclusive of this kind for the Bristol Post.

It's still complete nonsense imo. If I were the EFL I would simply ask exactly which players we would have sold to the tune of £30m, bearing in mind that Scott and Semenyo had not really emerged until this season.

The fact is we gambled on receiving big fees year after year to fund an ever increasing wage bill. This was at least risky and arguably reckless so we were likely to come a cropper sooner or later even without Covid.

Yet instead of admitting we got it wrong we double down. We ought to be embarrassed, keep our heads down and sort our finances out without recourse to fantasy accounting.

[Waconda]

The fact is we gambled on receiving big fees year after year to fund an ever increasing wage bill. 

 Our fees received versus fees paid in pure transfer fees wasn't the problem, massive profit was made ,with sell on clauses in Webster, Brownhill and Kelly yet to to be enjoyed also. Whether this was sustainable over a long term is debatable but pre COVID we were making millions in pure transfer fee profit .

It was all of the other stuff being mis manged that was the problem, poor quality signings on high wages etc.

We didn't scout and sign the right type of player to replace the massive success's like Reid, Bryan, Kelly, Brownhill, Webster etc.

[chinapig]

1 minute ago, VT05763 said:

The fact is we gambled on receiving big fees year after year to fund an ever increasing wage bill. 

 Our fees received versus fees paid in pure transfer fees wasn't the problem, massive profit was made ,with sell on clauses in Webster, Brownhill and Kelly yet to to be enjoyed also. Whether this was sustainable over a long term is debatable but pre COVID we were making millions in pure transfer fee profit .

It was all of the other stuff being mis manged that was the problem, poor quality signings on high wages etc.

We didn't scout and sign the right type of player to replace the massive success's like Reid, Bryan, Kelly, Brownhill, Webster etc.

Yes but the concept of net transfer spend is not helpful since it is only one part of the equation.

There is little point in returning profits on fees if you fritter it all and more away on increasing your squad and costs way beyond what is sustainable.

We built no resilience into our finances. We didn't fix the roof while the sun shone. Now we want provision to be made for our mistake.

[View from the Dolman]

1 hour ago, Mr Popodopolous said:

https://www.bristolpost.co.uk/sport/football/exclusive-bristol-citys-ffp-reform-6753159

It's being considered, the transfer addback. I don't agree with it as I've said since it was first mooted. I think it is opportunist, contains elements of special pleading and an attempt to mask some past shortcomings but it sounds like we have included them in our P&S returns??

Rare exclusive of this kind for the Bristol Post.

The Forest accounts also sound like they want to do the same thing: "The figures contained in this note are ... anticipated player sales based on historic player trading that was not possible due to Covid-19" so you'd expect every club to apply the same approach if it's permissible for one.

https://twitter.com/KieranMaguire/status/1499667416598593538/photo/1

[Mr Popodopolous]

13 minutes ago, View from the Dolman said:

The Forest accounts also sound like they want to do the same thing: "The figures contained in this note are ... anticipated player sales based on historic player trading that was not possible due to Covid-19" so you'd expect every club to apply the same approach if it's permissible for one.

https://twitter.com/KieranMaguire/status/1499667416598593538/photo/1

I don't think it should be permissible at all for anyone, same goes for e.g. Stoke's £30m Covid Impairment- up to clubs to vote on it I guess- good spot though, thanks.

Edited March 4, 2022 by Mr Popodopolous

[Waconda]

27 minutes ago, chinapig said:

Yes but the concept of net transfer spend is not helpful since it is only one part of the equation.

There is little point in returning profits on fees if you fritter it all and more away on increasing your squad and costs way beyond what is sustainable.

We built no resilience into our finances. We didn't fix the roof while the sun shone. Now we want provision to be made for our mistake.

Yes but that part of the equation was successful in it's self, it was what came after that was flawed. Obviously it all has to come together to be sustainable but they did at least make a profit on transfer fees.

[Mr Popodopolous]

I've posted a few speculative, frankly sloppily done figures in what we need independent of player sale profits or other exceptional gains to remain broadly FFP compliant assuming that a) Our income doesn't soar, b) Our costs don't plummet or c) There aren't major changes to FFP and revenue distribution.

Player trading models can work but only up to a point...far better not to rely on them for a meaningful period of time IMO- NP even called the model crazy the other week!

I guess if you are in a top division or naturally have a rather low cost base it can be different but we fit into neither category.

Edited March 4, 2022 by Mr Popodopolous

[Waconda]

7 minutes ago, Mr Popodopolous said:

I don't think it should be permissible at all, same goes for e.g. Stoke's £30m Covid Impairment- up to clubs to vote on it I guess- good spot though, thanks.

The league will have to increase the COVID allowance considerably IMO.

Risk having a farce Division next season otherwise.

 

[Waconda]

2 minutes ago, Mr Popodopolous said:

I've posted a few speculative, frankly sloppily done figures in what we need independent of player sale profits or other exceptional gains to remain broadly FFP compliant assuming that a) Our income doesn't soar, b) Our costs don't plummet or c) There aren't major changes to FFP and revenue distribution.

Player trading models can work but only up to a point...far better not to rely on them for a meaningful period of time IMO- NP even called the model crazy the other week!

I guess if you are in a top division or naturally have a rather low cost base it can be different but we fit into neither category.

Good point here.

[Mr Popodopolous]

1 minute ago, VT05763 said:

The league will have to increase the COVID allowance considerably IMO.

Risk having a farce Division next season otherwise.

 

It's £10m as a sum total across the prior 2 seasons and £2.5m for this season- clubs voted on/agreed to this in mid February, will clubs be asked to vote again?

Edited March 4, 2022 by Mr Popodopolous

[Waconda]

4 minutes ago, Mr Popodopolous said:

It's £10m as a sum total across the prior 2 seasons and £2.5m for this season- clubs voted on/agreed to this in mid February, will clubs be asked to vote again?

Yes, the accounts are beginning to emerge now. The full horror was not public and everyone was happy to point at us as the bad guys as we published earlier.

If not this then something else creative will have to be done.

[Mr Popodopolous]

8 minutes ago, VT05763 said:

Yes, the accounts are beginning to emerge now. The full horror was not public and everyone was happy to point at us as the bad guys as we published earlier.

If not this then something else creative will have to be done.

By us or the EFL?

We're still the 2nd highest losses from last season published to date of clubs at this level- think only Stoke are higher but would have to go back and look again, Reading run us close- but a fair number still to be published. OTOH, Barnsley, Coventry, Luton, Millwall and Preston all seem the right side although losses in the last two seem to be rising a bit. QPR another who through strong player sales and efforts to bring the costs down...

Edited March 4, 2022 by Mr Popodopolous

[Waconda]

2 minutes ago, Mr Popodopolous said:

By us or the EFL?

We're still the 2nd highest losses from last season published to date- think only Stoke are higher but would have to go back and look again but a fair number still to be published. OTOH, Barnsley, Coventry, Luton, Millwall and Preston all seem the right side although losses in the last two seem to be rising a bit.

EFL now and us going forward obviously.

Think there should be more empathises on wages - turn over.

Edited March 4, 2022 by VT05763

[chinapig]

5 minutes ago, VT05763 said:

Yes, the accounts are beginning to emerge now. The full horror was not public and everyone was happy to point at us as the bad guys as we published earlier.

If not this then something else creative will have to be done.

Unless a club has actually cheated I don't see it as good guys and bad guys. More a case of those who have managed their finances well and those who haven't.

If we, and a handful of other clubs, demand a rule change to mitigate the impact of our actions it will be interesting to see what the response of the better managed clubs is if it ever goes to a vote.

[Mr Popodopolous]

1 hour ago, VT05763 said:

EFL now and us going forward obviously.

Think there should be more empathises on wages - turn over.

 

1 hour ago, chinapig said:

Unless a club has actually cheated I don't see it as good guys and bad guys. More a case of those who have managed their finances well and those who haven't.

If we, and a handful of other clubs, demand a rule change to mitigate the impact of our actions it will be interesting to see what the response of the better managed clubs is if it ever goes to a vote.

I will say on good guys v bad guys, it does make Simon Jordan's comments look a bit premature- ranting about how terrible our model is, how we deserve punishment. Which isn't to say that we should get off the hook but I doubt we are the only likely overspenders.

I stand by my view that the add back of lost player sales isn't a goer- not for us, not for anyone- but his comments while fair, perhaps he would like to revisit them a bit or at least put them into context a bit given that there are some quite big 2 year loss figures out there...and some potentially creative means to try and bring back into line. I understand he has past history with SL however.

Edited March 4, 2022 by Mr Popodopolous

[Mr Popodopolous]

56 minutes ago, VT05763 said:

EFL now and us going forward obviously.

Think there should be more empathises on wages - turn over.

I think ultimately for solvency, just my view- the idea that a club has to be cash flow neutral through their own efforts has some merit. That may have an impact on ability to compete and spread the risk although it is burning through and running out of cash that kills businesses for the most part. I think the cash thing would solve the solvency issue but could crush the chance to compete or take a calculated risk?

Edited March 4, 2022 by Mr Popodopolous

[Waconda]

6 minutes ago, Mr Popodopolous said:

 

I will say on good guys v bad guys, it does make Simon Jordan's comments look a bit premature- ranting about how terrible our model is, how we deserve punishment.

I stand by my view that the add back of lost player sales isn't a goer- not for us, not for anyone- but his comments while fair, perhaps he would like to revisit them a bit or at least put them into context a bit given that there are some quite big 2 year loss figures out there...and some potentially creative means to try and bring back into line. I understand he has past history with SL however.

Not sure how much notice people should take of the comments of a "Spiv Bankrupt" to be fair.

[Mr Popodopolous]

I'll have another go at the Bristol City Holdings costs and revenue optimisation- my one yesterday was erratic to say the least.

2020/21

Well I can't be bothered to do a line by line item breakdown but it looks a bit like this.

In my calculations last night I was also including Interest payable etc.

I don't know if it's net Interest payable and receivable or just Interest payable I should include.

Operating costs are too high tbh. Some of that cash invested reflected in Operating costs will make revenue returns down the line but...they are too high.

Wages and amortisation plus Impairment combined

£47,718,332

By process of elimination, the remaining other costs are...

£10,993,343 + £2,849,881 + and this is where it gets "interest"ing...difference between payable and receivable or just payable? Granted it's below all of that but it will cost all the same.

Either £15,703,344 or £15,183,660. Interest receivable and payable counts towards P&S I believe.

Again these costs are just too high, the cost base as a whole- am not in fairness talking about this upcoming season or next but moving forward I think a £20-25m wage bill and £5-6m amortisation bill would be optimal- Impairment would be exceptional, so too are transfer profits- is it possible I should take the football club in isolation as some of these costs will be AGL which might reflect the rugby to an extent matchday staff wise etc?

Happy to reclassify depreciation to the amortisation and impairment section but we need to find a way to reduce the overall cost base just in general.

Edited March 4, 2022 by Mr Popodopolous

[Davefevs]

4 hours ago, Mr Popodopolous said:

https://www.bristolpost.co.uk/sport/football/exclusive-bristol-citys-ffp-reform-6753159

It's being considered, the transfer addback. I don't agree with it as I've said since it was first mooted. I think it is opportunist, contains elements of special pleading and an attempt to mask some past shortcomings but it sounds like we have included them in our P&S returns??

Rare exclusive of this kind for the Bristol Post.

2 hours ago, View from the Dolman said:

The Forest accounts also sound like they want to do the same thing: "The figures contained in this note are ... anticipated player sales based on historic player trading that was not possible due to Covid-19" so you'd expect every club to apply the same approach if it's permissible for one.

https://twitter.com/KieranMaguire/status/1499667416598593538/photo/1

Yep

Here’s my stab at their summarised accounts for P&S for cycle ending 20/21…based on the £5m / £5m / £2.5m allowances.  I’ve given them £5m for Cat 1 and added actual depreciation in the FFP Allowance column.

They are inside FFP no probs….but they are obviously worried about next year like us.  A £23m loss this season would take them to £39m for cycle ending this season.  Without transfer revenue (unless they’ve fiddled Carvalho) that loss is very likely.  Interesting that they’ve put £12m forecast add-back…might be Carvalho making up a lot if that as an impairment.

2 hours ago, Mr Popodopolous said:

By us or the EFL?

We're still the 2nd highest losses from last season published to date of clubs at this level- think only Stoke are higher but would have to go back and look again, Reading run us close- but a fair number still to be published. OTOH, Barnsley, Coventry, Luton, Millwall and Preston all seem the right side although losses in the last two seem to be rising a bit. QPR another who through strong player sales and efforts to bring the costs down...

So far, ourselves, Stoke and Forest look like the “cost juggernauts” of the Championship!!!  Cardiff will be fine, because their big loss in 17/18 drops off, we have the opposite issue!

[Mr Popodopolous]

6 minutes ago, Davefevs said:

Yep

Here’s my stab at their summarised accounts for P&S for cycle ending 20/21…based on the £5m / £5m / £2.5m allowances.  I’ve given them £5m for Cat 1 and added actual depreciation in the FFP Allowance column.

They are inside FFP no probs….but they are obviously worried about next year like us.  A £23m loss this season would take them to £39m for cycle ending this season.  Without transfer revenue (unless they’ve fiddled Carvalho) that loss is very likely.  Interesting that they’ve put £12m forecast add-back…might be Carvalho making up a lot if that as an impairment.

So far, ourselves, Stoke and Forest look like the “cost juggernauts” of the Championship!!!  Cardiff will be fine, because their big loss in 17/18 drops off, we have the opposite issue!

Thanks for that Dave- excellent stuff and estimates moving forward- that Covid add back certainly again is at odds with the EFL and their £5m x 2 and massively with this season.

Might also be the case that loan write offs don't count- that's the pre tax loss but with loan write offs, I've gone quite conservative in excluding loan write offs from P&S and excluding the excess Covid add-back ie anything above £5m and £5m for the last 2 seasons- I've therefore factored back in £10m in loan writeoffs and £6,694,000 in Covid add-backs for the last 2 years. £5.5m seems fair for annual FFP allowance, £5.5-6m in fact that kinda range- think SwissRamble at £5m a bit conservative?

I also foresee, Parachute Payments or not, that the figures for Bournemouth and Fulham maybe interesting- big cost base relative to income with the 1st and I'm unsure how much unlike say Norwich, Fulham flex wages despite yoyoing...they certainly haven't generated any notable Player sale profits which makes them unique among a range of relegated clubs in Year 1.

Edited March 4, 2022 by Mr Popodopolous

[chinapig]

29 minutes ago, Davefevs said:

Yep

Here’s my stab at their summarised accounts for P&S for cycle ending 20/21…based on the £5m / £5m / £2.5m allowances.  I’ve given them £5m for Cat 1 and added actual depreciation in the FFP Allowance column.

They are inside FFP no probs….but they are obviously worried about next year like us.  A £23m loss this season would take them to £39m for cycle ending this season.  Without transfer revenue (unless they’ve fiddled Carvalho) that loss is very likely.  Interesting that they’ve put £12m forecast add-back…might be Carvalho making up a lot if that as an impairment.

So far, ourselves, Stoke and Forest look like the “cost juggernauts” of the Championship!!!  Cardiff will be fine, because their big loss in 17/18 drops off, we have the opposite issue!

Is the £12m a reflection of the conversion of a £12m loan into shares I referred to earlier in the thread?

Edit: evidently not as it is shown as a Covid add back. Must read before commenting.

Edited March 4, 2022 by chinapig

[Davefevs]

22 minutes ago, Mr Popodopolous said:

Might also be the case that loan write offs don't count- that's the pre tax loss but with loan write offs, I've gone quite conservative in excluding loan write offs from P&S and excluding the excess Covid add-back ie anything above £5m and £5m for the last 2 seasons

I did wonder whether to include or not….I’ll revise w/o.

 

24 minutes ago, Mr Popodopolous said:

I also foresee, Parachute Payments or not, that the figures for Bournemouth and Fulham maybe interesting

Gonna wait til I see a set of accounts first, then reflect!

2 minutes ago, chinapig said:

Is the £12m a reflection of the conversion of a £12m loan into shares I referred to earlier in the thread?

Suspect that is cashflow injection rather than anything else.

[chinapig]

1 minute ago, Davefevs said:

I did wonder whether to include or not….I’ll revise w/o.

 

Gonna wait til I see a set of accounts first, then reflect!

Suspect that is cashflow injection rather than anything else.

Yes, see my edit and mea culpa.

[Davefevs]