Finances 21/22

[Mr Popodopolous]

@tin @Carey 6 @And Its Smith

Again the same holds with Scott sale point.

Even if some or all go.

Would it be by end of May 2023? I would suggest not because unless any in January the Reporting Period for Bournemouth, Brighton runs until end of June 2023 and Burnley runs until end of July 2023. Very unlikely by end of May, how do you get the best price for one.

Our Reporting Period as it stands out until the end of May 2023- we need the transfer to fall within that Reporting Period to count for this season. Be it Scott, Semenyo or sell-ons!

Edited November 18, 2022 by Mr Popodopolous

[Davefevs]

8 hours ago, Mr Popodopolous said:

A fair summary of Covid add-baxks using typical lost revenue and costs, for 2019-20 and 2020-21 would  come in at £15-16m (so £7.5-8m) for that and £2.5m for last season.

It eats into it somewhat but not enough. I also think that the added depreciation suggests that perhaps our allowables now are £5.5-6m per season rather than £5m in 2019-20 and 2020-21!

Agreed- just outlining theoretical possibilities even if that was moot ultimately.

Interest payments falling would help but putting on a lot of events...costs. Not the sole factors of course but it costs.

Palmer- £1.3m per year was mentioned?

O'Dowda- £15k per week? Guessing.

Cundy- £5k per week? Again guessing.

Moore might have been you who suggested it, Shrewsbury paying £8k per week?

What would Bakinson have been on- £5-10k per week?

£59-64k per week cost saving wages wise.

£2-3m in amortisation and impairment savings

On the flipside- Bajic, Wilson, Sykes, Naismith- all joined on a free, but none joined for free. I took a stab in the dark at an £8k per week average wage but maybe lower. £6k x 4 average? £1.2-1.6m added back to the wage savings?

Remember too the £2.5m in Covid allowance for last season is no longer applied for this- bit of revenue uplift but still a hole. Could easily be an 8-figure one on face value even if I add £5-6m in extra revenue losses to the standard £5m x 2 for 2019-20 and 2020-21.

PS- there was a transfer profit yes as you say but there was also one last season albeit small. Will the net difference to date differ so much from that of last season? All helps of course...

The point I was trying to make was about needing to bring those costs down, or increase revenue…£57m is too high for a £30m turnover club like City.  Trying to work out the gap is fine, but without knowing which year we are applying the allowance to, makes projecting anything very difficult / impossible.

I can only guess that we looked beyond the simple £7.5m (2 lots of £5m halved plus £2.5m) Covid allowance in terms of our lost revenue?

There is a legitimate case that we lost far more than the £5m allowed in 19/20, so I assume we put our evidence in for that.

And then we have the lost transfer revenue / add-backs.  But again, trying to work that out, and what year each part falls into makes future estimates difficult.  Seeing as we comply for the end of May 2022 cycle, you’d want to add that into the next cycle, as 22/23’s accounts will be used in three cycles and £28m isn’t a great starting point!

1 hour ago, Carey 6 said:

I would be. We’ve been saying this for the last 4 transfer windows haven’t we?

I think the best chance we have is Bournemouth going down and someone moving for Kelly, even then Bournemouths negotiating point will be weaker with him only having a year left & having just been relegated.

Also depends if we have a straight sell on clause or a sell on percentage of profit. Can you see him going for much more than the £13m we sold him for?

Dwight McNeil was relegated with Burnley last season, was 22 years old, had 3 years to run on his contract and went for £20m. 

I think he will go for a tidy sum, but not enough profit in it for us to end our financial woes…but anything is welcome.  I’m sure it will be a profit percentage too.

A couple of hundred thousand for Szmodics sell-on was all welcome in my book.

[And Its Smith]

13 minutes ago, Mr Popodopolous said:

@tin @Carey 6 @And Its Smith

Again the same holds with Scott sale point.

Even if some or all go.

Would it be by end of May 2023? I would suggest not because unless any in January the Reporting Period for Bournemouth, Brighton runs until end of June 2023 and Burnley runs until end of July 2023. Very unlikely by end of May, how do you get the best price for one.

Our Reporting Period as it stands out until the end of May 2023- we need the transfer to fall within that Reporting Period to count for this season. Be it Scott, Semenyo or sell-ons!

I’m sure the club has it under control. If not then that would be a bit embarrassing and complete mismanagement. They are better than that. 

[Mr Popodopolous]

Just now, And Its Smith said:

I’m sure the club has it under control. If not then that would be a bit embarrassing and complete mismanagement. They are better than that. 

I restate my case of last night, construct an argument to work it backwards? Again unless our accounting period was to shift to end of June or July, I can't really think of any.

Maybe they are but the numbers are horrible and don't augur well on face value.

[Davefevs]

10 minutes ago, Mr Popodopolous said:

@tin @Carey 6 @And Its Smith

Again the same holds with Scott sale point.

Even if some or all go.

Would it be by end of May 2023? I would suggest not because unless any in January the Reporting Period for Bournemouth, Brighton runs until end of June 2023 and Burnley runs until end of July 2023. Very unlikely by end of May, how do you get the best price for one.

Our Reporting Period as it stands out until the end of May 2023- we need the transfer to fall within that Reporting Period to count for this season. Be it Scott, Semenyo or sell-ons!

But the message we are getting from Gould is that we are compliant, so any sell doesn’t need to be done by the end of our financial year.

The reason for selling a player is to trade.

Currently we have no spare money to go into the market to improve the squad, so we are selling to create that headroom…not to comply with FFP.  Even if that happens in January.  Headroom will be created in the summer too as budget taken up by Kalas, Massengo, etc is released (wages and amortisation) either by them re-signing deals at 2023 wage levels or leaving.  We either have Kalas on £x’000 p.w. or his replacement, for example.

Of course Gould may tell us different in the coming days and weeks, but that isn’t the message he’s given out so far.

[And Its Smith]

2 minutes ago, Mr Popodopolous said:

I restate my case of last night, construct an argument to work it backwards? Again unless our accounting period was to shift to end of June or July, I can't really think of any.

Maybe they are but the numbers are horrible and don't augur well on face value.

If you are worrying that we are going to fail FFP then you must be worrying that Gould is completely inept as he has said we will be fine. 

[Mr Popodopolous]

8 minutes ago, Davefevs said:

But the message we are getting from Gould is that we are compliant, so any sell doesn’t need to be done by the end of our financial year.

The reason for selling a player is to trade.

Currently we have no spare money to go into the market to improve the squad, so we are selling to create that headroom…not to comply with FFP.  Even if that happens in January.  Headroom will be created in the summer too as budget taken up by Kalas, Massengo, etc is released (wages and amortisation) either by them re-signing deals at 2023 wage levels or leaving.  We either have Kalas on £x’000 p.w. or his replacement, for example.

Of course Gould may tell us different in the coming days and weeks, but that isn’t the message he’s given out so far.

I know and agree with the bulk of this but if compliant to this season- well it's take a major swing.

As to your other post, high costs often for lots of events. I expect the cost base for the club in isolation will be lower but then so will the revenue- Catch 22.

Indeed if we look at Derby who in 2017-18 had a similar income to us. No I don't believe we are run along similar lines.

Even accounting for wages of £46m (Sevco not club) their cost base was £75-76m!? Think this is pre re-statement etc so it meant their other costs were £25m or thereabouts following wages and amortisation..

Covid wise surely the huge hit falls into 2020-21. 2.5 to 3 months of lost trading while not great won't exceed £5m IMO.

Edited November 18, 2022 by Mr Popodopolous

[Mr Popodopolous]

1 minute ago, And Its Smith said:

If you are worrying that we are going to fail FFP then you must be worrying that Gould is completely inept as he has said we will be fine. 

I think Gould is good but there are two or three bits to this equation.

1) What we claim vs what the EFL believe to be the case.

2) Fine to 2021-22? Yes absolutely.

3) Deductions come after a fail usually. Has Gould stated expressly that we will not fail FFP.

[Davefevs]

2 minutes ago, Mr Popodopolous said:

I know and agree with the bulk of this but if compliant to this season- well it's take a major swing.

As to your other post, high costs often for lots of events. I expect the cost base for the club in isolation will be lower but then so will the revenue- Catch 22.

Indeed if we look at Derby who in 2017-18 had a similar income to us. No I don't believe we are run along similar lines.

Even accounting for wages of £46m (Sevco not club) their cost base was £75-76!? Think this is pre re-statement etc so it meant their other costs were £25m or thereabouts following wages and amortisation..

And that is where we use “add-backs” and more than the basic £5m lost revenue in 20/21 to complete that swing / plug the gap.

We know that without those two allowances we cannot comply with the £39m.

[Davefevs]

As we know, FFP compliance for the cycle ending May 2022 is achieved.  if you plug the numbers in, that was achieved without resorting to using any Covid Allowances!

So I can only assume that the comment above is referring to this current cycle.

[Mr Popodopolous]

5 minutes ago, Davefevs said:

And that is where we use “add-backs” and more than the basic £5m lost revenue in 20/21 to complete that swing / plug the gap.

We know that without those two allowances we cannot comply with the £39m.

This is the crux then. What we consider reasonable (especially the transfer side) vs the view of the not even so much Football League now but that new Independent financial control body they have.

It would probably be them who take a decision to charge or not.

I stand my £15-16m view of general revenue losses across the two main Covid years. Am also including furlough in turnover or at least not excluding it- were we to exclude then maybe the add-backs a bit bigger.

The transfer one feels pivotal.

Edited November 18, 2022 by Mr Popodopolous

[chinapig]

4 minutes ago, Mr Popodopolous said:

This is the crux then. What we consider reasonable (especially the transfer side) vs the view of the not even so much Football League now but that new Independent financial control body they have.

It would probably be them who take a decision to charge or not.

But would the club claim compliance in a public document without having the nod from the EFL?

Without that agreement I assume the document would say something more like "we expect to comply with ..." .

Precise language is important in these things.

[Davefevs]

6 minutes ago, Mr Popodopolous said:

This is the crux then. What we consider reasonable (especially the transfer side) vs the view of the not even so much Football League now but that new Independent financial control body they have.

It would probably be them who take a decision to charge or not.

I take heart that two other clubs (at least) - Forest and Stoke have put in accounts for earlier years than our early 2022 accounts and haven’t been “done”.  Stoke would’ve breached 20/21 cycle without their £40m “impairment”, Forest are likely to have breached 21/22 without theirs.

Nothing has happened to them has it?

We are fine for both those cycles.

[Mr Popodopolous]

13 minutes ago, chinapig said:

But would the club claim compliance in a public document without having the nod from the EFL?

Without that agreement I assume the document would say something more like "we expect to comply with ..." .

Precise language is important in these things.

Maybe. Maybe they have taken an approach of 'We consider ourselves to be compliant with this method- you prove otherwise'. Or maybe the EFL have given an unequivocal and binding green light.

It is important but...seems the sort of creative method that is open to challenge- unless lots of clubs have done it.

10 minutes ago, Davefevs said:

I take heart that two other clubs (at least) - Forest and Stoke have put in accounts for earlier years than our early 2022 accounts and haven’t been “done”.  Stoke would’ve breached 20/21 cycle without their £40m “impairment”, Forest are likely to have breached 21/22 without theirs.

Nothing has happened to them has it?

We are fine for both those cycles.

The right to review and the timeframe. Clearly they can't 'do' us in isolation, us and us alone and forget everyone else. We also don't know if Nottingham Forest 'selling' Carvalho in January 2022 yielded a good profit or cost saving. Newly promoted clubs are harder to pursue as well, as we know.

It is also the newly appointed Indepndent body who will decide this whether to accept or challenge I believe. I have reason to believe that review based on past cases isn't a short term issue- how can it be with unusual accounting treatments such as adding back for players not sold.

Edited November 18, 2022 by Mr Popodopolous

[maxjak]

15 hours ago, BTRFTG said:

Exactly as described.

Any long term loans, mortgages, debts but may also include shareholder capital that is to be repaid beyond 12 months.

In theory when you buy a share in a company at its 'issue price' that's what it's worth should it ever need to be repaid.  You often pay more than issue price and that's share premium (variable) and is at risk, as is share capital itself should the company go belly up. SL's regularly turned his 'loans' (have a repayment date and attract interest,) to 'share capital' (has no fixed repayment date and attracts dividends normally only if there's profit to pay them.) Gets City out of the P&S/FFP hole.

Thankyou for explaining.........Am i correct   in thinking that although it seems a massive amount, that SL, as you mention, covers most of this?  So £91 mill is not as scary as it first appears?   

[maxjak]

15 hours ago, cidercity1987 said:

Mainly owed to Pula Sport/Lansdown but £8m owed to the football league for a Covid loan 

Thankyou for explaining.

[Mr Popodopolous]

The Transfer add-back argument by us, Nottingham Forest and Stoke (Everton and to a lesser extent Aston Villa in the PL) feels like special pleading. Plus see Impairment by Fulham and Stoke.

I wouldn't be minded to accept if I was a Governing body or at least have it tested at an IDC. For both of the concepts.

Edited November 18, 2022 by Mr Popodopolous

[BTRFTG]

3 hours ago, BigAl&Toby said:

@BTRFTG that’ll be me?

Yep. Even now he has his hands on her teats. Pulling hard. Very hard.

Look beyond the accounts young man. Look beyond Winterstoke Road. There be his ultimate cash cow…..

Ask yourself this old wise one. Who has been the absolute constant in this mess?

Why the **** would anyone with any common sense stick at it?

And yes. Lovely facilities now. I enjoyed using the Airblade. Football though? Absolutely the same old rubbish……

 

Paranoid as well as deluded then....

Personally, like any sensible City fan, I'd like to thank SL for stumping up £240m of his own money to keep City going. As for the 'airblade' I assume you skipped the sustainability section of the accounts given your own doesn't include such.

[Davefevs]

48 minutes ago, Mr Popodopolous said:

The right to review and the timeframe. Clearly they can't 'do' us in isolation, us and us alone and forget everyone else. We also don't know if Nottingham Forest 'selling' Carvalho in January 2022 yielded a good profit or cost saving. Newly promoted clubs are harder to pursue as well, as we know.

It is also the newly appointed Indepndent body who will decide this whether to accept or challenge I believe. I have reason to believe that review based on past cases isn't a short term issue- how can it be with unusual accounting treatments such as adding back for players not sold.

Of course, but also worth referring to the Auditors comments too:

Looks like we want everything to be above board.

 

[BTRFTG]

53 minutes ago, maxjak said:

Thankyou for explaining.........Am i correct   in thinking that although it seems a massive amount, that SL, as you mention, covers most of this?  So £91 mill is not as scary as it first appears?   

Its all Lansdown. All debt is underwritten by him or is money he's invested in the club. Although his its still a huge amount of money as although SL might be happy to continue to pay what the club has to be worth to meet FFP/P&S that doesn't mean anybody else would be prepared to pay as much. Beyond football his personal wealth will have taken a hit these past few years hence why there are always overtures for others to look to invest, not anybody has yet bitten. And yes it is scary, for should he decide 'no more' City would be up The Malago without a paddle overnight.

[Mr Popodopolous]

22 minutes ago, Davefevs said:

Of course, but also worth referring to the Auditors comments too:

Looks like we want everything to be above board.

 

Thanks. Had a quick skim read last night, that is positive tbh.

If I had a slight criticism it would be why didn't we state our 'add-backs' itemised in the accounts- of course I also understand that commercial confidentiality and potentially even competitive positioning play a a part in disclosures and decisions about this.

[Mr Popodopolous]

2 minutes ago, BTRFTG said:

Its all Lansdown. All debt is underwritten by him or is money he's invested in the club. Although his its still a huge amount of money as although SL might be happy to continue to pay what the club has to be worth to meet FFP/P&S that doesn't mean anybody else would be prepared to pay as much. Beyond football his personal wealth will have taken a hit these past few years hence why there are always overtures for others to look to invest, not anybody has yet bitten. And yes it is scary, for should he decide 'no more' City would be up The Malago without a paddle overnight.

In truth you could say the same about many Championship clubs. Total money pit.

The scary thing for me is that our income recovered to nearly record levels ie not far off 2018-19 and we still made a cash loss let alone the huge pre tax loss.

Scarier still was needing equity or cash during the profit year which contained £38m of profit on player sales and a record turnover of around £30m. Is the model flawed? Championship model I mean!

Edited November 18, 2022 by Mr Popodopolous

[BTRFTG]

Just now, Mr Popodopolous said:

In truth you could say the same about many Championship clubs. Total money pit.

The scary thing for me is that our income rediceted to nearly record levels ie not far off 2018-19 and we still made a cash loss let alone the huge pre tax loss.

Scarier still was needing equity or cash during the profit year which contained £38m of profit on player sales and a record turnover of around £30m. Is the model flawed? Championship model I mean!

 

Broken basketcase and your first para is akin a doctor informing a patient they've terminal cancer then attempting to providing meaningless consolation by saying, "many others are in your position..."

Even the dipsticks who can't understand figures surely must be able to grasp City again lost over £28m last year. That every week of the year SL coughs up £480k such we may watch football.

The conundrum - the Premier ship's arguably sailed, so why bother trying to get there as if only for a season or so your still likely to end up massively out of pocket?

[tin]

A general question to the room, and particularly @Harry — I’m not sure how accurate this is, but the Post reports we’ve lost £439k p/w over the last decade. How many of those years was Mark Ashton involved for? Eight?

[The Bard]

 

14 hours ago, GrahamC said:

Me too & in Kalas’ case even that would only be if he was available for at least 50% of our remaining games now.

If they both say no, we move on without bothering to negotiate, because in those circumstances we are removing a huge chunk from our wage bill.

100%. If we mess around negotiating with them we will be missing opportunities elsewhere.  We should have made our minds up by February IMO.

[Davefevs]

13 minutes ago, Mr Popodopolous said:

In truth you could say the same about many Championship clubs. Total money pit.

The scary thing for me is that our income recovered to nearly record levels ie not far off 2018-19 and we still made a cash loss let alone the huge pre tax loss.

Scarier still was needing equity or cash during the profit year which contained £38m of profit on player sales and a record turnover of around £30m. Is the model flawed? Championship model I mean!

Because clubs (most clubs) don’t pay the transfer fee up-front!!!

[The Bard]

17 hours ago, Harry said:

The Naismith addition wouldn’t be on these accounts. That’ll be on next years. 
On this years accounts, the player additions totalling contracts of £2.3m would be James, King, Atkinson, Tanner & Klose. 
On next years accounts, player contract wise, the only biggies we really have coming off is O’Dowda & Palmer. With Naismith, Wilson, Sykes & Bajic being added (plus anything in Jan?)

We’re still gonna be paying the big Ashton contracts into next years accounts too (Kalas, Bentley, Wells, Dasilva, Martin), so it’s still not gonna be pretty until the following year. 

Aren't Weimann and Baker on those too?

[Mr Popodopolous]

1 minute ago, Davefevs said:

Because clubs (most clubs) don’t pay the transfer fee up-front!!!

True, always important to distinguish between cash losses and profit and loss.

The model at this level is mad though.

Edited November 18, 2022 by Mr Popodopolous

[Harry]

1 minute ago, The Bard said:

Aren't Weimann and Baker on those too?

True. Although doesn’t Weimann have another year? 
Plus I don’t consider them as the ‘high Ashton contracts’ as we chose to renew them at the end of the Ashton era. 

[Davefevs]

25 minutes ago, Mr Popodopolous said:

True, always important to distinguish between cash losses and profit and loss.

The model at this level is mad though.

Indeed, most businesses go bust as a result of lack of Cashflow rather than through losses.

It is mad, but if you’ve got a wealthy benefactor you can play it to your advantage.  When selling a player you can ask for more by offering nice payment terms.  When buying a player you can discount by offering to pay it all up-front.

23 minutes ago, Harry said:

True. Although doesn’t Weimann have another year? 
Plus I don’t consider them as the ‘high Ashton contracts’ as we chose to renew them at the end of the Ashton era. 

Yep, allegedly:

• Weimann accepted a deal on half his “Ashton Wages”
• Baker accepted one considerably less than half, but weighted towards appearances