Points deductions!

[Mr Popodopolous]

32 minutes ago, ExiledAjax said:

So if they miss the deadline by one or two days they automatically lose a few points?

Perhaps an automatic suspended points deduction, with a two month grace period before they kick in and are actually deducted. Late filing of accounts is something to be discouraged, but I don't think you want strict and automatic points deductions for administrative errors. Suspending the points deduction allows for rectification and is a more collaborative and supportive approach to regulation.

Given the timing in the season of most deadlines - with just a dozen or so games left to play - points deductions are sensitive (although I'd suggest they follow the same rules as insolvency related deductions when deciding which season to apply them to).

I do have a bit of sympathy with this, perhaps a suspended deduction, maybe getting bigger the later they are for internal submissions.

I've no issue with points deductions having a material impact on the League table, the onus is on the clubs to comply and if they don't and a deduction is rightly handed down- it will vindicate those who do. I understand that view however. I like the idea of a suspended deduction but otoh...

Derby under Mel Morris and Quantuma did not for a host of reasons submit to Companies House since 2019. Mix of regulatory disputes, Covid, administration and flagrant disregard.

2018-19 and 2019-20 were kept out of public view ostensibly due to Covid and the EFL dispute, 2020-21 accounts were not submitted due to administraton and 2021-22 accounts won't be submitted due to administration and new company.

That brings everything into disrepute IMO. Extreme example but it's mad looking back.

Edited March 13, 2023 by Mr Popodopolous

[Port Said Red]

9 minutes ago, Mr Popodopolous said:

I do have a bit of sympathy with this, perhaps a suspended deduction, maybe getting bigger the later they are for internal submissions.

I've no issue with points deductions having a material impact on the League table, the onus is on the clubs to comply and if they don't and a deduction is rightly handed down- it will vindicate those who do. I understand that view however. I like the idea of a suspended deduction but otoh...

Derby under Mel Morris and Quantuma did not for a host of reasons submit to Companies House since 2019. Mix of regulatory disputes, Covid, administration and flagrant disregard.

2018-19 and 2019-20 were kept out of public view ostensibly due to Covid and the EFL dispute, 2020-21 accounts were not submitted due to administraton and 2021-22 accounts won't be submitted due to administration and new company.

That brings everything into disrepute IMO. Extreme example but it's mad looking back.

It would seem a bit presumptuous of the League to evoke higher penalties for late filing than HMRC, who don't start charging fees for the first month and then only a nominal amount. 

[Mr Popodopolous]

8 minutes ago, Port Said Red said:

It would seem a bit presumptuous of the League to evoke higher penalties for late filing than HMRC, who don't start charging fees for the first month and then only a nominal amount. 

Fair although embargoes, 10 or 11 were handed down in 2020-21 when accounts not submitted by the EFL deadline- Government extended due to Covid but the League kept their own internal submission deadlines for FFP purposes.

Late submissions can materially impact FFP assessments but yes it would appear presumptious.

[Port Said Red]

3 minutes ago, Mr Popodopolous said:

Fair although embargoes, 10 or 11 were handed down in 2020-21 when accounts not submitted by the EFL deadline- Government extended due to Covid but the League kept their own internal submission deadlines for FFP purposes.

Late submissions can materially impact FFP assessments but yes it would appear presumptious.

My wife who dealt with HMRC and Companies House on behalf of multiple clients was always amazed at how laissez faire, they were over Company's producing late, anything up 9 months produced a fine at intervals, but nothing much else 

Edited March 13, 2023 by Port Said Red
Double negative.

[downendcity]

38 minutes ago, ExiledAjax said:

So if they miss the deadline by one or two days they automatically lose a few points?

Perhaps an automatic suspended points deduction, with a two month grace period before they kick in and are actually deducted. Late filing of accounts is something to be discouraged, but I don't think you want strict and automatic points deductions for administrative errors. Suspending the points deduction allows for rectification and is a more collaborative and supportive approach to regulation.

Given the timing in the season of most deadlines - with just a dozen or so games left to play - points deductions are sensitive (although I'd suggest they follow the same rules as insolvency related deductions when deciding which season to apply them to).

From April 6 I know I've got till midnight on Jan 31 2024 to submit my self assessment return to HMRC. Failure to do will incur a £100 fine - doesn't matter whether that's one hour late, one day, one week or one month.

Football clubs know the financial rules and the requirements and deadlines for submission of accounts and  financial statements. Unlike me, they also have professional management teams, accounting staff and accountants. As far as I can see, they have no excuse for being late with anything so, if a points deduction is the sanction for late submission, then so be it. 

[Mr Popodopolous]

15 minutes ago, downendcity said:

From April 6 I know I've got till midnight on Jan 31 2024 to submit my self assessment return to HMRC. Failure to do will incur a £100 fine - doesn't matter whether that's one hour late, one day, one week or one month.

Football clubs know the financial rules and the requirements and deadlines for submission of accounts and  financial statements. Unlike me, they also have professional management teams, accounting staff and accountants. As far as I can see, they have no excuse for being late with anything so, if a points deduction is the sanction for late submission, then so be it. 

Agreed.

Looking at a football context solely, we got ours out in mid November.

Birmingham parent company via Hong Kong listings submit without fail their prior seasons accounts made up to end of June by the end of September. 3 months- contains the Football segment and various bits. 

6 month accounts made up to end of December is there by the end of February- and Birmingham are not a well run club in many ways but it can easily be done.

[ExiledAjax]

16 minutes ago, downendcity said:

From April 6 I know I've got till midnight on Jan 31 2024 to submit my self assessment return to HMRC. Failure to do will incur a £100 fine - doesn't matter whether that's one hour late, one day, one week or one month.

Football clubs know the financial rules and the requirements and deadlines for submission of accounts and  financial statements. Unlike me, they also have professional management teams, accounting staff and accountants. As far as I can see, they have no excuse for being late with anything so, if a points deduction is the sanction for late submission, then so be it. 

I do SA for HMRC as well - you can appeal the £100 if you have a reasonable excuse, which are quite broad and include "your computer or software failed just before or while you were preparing your online return". It isn't as cut-and-dry as you portray. That's why I say there would need to be some sort of suspended penalty, or at least an appeals system. Professional accountants and staff are still human, and systems are prone to error, failure and mistake. Harsh, deaf, and draconian regulation only serves to create resistance to regulation. 

[downendcity]

36 minutes ago, ExiledAjax said:

I do SA for HMRC as well - you can appeal the £100 if you have a reasonable excuse, which are quite broad and include "your computer or software failed just before or while you were preparing your online return". It isn't as cut-and-dry as you portray. That's why I say there would need to be some sort of suspended penalty, or at least an appeals system. Professional accountants and staff are still human, and systems are prone to error, failure and mistake. Harsh, deaf, and draconian regulation only serves to create resistance to regulation. 

We might have agree to disagree EA.

I'm habitually a "leave it to the last minute" person. One time Mrs Downend was nagging me about my self-assessment prior to Christmas, and I told her that I had until Jan 31 to get it done and submitted ( my self-assessment wasn't complicated). Into the new year, I convinced myself that I had the whole month to get it done, so no rush. Then, for some reason I had a brain freeze and only realised that I hadn't submitted when it was already too late.

The £100 fine that I then received ensured that from then on I submitted my SA well in advance of the deadline. Perhaps I might have appealed and been successful, but the penalty ensured future compliance.

We've already seen that clubs will bend/break the rules and then use every mechanism possible to escape punishment for such transgressions. It seems that, unfortunately, it is only the real threat of meaningful penalty, and knowing that it will be applied, some what may, that will ensure that all clubs comply with the rules. 

I, and I think a number of others, think that Derby did what they did because they thought they'd get away with it and because they thought the EFL would not be prepared to apply points deduction. 

 

 

 

 

Edited March 13, 2023 by downendcity

[Hxj]

There are plenty of multi-national businesses with complex businesses and turnovers into many billions who get their accounts in on time, HSBC Holdings Ltd can produce full accounts within 4-5 months of their year end.

A football club who can't do it is clearly in the cannot be a***d brigade.

[Loco Rojo]

I think clubs who submit financials late should be put in front of a panel of self employed small business owners who have to self submit HMRC assessments by the deadline (or face strict consequences) to argue their case. 

The panel then get to decide the penalties and apply HMRC style consequences.

I wonder if that would put a quick end to the clubs bending/breaking by rules.

I'd love to hear some clubs [cough...Man City (allegedly)..cough] excuses for breaking the financial rules 100 times over the 9 year period. 

Edited March 13, 2023 by Loco Rojo

[downendcity]

3 minutes ago, Loco Rojo said:

I think clubs who submit financials late should be put in front of a panel of self employed small business owners who have to self submit HMRC assessments by the deadline (or face strict consequences) to argue their case. 

I wonder if that would put a quick end to the clubs bending/breaking by rules.

I'd love to hear some clubs [cough...Man City (allegedly)..cough] excuses for breaking the financial rules 100 times over the 9 year period. 

Hang on a minute.

Man City say they haven't broken any financial rules, so they don't need to offer  any excuses! 

So that's all right, isn't it? 

When it comes to just about every aspect of corporate governance, financial expediency and management, football clubs seem to operate on a completely different basis to most "normal" businesses, and too many believe they can continue to do so with impunity. I've mentioned before that we are lucky to have an owner who built his fortune in the highly regulated financial services sector, where penalties for breaking the rules can be massively punitive, so am pretty confident that SL will want to ensure we do everything necessary to stay within the rules..

 

[Jerseybean]

https://www.bbc.co.uk/sport/football/64944601
 

[slartibartfast]

5 hours ago, Jerseybean said:

https://www.bbc.co.uk/sport/football/64944601
 

Bit of a waste of time, window's closed anyhow.!

[ExiledAjax]

5 hours ago, slartibartfast said:

Bit of a waste of time, window's closed anyhow.!

Not if they've still not filed by the time the window opens. It may be a largely symbolic punishment right now - although it does stop them signing free agents (unless they somehow end up with fewer than 16 professional players) - but if the issue persists then imposing the embargo now means that it's in place at minute 1 of the window.

It's a good show of real time monitoring and sanctioning.

[1960maaan]

@ExiledAjax , what does this mean in real terms ?
Is the embargo firm and will be in place next Window even if they submit the Accounts soon ? That would be hard for Burnley.
Or can will the embargo be lifted when clean accounts submitted ?
Seems like Huddersfield might have bigger problems if they do go into Administration. 

[ExiledAjax]

1 hour ago, 1960maaan said:

@ExiledAjax , what does this mean in real terms ?
Is the embargo firm and will be in place next Window even if they submit the Accounts soon ? That would be hard for Burnley.
Or can will the embargo be lifted when clean accounts submitted ?
Seems like Huddersfield might have bigger problems if they do go into Administration. 

Great questions. I will try to explain the EFL's stance in clear terms. Ask me if you don't think I've been clear anywhere.

Firstly, the rules I describe below apply to "standard" embargoes for relatively "minor" or administrative errors and breaches of EFL regulations. There are additional rules where a club is embargoed because of an FFP breach - basically the EFL can strengthen the embargo depending on the severity of the FFP breach. Four Championship clubs are currently the subject of a transfer embargo:

• Huddersfield's embargo is purely because they have failed to submit accounts.
• Burnley's embargo is because they failed to submit accounts and they are subject to an FFP breach related to providing their estimated profit and loss account. They are therefore possibly subject to some additional restrictions - however these are determined on a case-by-case basis by the EFL and they don't publish them.
• Reading's embargo is just for FFP breaches, so I expect they have a pretty strict embargo in place. Probably stricter than Burnley's.
• Sheffield Utd are also embargoed, but like Huddersfield it's not an FFP breach (it's about transfer payments to other clubs) so they have the "standard" emabargo in place.

Below I focus on Huddersfield and Burnley as that is who you mention, but the rules apply equally to Reading and Sheffield Utd.

What does this mean in real terms ?

The extract you provide above says that "The embargo means [Club X] are unable to register new players". That is broadly true once you look at Huddersfield and Burnley's current squads, and the the various limits and rules around the embargo. The EFL knows that it might impose an embargo outside of a transfer window, and so there are two sets of rules that apply.

1. Outside of a Transfer Window
   • A Club can only register free agents if they have fewer than 16 players of Professional Standing (2x Goalkeepers, 14x Outfield Players).
     • A player is a player of "Professional Standing" if they have made one first team appearance (including as a sub) for any club in any first team competition (EFL Trophy appearances do not count).
   • Clubs can also register an Emergency Goalkeeper Loan if they don’t have any Professional Goalkeepers available due to injuries, suspensions or international call-ups.
2. During a Transfer Window
   • Clubs can ‘staff up’, so they have 23 players of Professional Standing within their squad.
     • However, when ‘staffing up’ they can only sign free agents or players on loan.
   • Clubs cannot pay fees to acquire loan players and cannot pay additional wages on top of the salary the player receives at their parent Club.
   • Free agents can only be signed until the end of the current season, and loans can only be for half a season (ie until the next transfer window.

So, currently Huddersfield and Burnley are under the first set of conditions. As both have squads of more than 16 players, we should expect to see them sign no free agents at this time. However, if they are still under the embargo when we hit the summer window, they will move to being under the second set of conditions. It is therefore possible that we could see them sign free agents or loanees in the summer if, due to contracts running out or player sales, their squad numbers drop below the 23 player threshold described above.

Clubs under embargo can register academy players and you can give academy players first-team professional contracts (subject to EFL approval).

Clubs under embargo can offer new contracts, or trigger extensions to existing contracts (subject to EFL approval).

These last two items might be the kind of thing that Burnley or Reading might be prevented from doing as they have breached the FFP rules.

Will the embargo be lifted when clean accounts submitted ?

Yes. The EFL says "An embargo prevents a Club from strengthening its team or adding to its playing staff costs until such time as it has met its existing financial obligations and/or the Club has rectified the relevant breach of EFL regulation(s)." So that suggests that once the EFL is satisfied that a club has rectified it's breach - in the case of Huddersfield that the Club has provided satisfactory accounts/financial information - then the embargo should be lifted. Burnley will need to rectify both the provision of their accounts and their future profit/loss information. 

Huddersfield might have bigger problems if they do go into Administration. 

Absolutely, that would be a different breach of rules and would incur an automatic 12 point deduction, as happened with Derby last season. Whether that deduction would apply this season or next depends on exactly when the "Insolvency Event" (as entering administration is classed) happens and exactly what the impact of -12 points would be this season. The important date is 5pm on the fourth Thursday in March - ie a week tomorrow - and given where they currently are in the table it's likely that if they go into Admin after the fourth Thursday then they will start in League 1 on -12.

If you'd like to read the full EFL description of embargoes then go here: https://www.efl.com/-more/governance/embargoes/embargoes-faqs/

Edited March 15, 2023 by ExiledAjax

[Mr Popodopolous]

9 hours ago, slartibartfast said:

Bit of a waste of time, window's closed anyhow.!

 

3 hours ago, ExiledAjax said:

Not if they've still not filed by the time the window opens. It may be a largely symbolic punishment right now - although it does stop them signing free agents (unless they somehow end up with fewer than 16 professional players) - but if the issue persists then imposing the embargo now means that it's in place at minute 1 of the window.

It's a good show of real time monitoring and sanctioning.

Maybe it depends on a case by case basis but can also impact upon contract extensions or registration of these anyway too I believe, until such time as the issues have been resolved.

[ExiledAjax]

1 hour ago, Mr Popodopolous said:

Maybe it depends on a case by case basis but can also impact upon contract extensions or registration of these anyway too I believe, until such time as the issues have been resolved.

See my above post.

Under a "standard" embargo in place for non-FFP related breaches they can sign free agents if they dip below the squad number thresholds - which depend on the transfer window being open or closed. 

If the embargo is partly or wholly in place due to FFP breaches then whether or not they can do that depends on the precise terms of the embargo - as you say on a case-by-case basis per the EFL's decision.

[Mr Popodopolous]

2 minutes ago, ExiledAjax said:

See my above post.

Under a "standard" embargo in place for non-FFP related breaches they can sign free agents if they dip below the squad number thresholds - which depend on the transfer window being open or closed. 

If the embargo is partly or wholly in place due to FFP breaches then whether or not they can do that depends on the precise terms of the embargo - as you say on a case-by-case basis per the EFL's decision.

Thanks.

Burnley fans seem relaxed about it and interestingly perhaps slightly surprisingly, the Athletic says that contract renewal won't be impacted given that there are two separate breaches on there.

Perhaps the draft accounts show that all is well and it's just a case of ratification.

Edited March 15, 2023 by Mr Popodopolous

[Mr Popodopolous]

This could go on here or it could go on the FFP thread but this can't be right??

https://www.dailymail.co.uk/sport/football/article-11873261/Sheffield-United-introduce-extraordinary-cost-cutting-measures-avoid-going-administration.html

2 years of PL cash, in profit (yes I know) even during Covid 19, had one of the lowest wage bills in PL anyway, which will clearly have fallen on relegation. Parachute Payments in year one and two are rather high, they haven't exactly been big spenders either perhaps save for 2020-21.

[Davefevs]

30 minutes ago, Mr Popodopolous said:

This could go on here or it could go on the FFP thread but this can't be right??

https://www.dailymail.co.uk/sport/football/article-11873261/Sheffield-United-introduce-extraordinary-cost-cutting-measures-avoid-going-administration.html

2 years of PL cash, in profit (yes I know) even during Covid 19, had one of the lowest wage bills in PL anyway, which will clearly have fallen on relegation. Parachute Payments in year one and two are rather high, they haven't exactly been big spenders either perhaps save for 2020-21.

Cashflow (lack of) is what kills most businesses, not profit / loss.

[Mr Popodopolous]

46 minutes ago, Davefevs said:

Cashflow (lack of) is what kills most businesses, not profit / loss.

Oh I agree, but all the same I would have thought that a combination of PL cash, wages falling on relegation from a relatively low base, not spending so much would have seen them alright to this year anyway cash flow wise.

[Davefevs]

5 minutes ago, Mr Popodopolous said:

Oh I agree, but all the same I would have thought that a combination of PL cash, wages falling on relegation from a relatively low base, not spending so much would have seen them alright to this year anyway cash flow wise.

Another club who look to have borrowed against their PL money before it was due.

I agree with you too.

[Never to the dark side]

Three point deduction for Wigan

https://www.bbc.co.uk/sport/football/65018030

Heinz and Kay Burley won't be best pleased

[Northern Red]

Dave Whelan didn't break his leg for this.

[PHILINFRANCE]

1 hour ago, Northern Red said:

Dave Whelan didn't break his leg for this.

Are you referring to the ex-Wigan owner, who played in an FA Cup Final?

I didn't know he had broken his leg, I'm not sure he has ever mentioned it.

[Robin101]

Well, that’s Wigan all but relegated unfortunately. 

Are we still expecting a Reading points deduction?

[Swede]

On 13/03/2023 at 09:52, Clutton Caveman said:

Makes you realise what a great job our management team have done not only to avoid a points deduction but also to be mid table this year.

Yes; I raised the point about Swansea as well needing to offload high earners. If only some of the bedwetters could understand this and think before posting anything negative.