The Championship FFP Thread (Merged)

[reddoh]

2 minutes ago, Davefevs said:

5) where Ken Anderson is the Owner, he should get eff all, and his son too.

let me be the fool

and keep my serious head offline.

[Davefevs]

According to Kieran Maguire, he thinks Villa have already sold their ground and leased it back.

[BanburyRed]

Apologies if this question has been asked before - but if one of Villa or Derby or both infact are found to be in breach of FFP, what are the implications to them once in the PL? Does this action carry forward? Do EFL and PL operate on different levels of FFP?

[Bristol Rob]

1 minute ago, BanburyRed said:

Apologies if this question has been asked before - but if one of Villa or Derby or both infact are found to be in breach of FFP, what are the implications to them once in the PL? Does this action carry forward? Do EFL and PL operate on different levels of FFP?

My understanding is that the PL and EFL are two very different beasts.

QPR were punished on relegation, Leicester chose to pay the EFL a fine as a premier league club. Not sure about Bournemouth.

So my guess is that if found guilty, the EFL will let then know what the five is and they can either pay it, or dispute it.

[Mr Popodopolous]

2 hours ago, Davefevs said:

According to Kieran Maguire, he thinks Villa have already sold their ground and leased it back.

I saw it too Dave.

I read a figure on some comment on an article that Villa Park sale maybe £200m...TWO HUNDRED!?

 Clubs and the EFL have to be really firm if they've done the same...think the question of "EFL Golden Share" needs to come onto the table. It really does.

Are the rest of the League owners going to take this on the chin? I'd be stunned if they did...some very rich men indeed amongst those owners, and in some cases- Marinakis being one- influential in their own nations to some level.

Edited May 27, 2019 by Mr Popodopolous

[Mr Popodopolous]

2 hours ago, Bristol Rob said:

My understanding is that the PL and EFL are two very different beasts.

QPR were punished on relegation, Leicester chose to pay the EFL a fine as a premier league club. Not sure about Bournemouth.

So my guess is that if found guilty, the EFL will let then know what the five is and they can either pay it, or dispute it.

I have read in places that sanctions ie points deductions or embargos can follow a side up- whether it'd be enforced though...

Kieran Maguire thinks fines only but in reality they should. Not in the PL's interest though, is it.

[chinapig]

16 minutes ago, Mr Popodopolous said:

I saw it too Dave.

I read a figure on some comment on an article that Villa Park sale maybe £200m...TWO HUNDRED!?

 Clubs and the EFL have to be really firm if they've done the same...think the question of "EFL Golden Share" needs to come onto the table. It really does.

Are the rest of the League owners going to take this on the chin? I'd be stunned if they did...some very rich men indeed amongst those owners, and in some cases- Marinakis being one- influential in their own nations to some level.

I know I keep repeating myself but the other clubs have already let Derby get away with it so they are in no position to tell Villa they can't do the same.

Unless Gibson succeeds in his action we may as well wave FFP goodbye as other clubs will now come up with different scams knowing they are likely to get away with it.

 

[Mr Popodopolous]

9 minutes ago, chinapig said:

I know I keep repeating myself but the other clubs have already let Derby get away with it so they are in no position to tell Villa they can't do the same.

Unless Gibson succeeds in his action we may as well wave FFP goodbye as other clubs will now come up with different scams knowing they are likely to get away with it.

 

Emergency meeting or announcement that the playoff promotion of whoever wins today will be subject to a review and a vote by the Championship 24 would do it. That'd be a game changer.

Do the EFL understand the seriousness of all this- clubs going to the court system as they appear to have lost faith in the Governing body, is pretty drastic escalation of the stakes!

Edited May 27, 2019 by Mr Popodopolous

[chinapig]

43 minutes ago, Mr Popodopolous said:

Emergency meeting or announcement that the playoff promotion of whoever wins today will be subject to a review and a vote by the Championship 24 would do it. That'd be a game changer.

Do the EFL understand the seriousness of all this- clubs going to the court system as they appear to have lost faith in the Governing body, is pretty drastic escalation of the stakes!

It would do it but I see no evidence that the clubs have the guts to act. Or that they are particularly bothered. I'd love to be proven wrong but they had a chance and chickened out.

The fact remains that the clubs are themselves the de facto governing body but show no inclination to govern when the chips are down.

Bitterly disappointing but not surprising. The business of football stinks from a combination of dishonesty and incompetence, and worse.

[Mr Popodopolous]

7 minutes ago, chinapig said:

It would do it but I see no evidence that the clubs have the guts to act. Or that they are particularly bothered. I'd love to be proven wrong but they had a chance and chickened out.

The fact remains that the clubs are themselves the de facto governing body but show no inclination to govern when the chips are down.

Bitterly disappointing but not surprising. The business of football stinks from a combination of dishonesty and incompetence, and worse.

I agree with a lot of what you say. Especially about the business of football.

I also think this issue won't go away though- a simple majority vote of the clubs, absolute democracy in action there.

I just don't see the remaining 21, 22 clubs accepting the status quo, how on earth can they. More to the point, why should they?

Maybe FFP will be scrapped in the Championship because letting 2-3 clubs get away with taking the piss is plainly untenable.

People like to and rightly so slate FIFA and UEFA, but are our own football Governing bodies really much better?

[Davefevs]

1 minute ago, Mr Popodopolous said:

I agree with a lot of what you say. Especially about the business of football.

I also think this issue won't go away though- a simple majority vote of the clubs, absolute democracy in action there.

I just don't see the remaining 21, 22 clubs accepting the status quo, how on earth can they. More to the point, why should they?

Maybe FFP will be scrapped in the Championship because letting 2-3 clubs get away with taking the piss is plainly untenable.

People like to and rightly so slate FIFA and UEFA, but are our own football Governing bodies really much better?

Part of the reason FFP was brought in was Platini (great footballer - awful administrator) wanting to break England’s dominance of the Champions League, allowing a French team a chance.  Spain then dominated, but it is going full-circle with English clubs again.  Platini couldn’t stop Sky, and PSG fail again.

The lower league versions in this country, I'm not convinced have been rigorously applied either, and it’s all becoming a bit of a farce.

If Gibson’s lawsuit fails to have any impact on the rules and Villa’s ground sale swells their coffers, then I think it’s time to admit defeat, and either accept there are those taking advantage of the rules and there are those who aren’t.  Not sure where SL will sit...unchanged I suspect, playing by the rules....but expect FFP to die a death.

[chinapig]

26 minutes ago, Davefevs said:

Part of the reason FFP was brought in was Platini (great footballer - awful administrator) wanting to break England’s dominance of the Champions League, allowing a French team a chance.  Spain then dominated, but it is going full-circle with English clubs again.  Platini couldn’t stop Sky, and PSG fail again.

The lower league versions in this country, I'm not convinced have been rigorously applied either, and it’s all becoming a bit of a farce.

If Gibson’s lawsuit fails to have any impact on the rules and Villa’s ground sale swells their coffers, then I think it’s time to admit defeat, and either accept there are those taking advantage of the rules and there are those who aren’t.  Not sure where SL will sit...unchanged I suspect, playing by the rules....but expect FFP to die a death.

I think SL's position will remain unchanged in that he wants the club to be sustainable financially, regardless of FFP. I believe that is his priority above all else.

If he had strong enough feelings about other clubs complying with FFP he would have supported Gibson at the EFL meeting. He didn't and neither did anybody else.

If somebody like Steve is not prepared to stand up for the principle then FFP's death throes have already started.

[ScottishRed]

On 23/05/2019 at 17:03, chinapig said:

Agreed, but as far as we can tell Steve Gibson was a lone voice when he raised objections about Derby. 

Steve L was quick to have a go about the trivial 'spygate ' nonsense but we have heard nothing about his view of a club circumventing FFP when he plays by the rules. Which leads me to assume he is not bothered.

Shaun Harvey, who has a somewhat chequered past, was forced out as EFL CEO of course. Perhaps somebody at Ashton Gate has their eye on that job in due course. Though I can't think who.

Nor can I........

Maybe ‘due course’ is actually quite soon......might explain a few things regarding our apparent silence on these matters.

[Mr Popodopolous]

4 hours ago, Davefevs said:

Part of the reason FFP was brought in was Platini (great footballer - awful administrator) wanting to break England’s dominance of the Champions League, allowing a French team a chance.  Spain then dominated, but it is going full-circle with English clubs again.  Platini couldn’t stop Sky, and PSG fail again.

The lower league versions in this country, I'm not convinced have been rigorously applied either, and it’s all becoming a bit of a farce.

If Gibson’s lawsuit fails to have any impact on the rules and Villa’s ground sale swells their coffers, then I think it’s time to admit defeat, and either accept there are those taking advantage of the rules and there are those who aren’t.  Not sure where SL will sit...unchanged I suspect, playing by the rules....but expect FFP to die a death.

Is an interesting one. When it was first mooted, FFP, I remember it was part of some grand idealistic reform, so it was said.

Not just French, I seem to recall his vision was a reformed CL- a seriously reformed one and I seem to recall straight knockout in a huge competition of 256 sides.

Maybe combining the 2 European club competitions- was a wide range of ideas, seem to recall these in mid to late 2000s.

PSG and their failings...think they've got significant cultural failings. Great players, some good managers but lacking something... their collapse v Man Utd was astonishing and I think the star players there hold a lot too much sway. Something rotten, sub-elite in the culture the DNA almost there IMO.

It's looking that way. This season was an acid test really. I suspect though that if an EFL club were to win FA Cup or League Cup and no FFP rules, then a UEFA License would be doubtful.

I also think though from a Platini viewpoint he wasn't keen on monopolies or near monopolies... he got votes from smaller and middle ranking European Leagues for one.

I remember he made some changes to CL...possible clash or sign of clash between UK and European types of capitalism?

More laisse faire v interventionist, Platini looking at pushing the latter in CL. Think more to it though than he just wanted a French side winning it or going far.

[NcnsBcfc]

On 24/05/2019 at 20:12, CyderInACan said:

 

Exclusive: Middlesbrough to sue Derby over alleged breaches of financial rules

share 

Middlesbrough and Derby in action earlier this season

•  John Percy 

24 MAY 2019 • 7:36 PM

Middlesbrough have stunned Derby by announcing their intention to sue the Championship club, days before the play-off final at Wembley.

Steve Gibson, the Middlesbrough owner, has taken drastic action in his dispute with Mel Morris by vowing to take legal action over what he insists are clear breaches of financial rules.

 

Gibson is alleging that Morris has broken the English Football League’s profitability and sustainability rules and Middlesbrough officials contacted Derby on Friday to inform them of their stance.

Boro are understood to be furious that Derby reported a £14.6m profit in their 2017/18 accounts, after Morris sold the club’s Pride Park stadium and then leased it back. Gibson believes that Morris has flouted the rules.

Derby are adamant they have been fully compliant, and the timing of Middlesbrough’s shock move has surprised the club ahead of their play-off final against Aston Villa on Monday.

 

 

Morris also twice invited Middlesbrough officials to look at Derby’s accounts in a meeting of all EFL clubs at Nottingham Forest’s City Ground in March.

He said: "Middlesbrough were offered by us in writing to come with their advisors to go through our submissions for profitability and sustainability, [but] they declined."

Gibson’s attempt to force an independent inquiry of club finances was also rejected by all of the Championship clubs in another meeting last month.

Villa and Sheffield Wednesday have also been in Gibson’s sights but his row with Derby is now threatening to turn ugly.

Derby were unavailable for comment.

 

Christ reg.

I know we're getting old. But how large donyiu want the text?????

[CyderInACan]

54 minutes ago, ncnsbcfc said:

Christ reg.

I know we're getting old. But how large donyiu want the text?????

Yeah yeah yeah it was just how it was formatted from copy & paste. Don’t blame me etc etc 

At least I can spell, though, eh 

[wayne allisons tongues]

Maybe as Prince William is President of the FA, Villa misdemeanours are being overlooked.

[BS4 on Tour...]

2 hours ago, CyderInACan said:

Yeah yeah yeah it was just how it was formatted from copy & paste. Don’t blame me etc etc 

At least I can spell, though, eh 

How do we know you can spell?! You copied and pasted an article with no input from yourself?  

[Bristol Rob]

On the plus side, if Villa have already sold themselves the stadium for 200mil, they can't sell it again when they invariably get relegated and have another 3 year stay in the Championship.

Unless they buy the stadium back of course.

[BCFC11]

I’m still totally baffled as to why not 1 Championship club gave Steve Gibson their backing? There must surely be more to it than the obvious loopholes Villa/Derby have used for him to receive no support over this?

[downendcity]

On 28/05/2019 at 08:38, Bristol Rob said:

On the plus side, if Villa have already sold themselves the stadium for 200mil, they can't sell it again when they invariably get relegated and have another 3 year stay in the Championship.

Unless they buy the stadium back of course.

Derby will buy it and sell it on to Villa. 

[Lanterne Rouge]

8 hours ago, downendcity said:

Derby will buy it and sell it on to Villa. 

And while the deal`s being sorted out it will just be resting in Sheffield Wednesday`s account.

[Bristol Rob]

31 minutes ago, Red Right Hand said:

And while the deal`s being sorted out it will just be resting in Sheffield Wednesday`s account.

It's okay, Bailey Wright can monitor the account as he will have been suspended as a result of these sales.

[Mr Popodopolous]

16 hours ago, BCFC11 said:

I’m still totally baffled as to why not 1 Championship club gave Steve Gibson their backing? There must surely be more to it than the obvious loopholes Villa/Derby have used for him to receive no support over this?

I think a few may have done- there are rumours that Bristol City and Nottingham Forest are also keen on, supporting this legal case.

Unless you mean the March/April meetings? I remember talk of SL being keen on it, on seeing these rules enforced correctly and Nottingham Forest too- seems to be a bit of a split in the League though...some clubs were actually pushing for a relaxation of the rules from what they are now!

[downendcity]

8 minutes ago, Mr Popodopolous said:

I think a few may have done- there are rumours that Bristol City and Nottingham Forest are also keen on, supporting this legal case.

Unless you mean the March/April meetings? I remember talk of SL being keen on it, on seeing these rules enforced correctly and Nottingham Forest too- seems to be a bit of a split in the League though...some clubs were actually pushing for a relaxation of the rules from what they are now!

Ive wondered whether this might be the case Mr P - it would explain the apparent lack of support earlier in the year.

Some clubs might be finding it too much of an uphill battle to try and control their finances in order to stay within ffp and still remain competitive. Others might have owners frustrated by the financial constraints ffp brings and which prevent them using their money to boost their on field fortunes.

In either case, it might be that by keeping their powder dry, while seeing clubs like Derby and Villa seemingly "getting away with it" and benefitting as a result, they feel that clubs and the EFL will give up on ffp, thereby allowing clubs to run their financial affairs as they please.

[Mr Popodopolous]

13 hours ago, downendcity said:

Ive wondered whether this might be the case Mr P - it would explain the apparent lack of support earlier in the year.

Some clubs might be finding it too much of an uphill battle to try and control their finances in order to stay within ffp and still remain competitive. Others might have owners frustrated by the financial constraints ffp brings and which prevent them using their money to boost their on field fortunes.

In either case, it might be that by keeping their powder dry, while seeing clubs like Derby and Villa seemingly "getting away with it" and benefitting as a result, they feel that clubs and the EFL will give up on ffp, thereby allowing clubs to run their financial affairs as they please.

I wonder if quite a few are planning on doing a Mel Morris and selling their grounds to related parties.

I would say giving it up could pose a problem, not just from a financial POV. In the highly unlikely event that a club outside the top flight wins FA Cup, or Carling (whatever it's called now!) or a relegated club wins either, if EFL has no FFP rules, would they get a UEFA License? Not sure- this is an outside possibility. More realistic perhaps is if a club goes up and then gets into Europe the same season and is in 3 year breach as per the rules of FFP when there were none at this level, again UEFA would be well within rights well IMO anyway, to refuse a license during that period for said club. Wouldn't expect some of the short termist foreign in particular- but not exclusively- owners to think this far ahead though...

I can't see a majority voting to scrap it though. I'd like to see a vote this summer tbh, on whether to punish Derby and when they choose to release their accounts if they have done the same, Sheffield Wednesday. EFL should grow a pair literally put it to a formal vote of clubs and particularly those in the Championship- if there is no majority then so be it!

Interesting story as it goes, just found it- not even read it!

https://www.dailymail.co.uk/sport/football/article-7088131/Championship-clubs-fear-Aston-Villa-avoid-points-deduction-breach-FFP-rules.html

[downendcity]

33 minutes ago, Mr Popodopolous said:

I wonder if quite a few are planning on doing a Mel Morris and selling their grounds to related parties.

I would say giving it up could pose a problem, not just from a financial POV. In the highly unlikely event that a club outside the top flight wins FA Cup, or Carling (whatever it's called now!) or a relegated club wins either, if EFL has no FFP rules, would they get a UEFA License? Not sure- this is an outside possibility. More realistic perhaps is if a club goes up and then gets into Europe the same season and is in 3 year breach as per the rules of FFP when there were none at this level, again UEFA would be well within rights well IMO anyway, to refuse a license during that period for said club. Wouldn't expect some of the short termist foreign in particular- but not exclusively- owners to think this far ahead though...

I can't see a majority voting to scrap it though. I'd like to see a vote this summer tbh, on whether to punish Derby and when they choose to release their accounts if they have done the same, Sheffield Wednesday. EFL should grow a pair literally put it to a formal vote of clubs and particularly those in the Championship- if there is no majority then so be it!

Interesting story as it goes, just found it- not even read it!

https://www.dailymail.co.uk/sport/football/article-7088131/Championship-clubs-fear-Aston-Villa-avoid-points-deduction-breach-FFP-rules.html

Re the Villa story, suggesting championship clubs wanting the premier league to apply a points deduction if Villa are found to have breached.

There may be something obvious I've missed, but I thought one of the main purposes behind the new ffp rules was that by requiring clubs to provide projected accounts in year 3, it would enable a breach to be identified and appropriate punishment given during the same season.

If so, I can't for the life of me work out why Vila's situation still seems uncertain. Has the EFL not received Villa's accounts, to enable the requisite ffp checks to be undertaken, because if so then that has to ring alarm bells? If they have received  all the account information, then either Villa are within ffp, or not. If the former, then all the EFL has to do is confirm this to be the case, even if we are not too happy with the decision. If the latter, then it really is a can of worms and I would have thought serious questions should be asked of the EFL's governance.

As for the suggestion about championship clubs hoping that the premier league will apply a points deduction should Villa have breached ffp. That smacks of shutting the stable door after the horse has bolted, as I presume the prem can only deduct points for next season, by which time Vila will already be benefitting financially from promotion to the premier league as a result of cheating.

If the EFL want ffp to continue, then they really need to get their act together. They need to address the loophole Derby has exploited and get experts to look at the ffp rules to identify any other areas clubs could look to exploit and amend the rules as necessary. They also need to grow a pair, and ensure that the rules are applied and penalties given notwithstanding which club is involved, as I think many fans currently feel that Villa got off the hook because of who they are.

[Mr Popodopolous]

26 minutes ago, downendcity said:

Re the Villa story, suggesting championship clubs wanting the premier league to apply a points deduction if Villa are found to have breached.

There may be something obvious I've missed, but I thought one of the main purposes behind the new ffp rules was that by requiring clubs to provide projected accounts in year 3, it would enable a breach to be identified and appropriate punishment given during the same season.

If so, I can't for the life of me work out why Vila's situation still seems uncertain. Has the EFL not received Villa's accounts, to enable the requisite ffp checks to be undertaken, because if so then that has to ring alarm bells? If they have received  all the account information, then either Villa are within ffp, or not. If the former, then all the EFL has to do is confirm this to be the case, even if we are not too happy with the decision. If the latter, then it really is a can of worms and I would have thought serious questions should be asked of the EFL's governance.

 As for the suggestion about championship clubs hoping that the premier league will apply a points deduction should Villa have breached ffp. That smacks of shutting the stable door after the horse has bolted, as I presume the prem can only deduct points for next season, by which time Vila will already be benefitting financially from promotion to the premier league as a result of cheating.

If the EFL want ffp to continue, then they really need to get their act together. They need to address the loophole Derby has exploited and get experts to look at the ffp rules to identify any other areas clubs could look to exploit and amend the rules as necessary. They also need to grow a pair, and ensure that the rules are applied and penalties given notwithstanding which club is involved, as I think many fans currently feel that Villa got off the hook because of who they are.

Agree with all of this- an organisation headed up by Shaun Harvey though, can we expect anything better, look how they messed up the Birmingham one, how slow it was, never mind such wizardry as interpreting projected accounts and punishing accordingly in 2017/18! I always think back to what @Coppello wrote about someone from EFL finance department on here and it makes me pretty pissed off.

A soft embargo and an appropriate points deduction could see them come straight back down, but you are right the money aspect is ill-gotten gains as far as I'm concerned- not in a legal sense I hasten to add, but ethically, morally.

Now Birmingham are on one season account submissions until the 2017/18 period is spent and I assume that will be a precedent moving forward...therefore rationally they should also cut the overspend threshold by a third- bet they won't though! 

Edited May 31, 2019 by Mr Popodopolous

[Mr Popodopolous]

 

Quote

 

Championship clubs are concerned that the Premier League will not impose a points deduction on Aston Villa if they are found to have breached profit and sustainability rules.

Villa, who were promoted to the top flight after beating Derby County in Monday's Championship play-off final at Wembley, are among a number of clubs — Derby included — currently operating under a soft transfer embargo while the English Football League continue to assess their P and S submission.

Officials at Villa Park have insisted they will be compliant with financial fair play regulations despite reports of heavy losses.

 

+4

•  

The Football League is investigating Aston Villa, who are under a soft transfer embargo

 

+4

•  

Aston Villa secured promotion to the Premier League via the Championship play-offs

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But Sportsmail understands high-level discussions are currently taking place between the EFL and the Premier League - discussions being led by the Football League's interim chair Debbie Jevans, amid concern that there could be lack of consistency in applying the appropriate sanctions.

In March an independent panel concluded that Birmingham City should be hit with a nine-point deduction by the EFL after incurring losses of nearly £48.8m between 2015 and 2018 — and therefore breaching the £39m three-year limit — and clubs would certainly like to see consistency should Villa also be found to be in breach.

But insiders believe poor communication between the EFL and the Premier League has led to 'a disconnect'. 

'The rules are supposed to be aligned across the leagues but there is a concern that the interpretation of those rules is different,' said one source.

 

+4

•  

Championship clubs fear a lack of consistency if Villa escape punishment for FFP breaches

Sportsmail understands there would be a reluctance among senior Premier League officials to hit a newly-promoted club with a points deduction, and so making it all the more harder for them to survive in the top flight.

However, what concerns the clubs, and is likely to be the point being made by the EFL, is the message the Premier League will be delivering if they don't agree with a points deduction for a club that breaks financial rules to reach football's promised land with its television riches.

'The winner of the Championship play-off final lands a £170m jackpot so if the only punishment if you are then found guilty of breaching the regulations is a fine, you take that gamble,' said one club official. 'Because the worst that then happens, if you fail to get promoted, is you start the new Championship season with a points deduction.'

 

 

 

My depressing but possibly likely take on the Aston Villa issue is that the PL won't do anything or want to do anything to dilute their "brand", brand at all costs so won't apply the regs for an FFP overspend- I reckon based on formulas and mitigation- somewhere between 10-15 points and a soft embargo. It is almost impossible to fail FFP in the Premier League and I don't believe that to be an accident. Why is a League with such higher revenue- and costs admittedly, but a higher by far ratio of income/costs, giving such leeway of £35m (plus allowable costs) per season??

 

Where we may well have more hope is the Derby issue...

 

Quote

 

The dispute that has been raging for much of the season between Championship clubs is likely to remain on the agenda at next week's AGM in Portugal.

Reports last week suggested Middlesbrough have issued a legal letter to Derby in the belief a side that finished one point ahead of them, and in the play-offs, broke the rules when owner Mel Morris essentially bought the stadium with another company he also owns for what, at £80m, was double the value of what Pride Park was listed in the club's books as an asset.

It meant Derby were able to report a pre-tax profit of £14.6m and while the EFL might yet conclude the stadium purchase has been completed within the rules, Boro owner and chairman Steve Gibson has made no secret of the fact that he has a different view.

 

That means thought that this is unfinished business and possibly significantly, the EFL might yet conclude that it was completed as an attempt to evade the rules- it is unknown at this time. I think a vote of clubs is the best way to settle this Derby, possibly Sheffield Wednesday issue.

How they do it elsewhere. I believe Bundesliga you have to get a license to prove finances all in order. Palermo got docked 20 points in Serie B season just gone, admittedly a court downgraded it from automatic relegation. Think 2017/18 Serie B table looks nuts with deductions, demotions etc!

[downendcity]

37 minutes ago, Mr Popodopolous said:

Agree with all of this- an organisation headed up by Shaun Harvey though, can we expect anything better, look how they messed up the Birmingham one, how slow it was, never mind such wizardry as interpreting projected accounts and punishing accordingly in 2017/18! I always think back to what @Coppello wrote about someone from EFL finance department on here and it makes me pretty pissed off.

A soft embargo and an appropriate points deduction could see them come straight back down, but you are right the money aspect is ill-gotten gains as far as I'm concerned- not in a legal sense I hasten to add, but ethically, morally.

Now Birmingham are on one season account submissions until the 2017/18 period is spent and I assume that will be a precedent moving forward...therefore rationally they should also cut the overspend threshold by a third- bet they won't though! 

Think you might a bit overqualified for the EFL Mr P!

[Davefevs]

The argument I get Re FFP on twitter from Villa fans is Christian Purslow wrote the FFP rules, so they’ll be alright.  From what Copello states that probably enough for the EFL guys to not bother looking at Villa’s projected submission.

What I do find worrying is talk that they are under soft embargo....that must mean they are in trouble, in which case why haven’t the EFL docked them points / stopped them going up?

[downendcity]

20 minutes ago, Davefevs said:

The argument I get Re FFP on twitter from Villa fans is Christian Purslow wrote the FFP rules, so they’ll be alright.  From what Copello states that probably enough for the EFL guys to not bother looking at Villa’s projected submission.

What I do find worrying is talk that they are under soft embargo....that must mean they are in trouble, in which case why haven’t the EFL docked them points / stopped them going up?

Must be because everyone knows that Villa deserve to be back in the premier league.

[Mr Popodopolous]

1 hour ago, downendcity said:

Think you might a bit overqualified for the EFL Mr P!

Haha, I think many on here could be also classed as that- those who post on this thread for one and many more besides!

31 minutes ago, Davefevs said:

The argument I get Re FFP on twitter from Villa fans is Christian Purslow wrote the FFP rules, so they’ll be alright.  From what Copello states that probably enough for the EFL guys to not bother looking at Villa’s projected submission.

What I do find worrying is talk that they are under soft embargo....that must mean they are in trouble, in which case why haven’t the EFL docked them points / stopped them going up?

The other interesting angle- other than favouritism to "big" clubs of course, is that maybe the EFL only wish to punish the most blatant of breaches e.g. Birmingham and QPR heavily, to keep the "product" more attractive. Less money to spend on wages, means less bigger names, less players- it can still be done of course but the EFL are likely walking a tightrope. Serie B is quite a bit harsher on financial breaches though it is unclear if it's FFP or outright irregularities! Dunno if Germany still has the license requirement. As for EFL I mean if rules bent a bit, and especially if it is a "big" club look the other way and whistle. I also wonder if they messed up projected accounts legally by not punishing Birmingham in 2017/18...9 points slapped on a year earlier would surely have sent them down.

Birmingham's misfortune was through being too honest in a sense, and yet their fortune was the EFL seemed unwilling or unable to do projected accounts as submitted by Birmingham themselves in March 2018!! Precedent set- for the in-season punishments at least?

By way of comparison to a 2nd tier which while not as big as this League, go on Wiki, 2017/18 and 2018/19 Serie B...note how many points deductions etc! Think 2 clubs even got demoted TWO divisions from Serie B to D for financial irregularities.

Edited May 31, 2019 by Mr Popodopolous

[Davefevs]

13 minutes ago, Mr Popodopolous said:

Haha, I think many on here could be also classed as that- those who post on this thread for one and many more besides!

The other interesting angle- other than favouritism to "big" clubs of course, is that maybe the EFL only wish to punish the most blatant of breaches e.g. Birmingham and QPR heavily, to keep the "product" more attractive. Less money to spend on wages, means less bigger names, less players- it can still be done of course but the EFL are likely walking a tightrope. Serie B is quite a bit harsher on financial breaches though it is unclear if it's FFP or outright irregularities! Dunno if Germany still has the license requirement. As for EFL I mean if rules bent a bit, and especially if it is a "big" club look the other way and whistle. I also wonder if they messed up projected accounts legally by not punishing Birmingham in 2017/18...9 points slapped on a year earlier would surely have sent them down.

Birmingham's misfortune was through being too honest in a sense, and yet their fortune was the EFL seemed unwilling or unable to do projected accounts as submitted by Birmingham themselves in March 2018!! Precedent set- for the in-season punishments at least?

By way of comparison to a 2nd tier which while not as big as this League, go on Wiki, 2017/18 and 2018/19 Serie B...note how many points deductions etc! Think 2 clubs even got demoted TWO divisions from Serie B to D for financial irregularities.

I think this could be the pertinent point.

EFL aware of Brum’s difficulties in May 2018.  What did embargo and hand-holding them actually do to their accounts?  Nothing!  They ultimately post a loss in the ball-park they projected (you imagine).  So the embargo and hand-holding is about trying to correct them going forwards....it can’t possibly resolve their annual accounts unless they sold Adams early last summer.  That obviously didn’t happen....he’s still at Brum now.  In effect, they let Burton and Barnsley be relegated whilst they sorted out the mess.

That is what they’re now doing with Villa.  Soft embargo whilst they sort out out their sale and lease-back, whilst privately hoping they get promoted...the Prem won’t deduct points, they’ll apply a fine at worst, which is covered by the £100m+.  Had they lost to Derby, I’m pretty sure the ground deal would’ve been sped-up to fall into this year’s accounts and negate any further sanction.

All in all, the projected accounts should be a trigger for taking action in the season, when all they are really being used for is a trigger for the EFL to start helping a club (depending on their size) to get around sanction.

 

[Mr Popodopolous]

3 minutes ago, Davefevs said:

I think this could be the pertinent point.

EFL aware of Brum’s difficulties in May 2018.  What did embargo and hand-holding them actually do to their accounts?  Nothing!  They ultimately post a loss in the ball-park they projected (you imagine).  So the embargo and hand-holding is about trying to correct them going forwards....it can’t possibly resolve their annual accounts unless they sold Adams early last summer.  That obviously didn’t happen....he’s still at Brum now.  In effect, they let Burton and Barnsley be relegated whilst they sorted out the mess.

That is what they’re now doing with Villa.  Soft embargo whilst they sort out out their sale and lease-back, whilst privately hoping they get promoted...the Prem won’t deduct points, they’ll apply a fine at worst, which is covered by the £100m+.  Had they lost to Derby, I’m pretty sure the ground deal would’ve been sped-up to fall into this year’s accounts and negate any further sanction.

All in all, the projected accounts should be a trigger for taking action in the season, when all they are really being used for is a trigger for the EFL to start helping a club (depending on their size) to get around sanction.

 

Agreed...the one possibility with Birmingham is they could have sold and sold well in the month or 2 until June 30th as it would have been included in their accounts- say sold well I don't know who was a real saleable asset for them a year ago, but if they had sold some, Adams was okay but not spectacular a year ago- was only 2018/19 he really kicked on, and Stoke had sold Butland in that period, then that would have likely resolved their issues- they were banking on a big sell on fee for Butland in particular I believe. Should have been applied in-season as per their own regulations however!

Better be quick about it, sale and leaseback- Aston Villa's accounts run until 31st May 2019, though what odds they shift the reporting period to 30th June or 31st July 2019? I am fairly sure I read somewhere there was an agreement between EFL and EPL to enforce EFL sanctions in PL, but is it worth the paper it's written on?  EPL won't want to dilute their "brand" in any possible way- an outside body maybe useful in the medium to long run to get a grip...£35m losses combined with huge TV money means it is virtually impossible now to fail FFP as a PL club and that suits them just fine!

Fully agree- I think EFL are a mix of cowardly and incompetent though- they missed the boat somewhat with Birmingham- and have possibly made a rod for their own back. These things can still be changed, and the 2 in the Championship who have sold ground could yet be punished- Aston Villa we'll see- but it would require a full vote IMO.

[sh1t_ref_again]

58 minutes ago, downendcity said:

Must be because everyone knows that Villa deserve to be back in the premier league.

well according to a vile fan

 

The Premier League will be delighted that one of the truly big clubs is back in the fold. They will not risk losing us, only to end up with another Bournemouth, Brighton or Burnley, no offence intended to those clubs. 

[Mr Popodopolous]

Other end of the table, but Reading may also be under an embargo of some description.

[downendcity]

9 minutes ago, sh1t_ref_again said:

well according to a vile fan

 

The Premier League will be delighted that one of the truly big clubs is back in the fold. They will not risk losing us, only to end up with another Bournemouth, Brighton or Burnley, no offence intended to those clubs. 

If it were not for unsatisfactory aspect of their ffp issues, the upside of Villa's promotion is that we've now seen the back of them and their entitled fans for at least one season.

As the premier league can't risk losing Villa, I guess they will give them special dispensation so that they get 5 points for a win, 3 for a draw and 1 for a defeat as this should ensure they stay"in the fold".

[Lanterne Rouge]

10 hours ago, Mr Popodopolous said:

I wonder if quite a few are planning on doing a Mel Morris and selling their grounds to related parties.

I would say giving it up could pose a problem, not just from a financial POV. In the highly unlikely event that a club outside the top flight wins FA Cup, or Carling (whatever it's called now!) or a relegated club wins either, if EFL has no FFP rules, would they get a UEFA License? Not sure- this is an outside possibility. 

 

That one`s easy - UEFA would take it as a God-given excuse to prevent a club from the lower orders entering their golden competitions and just stick another Premier League club in instead.

[bcfc01]

This is getting a bit of a boring thread now.

Blokes going round in circles.

I'll wait till something comes of it - or not.

[Mr Popodopolous]

https://astonvilla.vitalfootball.co.uk/cheers-steve-gibson-is-crying-again-major-changes-behind-the-scenes-at-aston-villa/

Aren't a substantial minority of Aston Villa fans odious?

One note on this- they should be docked points in PL, but failing that?

Simple- follow the formula used on Birmingham and dock points according to that- historic breaches are breaches nonetheless, none of this fine nonsense- doesn't matter if they are up for 1 year or for 10 years, they should be in no doubt that a punishment- and using the Birmingham formula that is 11-21 points- should await them on their return.

Soft embargo too.

Dunno if clubs would need to vote on it though?

[Mr Popodopolous]

Rumours that Birmingham now looking at the same in terms of stadium sale and leaseback!?

Birmingham fans on their forum aren't exactly optimistic about it though!

Edited June 3, 2019 by Mr Popodopolous

[Sniper]

1 hour ago, Mr Popodopolous said:

https://astonvilla.vitalfootball.co.uk/cheers-steve-gibson-is-crying-again-major-changes-behind-the-scenes-at-aston-villa/

Aren't a substantial minority of Aston Villa fans odious?

One note on this- they should be docked points in PL, but failing that?

Simple- follow the formula used on Birmingham and dock points according to that- historic breaches are breaches nonetheless, none of this fine nonsense- doesn't matter if they are up for 1 year or for 10 years, they should be in no doubt that a punishment- and using the Birmingham formula that is 11-21 points- should await them on their return.

Soft embargo too.

Dunno if clubs would need to vote on it though?

I've come to hate their arrogance, self entitlement, and bellendish behavior all season belittling every other Championship club. They really are a vile set of supporters. The sort of people I'd cross the road to avoid.

I'm very much looking forward to them getting smashed every game next season, and get relegated back where hopefully they will self implode with the financial importance they seem to think is a divine right because they are so superior, and disappear up their own shite pipe without a trace.

Edited June 3, 2019 by Sniper

[downendcity]

1 hour ago, Mr Popodopolous said:

https://astonvilla.vitalfootball.co.uk/cheers-steve-gibson-is-crying-again-major-changes-behind-the-scenes-at-aston-villa/

Aren't a substantial minority of Aston Villa fans odious?

One note on this- they should be docked points in PL, but failing that?

Simple- follow the formula used on Birmingham and dock points according to that- historic breaches are breaches nonetheless, none of this fine nonsense- doesn't matter if they are up for 1 year or for 10 years, they should be in no doubt that a punishment- and using the Birmingham formula that is 11-21 points- should await them on their return.

Soft embargo too.

Dunno if clubs would need to vote on it though?

"Although the releases were dated May 30, they came into effect back in the middle of the month and with it already known that one of our arms had rebranded itself as NSWE Stadium Limited, that had already kick started further speculation that we were planning to following the lead of Derby when it came to their stadium sale and lease back deal.

With promotion secured I assume this might not now be a path we follow – but the structure is clearly in place if we want to."

So had promotion not been secured I wonder why this would have been the path they would probably have followed? 

[Mr Popodopolous]

25 minutes ago, Sniper said:

I've come to hate their arrogance, self entitlement, and bellendish behavior all season belittling every other Championship club. They really are a vile set of supporters. The sort of people I'd cross the road to avoid.

I'm very much looking forward to them getting smashed every game next season, and get relegated back where hopefully they will self implode with the financial importance they seem to think is a divine right because they are so superior, and disappear up their own shite pipe without a trace.

Yeah- the worst I have seen certainly.

I hope they come back down, straight back down and get a points penalty either this season or held in reserve for their return- think EFL FFP rules suggest historic breaches can be punished- UEFA going after Man City sets an interesting benchmark in this respect.

15 minutes ago, downendcity said:

"Although the releases were dated May 30, they came into effect back in the middle of the month and with it already known that one of our arms had rebranded itself as NSWE Stadium Limited, that had already kick started further speculation that we were planning to following the lead of Derby when it came to their stadium sale and lease back deal.

With promotion secured I assume this might not now be a path we follow – but the structure is clearly in place if we want to."

So had promotion not been secured I wonder why this would have been the path they would probably have followed? 

Well quite.

There was an excellent window of opportunity to close this loophole- they might actually do it in any case to spend more still in PL?

13th May 2019 was when name was changed for this, therefore paving the way for it to be done- EFL and the useless bastard Shaun Harvey asleep...again! Ample time to change the rules between Derby and that.

On the Derby front, the company who purchased it was Gellaw Newco 203 Limited- Companies House says it was incorporated on 18th June 2018...EFL should've been wise to this at the time, the transaction would have been done in 12 days therefore as Derby's accounts ran until June 30th 2018.

I also notice that NSWE Stadium Limited- previously known as Recon Football Limited until 13th May 2019 had an "Audit Exemption subsidiary accounts" . Could all be legit and not suggesting any wrongdoing- seems applicable with company and accounting law etc.

One more note on Derby.

https://www.insidermedia.com/insider/midlands/stadium-transformation-plan-revealed

This, combined with commercial revenue showing its potential, it being completed in 1997 and and Mel Morris wanting to make the most of the commercial facilities minus depreciation is why I believe it could have risen from £20-21m in 2013 to £40m or so in 2017/18. Never in a million years what it went for though!

Edited June 3, 2019 by Mr Popodopolous

[Olé]

39 minutes ago, Mr Popodopolous said:

Rumours that Birmingham now looking at the same in terms of stadium sale and leaseback!?

Just seen that - EFL well and truly losing control now!

Quote

Documents from Companies House confirm that a new subsidiary of Birmingham Sports Holdings has been created in the UK in the last fortnight which looks to be specifically to complete the sale of the stadium.

 

[Mr Popodopolous]

10 minutes ago, Olé said:

Just seen that - EFL well and truly losing control now!

 

One compromise solution here- obviously such sales need to be backdated and retrospective punishment applied.

Failing that though...let every club do it once and then shut off the loophole for good. EFL have a lot to answer for though- MA in Shaun Harvey's position- he would have seen this was enforced and do so well...going to be a very interesting end of season Conference/meeting indeed in Portugal!! To be a fly on the wall eh?

Edited June 3, 2019 by Mr Popodopolous

[sh1t_ref_again]

if they don't close the loophole, then clubs could be clever and exploit further buy only selling a percentage of it ground each year for just enough to prevent FFP, also avoiding any tax implications.

[Mr Popodopolous]

I believe Derby despite an £81.1m gross transaction have no taxation liabilities on their £14m "profit" in 2017/18 reporting period/season- owing to offsetting it vs past losses.

Yep, I was right- they paid no tax in financial year 2017/18! Maybe I got the reason a bit wrong but seemed they paid zero tax last season. Possibly because Sevco 5112 their holding company made a small loss even after the transaction.

Edited June 3, 2019 by Mr Popodopolous

[Guest DerbyFan]

28 minutes ago, Mr Popodopolous said:

Yeah- the worst I have seen certainly.

I hope they come back down, straight back down and get a points penalty either this season or held in reserve for their return- think EFL FFP rules suggest historic breaches can be punished- UEFA going after Man City sets an interesting benchmark in this respect.

Well quite.

There was an excellent window of opportunity to close this loophole- they might actually do it in any case to spend more still in PL?

13th May 2019 was when name was changed for this, therefore paving the way for it to be done- EFL and the useless bastard Shaun Harvey asleep...again! Ample time to change the rules between Derby and that.

On the Derby front, the company who purchased it was Gellaw Newco 203 Limited- Companies House says it was incorporated on 18th June 2018...EFL should've been wise to this at the time, the transaction would have been done in 12 days therefore as Derby's accounts ran until June 30th 2018.

I also notice that NSWE Stadium Limited- previously known as Recon Football Limited until 13th May 2019 had an "Audit Exemption subsidiary accounts" . Could all be legit and not suggesting any wrongdoing- seems applicable with company and accounting law etc.

One more note on Derby.

https://www.insidermedia.com/insider/midlands/stadium-transformation-plan-revealed

This, combined with commercial revenue showing its potential, it being completed in 1997 and and Mel Morris wanting to make the most of the commercial facilities minus depreciation is why I believe it could have risen from £20-21m in 2013 to £40m or so in 2017/18. Never in a million years what it went for though!

I have no idea why you keep referring to the stadium valuation being £20-21m in 2013, and therefore doubling to the £41m book value at the sale and then doubling again to the sale value of £81m. The stadium was valued in 2007 by King Sturge LLP at £55m. The £20-21m you mention is referring the historical cost of the stadium. Look back through further sets of accounts and you will quite clearly see this stated. It was revalued in 2013 'as required under FRS 11' by Jones Lang LaSalle, but unlike with the 2007 valuation there is no mention of said value in the notes, and the book value did not change, apart from the expected depreciation.

[Mr Popodopolous]

40 minutes ago, DerbyFan said:

I have no idea why you keep referring to the stadium valuation being £20-21m in 2013, and therefore doubling to the £41m book value at the sale and then doubling again to the sale value of £81m. The stadium was valued in 2007 by King Sturge LLP at £55m. The £20-21m you mention is referring the historical cost of the stadium. Look back through further sets of accounts and you will quite clearly see this stated. It was revalued in 2013 'as required under FRS 11' by Jones Lang LaSalle, but unlike with the 2007 valuation there is no mention of said value in the notes, and the book value did not change, apart from the expected depreciation.

Okay then, I don't see how it could have gone up to £81.1m...maybe doubled and doubled again a technical error from me but the profit should be disallowed for FFP purposes owing to it being a related party. Only way it should be accepted IMO is if you had sold it to a bank, or a property developer or similar unrelated to your club, to your owner, to your owners family, to any other companies owned by your owner, your owners family, your owners business associates to name a few- indeed UEFA regs on this offer provision for this very scenario. 

EFL should have hired their own independent valuer also. As they should for any other clubs who have done it.

I think you've made the move in part to buy time for contract expiries amongst other things owing to your fairly unusual model- lot of players out of contract will save on wages but will take a hit as you amortise differently.

To me, any club doing this unless it is to a true and genuinely verifiable third party are cheats. Pure and simple- cheats.

If I had my way, you and Aston Villa would have been demoted from the playoffs and Birmingham would have received their deduction in-season, as the rules seem to allow for so they would have got the relegation that they merited in 2017/18.

In fairness, with yourselves there are mitigating factors- you sold Grant-Christie-Hendrick-Hughes-Ince-Vydra-Weimann in 3 seasons. 4-5 first teamers, 2-3 squad players?

Nonetheless, I guess you needed to sell more or to cut costs further on wages or sales- hope the EFL have a vote and punish clubs who did this if the vote wins. You are in a separate category to those who complied though and those who broke FFP and made little efforts.

Edited June 3, 2019 by Mr Popodopolous

[Guest DerbyFan]

23 minutes ago, Mr Popodopolous said:

Okay then, I don't see how it could have gone up to £81.1m...maybe doubled and doubled again a technical error from me but the profit should be disallowed for FFP purposes owing to it being a related party. Only way it should be accepted IMO is if you had sold it to a bank, or a property developer or similar unrelated to your club, to your owner, to your owners family, to any other companies owned by your owner, your owners family, your owners business associates to name a few- indeed UEFA regs on this offer provision for this very scenario. 

EFL should have hired their own independent valuer also.

I think you've made the movie to buy time for contract expiries amongst other things owing to your fairly unusual model- lot of players out of contract will save on wages but will take a hit as you amortise differently.

To me, any club doing this unless it is to a true and genuinely verifiable third party are cheats. Pure and simple- cheats.

If the valuation was £55m in 2007, then surely it's entirely possible it could have gone up to that amount in the 11 years from then to the sale? There has also been a lot of work done to the stadium in the last few years, that while not increasing the value by that amount solely, does still add value.

There has also been talk locally, and I see Sky picked up on it in a recent article, of a roof being added to the stadium, to create a better venue for events. Sky Article

Derby is without a proper events venue at the moment, our Assembly Rooms has been closed for over 5 years now due to a fire in the plant room, those years since have seen a lot of wrangling over whether to replace it with something more suitable for larger events, at a higher cost, or to refurbish what is there, which is essentially too small, at a lower cost. It has been decided that it will be refurbished.

We have an 'arena', right next to the stadium in fact, however, this is a velodrome and completely unsuited for events outside of this, there have been a lot of recent complaints about the sound quality in the (small) fixed seating block above the track, but it has been a case of making do, for now.

I believe all of this may have influenced the decision to look at using the stadium as an events venue, and may have influenced the purchase by Mel Morris, to make sure this happens for the sake of the city, as it is not only the club he cares about, he is from Derby and wants the best for the City of Derby also, especially if as is rumoured, the club is sold, either partially, or fully to another party.

Edited June 3, 2019 by DerbyFan
Adding link to Sky article

[Mr Popodopolous]

30 minutes ago, DerbyFan said:

If the valuation was £55m in 2007, then surely it's entirely possible it could have gone up to that amount in the 11 years from then to the sale? There has also been a lot of work done to the stadium in the last few years, that while not increasing the value by that amount solely, does still add value.

There has also been talk locally, and I see Sky picked up on it in a recent article, of a roof being added to the stadium, to create a better venue for events. Sky Article

Derby is without a proper events venue at the moment, our Assembly Rooms has been closed for over 5 years now due to a fire in the plant room, those years since have seen a lot of wrangling over whether to replace it with something more suitable for larger events, at a higher cost, or to refurbish what is there, which is essentially too small, at a lower cost. It has been decided that it will be refurbished.

 We have an 'arena', right next to the stadium in fact, however, this is a velodrome and completely unsuited for events outside of this, there have been a lot of recent complaints about the sound quality in the (small) fixed seating block above the track, but it has been a case of making do, for now.

I believe all of this may have influenced the decision to look at using the stadium as an events venue, and may have influenced the purchase by Mel Morris, to make sure this happens for the sake of the city, as it is not only the club he cares about, he is from Derby and wants the best for the City of Derby also, especially if as is rumoured, the club is sold, either partially, or fully to another party.

Struggle to see it myself- saw a breakdown of that said same £55m valuation minus depreciation on Twitter somewhere- £41m or so I can believe, but not £81.1m which I believe was the sale price. Just doesn't seem that plausible to me. Maybe work done takes it back to £55m.

Well fair enough on that point, but surely that would be a future projected valuation- if the work hasn't been done yet, how can that be the present valuation?

Yeah, I can believe that Mel Morris wants the best for Derby i.e. the football club and the city. He is from Derby and according to Wiki an actual fan so I don't doubt that.

I have severe doubts about £81.1m price at the time of sale.

I understand too people always look for loopholes but EFL should govern it a lot better...should have and should. As for yourselves and other clubs who have purportedly done the same...why is it so hard to stick to the regulations- if you have to sell players, then so be it like a LOT of clubs! Your wage bill too...higher than Wolves in 2017/18 once promotion bonuses stripped out for them- though they had an "interesting" business model admittedly. It's cheating the competition IMO and yeah I can imagine clubs aplenty will be furious.

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it is seemingly £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value. Perhaps cheats can be a bit strong but it's not right- it can't be right.

Were it down to me on FFP, I'd be handing out soft embargoes while investigating and getting clubs into EFL hearings left, right and centre- including in-season deductions.

Edited June 3, 2019 by Mr Popodopolous

[Guest]

46 minutes ago, Mr Popodopolous said:

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it is seemingly £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value. Perhaps cheats can be a bit strong but it's not right- it can't be right.

 

That is ridiculous in the extreme..., £10m on an £81m asset is a 12.5% yield. £4m would be much more realistic though

[Guest DerbyFan]

2 minutes ago, Mr Popodopolous said:

Struggle to see it myself- saw a breakdown of that said same £55m valuation minus depreciation on Twitter somewhere- £41m or so I can believe, but not £81.1m which I believe was the sale price. Just doesn't seem that plausible to me.

Well fair enough on that point, but surely that would be a future projected valuation- if the work hasn't been done yet, how can that be the present valuation?

Yeah, I can believe that Mel Morris wants the best for Derby i.e. the football club and the city. He is from Derby and according to Wiki an actual fan so I don't doubt that.

I have severe doubts about £81.1m price at the time of sale.

I understand too people always look for loopholes but EFL should govern it a lot better...should have and should. Why is it so hard to stick to the regulations- if you have to sell players, then so be it like a LOT of clubs! Your wage bill too...higher than Wolves in 2017/18 once promotion bonuses stripped out for them- though they had an "interesting" business model admittedly.

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it's £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value.

I didn't mean that the roof project would make the current valuation higher, that was mentioned purely to help explain what the reasoning may have been for Mel Morris in particular for wanting to buy the stadium from the club, ie. the events venue, I probably shouldn't have added the 'also' to make this clear.

The Sky article I referenced also states that we cleared the stadium sale with the EFL before going ahead with it. In which case, I'm not sure how anyone can have a problem with us doing this? I can understand the argument of having a problem which such loopholes being in the rules, but in that case the problem is with the rules, not the clubs that have found the loopholes, clubs and people in life in general are always finding loopholes, isn't there a lawyer nicknamed 'Mr Loophole'?

I can understand why other fans may think this is unfair if their club is not in a position to do the same, however, the same goes for most things, not everyone has the players to sell for huge sums, and don't get me started on parachute payments being used for anything other than their intended purpose, football finance is an uneven playing field, it always will be, and clubs will always be looking for ways to compete financially, so long as they don't explicitly break the rules, I'm not sure how clubs can be punished for this?

I've seen a lot of fans talk about the valuation, but in reality, how does anyone know? I believe the valuation for the accounts is based on how much it would cost to rebuild minus depreciation. I know that some recent stadiums have cost an awful lot more than that to build, so maybe it's not so outlandish? I'm also not sure whether the market value for a sale would be the same as the valuation for the accounts, ie. minus the depreciation?

I'm not an accountant, and to be honest, most of it goes straight over my head, but I could see the section about the stadium valuation mentioned, which is why I created this account to point it out, as I could see you had repeated the same about the doubling and then doubling again a few times in this thread already, and I believed it to be misinformation.

Again, not being an accountant, I don't understand what it means, but I have noticed on the accounts a 'Revaluation reserve' which to my untrained eye looked like it was being depreciated each year, which I assume is due to the stadium, as it appeared in the 2008 accounts and disappeared in the 2018 accounts.

As for the rent, I'm not sure whether the value should be the market rate for a sale of that size, or whether the market rate is based upon what other clubs are paying, there are a lot of clubs renting their stadium in both the Premier League and the Championship, I doubt many are paying anything like that kind of sum, even in a more expensively valued stadium.

[Mr Popodopolous]

5 minutes ago, 29AR said:

That is ridiculous in the extreme..., £10m on an £81m asset is a 12.5% yield. £4m would be much more realistic though

That is what some posts on sites suggested- I'd say somewhere between £4-5m perhaps. Seen 8% with a  quick search, so that would be about £6.488m per season/year.

Definitely not £1.1m!

Edited June 3, 2019 by Mr Popodopolous

[downendcity]

51 minutes ago, Mr Popodopolous said:

Any rent for Pride Park should be set at a market rate- according to sites I have read that is anything between £4m-£10m per season. However it is seemingly £1,1m which is a nonsense- EFL should insist that leasebacks are set at true market value. Perhaps cheats can be a bit strong but it's not right- it can't be right.

Were it down to me on FFP, I'd be handing out soft embargoes while investigating and getting clubs into EFL hearings left, right and centre- including in-season deductions.

If I were a layman, looking this transaction from the outside, I would assume that in return for such a low rental, the revenue generated from the ground - match day and non-match day commercial income- is going to the "new owner" company ? 

[Mr Popodopolous]

5 minutes ago, downendcity said:

If I were a layman, looking this transaction from the outside, I would assume that in return for such a low rental, the revenue generated from the ground - match day and non-match day commercial income- is going to the "new owner" company ? 

Let's hope so...but if Mel Morris a Derby fan and cares about the city of Derby- which I believe to be true incidentally on both counts, I fear it maybe wishful thinking.

Would be great though!

Based on 2017/18 season, their turnover would be slashed- down by £13,198,070- or 44.56%. 

To comply with existing FFP in that great scenario, firesale?  

Edited June 3, 2019 by Mr Popodopolous

[Mr Popodopolous]

1 hour ago, DerbyFan said:

I didn't mean that the roof project would make the current valuation higher, that was mentioned purely to help explain what the reasoning may have been for Mel Morris in particular for wanting to buy the stadium from the club, ie. the events venue, I probably shouldn't have added the 'also' to make this clear.

 The Sky article I referenced also states that we cleared the stadium sale with the EFL before going ahead with it. In which case, I'm not sure how anyone can have a problem with us doing this? I can understand the argument of having a problem which such loopholes being in the rules, but in that case the problem is with the rules, not the clubs that have found the loopholes, clubs and people in life in general are always finding loopholes, isn't there a lawyer nicknamed 'Mr Loophole'?

I can understand why other fans may think this is unfair if their club is not in a position to do the same, however, the same goes for most things, not everyone has the players to sell for huge sums, and don't get me started on parachute payments being used for anything other than their intended purpose, football finance is an uneven playing field, it always will be, and clubs will always be looking for ways to compete financially, so long as they don't explicitly break the rules, I'm not sure how clubs can be punished for this?

I've seen a lot of fans talk about the valuation, but in reality, how does anyone know? I believe the valuation for the accounts is based on how much it would cost to rebuild minus depreciation. I know that some recent stadiums have cost an awful lot more than that to build, so maybe it's not so outlandish? I'm also not sure whether the market value for a sale would be the same as the valuation for the accounts, ie. minus the depreciation?

I'm not an accountant, and to be honest, most of it goes straight over my head, but I could see the section about the stadium valuation mentioned, which is why I created this account to point it out, as I could see you had repeated the same about the doubling and then doubling again a few times in this thread already, and I believed it to be misinformation.

Again, not being an accountant, I don't understand what it means, but I have noticed on the accounts a 'Revaluation reserve' which to my untrained eye looked like it was being depreciated each year, which I assume is due to the stadium, as it appeared in the 2008 accounts and disappeared in the 2018 accounts.

As for the rent, I'm not sure whether the value should be the market rate for a sale of that size, or whether the market rate is based upon what other clubs are paying, there are a lot of clubs renting their stadium in both the Premier League and the Championship, I doubt many are paying anything like that kind of sum, even in a more expensively valued stadium.

Thank you for the response.

I struggle to believe it would be £81.1m, that's my view- if an EFL appointed independent valuer came to the same conclusion, I suppose that would change the picture somewhat. Yes, loopholes are a fact of life- good governance can severely clamp down on these though- which leads me onto my next point...

The EFL...an organisation headed up by Shaun Harvey is questionable. To me it isn't a legitimate profit unless sold to a bona fide third party- and Gellaw NewCo 203 Limited most definitely is not.

We are easily in a position to do the same- so too are Middlesbrough financially I expect, in fact so would a lot of clubs- SL was a chartered accountant he could easily, easily have done this! Could have come up with it standing on his head I reckon- it's so blatant that it shouldn't be allowed though and I assumed he like many other owners who could also took the view that it just wouldn't be allowed- it's ridiculous- not even any great attempt to conceal! You have sold players, you are still in deficit- here's an idea, cut the wage bill! Same goes for Aston Villa in spades and quite likely Sheffield Wednesday...Birmingham also. Parachute payments are a different matter and though I don't believe they should be done away with, they definitely need reform.

Did we transfer AG to the club and then sell to Steve Lansdown or a company that he has a stake in? Did we bollocks! We instead sold Flint, Bryan and Reid- 3 key players, we also sold Messrs Magnússon, Djuric and Engvall- 2 squad players and one who never made it but it helped bring down costs, amortisation and the like. Did Middlesbrough sell the Riverside to SG? I could go on! We also sold Kelly right near the end of our financial year- an England U21 international LB who also can play and indeed in medium to long run will likely play there- only signing one out of Waghorn or Marriott maybe an idea? Or selling Bogle in 2018/19- either of those would have moved you significantly towards the right direction if not reached compliance. Technically your accounting period until 30th June 2019 so you still have time to be legit- get Bogle and Waghorn out that door but be quick! Or put up ticket prices, or further push on with commercial revenue- gained legitimately of course.

Pride Park- cost £28m to build, completed in 1997...about £50.12m in 2017/18 prices according to an inflation calculator.

Doubling and doubling again may have been a slight technical misunderstanding on my part- happy to correct that. I've always had a gut feeling that you might have scraped FFP so it came as a surprise to see you failed it or would have done without this sale. Then there is the matter of Newco 5112- non football staff paid on that- funny feeling that even with the stadium sale if the Newco 5112 Limited were your FFP figures you might have failed regardless.

'Revaluation reserve'- that sounds interesting, will look closer on that.

Premier League seems a law unto itself- they pay lip-service to FFP although not necessarily STCC- time will tell on that. EFL in terms of FFP in the Championship[ do less so but if I was in there, I would be very serious on it. Would have to find rent but to me, if owned by a related party then rent should be at market rate- why after all would a true, 3rd unrelated party charge a low rent in most cases after all?

Edited June 3, 2019 by Mr Popodopolous

[Davefevs]

Mr P - you on fire  

[Guest DerbyFan]

13 minutes ago, Mr Popodopolous said:

Thank you for the response.

I struggle to believe it would be £81.1m, that's my view- if an EFL appointed independent valuer came to the same conclusion, I suppose that would change the picture somewhat. Yes, loopholes are a fact of life- good governance can severely clamp down on these though- which leads me onto my next point...

The EFL...an organisation headed up by Shaun Harvey is questionable. To me it isn't a legitimate profit unless sold to a bona fide third party- and Gellaw NewCo 203 Limited most definitely is not.

We are easily in a position to do the same- so too are Middlesbrough financially I expect, in fact so would a lot of clubs- SL was a chartered accountant he could easily, easily have done this! Could have come up with it standing on his head I reckon- it's so blatant that it shouldn't be allowed though and I assumed he like many other owners who could also took the view that it just wouldn't be allowed- it's ridiculous- not even any great attempt to conceal! You have sold players, you are still in deficit- here's an idea, cut the wage bill! Same goes for Aston Villa in spades and quite likely Sheffield Wednesday...Birmingham also. Parachute payments are a different matter and though I don't believe they should be done away with, they definitely need reform.

Did we transfer AG to the club and then sell to Steve Lansdown or a company that he has a stake in? Did we bollocks! We instead sold Flint, Bryan and Reid- 3 key players, we also sold Messrs Magnússon, Djuric and Engvall- 2 squad players and one who never made it but it helped bring down costs, amortisation and the like. Did Middlesbrough sell the Riverside to SG? I could go on! We also sold Kelly right near the end of our financial year- an England U21 international LB who also can play and indeed in medium to long run will likely play there- only signing one out of Waghorn or Marriott maybe an idea? Or selling Bogle in 2018/19- either of those would have moved you significantly towards the right direction if not reached compliance. Technically your accounting period until 30th June 2019 so you still have time to be legit- get Bogle and Waghorn out that door but be quick! Or put up ticket prices, or further push on with commercial revenue- gained legitimately of course.

Pride Park- cost £28m to build, completed in 1997...about £50.12m in 2017/18 prices according to an inflation calculator.

Doubling and doubling again may have been a slight technical misunderstanding on my part- happy to correct that. I've always had a gut feeling that you might have scraped FFP so it came as a surprise to see you failed it or would have done without this sale. Then there is the matter of Newco 5112- non football staff paid on that- funny feeling that even with the stadium sale if the Newco 5112 Limited were your FFP figures you might have failed regardless.

'Revaluation reserve'- that sounds interesting, will look closer on that.

Premier League seems a law unto itself- they pay lip-service to FFP although not necessarily STCC- time will tell on that. EFL in terms of FFP in the Championship[ do less so but if I was in there, I would be very serious on it. Would have to find rent but to me, if owned by a related party then rent should be at market rate- why after all would a true, 3rd unrelated party charge a low rent in most cases after all?

But it is legitimate profit, the rules specifically state this, the club had the stadium independently valued, you may not think the stadium is worth that, but if an independent valuer does then why should they listen to you rather than them, after all that is their job is it not, they should be right not you? The club is allowed to dispose of tangible fixed assets and count this as profit, regardless of who they sell it to providing it is fair value, hence the independent valuation, this is why the club made no attempt to conceal it, why would they? There's nothing wrong with the transaction and we're told the EFL okayed it before it happened.

Loopholes can only be clamped down upon after they have been discovered, you cannot punish someone for finding a loophole and using it, that is why it is a loophole in the first place, it is not against the rules, the rules can be changed, but you cannot punish someone for something they did before the rules changed after changing the rules, as they didn't break them when they did it.

Cutting the wage bill sounds easy, however, you can only cut the wage bill if people are either 1. Out of contract, or 2. Someone wants to buy them and/or take on their contract. It's easy with hindsight to say you shouldn't have signed someone on high wages, but once it is done, it is done, you are contracted to pay them that until the end of their contract, even if you quickly realise it is a mistake, surely you yourselves have found this at some point? We all wish we could turn back the clock and not do something, but it is not possible. There was a well publicised High Court claim, the details for which are in the 2017 accounts, this was settled out of court in October 2018, so obviously no one knows how that ended, but it could play a part in the above.

As you mentioned yourself we have sold players, we sold the 2017/18 golden boot winner to fund last years signings, we let the (believed to be) high earners of Bent, Baird and Shackell go, as well as selling Weimann to yourselves, Jerome to Goztepe, Ledley left this January after he terminated his contract, we also let some younger players (Vernam, Zanzala, Guy and Hanson) that we didn't feel would make it go for small fees to the lower leagues, we also let Walker go for the sake of his career as he wanted first team football which we couldn't offer.

We have 11* 10 first team players out of contract this summer (Bryson, Butterfield, Johnson, Olsson, Nugent, Pearce, Blackman, Roos*, Elsnik, Cole and Ambrose), even if we might keep a few of them, that is a huge chunk of wages gone, and of the ones that may re-sign, most will not be on anything like the wages they are on now as they are in their 30's, and coming to the end of their careers, so they won't get great offers anywhere, including here. We have an extremely good academy, with many players likely to play a part next season, you may have noticed some of them on the bench for us already during this season, as Bogle was last season before breaking through during this one, so we may not need to spend too much this summer, to let them take their places in the squad.

That inflation calculator doesn't take into account the work that has gone into the stadium over the years, adding to the value.

I don't know about the non-football staff being in the other company, as I say, I'm not an accountant, I don't understand the workings or the reasonings. I do know that the club has a joint venture with Delaware North for the catering, Club DCFC, which I believe is owned jointly by the 2 parties, so I'm not sure how that would work with regard to FFP, or whether it is even relevant to this.

With the rent, I believe most stadia are owned in the same way as ours now is, ie. by the same owner in a different company, so I don't think this makes a difference to the market rate.

*We've just announced Roos has signed until 2022.

[Mr Popodopolous]

1 hour ago, DerbyFan said:

But it is legitimate profit, the rules specifically state this, the club had the stadium independently valued, you may not think the stadium is worth that, but if an independent valuer does then why should they listen to you rather than them, after all that is their job is it not, they should be right not you? The club is allowed to dispose of tangible fixed assets and count this as profit, regardless of who they sell it to providing it is fair value, hence the independent valuation, this is why the club made no attempt to conceal it, why would they? There's nothing wrong with the transaction and we're told the EFL okayed it before it happened.

Loopholes can only be clamped down upon after they have been discovered, you cannot punish someone for finding a loophole and using it, that is why it is a loophole in the first place, it is not against the rules, the rules can be changed, but you cannot punish someone for something they did before the rules changed after changing the rules, as they didn't break them when they did it.

Cutting the wage bill sounds easy, however, you can only cut the wage bill if people are either 1. Out of contract, or 2. Someone wants to buy them and/or take on their contract. It's easy with hindsight to say you shouldn't have signed someone on high wages, but once it is done, it is done, you are contracted to pay them that until the end of their contract, even if you quickly realise it is a mistake, surely you yourselves have found this at some point? We all wish we could turn back the clock and not do something, but it is not possible. There was a well publicised High Court claim, the details for which are in the 2017 accounts, this was settled out of court in October 2018, so obviously no one knows how that ended, but it could play a part in the above.

As you mentioned yourself we have sold players, we sold the 2017/18 golden boot winner to fund last years signings, we let the (believed to be) high earners of Bent, Baird and Shackell go, as well as selling Weimann to yourselves, Jerome to Goztepe, Ledley left this January after he terminated his contract, we also let some younger players (Vernam, Zanzala, Guy and Hanson) that we didn't feel would make it go for small fees to the lower leagues, we also let Walker go for the sake of his career as he wanted first team football which we couldn't offer.

We have 11* 10 first team players out of contract this summer (Bryson, Butterfield, Johnson, Olsson, Nugent, Pearce, Blackman, Roos*, Elsnik, Cole and Ambrose), even if we might keep a few of them, that is a huge chunk of wages gone, and of the ones that may re-sign, most will not be on anything like the wages they are on now as they are in their 30's, and coming to the end of their careers, so they won't get great offers anywhere, including here. We have an extremely good academy, with many players likely to play a part next season, you may have noticed some of them on the bench for us already during this season, as Bogle was last season before breaking through during this one, so we may not need to spend too much this summer, to let them take their places in the squad.

That inflation calculator doesn't take into account the work that has gone into the stadium over the years, adding to the value.

I don't know about the non-football staff being in the other company, as I say, I'm not an accountant, I don't understand the workings or the reasonings. I do know that the club has a joint venture with Delaware North for the catering, Club DCFC, which I believe is owned jointly by the 2 parties, so I'm not sure how that would work with regard to FFP, or whether it is even relevant to this.

With the rent, I believe most stadia are owned in the same way as ours now is, ie. by the same owner in a different company, so I don't think this makes a difference to the market rate.

*We've just announced Roos has signed until 2022.

EFL should've sent an independent valuer before passing it IMO. I am and have been consistent on this...I struggle to believe it is £81.1m legitimately. Who said anything about listening to me- EFL should appoint independent valuers to these matters- do you think UEFA would have accepted it? Not sure. I understand the independent valuer argument, but I'd want a 2nd opinion in the circs...

Hmm...I think you'll find that they can. IF EFL were to put it to a vote of clubs then I could see it going wrong for you! EFL need to get it to a vote- Leeds got punished under a rule that wasn't even a rule in place at the time and yours is IMO a lot more damaging towards the competition as a whole. EFL could reverse this if they get it right, disallow the profit- if you're under a soft embargo it would suggest this is still a live matter.

Well you should have put more up for sale then- why sign Waghorn and Marriott? One would suffice! Had a quick google for Sam Rush- "Respective differences settled", doesn't sound like you got the £6.8m you were hoping for I would assume, but we'll see what the accounts say. You sell Bogle, you only sign one of those 2 strikers- you don't sign both- there are solutions, you just didn't look hard enough- compare it to our transfer activity and that of Middlesbrough to name 2!! Forgot about Jerome fair point, but you would still have been in breach- that's on yourselves and nobody else. However I do put you and have put you in a different category to out and out flagrant breachers like Aston Villa, Sheffield Wednesday and in some ways Birmingham- you have sold players, you have moved in a positive direction but it's quite simple- if you can't afford within the regulations, then you can't buy- therefore buying one and one only out of Marriott or Waghorn would have been a good start. Bogle sold? Maybe- would have to look at the figures in more depth. We could easily have flouted and purchased Assombalonga in Jan- had he been up for sale.

Big chunk of wages yes, and you do seem to have a useful academy but you're overlooking an operating loss, you're overlooking your accounting methods in which unlike the bulk of clubs has players on straight line amortisation, you seem to sign players and there is a residual revaluation- chances are those 10-11 if no fee received will all be at a loss , but this will be superseded by savings in wages. I don't doubt you are moving in the right direction but punished you should be and if clubs vote on it and it is watertight, punished you would be.

If it is truly £81.1m- then I'm a Dutchman. I find it laughable- EFL should have appointed an independent land valuer and got them in there right away. Same as for any club who wants to sell a ground but especially to a related party. £50m rather than £41m maybe a more realistic value but depreciation had it under £50m until recent revaluation. Will look through 10-15 years worth of Derby accounts later and try to work out depreciation rate- it was somewhere between 2-10% for Pride Park according to your accounts.

A list would be good- done under the old regs perhaps, before this became a thing- good reasons behind it in order to separate out the club and ground in event of bankruptcy but I certainly don't think most clubs rent their grounds.

Regarding this case, well let's say you had sold it to for example Barclays Bank- and you had got £81.1m and leased back? I and many others would have been a bit annoyed likely but accepted it for what it was- a legitimate, arms-length non-related third party transaction. Oddly I would have no problem with that- you would be taking a risk on your ground short or even medium-long term but you take the risk then it's legitimate IMO- if no connection. If it goes wrong, that's life. You gamble, you can win or you can lose! If it goes right, you reap the rewards- if it goes right you can buy ground back...incredibly reckless but if you do that, well risk-reward and no conflict of interest. You didn't do that though did you? No- you sold it to a company owned by Mel Morris...would Barclays have paid £81.1m for Pride Park? Doubtful!

Interesting- Derby related- tweet.

Any ideas on this one @DerbyFan ?

Edited June 3, 2019 by Mr Popodopolous

[Olé]

27 minutes ago, DerbyFan said:

Cutting the wage bill sounds easy, however, you can only cut the wage bill if people are either 1. Out of contract, or 2. Someone wants to buy them and/or take on their contract.

Isn't that precisely what Derby's unconventional method of amortisation says not just IS easy, but is a foregone conclusion! 

Are you telling us that your players aren't actually guaranteed to automatically be bought? What a shocker, as that would imply your residual amortisation model exists for some other reason, although I'm struggling to see one besides being able to have some seasonal flex on FFP!

[bcfc01]

Good to see some input from the Derby fella - gives both sides of the story and his input has given a lot more context imo.

Maybe Derby aren't off the hook just yet but it does seem like they've acted within the interpretation of the rules if not the spirit. 

 

[Guest DerbyFan]

1 minute ago, bcfc01 said:

Good to see some input from the Derby fella - gives both sides of the story and his input has given a lot more context imo.

Maybe Derby aren't off the hook just yet but it does seem like they've acted within the interpretation of the rules if not the spirit. 

 

I'm female 

[downendcity]

I know there is a danger of repeating things previously covered on this thread, so apologies if any of these points have been raised before.

The Derby fan suggests that a Sky article mentioned that Derby cleared the stadium sale with the EFL prior to carrying out the transaction. If so, then, as our own financial Rotweiller( better known as Mr Popodopulous) has pointed out many times, this is just yet another example of the EFL's abject handling of ffp and the issues it raises. If nothing else, the timing of this sale transaction, let alone that it was a paper transaction between related companies, should have raised concerns, coming at the year end and just at the point of ffp reckoning.

As for the Derby fan's suggestion that fans of other clubs will think it unfair if their club is not in a position to do the same. As Mr P rightly points out, many clubs are in a position to do something similar, one of which almost certainly is Boro, whose  Chairman has been outspoken about ffp issues recently. What the Derby fans seems to miss completely, is that it is not whether other clubs can or cannot do the same, but whether they have chosen not to do so because they realise it is not within the spirit of ffp rules and  that some/many of them have taken appropriate steps with their financial management and controls to ensure they do not breach ffp, so have no need to do so.

There is a final point regarding the stadium value. We know Pride Park was built 20 odd years ago, but for the purposes of making this point,  imagine that Morris has just funded the £80m construction of a new Pride Park. Ffp allows him to invest in infrastructure, such as a new stadium, without that expenditure counting towards  ffp but what if then, immediately on completion, Derby County then sold the completed stadium to another of Morris's companies for £80m?

Accordingly,  to my mind It's not the value that is the issue, because in this example it would be equal to  the cost of construction.  It is that, at a stroke, Morris has converted £80m of his personal investment that ffp only allowed to go into infrastructure, into £80m of allowable "income" that ffp now allows to be used for any purpose, including covering wages, transfer fees i.e. to improve the playing side of the club. Had Morris simply invested £80m into the club for this purpose it would not be allowed. This is ludicrous!

At the moment, by allowing Derby to get away with this without any sanction, the EFL is in danger of creating a precedent that others clubs can point to in their defence if they want to follow a similar course in future.

 

[Davefevs]

@Mr Popodopolous and @Olé 

Their method of accounting is gonna bite them in the arse (if they do t get promoted), maybe not this year or the next, but at some point those players are gonna be worth eff all and their amortisation impairment is gonna be huge.  Perhaps Morris can sell the player’s houses and lease them back.  It’s a dangerous game not straight line depreciating.  I can see Huddlestone being valued at £10m aged 57, continuing to get renewals just to keep Derby inside ffp!

[Guest DerbyFan]

12 minutes ago, Mr Popodopolous said:

EFL should've sent an independent valuer before passing it IMO. I am and have been consistent on this...I struggle to believe it is £81.1m legitimately. Who said anything about listening to me- EFL should appoint independent valuers to these matters- do you think UEFA would have accepted it? Not sure. I understand the independent valuer argument, but I'd want a 2nd opinion in the circs...

Hmm...I think you'll find that they can. IF EFL were to put it to a vote of clubs then I could see it going wrong for you- we can hope eh! EFL need to get it to a vote- Leeds got punished under a rule that wasn't even a rule in place at the time and yours is IMO a lot more damaging towards the competition as a whole. EFL could reverse this if they get it right, disallow the profit- if you're under a soft embargo it would suggest this is still a live matter.

Well you should have put more up for sale then- why sign Waghorn and Marriott? One would suffice! Had a quick google for Sam Rush- "Respective differences settled", doesn't sound like you got the £6.8m you were hoping for I would assume, but we'll see what the accounts say. You sell Bogle, you only sign one of those 2 strikers- you don't sign both- there are solutions, you just didn't look hard enough- compare it to our transfer activity and that of Middlesbrough to name 2!! Forgot about Jerome fair point, but you would still have been in breach- that's on yourselves and nobody else. However I do put you and have put you in a different category to out and out flagrant breachers like Aston Villa, Sheffield Wednesday and in some ways Birmingham- you have sold players, you have moved in a positive direction but it's quite simple- if you can't afford you can't buy- therefore buying one and one only out of Marriott or Waghorn would have been a good start. Bogle sold? Maybe- would have to look at the figures in more depth

Big chunk of wages yes, and you do seem to have a useful academy but you're overlooking an operating loss, you're overlooking your accounting methods in which unlike the bulk of clubs has players on straight line amortisation, you seem to sign players and there is a residual revaluation- chances are those 10-11 if no fee received will all be at a loss , but this will be superseded by savings in wages. I don't doubt you are moving in the right direction but punished you should be and if clubs vote on it and it is watertight, punished you would be.

If it is truly £81.1m- then I'm a Dutchman. I find it laughable- EFL should have got an independent land valuer in there right away. Same as for any club who wants to sell a ground but especially to a related party. £50m rather than £41m maybe a more realistic value but depreciation had it under £50m until recent revaluation. Will look through 10-15 years worth of Derby accounts later and try to work out depreciation rate- it was somewhere between 2-10% for Pride Park according to your accounts.

A list would be good- done under the old regs perhaps, before this became a thing- good reasons behind it in order to separate out the club and ground in event of bankruptcy but I certainly don't think most clubs rent their grounds.

Regarding this case, well let's say you had sold it to for example Barclays Bank- and you had got £81.1m and leased back? I and many others would have been a bit annoyed likely but accepted it for what it was- a legitimate, arms-length non related third party transaction. Oddly I would have no problem with that- you would be taking a risk on your ground short or even medium-long term but you take the risk then it's legitimate IMO- if no connection. If it goes wrong, that's life! You gamble, you can win or you can lose! If it goes right, you reap the rewards- if it goes right you can buy ground back...incredibly reckless but if you do that, well risk-reward and no conflict of interest. You didn't do that though did you? No- you sold it to a company owned by Mel Morris...would Barclays have paid £81.1m for Pride Park? Doubtful!

You don't seem to want to accept that what the club did is ok, you don't think it is ok, so it is not ok seems to be your attitude. I'm not sure how many companies are out there that deal with stadium valuation, I'm guessing not a lot as it's pretty specialised, maybe the EFL trust the one that we used? Maybe they told us which company to use when we contacted them before we did it? I don't know, I'm just surmising.

I don't believe we are under a soft embargo, I'm not sure why the Daily Mail said that we were in the article the other day, no one else has said that we are any more, in fact I saw your other thread where you mentioned the Times article that specially didn't mention us at all in relation to being close to FFP, and I'm sure it was the Times that were the first to say we had a soft embargo before, it was said previously that we couldn't announce the signing of Shinnie because we were, then we announced it, after he'd recovered from his injury.

I don't see how they can punish us for 1. Something they EFL have okayed and 2. Something that was allowed within the rules at the time. What the other clubs think now it's happened doesn't matter, they agreed to the rules, they clearly say that you can dispose of tangible fixed assets, this will presumably always be buildings and land, and as such will always lead to an uneven effect with being able to invest in them as infrastructure without taking an FFP hit and then selling them on, to whoever, and making a profit from the sale. Do you have any idea what the legal implications of punishing us for acting within the rules would be? It would surely be laughed out of court. I don't see it as being against the spirit, in finance it's surely pretty black and white, it's either allowed in the rules, or it's not.

We've just released our retained list, and while there are some surprises, with Johnson, Blackman and Butterfield being given 12 month extensions on 'vastly reduced terms', I'm sure they are done for FFP purposes, to avoid the residual values meaning we take a hit to this years accounts. I probably expected Johnson to be given a new contract anyway, as he has been an important player for us in the last few months and I would expect him to rotate with Shinnie, with a youngster (more than likely Bird) to back them up, but Butterfield and Blackman, as our local paper said are expected to be released, however I think this will happen in July, so that our irregular amortisation means we take the hit next season instead, yes it means always chasing your tail, well it does until we can get the wages under control and then we can take larger amounts off the residual values and get back on track, but this is the situation we are in.

At the end of next season we have Martin (apparently high wages but no residual value, we got him on a free and you apparently cannot have a residual value higher than you paid), Anya and Thorne out of contract, along with a few others that I don't think will mean too much of a hit (we didn't pay much for Davies) it's possible there could be interest in them this summer, but I'd expect them to go out on loan if anything (not Davies, he'll stay). There was interest in Huddlestone in January and I expect him to go this summer, I also expect us to sell Carson this summer, now that Roos has signed his contract, we may then choose to have a youngster (probably Ravas, as he has been with the squad for every game recently as the third choice) as backup, or we have Mitchell coming back from loan.

Why on earth would the stadium be valued at £50m now when it was valued at £55m 11 years ago and there has been lots of work done in the meantime.

Apologies for such long answers, I'm refreshing the new replies and while not quoting everyone I'm trying to reply to everyone in the one post so as not to have to cover the same ground in each reply.

[Jerseybean]

SL invests a further £10m https://www.bristolpost.co.uk/sport/football/football-news/steve-lansdown-invests-extra-10m-2936355

The article comes across to me as it’s simply the done thing and nothing to get excited about, which seems a wee bit ungrateful in my book!

[Mr Popodopolous]

1 hour ago, DerbyFan said:

You don't seem to want to accept that what the club did is ok, you don't think it is ok, so it is not ok seems to be your attitude. I'm not sure how many companies are out there that deal with stadium valuation, I'm guessing not a lot as it's pretty specialised, maybe the EFL trust the one that we used? Maybe they told us which company to use when we contacted them before we did it? I don't know, I'm just surmising.

I don't believe we are under a soft embargo, I'm not sure why the Daily Mail said that we were in the article the other day, no one else has said that we are any more, in fact I saw your other thread where you mentioned the Times article that specially didn't mention us at all in relation to being close to FFP, and I'm sure it was the Times that were the first to say we had a soft embargo before, it was said previously that we couldn't announce the signing of Shinnie because we were, then we announced it, after he'd recovered from his injury.

I don't see how they can punish us for 1. Something they EFL have okayed and 2. Something that was allowed within the rules at the time. What the other clubs think now it's happened doesn't matter, they agreed to the rules, they clearly say that you can dispose of tangible fixed assets, this will presumably always be buildings and land, and as such will always lead to an uneven effect with being able to invest in them as infrastructure without taking an FFP hit and then selling them on, to whoever, and making a profit from the sale. Do you have any idea what the legal implications of punishing us for acting within the rules would be? It would surely be laughed out of court. I don't see it as being against the spirit, in finance it's surely pretty black and white, it's either allowed in the rules, or it's not.

We've just released our retained list, and while there are some surprises, with Johnson, Blackman and Butterfield being given 12 month extensions on 'vastly reduced terms', I'm sure they are done for FFP purposes, to avoid the residual values meaning we take a hit to this years accounts. I probably expected Johnson to be given a new contract anyway, as he has been an important player for us in the last few months and I would expect him to rotate with Shinnie, with a youngster (more than likely Bird) to back them up, but Butterfield and Blackman, as our local paper said are expected to be released, however I think this will happen in July, so that our irregular amortisation means we take the hit next season instead, yes it means always chasing your tail, well it does until we can get the wages under control and then we can take larger amounts off the residual values and get back on track, but this is the situation we are in.

At the end of next season we have Martin (apparently high wages but no residual value, we got him on a free and you apparently cannot have a residual value higher than you paid), Anya and Thorne out of contract, along with a few others that I don't think will mean too much of a hit (we didn't pay much for Davies) it's possible there could be interest in them this summer, but I'd expect them to go out on loan if anything (not Davies, he'll stay). There was interest in Huddlestone in January and I expect him to go this summer, I also expect us to sell Carson this summer, now that Roos has signed his contract, we may then choose to have a youngster (probably Ravas, as he has been with the squad for every game recently as the third choice) as backup, or we have Mitchell coming back from loan.

Why on earth would the stadium be valued at £50m now when it was valued at £55m 11 years ago and there has been lots of work done in the meantime.

Apologies for such long answers, I'm refreshing the new replies and while not quoting everyone I'm trying to reply to everyone in the one post so as not to have to cover the same ground in each reply.

I don't think much of the EFL- the fact they bottled in-season penalties on Birmingham in 2017/18 and Aston Villa, Sheffield Wednesday this season shows what they are all about- Shaun Harvey is not terribly capable, our own Mark Ashton IMO would have seen to it that the right punishments would have been handed out in a timely manner. I think it simply flummoxed a less than capable organisation- Birmingham's case was nailed on, look how long it took them to get sanctioned!

We'll see- no smoke without fire. If you aren't then you should be while EFL investigate properly. Would make sense...I believe you can sign within certain conditions loans and frees under a soft embargo but it's a good holding position I think to prevent major signings.

The rules also refer to "Fair Market Value" and related parties- this will perhaps form part of Gibson's legal argument. I would also consider putting the golden share in EFL as a matter on table for clubs that take it to an external court personally- put that to a vote of member clubs, see how you like that!  In short, the risk of suspension of membership from the EFL. Putting aside that nuclear option, the other way of looking at it is that if infrastructure expenditure does not count towards expenses, nor should income of this nature count towards income. Now it isn't wholly a view I agree with, but the clause should read "Third and unrelated party or sale of a ground as moving to a new one" Words to that effect but much more legal language etc.

Do you think the other 21 clubs at this meeting in June in Portugal are going to take it well from yourselves, Sheffield Wednesday and though they have gone up, trying to push for the deductions for Aston Villa? Tell me why they should...I'd be furious if I was a chairman who had played by the rules and the spirit as most had. Or for that matter, Birmingham getting punished as they did.

Yes, for FFP purposes. Johnson seems a decent player in any case agreed. The situation you are in- and why are you in it? You overspent! Badly...to me you should be docked 10-11 points as per the formula, EFL has provision to punish historic breaches within the rules- well if they bother to enforce that is. UEFA does I know that. These rules are based to varying levels on UEFA's. If they have nothing in the regs about it, that is another huge fuckup on their part but they must have as QPR got punished for offences in 2013/14. Not punished enough granted, but they were punished.

Wonder if Carson, Davies, Anya, Thorne, Martin will incur a loss- well Martin won't but he should therefore be up for sale- pure profit and wages off?

Depreciation- like I say going to look through 10-15 years of accounts. Is this work done, or work that is and has been in the pipeline? To me planned work, counting as current value is a bit odd.

I struggle though to understand why you refuse to accept- you've overspent and you've been looking at any and every loophole to try to get out of it. From Sevco 5112, to this, to the residual value- I struggle to see your argument other than it just being a technicality.

Sevco 5112 Limited takes non footballing wages off the wage bill, does it not?

On the related party thing- so what Morris did basically?

Quote

"All accounts are adjusted by the EFL to remove any excessive sponsorship or advertising income received from owners or related parties before the tests are started". 

To me a stadium sale with a large profit fits that bill perfectly- if accounts adjusted, then you're in breach. If you're in breach it'd be points off? It is just a way of funnelling income from the owner to the club- whether actual or paper as far as I can see. For example, I'd remove £30-35m based on that.

https://www.mikethornton.xyz/new-ffp-tests/

The rules themselves are mostly pretty sound- it's the morons who cannot enforce them with sufficient rigour or speed that brings about these issues.

Edited June 3, 2019 by Mr Popodopolous