The Championship FFP Thread (Merged)

[chinapig]

1 minute ago, Mr Popodopolous said:

The counterbalance there is though that there are other big clubs who comply- they too can perhaps cancel out the weight of the ones with sharp practice.

Well big to medium anyway- Leeds, Middlesbrough and Nottingham Forest.

Agree, David Conn- this sort of thing would be made for him. Given the EFL usually announce rule changes on their site, this one is pretty scandalous.

Forest's recent history means they are unlikely to rock the boat I reckon. Leeds appear to have their own financial issues so may want a get out in future perhaps.

Boro are the only ones to put their heads above the parapet and got zero support.

The bad guys have already won I think.

[Mr Popodopolous]

6 minutes ago, chinapig said:

Forest's recent history means they are unlikely to rock the boat I reckon. Leeds appear to have their own financial issues so may want a get out in future perhaps.

Boro are the only ones to put their heads above the parapet and got zero support.

 The bad guys have already won I think.

That genuinely did surprise me- that vote in April- I wonder what would have happened had the vote gone differently, would there have been some sort of demotion from the playoffs for Aston Villa especially, points deductions for Sheff Wed too? Plus maybe Derby- a good alternate history that.

I think Gibson overplayed his hand in that meeting tbh. I understand the urgency too, but at the same time simply a motion of "Disallow profit or profit beyond a certain Reading type ratio on these transactions as a % from FFP calculations, then adjudge it from that new starting point"- I wonder if that might have passed.

Then if it did pass, Aston Villa might have been docked points in-season, Sheffield Wednesday and maybe Derby.

Edited July 12, 2019 by Mr Popodopolous

[Mr Popodopolous]

Sheff Wed fans are somewhat salty, touchy- they don't seem to like the scrutiny for some reason!

https://www.owlstalk.co.uk/forums/topic/283349-kieran-maguire-article/

Edited July 15, 2019 by Mr Popodopolous

[Coppello]

On 12/07/2019 at 17:37, Mr Popodopolous said:

Aston Villa- really hard to say. I fear nothing but there were rumours at PL were looking into their deal as though it may well be acceptable within EFL regulations, EPL ones are not so clear- @Coppello if he hasn't covered it already maybe best placed to answer if the EPL could dock Aston Villa points for it breaching their rules?

In all honesty, I have no idea and I don't think the Premier League do. I'd be shocked if there were repercussions in the PL for their failings in the Championship.

36 minutes ago, Mr Popodopolous said:

Sheff Wed fans are somewhat salty, touchy- no surprise though, always considered them quite arrogant as a fanbase/club. Entitled maybe a better term.

https://www.owlstalk.co.uk/forums/topic/283349-kieran-maguire-article/

I haven't read the article but he does tend to touch a nerve with a lot of people in football. For someone who is trying to become a credible journalist and increase his appearances on Sky/BBC, he doesn't need to write distasteful things about the owners of each club which detracts from his articles.

[downendcity]

46 minutes ago, Coppello said:

In all honesty, I have no idea and I don't think the Premier League do. I'd be shocked if there were repercussions in the PL for their failings in the Championship.

I haven't read the article but he does tend to touch a nerve with a lot of people in football. For someone who is trying to become a credible journalist and increase his appearances on Sky/BBC, he doesn't need to write distasteful things about the owners of each club which detracts from his articles.

Agree about him personalising criticism of club owners. However he does make some serious points. 

Elsewhere the Du k & Maguire transfers are mentioned as evidence of the financial madness in football. Although that is true, at PL level with TV money they can"afford" ludicrous fees and wages. 

The real madness is at championship level where clubs are spending more than their revenue on player wages. From a business point of view that is suicidal and unsustainable.

The caveat to that is, of course, promotion and it is the premier league crock of gold at the end of the promotion rainbow that drives clubs and their owners to throw financial common sense out of the window. 

Would Hargreaves Lansdown's accountant have advocated spending more than they earned to bring in the best financial brains in the industry? Yet that is what SL was doing until changing tack and putting the club on its current path. 

Having said all of that you only have to read this forum to see that many fans don't understand basic financial economics - or chose to ignore it- in the clamour for the£40K per week striker that would surely take us to the promised  land. 

 

Edited July 15, 2019 by downendcity

[Mr Popodopolous]

1 hour ago, Coppello said:

In all honesty, I have no idea and I don't think the Premier League do. I'd be shocked if there were repercussions in the PL for their failings in the Championship.

I haven't read the article but he does tend to touch a nerve with a lot of people in football. For someone who is trying to become a credible journalist and increase his appearances on Sky/BBC, he doesn't need to write distasteful things about the owners of each club which detracts from his articles.

I fear you are right, but I believe UEFA regs don't allow profit on stadium sale and leaseback to count towards FFP- PL ones may though, but though I fear you are right I think there should be repercussions as it has effectively allowed them to circumnavigate PL rules to gain a place there- assuming that is that said rules have more in common with UEFA guidelines than EFL ones. God knows why the EFL lifted that regulation though...if they must have it they should set some sort of % of upper limit, ratio, proportion of profit that can count towards FFP. Reading's £6.5m profit on a £20m asset feels somewhat more realistic- that 32.5% or maybe a bracket of 25-35% should be the benchmark IMO when it comes to such RPTs. 

He can touch a nerve, I do agree. His hidden cryptic messages are ultimately pretty harmless though I reckon, can be amusing too. Bit juvenile though?

Edited July 15, 2019 by Mr Popodopolous

[downendcity]

6 hours ago, billywedlock said:

Until the penalties for abusing the system are 1) Clear 2) Punitive  this will go around in circles for years. 

Relegation by 2 leagues would start to make clubs think 

Like happened to Swindon a long while ago, while for almost exactly the same offence ( IIRC) Man U got a slap on the wrist by way of a a hefty fine.

It made Swindon think, but made Man Utd think how lucky they were to be a rich and successful club!

[Mr Popodopolous]

1 hour ago, downendcity said:

Like happened to Swindon a long while ago, while for almost exactly the same offence ( IIRC) Man U got a slap on the wrist by way of a a hefty fine.

It made Swindon think, but made Man Utd think how lucky they were to be a rich and successful club!

Was that a similar timeframe? Certainly I remember reading about Swindon, definitely don't know about Man Utd.

Interesting and funny thing.

Auditor who signed off on Sheff Wed accounts- is or has been by his own admission, a Mr. John Warner, well he is or has been a season ticket holder. Of them Blades? Er, oddly enough no!

Like I say work comes over pleasure but it's a funny thing- not so easy to find this one, but the internet never forgets?

http://www.bqlive.co.uk/yorkshire/2015/09/28/news/golf-s-loss-was-firm-s-gain-6443/

It's a long article so I will just quote the relevant bits.

Quote

GOLF'S LOSS WAS FIRM'S GAIN

Mike Hughes meets John Warner, managing partner at chartered accountants BHP.

 

It was a small matter of 38 years ago that John Warner joined BHP as a chartered accountant. But those first steps on the ladder were not what I would expect from the immaculately dressed polite, almost reserved, gentleman in front of me. After university he spent a year “playing golf and working in a pub” before a “significant” number of job interviews followed.

 

Quote

Out of the office, he and his wife take their dog walking on the North York Moors and the Dales to blow away any lingering cobwebs. The golf is still a hobby as well, with an aim to play the top 100 courses, as well as a season-ticket passion for Sheffield Wednesday. John is a fascinating mix. He has deep knowledge and understanding of the older traditions - which firms lose track of at their peril – and of the 21st Century needs of an accountancy business.

While I am suggesting no impropriety or wrongful conduct, really even if all above board it would appear to an outside observer to have potential for a conflict of interest.

Do I think one has happened here? Certainly not! The problem is that people have to be seen to be above and beyond reproach as well as actually being so, when it comes to certain professions, or certain situations.

Also for double verification- this appears to be same one as the other one, South Yorkshire Investment fund. The article times out, age etc but this search should provide:

Quote

"syif news "john warner" "sheffield wednesday"

Quote

"John, who is an avid supporter of Sheffield Wednesday, said: "I am thrilled to have joined SYIF and am relishing the challenges ahead. "

Like I say just the nature of the beast, surely have to be seen as beyond the fray- can someone who is a supporter, let alone an ST holding one be truly seen as 110% impartial? Again I say yes but! Seems like the sort of thing that should be avoided really, even if all above board which I am sure it is.

https://www.accountancyage.com/aa/interview/2414051/best-practice-bhps-john-warner

https://www.insidermedia.com/insider/yorkshire/bhp-merges-with-sheffield-practice

https://www.insidermedia.com/business_directory/profile/profile-5465

Instinctively to me, even if all turns out to be right and above board which I am sure it is and will, it just "feels" a bit of a puzzle to have a season ticket holder or what seems to be a long term fan with a role in auditing a clubs accounts? Maybe it's a lot more common than I've ever assumed!

Edited July 15, 2019 by Mr Popodopolous

[Mr Popodopolous]

http://priceoffootball.com/selling-your-stadium-to-yourself-its-not-cricket/

A piece I'm looking forward to!

Not read it yet, but it apparently has one of those cryptic messages in there. This message is about Shaun Harvey by the looks so it's richly deserved!

[Busterrimes]

54 minutes ago, Mr Popodopolous said:

http://priceoffootball.com/selling-your-stadium-to-yourself-its-not-cricket/

A piece I'm looking forward to!

Not read it yet, but it apparently has one of those cryptic messages in there. This message is about Shaun Harvey by the looks so it's richly deserved!

Love it. “Shaun Harvey is A complete bellend”

[James54De]

 

How does this this work then? Anyone care to explain? 

[Coppello]

48 minutes ago, James54De said:

 

How does this this work then? Anyone care to explain? 

What is the source of this information? It's completely wrong as clubs are allowed to make deductions for certain expenditure such as on the youth academy and women's football. It's definitely incorrect!

[James54De]

4 minutes ago, Coppello said:

What is the source of this information? It's completely wrong as clubs are allowed to make deductions for certain expenditure such as on the youth academy and women's football. It's definitely incorrect!

Tweeted by the price of football account.

[chinapig]

10 minutes ago, James54De said:

Tweeted by the price of football account.

A fuller picture from the same source is here:

http://priceoffootball.com/tag/bristol-city/

Note the net sales of £13m are to appear in the latest accounts. Presumably the sales of Kelly and Eisa will appear next year.

[Coppello]

20 minutes ago, James54De said:

Tweeted by the price of football account.

Cheers, I've just found it:

It's actually a completely pointless post by him as the losses haven't been adjusted for infrastructure spend and therefore we are fine. We were probably closer than we should've been in 17/18 but we will register significantly better results in 18/19 because of the sales of Reid, Bryan and Flint. It's actually misleading and no doubt someone will start circulating it when we're complaining about the FFP dealing of Derby and Sheffield Wednesday etc. 

[Mr Popodopolous]

Kelly sale will fall in 2018/19 or? Eisa defintiely 2019/20 I believe.

I assume he's in the process of putting up the initial then going through and adjusting for infrastructure, youth, womens football etc.

[Davefevs]

2 minutes ago, Mr Popodopolous said:

Kelly sale will fall in 2018/19 or? Eisa defintiely 2019/20 I believe.

I assume he's in the process of putting up the initial then going through and adjusting for infrastructure, youth, womens football etc.

Kelly into 18/19 definitely....along with Reid, Flint and Bryan.  18/19 is gonna look healthy.

Eisa into 19/20 definitely.

Surprised Price Of Football putting out a table like that, knowing it’s not accurate.  There are one or two clubs where we don’t know whether their owners are backing them for the full £13m or just working on £5m losses.

[Mr Popodopolous]

8 minutes ago, Davefevs said:

Kelly into 18/19 definitely....along with Reid, Flint and Bryan.  18/19 is gonna look healthy.

Eisa into 19/20 definitely.

Surprised Price Of Football putting out a table like that, knowing it’s not accurate.  There are one or two clubs where we don’t know whether their owners are backing them for the full £13m or just working on £5m losses.

Yep agreed- we should see a profit in 2018/19 plus added to FFP exempt pushes up the FFP profit. If we don't go wildly overboard this year we can have a bit of a go, albeit probably less of one in 2020/21 too as that £24-25m (pre deductions) loss will drop off.

Think it's a simple response to a fans query and as a starting point, rather than an end one. i.e. Gross losses then adjusted accordingly- and adjusted again with the £5-13m differential, possibly based on capital injections at CH.

Plus indeed I suspect removal of non included items like debt write offs- takeovers for exceptional bad debts or clearance may qualify but then again may not.

Edited July 21, 2019 by Mr Popodopolous

[Mr Popodopolous]

This can go in Bolton thing too, and not looked over it properly but Administrators report for season 2018/19 seems to be in for Bolton.

Their losses for 2018/19, totalled £4,224,023, the Management Accounts anyway. No indication for 2017/18 but it may well have been lower- it's barely relevant in a sense anyway as they maybe going bust!

A textbook- if very unusual case- of how a side can likely keep within FFP but have significant solvency issues. Most are the other way round- Rich and willing owners but an inability to stick to FFP!

Courtesy of Kieran Maguire on his Twitter.

Edited July 24, 2019 by Mr Popodopolous

[1960maaan]

I've pretty much stopped reading this thread, some great work by you guys and from other sites but you get to the point where you ask if any of it matters.
Just for an example, Villa looked to be close to trouble. Then smoke & mirrors , ground sold to themselves and their predicted accounts go up in smoke ,while they spend £100m so far this summer. I would dearly love Villa to copy Fulham's return to the Championship to see what would happen, sadly can't see that happening.  I can see the EFL stopping the loophole, but probably only when a "smaller" team does it. 
Keep up the good work guys .

[downendcity]

7 minutes ago, 1960maaan said:

I've pretty much stopped reading this thread, some great work by you guys and from other sites but you get to the point where you ask if any of it matters.
Just for an example, Villa looked to be close to trouble. Then smoke & mirrors , ground sold to themselves and their predicted accounts go up in smoke ,while they spend £100m so far this summer. I would dearly love Villa to copy Fulham's return to the Championship to see what would happen, sadly can't see that happening.  I can see the EFL stopping the loophole, but probably only when a "smaller" team does it. 
Keep up the good work guys .

Ask Bolton fans whether "any of it matters".

[chinapig]

5 minutes ago, 1960maaan said:

I've pretty much stopped reading this thread, some great work by you guys and from other sites but you get to the point where you ask if any of it matters.
Just for an example, Villa looked to be close to trouble. Then smoke & mirrors , ground sold to themselves and their predicted accounts go up in smoke ,while they spend £100m so far this summer. I would dearly love Villa to copy Fulham's return to the Championship to see what would happen, sadly can't see that happening.  I can see the EFL stopping the loophole, but probably only when a "smaller" team does it. 
Keep up the good work guys .

Agreed, except the EFL is more likely to create more loopholes. That is what some clubs are after and if they are big enough they will get their way, with only Steve Gibson resisting I suspect.

[Mr Popodopolous]

11 minutes ago, 1960maaan said:

I've pretty much stopped reading this thread, some great work by you guys and from other sites but you get to the point where you ask if any of it matters.
Just for an example, Villa looked to be close to trouble. Then smoke & mirrors , ground sold to themselves and their predicted accounts go up in smoke ,while they spend £100m so far this summer. I would dearly love Villa to copy Fulham's return to the Championship to see what would happen, sadly can't see that happening.  I can see the EFL stopping the loophole, but probably only when a "smaller" team does it. 
Keep up the good work guys .

I'm unsure tbh- since that Birmingham 9 points, clubs close to the limit or even ones who aren't so close appear to be reigning it in.

Derby to date have loaned Dowell and likely will be heavily reliant on loanees- for them the ground stunt appeared to form part of a restructuring.

Leeds who certainly are a big club are being cautious. Middlesbrough likely have more headroom than they're using. Sheffield Wednesday tried the ground sale and leaseback but appear to still be in a soft embargo.

Possible inconsistencies regarding the ground transaction maybe a reason.

Birmingham and QPR are taking it seriously, so too are Reading- only just out of soft embargo. Cardiff and Huddersfield have big headroom especially Huddersfield but both are, have so far been quite conservative in the market.

The big one here is Aston Villa- I cannot think clubs are happy about it, especially as they made no efforts to even slow down losses and this despite nearly £90m over 3 years in parachute payments!

I think another problem as well as the much discussed, documented actions of EFL- somewhere between incompetence and complicity some may say- is it's been done on the hoof a bit. There's now a hard and fast points tariff, before there was not.

[1960maaan]

22 minutes ago, downendcity said:

Ask Bolton fans whether "any of it matters".

I doubt Bolton are near running foul of FFP, their problems are slightly different and nothing to do with my point. I am fed up with so called, or self professed "big clubs" exploiting loopholes or just running rough shod over rules and getting away with it , while others try and stay within the rules.

11 minutes ago, Mr Popodopolous said:

I'm unsure tbh- since that Birmingham 9 points, clubs close to the limit or even ones who aren't so close appear to be reigning it in.

Derby to date have loaned Dowell and likely will be heavily reliant on loanees- for them the ground stunt appeared to form part of a restructuring.

Leeds who certainly are a big club are being cautious. Middlesbrough likely have more headroom than they're using. Sheffield Wednesday tried the ground sale and leaseback but appear to still be in a soft embargo.

Possible inconsistencies regarding the ground transaction maybe a reason.

Birmingham and QPR are taking it seriously, so too are Reading- only just out of soft embargo. Cardiff and Huddersfield have big headroom especially Huddersfield but both are, have so far been quite conservative in the market.

The big one here is Aston Villa- I cannot think clubs are happy about it, especially as they made no efforts to even slow down losses and this despite nearly £90m over 3 years in parachute payments!

I think another problem as well as the much discussed, documented actions of EFL- somewhere between incompetence and complicity some may say- is it's been done on the hoof a bit. There's now a hard and fast points tariff, before there was not.

Villa really seem to be taking the piss. TBF after Derby I don't blame them for going down the ground selling route, but I would love to know (and understand) how they can seem to ignore predicted accounts and then go on another massive spending spree. Good to see a few clubs trying to adhere to the rules, I get that like anything it takes time to get things right, but you'd like to see the EFL move much quicker to close loopholes as they appear. Be interesting to know how Fulham shape up. Their promotion year can't have been cheap, spent £100m last year , although Sessegnon's move to could help a little. 
Your comment "somewhere between incompetence and complicity" pretty well sums it up, and if I supported QPR , Brum or one of the others who have had any kind of penalty imposed, I would be more than a little annoyed.

[JoeAman08]

Just saw Birmingham City linked with a 6.5m CDM. How is it possible to be docked 9 points for breaches then 6 months later spend that amount on 1 player? Did the 15m for Adams dent their losses that much because we seem to have to sell 10m worth every summer just to start at even 0

[Guest]

6 minutes ago, JoeAman08 said:

Just saw Birmingham City linked with a 6.5m CDM. How is it possible to be docked 9 points for breaches then 6 months later spend that amount on 1 player? Did the 15m for Adams dent their losses that much because we seem to have to sell 10m worth every summer just to start at even 0

It’s probably spread over a couple of years.

[Mr Popodopolous]

11 hours ago, JoeAman08 said:

Just saw Birmingham City linked with a 6.5m CDM. How is it possible to be docked 9 points for breaches then 6 months later spend that amount on 1 player? Did the 15m for Adams dent their losses that much because we seem to have to sell 10m worth every summer just to start at even 0

The Birmingham situation.

Can't go into too much detail right now but it was reset to £13m + allowable losses for 2018/19 and 2019/20. Idea being that you couldn't punish them twice for the 2017/18 overspend.

In fairness to them they've been making cutbacks, in teems of fees, wages and amortisation. Jota was a big cost removed moving forward in terms of wages and amortisation. Morrison and Adams gone, Mahoney no longer there- sure there are others too. Clotet surely cheaper than Monk.

This new holding midfielder could be on a 4-5 year deal. Amortisation £1.6m or £1.3m per season- not exorbitant. Notice too he's from Dinamo Zagreb- wages out there really are not much so an uptick on that shouldn't be too hard without breaking the bank.

Edited July 26, 2019 by Mr Popodopolous

[Mr Popodopolous]

Appears that Sheffield Wednesday soft embargo lifted.

This raises a range of puzzling and in some cases troubling questions.

1. Has the ground transaction come through on the Land Registry yet?
2. Why is there nothing in the cash flow statement about it?
3. Is it possible that this transaction could have been backdated? Chansiri after all declared in December 2018 or was it January 2019 at a Fans Forum that if there was no promotion, they would be in "big trouble".
4. Following on from that, if the transaction was all in order and consistent with the right accounting period, why did it therefore take until July 16th 2019 to submit accounts to Companies House- that were due there on April 30th 2019? (Actually in reality before the extension of accounting period, they would have been due on February 28th 2019). July 11th 2019 was when it appeared on their website.
5. Even in accepting that businesses may well submit accounts late, why were they dated as signed off June 21st 2019- which was clearly after the date they were due at CH.
6. Surely the soft embargo should have been held in place pending an investigation into this transaction, the nature of it?

Forget Derby, this is the most questionable yet!

More questions than answers IMO- a lot of odd aspects here. If they don't go up this season though and the fixed asset loophole closed they will indeed be in fairly big trouble as their ill-gotten "profit" will fall off the books in a years time, moving forward that is into 2020/21. Unless they do the normal thing and you know, sell some players with value.

Reading below the line comments briefly, arrogant pricks a lot of their fans- but then I've always thought of them as a bighead club, entitlement. This year's Aston Villa? Hope this very interesting manoeuvre blows up in your face- not as bad as Aston Villa of course but then can't remember a Championship club that was.

 

Edited July 26, 2019 by Mr Popodopolous

[Davefevs]

Sir Les now weighing in. QPR have put a complaint into EFL. 

 

[chinapig]

1 hour ago, Davefevs said:

Sir Les now weighing in. QPR have put a complaint into EFL. 

 

And still football journalists continue to ignore the issue. It couldn't be because it would take some actual work as opposed to regurgitating stuff from Pogba's Instagram and other such fluff surely?

[Mr Popodopolous]

On 27/07/2019 at 10:18, chinapig said:

And still football journalists continue to ignore the issue. It couldn't be because it would take some actual work as opposed to regurgitating stuff from Pogba's Instagram and other such fluff surely?

I think it's that partly.

Also think it's that a good chunk of the UK football media they are at best indifferent, at worst hostile- in a fair few but certainly not all cases- to FFP. Maybe it's the same abroad, I don't know. If it's circumvented in many cases therefore, it's seen as a bit 'meh'.

The EFL lifting this soft embargo considering all of the puzzling questions around the transaction though, is a new low. Even for them.

We need Man City to get a CL ban, to put the message home a bit with the UK football media- PSG too but focusing specifically on UK it'd need to be Man City with us, PSG too of course- as they seem much the same in this respect as Man City.

1 season and maybe 2 but certainly one season. AC Milan who are a historic giant of the game with 7 European Cups/CLs is a good start albeit that was partially a voluntary agreement.

Interesting to note as well that within the last 9 months, UEFA have admitted there are loopholes that need to be looked at, whereas just lately FIFA have spoken about loosening FFP.

Edited July 28, 2019 by Mr Popodopolous

[chinapig]

30 minutes ago, Mr Popodopolous said:

I think it's that partly.

Also think it's that a good chunk of the UK football media they are at best indifferent, at worst hostile- in a fair few but certainly not all cases- to FFP. Maybe it's the same abroad, I don't know. If it's circumvented in many cases therefore, it's seen as a bit 'meh'.

The EFL lifting this soft embargo considering all of the puzzling questions around the transaction though, is a new low. Even for them.

We need Man City to get a CL ban, to put the message home a bit with the UK football media- PSG too but focusing specificlaly on UK it'd need to be Man City with us, PSG too of course- as they seem much the same in this respect as Man City.

1 season and maybe 2 but certainly one season. AC Milan who are a historic giant of the game with 7 European Cups/CLs is a good start albeit that was partially a voluntary agreement.

Interesting to note as well that within the last 9 months, UEFA have admitted there are loopholes that need to be looked at, whereas just lately FIFA have spoken about loosening FFP.

The question you have to ask in circumstances like this, and the way controls over agents were introduced then swept away 5 minutes later is another example, is who benefits? In other words, follow the money.

To use your example, the UK media has been largely silent on the Man City issue. The bottom line is they are not going to upset the various cash cows they benefit from, however corrupt they are. In their defence, most fans don't give a toss either, particularly if their club is a beneficiary.

So stuff like this is left to people like Football Leaks but of course the football authorities combined with the Portuguese public authorities to turn the law on Rui Pinto. Again, virtual silence from the media.

[Mr Popodopolous]

I'll answer the post by @chinapig later but yeah- this statement gives serious doubt about transactions and accounting period or the consistency therein. Sheffield Wednesday website in mid January of this year aka 2019- remember the Transaction of the ground was meant to have occurred/been completed in the accounting period to May 31st 2018- latterly July 31st 2019!

 

Quote

 

Dejphon Chansiri statement

16 January 2019

 

 

 

 

Since I bought our club in February 2015 I have always made every decision in the best interests of Sheffield Wednesday. Sometimes those decisions have not been popular, which I understand, but the intention was and is always the same – for the good of Wednesday. The decision I am making now with this statement is also not easy but something I need to do.

I have always tried to do my best, which I will continue to do for every day, week and year I remain chairman. Sometimes, given the restraints that Championship clubs must work within, every effort is not enough. The embargo we were under filled me with sadness, it still does, I never wanted this as Wednesday owner and I apologise to our supporters. 

Many people have suggested that I invested the amount of money I did – and continue to do – in order to achieve promotion to the Premier League. But this is not correct. I invested these sums to stay in the Championship, to ensure we would have the best chance of avoiding relegation. If promotion came, then great, but building from the bottom gave us the best opportunity of getting to the top.

 

The Championship is incredibly competitive and gets stronger and stronger each year with the parachute money from the Premier League clubs coming into this division. Owners who have not spent big sums before are now doing so just to remain competitive and first of all, stay in this division and we must challenge with them and others in the division.

At fans’ forums and Steering Group meetings, I have warned of the problems we will face with the Profitability and Sustainability regulations if we did not get promoted. The same is true as I write today. Unless we achieve promotion this season, we will again experience problems. I said it then and I say it now because I do not wish for bad surprises for our supporters. I wish to say it how it is and that way it is clear on both sides.

To make our situation 100% clear, we are not under any kind of embargo right now. However, if our problems cannot be solved by March when we submit our accounts to the EFL, another soft embargo is inevitable. This will become a full embargo if again the problems cannot be solved at the end of the financial year.

I never ask for anything more than the best support possible from our loyal fans and with the Profit and Sustainability regulations, I repeat I cannot solve the problems we have as a club alone. We have to solve these issues together as these problems are not going to disappear. The solution we worked so hard to achieve this year will not matter next year, when the same problems will arise if we do not get promoted.

Normally you cannot spend like this every year, probably just two years maximum given the regulations in place. But our spending extended to three years and if you do not break P&S in that time, it is inevitable in the future, so I believe other clubs will find themselves in a similar situation this year and next and in the years ahead. It was very hard to accept any kind of embargo because when I arrived here I came to do better, make things better for everyone. 

Many fans have told me they are scared that if I leave Wednesday, which would break my heart, our club will be worse than before but to those fears, I say do not worry. Whatever I decide now or in the future, Sheffield Wednesday will be in a stronger position than before my time, that is my word.

I have never thought about worth or value to myself or my family since I am here, I have never had one penny from Wednesday. I have always put our fans first and never thought about business because that would conflict with the ambitions and emotions everyone connected to our club has. Throughout my life, I have never done business before like this. Normally, a business will think of profit first but if we want to stay in this division and also have a chance of promotion, this is impossible and I understand that.

Some people think I want promotion to make a profit but the investment required to stay in the Premier League makes that impossible and it was never my intention anyway. It would probably take four or five years in the Premier League to break even and then more before anyone could even think about profit. So as an owner, until many years down the line, I lose either way.

But I do not have a problem with that, I knew this would be the case when I bought our club. I could have made a profit in the Championship already if I really wanted to by not buying the players or buying players and selling them for much more. But I never wanted to do that. I wanted the best for our fans and our club because I have commitment and responsibility as the chairman and owner. If I thought that way, it would be much easier to manage Wednesday. 

Some have said why not spend smaller amounts of money and still aim for promotion but football has changed a lot in recent years and how many clubs will realistically achieve that target? There will be some examples as this is football but very few. That level of investment went into Wednesday 15 years and more before my time without success when it was not so hard as it is today.

So with the problems we faced, I believe many people thought they were not true as there are too many experts on Sheffield Wednesday who are really no experts at all. I have said for a long time that I cannot do this by myself but if I could, I would. Money is not the issue here, it is all about revenue, that is the difference. I have done everything I can in my power. This is why I launched Club 1867 last time and this is why I will launch a new version of Club 1867 again, with pricing and structures to enable as many fans as possible to help avoid the problems we could face again. No one fully understands how hard it has been for me to solve the problems last time, something I never wish to experience alone ever again.

If someone asks me to not spend and do like in the past, I cannot accept that because then there is a risk of relegation and no chance at all of promotion. That is not the ambition I have for Sheffield Wednesday. It is not the ambition of our fans. But I have the responsibility. I want to know how many people could manage this club with responsibility because it so easy to do it without. I believe that if anyone else managed our club, they would think about profit.

I have learned a lot about football in the time I have been here. Some people right now think the worst of me but I know that had we been promoted in the first two years when we reached the play-offs I would have been the hero, the coach would have been the hero, recruitment and other negative things would never have been brought into question. I would like to say once more that I have used the same recruitment team since I started, other than the change of the coaches, of course. If anyone suggests someone who has now left was the one responsible for recruitment I can categorically say that is not true or they would still be here.

Since I am here I have wanted trust. I want our fans to show it is not just my money they want me to spend. Now is the time for everyone to come together and show trust and not just give the word. We can make our club the very best. I have never asked anyone who cannot afford to buy anything for even one penny. To those who invested in Club 1867, I say thank you for supporting me without thinking of worth. I can also think of worth myself but I do not wish to do that, I want to finish the job I started but we have a problem that we can only solve together. If our fans really trust me, we will go together for the next part of the 1867 campaign and I truly hope we will be a great team.

 

 

 

https://www.swfc.co.uk/news/2019/january/dejphon-chansiri-statement/

A few quick takeaways here.

1. BIG FFP problems.
2. January 2019- still in the mess- as per Chansiri himself.
3. Accounting Period ended May 31st 2018 and latterly July 31st 2018.
4. Accounts for that season i.e. 2017/18 dated 21 days and a month after the revised Accounting Period for 2017/18 or 3 months and 21 days after they were due at CH.

He could have planned at all as a big surprise I guess- pretending at meeting after meeting that they're in trouble, big trouble and have done this all along or done enough of it all along by May 31st/July 31st 2018.

@Coppello You are our resident football accounting expert- would and I'm sure I'm speaking for us all, be very interested in any thoughts on the Sheffield Wednesday transaction/Hillsborough sale and leaseback in light of all of the interesting aspects?

Edited July 29, 2019 by Mr Popodopolous

[Coppello]

On 29/07/2019 at 16:56, Mr Popodopolous said:

I'll answer the post by @chinapig later but yeah- this statement gives serious doubt about transactions and accounting period or the consistency therein. Sheffield Wednesday website in mid January of this year aka 2019- remember the Transaction of the ground was meant to have occurred/been completed in the accounting period to May 31st 2018- latterly July 31st 2019!

 

https://www.swfc.co.uk/news/2019/january/dejphon-chansiri-statement/

A few quick takeaways here.

1. BIG FFP problems.
2. January 2019- still in the mess- as per Chansiri himself.
3. Accounting Period ended May 31st 2018 and latterly July 31st 2018.
4. Accounts for that season i.e. 2017/18 dated 21 days and a month after the revised Accounting Period for 2017/18 or 3 months and 21 days after they were due at CH.

He could have planned at all as a big surprise I guess- pretending at meeting after meeting that they're in trouble, big trouble and have done this all along or done enough of it all along by May 31st/July 31st 2018.

@Coppello You are our resident football accounting expert- would and I'm sure I'm speaking for us all, be very interested in any thoughts on the Sheffield Wednesday transaction/Hillsborough sale and leaseback in light of all of the interesting aspects?

@Mr Popodopolous, thanks but you clearly wear that crown! In all honesty, I've taken a bit of a backseat regarding Championship FFP as I've found the whole thing a little disheartening and feel like we're part of a losing battle. I will have a little read of this over the coming days and share my thoughts. The whole thing is an absolute shambles though no doubt!

[Mr Popodopolous]

20 hours ago, Coppello said:

@Mr Popodopolous, thanks but you clearly wear that crown! In all honesty, I've taken a bit of a backseat regarding Championship FFP as I've found the whole thing a little disheartening and feel like we're part of a losing battle. I will have a little read of this over the coming days and share my thoughts. The whole thing is an absolute shambles though no doubt!

Haha thanks, but you working at a club or having worked at one I thought? Well that makes you a technical expert.

Yeah, know what you mean- but I have a bit of hope in how spending has tailed off a bit this summer, possible the 9 points could have given teams close to the line pause for thought. Whichever administrator allowed stadia sale and leaseback though...I struggle to see how the Sheffield Wednesday one is/was permitted especially given the discrepancy in accounting periods or should I say the possible discrepancy at least.

This you might be interested in- saw it yesterday online. We know and all have discussed most of it at length on this thread but up to 5 clubs under soft embargoes is interesting! As well as a large number placing a cap or a close watch on expenditure.

https://www.standard.co.uk/sport/football/championship-clubs-are-breaching-efl-spending-rules-in-bid-to-reach-premier-league-bonanza-a4201466.html

Edited July 31, 2019 by Mr Popodopolous

[Try Again coatpile]

I don't post much, but just wanted to say how much I appreciate everything that goes into this thread. I may not understand all of the technicalities, but it's great to get an insight into how the outside constraints on finances work, and how the governance follows (or mostly doesn't!!) on from that. I can't imagine there are many forums (fora!!?!) with this level of discussion. Thanks again, TAc

[chinapig]

28 minutes ago, Try Again coatpile said:

I don't post much, but just wanted to say how much I appreciate everything that goes into this thread. I may not understand all of the technicalities, but it's great to get an insight into how the outside constraints on finances work, and how the governance follows (or mostly doesn't!!) on from that. I can't imagine there are many forums (fora!!?!) with this level of discussion. Thanks again, TAc

Well said, hear, hear!

[Leveller]

On 27/07/2019 at 10:18, chinapig said:

And still football journalists continue to ignore the issue. It couldn't be because it would take some actual work as opposed to regurgitating stuff from Pogba's Instagram and other such fluff surely?

On the other hand Alan Nixon, as an example, regularly tweets that FFP is pointless, and that owners that can afford to spend should be allowed to. He argues that EFL are punishing those that have the money, while allowing people like the owners at Bolton and Bury to ruin clubs, because they can’t cover the losses.

I’m not sure I agree, and it doesn’t excuse breaking the rules that do exist, but he doesn’t ignore the issue, and it’s a valid point of view.

[chinapig]

10 minutes ago, Leveller said:

On the other hand Alan Nixon, as an example, regularly tweets that FFP is pointless, and that owners that can afford to spend should be allowed to. He argues that EFL are punishing those that have the money, while allowing people like the owners at Bolton and Bury to ruin clubs, because they can’t cover the losses.

I’m not sure I agree, and it doesn’t excuse breaking the rules that do exist, but he doesn’t ignore the issue, and it’s a valid point of view.

Then he doesn't understand that the Bolton and Bury problems are not FFP issues. What he suggests would lead to some clubs being even more reckless than they already are and perhaps one of the big clubs his suggestion would give an even bigger competitive advantage to going the way of Bolton.

He is right to criticise the EFL but you don't solve a weakness in one area of governance by making another weaker.

Perhaps he should read David Conn's piece to get a better understanding.

[Leveller]

2 hours ago, chinapig said:

Then he doesn't understand that the Bolton and Bury problems are not FFP issues. What he suggests would lead to some clubs being even more reckless than they already are and perhaps one of the big clubs his suggestion would give an even bigger competitive advantage to going the way of Bolton.

He is right to criticise the EFL but you don't solve a weakness in one area of governance by making another weaker.

Perhaps he should read David Conn's piece to get a better understanding.

You misunderstand my post. He does understand that Bolton/Bury’s Problems aren’t FFP issues - his point being that EFL regs are punishing those that can afford to splash out, while allowing “fit and proper” owners to buy clubs they can’t afford to run.

[chinapig]

14 minutes ago, Leveller said:

You misunderstand my post. He does understand that Bolton/Bury’s Problems aren’t FFP issues - his point being that EFL regs are punishing those that can afford to splash out, while allowing “fit and proper” owners to buy clubs they can’t afford to run.

I see, thanks. Even the EFL now accepts the fit and proper test is inadequate and it is being amended but somebody could pass a stiffer test then indulge in the uncontrolled spending he advocates and bankrupt a club.

You need something like FFP to protect clubs from reckless owners "living the dream".

[Leveller]

31 minutes ago, chinapig said:

I see, thanks. Even the EFL now accepts the fit and proper test is inadequate and it is being amended but somebody could pass a stiffer test then indulge in the uncontrolled spending he advocates and bankrupt a club.

You need something like FFP to protect clubs from reckless owners "living the dream".

Your last line is is arguable though. The truly wealthy and supportive owners, like Lansdown will always put in as much cash as they feel they want to afford to achieve success. They aren’t a risk. Without FFP they may choose to inject £100m over three years instead of £39m. On the other hand, even FFP lets a bad owner take on commitments they can’t afford (as at Bolton). And if a Ken Anderson can let a club lose £39m before it is even investigated, then FFP doesn’t really achieve much - the club will be long gone before then if there is no capital injection to cover the losses. Nixon’s argument (as I understand it) is that the ordinary insolvency laws will come into play before FFP achieves any thing. FFP tends to punish the responsible owners as much as, if not more than, the irresponsible ones. Has FFP ever actually saved a club from disaster? 

[Yellow&Blue&Red]

7 hours ago, Leveller said:

The truly wealthy and supportive owners, like Lansdown will always put in as much cash as they feel they want to afford to achieve success. They aren’t a risk.  

I'm not sure that's right. Eddie Davies had bottomless pockets when it came to Bolton... until suddenly he didn't, at which point all the player contacts that has been signed became unaffordable. Now look at them.

How much better to have clear rules linking expenditure to real income: rights, gates and sponsorship. That way, you stay afloat, whoever owns you.

It's not normal capitalism, which might be why it feels odd - the idea that a business should have rules which restrict investment IS unusual. But you can't have it both ways: either football clubs are community institutions which endure over generations, or they're normal businesses which go bust from time to time.

[Davefevs]

@Mr Popodopolous Derby buying Bielik for £10m, loaning Clarke.  They’ve trimmed their squad but how do you think this looks from their FFP perspective?

[downendcity]

7 hours ago, Davefevs said:

@Mr Popodopolous Derby buying Bielik for £10m, loaning Clarke.  They’ve trimmed their squad but how do you think this looks from their FFP perspective?

I think I saw something mentioned at the time of the stadium "sale" along the lines of the value being inflated so that it not only resolved their ffp issues, but gave them a bit of "surplus" to help this season.

Their new manager's recent press conference almost pleaded poverty, and their owners suggestion that sustainability was their new way forward, but if the proceeds of the stadium sale have given them a bit of wriggle room it would explain deals for Bielik and Clarke.

[downendcity]

On 31/07/2019 at 22:26, Leveller said:

Your last line is is arguable though. The truly wealthy and supportive owners, like Lansdown will always put in as much cash as they feel they want to afford to achieve success. They aren’t a risk. Without FFP they may choose to inject £100m over three years instead of £39m. On the other hand, even FFP lets a bad owner take on commitments they can’t afford (as at Bolton). And if a Ken Anderson can let a club lose £39m before it is even investigated, then FFP doesn’t really achieve much - the club will be long gone before then if there is no capital injection to cover the losses. Nixon’s argument (as I understand it) is that the ordinary insolvency laws will come into play before FFP achieves any thing. FFP tends to punish the responsible owners as much as, if not more than, the irresponsible ones. Has FFP ever actually saved a club from disaster? 

It seems to me that football operates outside of the normal common sense rules of business finance e.g. how many businesses would pay 90% (and sometimes in excess of 100%) of the income to staff in salaries? We all know this is because there will always be owners with deep pockets who are prepared to push the boat out in the quest for moving their club up the ladder towards football's "promised land".

I heard Bury's owner talking yesterday. He took over the club in January but says that they were/are paying some of their players £9000 per week and some on £6,000 per week weren't even featuring in the squad - they were a league 2 club last season with gates under 3,000!

You are right in saying that ffp cannot prevent a club having cash flow/insolvency problems - only a year ago Villa were on the verge of a winding up order because their owner was struggling to get money out of his country.  However, better to have something in place, to reign in reckless owners and especially those who might leave a club in the lurch when it goes wrong, then nothing at all.

When you mention Anderson, it raises a question about the tests the EFL undertake to approve a new owner as suitable - what used to be called the fit and proper person test - as it does seem to be as full of holes as ithe ffp rules! 

[Mr Popodopolous]

9 hours ago, Davefevs said:

@Mr Popodopolous Derby buying Bielik for £10m, loaning Clarke.  They’ve trimmed their squad but how do you think this looks from their FFP perspective?

Interesting one.

I'm not sure Clarke is such a cost but we'll see I guess. Bielik though certainly would be!

I think regardless of stadium sale they would have been alright with it to June 2018, as I've had a bit of a look at their Sevco 5112 Limited accounts for 2015/16 and 2017/18- will post full workings on here in a few days.

Could've been in a bit of bother once 2015/16 dropped off as there was a large "Impairment of Goodwill" on the Sevco 2015/16 accounts of £21,198,000 or thereabouts and it is unclear whether this was playing side related or not, and if it isn't then it could have been eligible for deduction from losses/addition to allowable costs.

Mel Morris did mention something about £10-15m of players wages being off the wage bill after the season just gone, so unlike say Aston Villa and Sheffield Wednesday definitely moving in the right direction. Entirely possible they will sell some academy/fringe players too which could be profit on transfers, the Lampard compensation helps too.

On the flipside, if they have that residual value model could that store up a few problems? Those aging/expensive/out of contract players who left this summer commanded no fee so far as I can see! Then again, Cup run including big Cup ties, playoff final as the losing side keeps gate receipts all helpful of course. On the other hand after this season, that stadium sale drops off- I think it brought a decent whack of restructuring time personally, as their amortisation model seems to differ to most,  I don't know how much impact an addition of £10m Bielik will have right now.

EFL really needed to set a cap, a precedent- in short to benchmark- on valuations once Reading's sale and leaseback was done.

Their profit as a% of current Net Book Value sounds feasible and realistic and the EFL should have capped as that for FFP purposes- i.e. the owner can pay what they like on paper and in actual accounts it would appear as that, but for FFP it's adjusted downwards- that sort of thing. Quickest example- Madjeski worth £20m or so, purchase cost £26.5m, profit £6.5m (roughly). Therefore for Pride Park say, Net Book Value £42m, Profit £13.65m for FFP- as I say owner can pay what they like in reality but for FFP you only allow that %. So simple- it's clear, it has a precedent and it has a benchmark to weight against.

For Hillsborough that would have left Sheffield Wednesday right up shit street. Highly likely Aston Villa too.

Incidentally, once this season is up that stadium sale and leaseback induced "profit" drops off the accounts- new starting point for the projected in March 2021 is 2018/19. Similar goes for Sheffield Wednesday though the veracity of that particular transaction, well it's very odd.

They adjust down related party sponsorship transactions after all so a benchmarking of this would surely be similar, easier if anything!

Edited August 2, 2019 by Mr Popodopolous

[Davefevs]

32 minutes ago, Mr Popodopolous said:

Interesting one.

I'm not sure Clarke is such a cost but we'll see I guess. Bielik though certainly would be!

I think regardless of stadium sale they would have been alright with it to June 2018, as I've had a bit of a look at their Sevco 5112 Limited accounts for 2015/16 and 2017/18- will post full workings on here in a few days.

Could've been in a bit of bother once 2015/16 dropped off as there was a large "Impairment of Goodwill" on the Sevco 2015/16 accounts of £21,198,000 or thereabouts and it is unclear whether this was playing side related or not, and if it isn't then it could have been eligible for deduction from losses/addition to allowable costs.

Mel Morris did mention something about £10-15m of players wages being off the wage bill after the season just gone, so unlike say Aston Villa and Sheffield Wednesday definitely moving in the right direction. Entirely possible they will sell some academy/fringe players too which could be profit on transfers, the Lampard compensation helps too.

On the flipside, if they have that residual value model could that store up a few problems? Those aging/expensive/out of contract players who left this summer commanded no fee so far as I can see! Then again, Cup run including big Cup ties, playoff final as the losing side keeps gate receipts all helpful of course. On the other hand after this season, that stadium sale drops off- I think it brought a decent whack of restructuring time personally, as their amortisation model seems to differ to most,  I don't know how much impact an addition of £10m Bielik will have right now.

EFL really needed to set a cap, a precedent- in short to benchmark- on valuations once Reading's sale and leaseback was done.

Their profit as a% of current Net Book Value sounds feasible and realistic and the EFL should have capped as that for FFP purposes- i.e. the owner can pay what they like on paper and in actual accounts it would appear as that, but for FFP it's adjusted downwards- that sort of thing. Quickest example- Madjeski worth £20m or so, purchase cost £26.5m, profit £6.5m (roughly). Therefore for Pride Park say, Net Book Value £42m, Profit £13.65m for FFP- as I say owner can pay what they like in reality but for FFP you only allow that %. So simple- it's clear, it has a precedent and it has a benchmark to weight against.

For Hillsborough that would have left Sheffield Wednesday right up shit street. Highly likely Aston Villa too.

Incidentally, once this season is up that stadium sale and leaseback induced "profit" drops off the accounts- new starting point for the projected in March 2021 is 2018/19. Similar goes for Sheffield Wednesday though the veracity of that particular transaction, well it's very odd.

@DerbyFan re Bielik post, looks like you are getting your house in order.

[Guest DerbyFan]

1 hour ago, Davefevs said:

@DerbyFan re Bielik post, looks like you are getting your house in order.

Yes we are, I've said before the club knew they needed to, they have been saying it for a few years, from what we've been told at fans forums the amount of contracts ending helps a lot, we weren't getting value out of the wages we were paying, too many not playing or playing only a bit part, even with the residual value hit that we will presumably take.

It seems it's the wage bill that really hurts a club rather than transfer fees, within reason. I'd imagine we've cut at the very least £10m off the wage bill now, although expecting it to be a fair bit more to be honest, just depends on the ones coming in.

[Carey 6]

Is this true? Would he have to be classed as a youth team coach rather than a first team coach?

 

[Davefevs]

53 minutes ago, Carey 6 said:

Is this true? Would he have to be classed as a youth team coach rather than a first team coach?

 

Gilmartin’s on more

You would think that any contract including a playing role, would have to count towards FFP.

[Mr Popodopolous]

Seems a weird loophole- because when you get compensation for a managerial or coaching departure, well that counts as income towards FFP so surely the whole wage bill should count towards it!

Especially if it includes a playing/coaching role.

Edited August 6, 2019 by Mr Popodopolous

[Carey 6]

3 minutes ago, Davefevs said:

Gilmartin’s on more

You would think that any contract including a playing role, would have to count towards FFP.

 

2 minutes ago, Mr Popodopolous said:

Seems a weird loophole- because when you get compensation for a managerial or coaching departure, well that counts as income towards FFP so surely the whole wage bill should count towards it!

Especially if it includes a playing/coaching role.

Interesting few comments here, 

 

Edited August 6, 2019 by Carey 6

[Mr Popodopolous]

1 minute ago, Carey 6 said:

 

Interesting few comments here, 

 

Ah yeah, that has SCMP which has differences to our level FFP, officially known as P&S.

Ironically, the stadium sale and leasebacks of Derby and 2 others in a big way wouldn't have counted under SCMP but seemingly can under P&S- perhaps the reverse applies to our level?

[Davefevs]

1 minute ago, Carey 6 said:

 

Interesting few comments here, 

https://twitter.com/danielstorey85/status/1158667384015794176

Still £40k per week....£2m per annum.

SL - you need to get better lawyers, Morris is using every loophole!!!

[Mr Popodopolous]

I'd refuse some of these FFP cheats entry to AG and tbh all the compliant or effort making clubs should refuse to play the pricks who act like this. In the same way as FFP cheats in theory can get excluded from the CL, I don't believe they're worthy to share a pitch with clubs who do or try to do the right thing.

Aston Villa are my big ones but Derby are beginning to push them and Sheffield Wednesday a bit closer IMO.

It's an emotive rather than a realistic view my opening gambit- but ******* hell- incidentally I don't believe Derby because of varied things, mix of loopholes and cost cutting would be in breach even if full Rooney wages paid for one season and one season only by the end of this season but other clubs really really need to do something about this shit.

Edited August 6, 2019 by Mr Popodopolous

[Mr Popodopolous]

Daniel Storey's latest Tweet suggests he was conflating P&S and SCMP- all EFL FFP but both have differences.

[Carey 6]

2 minutes ago, Mr Popodopolous said:

Daniel Storey's latest Tweet suggests he was conflating P&S and SCMP- all EFL FFP but both have differences.

I've also just seen that, so I take it Derby will have to factor in all of Rooneys wages into their FFP calculations?

[Mr Popodopolous]

3 minutes ago, Carey 6 said:

I've also just seen that, so I take it Derby will have to factor in all of Rooneys wages into their FFP calculations?

Would've thought so yeah- still looking at the regs myself as on annual leave- hopefully the right ones as I know they got updated in recent times- to see if there's any reference to this one way or the other.

Like I said though what with stadium sale, one season and a large amount of surplus players departing might leave them ok for it for one season- and I mean one season only. Dunno how long his contract might be for.

On a side note, it does seem to me that certain clubs get done certain favours by others. West Ham subsiding Huglll wages or so it seemed eg, this? Maybe it's just my perception and in some ways with our Chelsea dealings we can't complain too much but I do wonder if certain ex PL clubs get players etc on more favourable terms than most! Contact cancelled so he can go join Derby for no fee in Rooney's case.

Edited August 6, 2019 by Mr Popodopolous

[downendcity]

4 minutes ago, Carey 6 said:

I've also just seen that, so I take it Derby will have to factor in all of Rooneys wages into their FFP calculations?

Yep!

£80,000 x 52 = £4.16m

The annual wage is then multiplied by the  the Mel Morris ffp coefficient.

The Mel Morris ffp coefficient is currently valued at 0, so multiplying £4.16m x 0 = 0 for ffp purposes.

 

 

 

[Ian M]

On 06/08/2019 at 11:03, Mr Popodopolous said:

Daniel Storey's latest Tweet suggests he was conflating P&S and SCMP- all EFL FFP but both have differences.

Certain areas of Academy expenditure certainly sit outside FFP though. If staff wages are included then are we missing a trick by not setting up weekly 5minute sessions with our first team squad and listing them all as player coachs? 

[Mr Popodopolous]

Saw an interesting article on The Athletic- on FFP. Phil Hay the author- interesting to see Leeds view on some of the transactions of grounds etc that took place in the summer.

Quote

The Championship is where clubs and owners go to lose money. A chief executive who now works abroad once summed it up like this: “You’re going to make losses whether you want to or not. You just have to decide how much you’re going to lose.”

From time to time there are exceptions to the rule, like the nominal profit of £976,000 Leeds United turned in 2017. That would pay their current wage bill for less than a fortnight. And less again after tax.

England’s second division has long been a diverse field in which certain clubs overspend because they feel they have no choice and others overspend because they have the cash and the mood takes them.

What CEOs across the league noticed in this transfer window was a developing trend: that of a high proportion of teams heading for negative net spends, some by a very comfortable margin. Incoming fees have been vast: £15 million to Birmingham City for Che Adams, £20 million to Brentford for Neal Maupay, £20 million to Bristol City for Adam Webster. In a demonstration of the disparity with the Premier League, Brighton alone financed two of those signings (Maupay and Webster).

The mutual prudence of the clubs who pocketed those fees was not a coincidence. The Championship has been bound by Profit and Sustainability (PnS) rules for the past three years but in March, something happened. Birmingham City exceeded the losses permitted by the EFL and, on the guidance of an independent disciplinary commission, were deducted nine points.

“The Birmingham decision changed the world in this division,” Leeds chief executive Angus Kinnear tells The Athletic. “Everybody realised PnS had teeth.”

Birmingham’s breach of EFL limits, which allow a maximum loss of £39 million over a rolling three-year period, was public knowledge and widely discussed but no-one in the Championship was sure how the EFL would act. The end of the 2018-19 season marked the end of the first full PnS accounting window and Birmingham became something of a guinea pig: the only club officially in breach and the only club in harm’s way. Even the directors at St Andrew’s were in the dark about the likely consequences.

The lack of clarity was a frustration. “Every club wanted to be absolutely clear about the sanctions,” Kinnear says. “None of us were sure if there would be sporting sanctions or if the penalty would be financial. If it’s financial then a decision over whether to abide by PnS becomes an economic one, like in US sport if you breach the salary cap. If it’s a sporting sanction, like a points deduction, then that’s very different.”

Leeds made a big play of PnS – the EFL’s version of Financial Fair Play (FFP) – throughout the transfer window just gone. They concentrated heavily on ensuring compliance internally while trying to manage an external audience who questioned the numbers involved and, in some quarters, debated whether the club’s majority shareholder, Andrea Radrizzani, was merely being tight.

Radrizzani, a charismatic Italian who made a fortune through the sale of TV rights deals, is heavily invested in Leeds: £45 million for his original takeover, some £20 million to buy back Leeds’ Elland Road stadium from its private landlord two years ago and the person whom Kinnear calls whenever the club need additional funds.

A stake of around 13 per cent was sold by Radrizzani to the San Francisco 49ers last summer but the £11 million paid by the 49ers went back into the Elland Road accounts. Leeds are a perfect example of how life in the Championship works: the team with the biggest annual turnover in the league, losing more than £1 million a month.

In the first two years of the EFL’s PnS cycle — which began with the 2016-17 season — Leeds’ deficit stood at less than £4 million, a long way short of £39 million. But last year, as the wage bill inflated to more than £30 million, the yearly loss rose above £15 million despite a turnover of close to £50 million. (Leeds, commercially, have few serious rivals below the Premier League).

Certain costs are exempt from PnS calculations. Financial experts estimate that a category two academy, which Leeds have, removes around £1.2 million from the total annually, but United worried that another round of heavy losses this season would put them in breach. Even now, Kinnear says, their figures are extremely close to the limit.

The wage bill is where Leeds have stretched themselves most. According to Kinnear, it is two and a half times higher than it was when Radrizzani bought out Massimo Cellino in 2017, and not by accident.

“Over the past 10 years or so the club’s average finishing position in the Championship was around 12th and the wage bill when Andrea first came here was in line with that,” Kinnear says. “We’ve done a lot of analysis of this.

“There’s always the odd exception but, in general, a wage bill of £15 million or £16 million will get you a mid-table place. A wage bill of £25 million will get you into the play-offs. And over £30 million will get you promoted.”

Less than £10 million – the reality for a newly-promoted side like Charlton Athletic –will most likely bring about relegation.

“The reality when Andrea started was that players here weren’t being paid enough,” Kinnear says. “They were underpaid.” By acquiring goalkeeper Kiko Casilla from Real Madrid in January, United were committed to a wage of £35,000 a week.

When this transfer window opened, the club had three priorities beyond the new signings they were targeting: to retain their most important players and staff, including head coach Marcelo Bielsa; free the squad of fringe players who had no chance of playing and to cover their back against the EFL by selling a few who figured in the manager’s plans. Bielsa extended his contract in May and players unlikely to play under him became a hindrance when it came to complying with PnS — particularly in light of the threat of a points deduction. 

Most of the names who left were surplus. Caleb Ekuban took up an offer from Turkey, Yosuke Ideguchi went back to Japan and Tom Pearce joined Wigan Athletic. “In the past these were players who you might have kept to develop,” Kinnear says. “But with the way PnS is, it’s simple: you cannot afford to have them on your balance sheet. You cannot afford to have them doing nothing.”

Other sales were more high-profile and politically sensitive, the type over which supporters fret. Tottenham Hotspur paid £9.5 million for Jack Clarke, though loaned the winger back to Leeds immediately. Pontus Jansson joined Brentford for £5.5 million – a transfer driven as much by deteriorating relations between the Swede and Bielsa – and Anderlecht bid £6.5 million for Kemar Roofe days before the window closed. Leeds had allowed Roofe’s contract to run into its last 12 months and could not tempt him with the late offer of improved terms. In all, Leeds estimate that £27 million has been raised through outgoing deals.

At points they had scope to make far more. Kinnear says incoming offers which Leeds rejected totalled £35 million, the largest of which was made for Kalvin Phillips. The 23-year-old, the player whose development at Elland Road has been most stratospheric on Bielsa’s watch, was the subject of an approach by Aston Villa but Leeds were always adamant that Phillips would stay unless he asked to leave.

“I can’t think of another team in the league who’ve kept a £20 million player,” Kinnear says. “That was very important for us.”

Bielsa fell into the same category as Phillips: someone who was irreplaceable in the same shape or form and who was worth the biggest coaching salary United have ever paid out. Bids for Luke Ayling, Adam Forshaw and Pablo Hernandez, none of which were ever publicised, also failed.

“This is where I get a bit frustrated about the criticism of Andrea’s financial investment,” Kinnear says. “If he was only thinking from a financial point of view, he’d have sold them.”

Fulham have worked in a similar fashion since their relegation from the Premier League, despite the tranche of parachute money which came with it. Anthony Knockaert, Ivan Cavaleiro and Harry Arter are expensive loanees but Fulham raked in £25 million by selling Ryan Sessegnon to Spurs on deadline day. Like Leeds and Phillips, one of their biggest priorities appeared to be the retention of Aleksandar Mitrovic and Tom Cairney. Manager Scott Parker described that as “vitally important”.

Leeds’ signings came to six, five of them on loan and one – Helder Costa – on a temporary deal which will automatically convert into a permanent move next summer. He will cost Leeds £16 million over the course of his permanent four-year contract – one of the most expensive purchases in their history – but an initial loan kept the first amortised payment to Wolverhampton Wanderers off the books for another 12 months. Bielsa does not often throw his weight about with transfers but he was relentless in pressing Leeds to get Costa signed as the days before pre-season ticked down. Wolves’ willingness to help made it happen.

At that stage, Elland Road was still being circled by rumours of imminent investment from Qatar Sports Investments (QSI), the Middle Eastern muscle behind Paris Saint-Germain. Officials at Leeds doubt that the reports had substance, which is not to say QSI might not have plans for the future, but the impact of an immediate injection of cash was nonetheless moot.

PnS rules limit shareholder investment and the club were close to the red line. “The reality is that if someone had given us £40 million, we couldn’t really have been able to spend a penny of it,” Kinnear says. “I mean, we could have made the academy look nice or built a new stadium (infrastructure costs do not count towards PnS) but not (spend it) on players. We were already right at the limit.”

Leeds’ willingness to abide by PnS regulations hides a general feeling of contempt for them. The EFL’s structure has been plagued by suggestions of creative accounting and attempts by owners to circumnavigate the restrictions. Derby County are the subject of legal action from Middlesbrough after using the sale of Pride Park to owner Mel Morris to comply with EFL limits. Aston Villa and Sheffield Wednesday employed the same strategy, exploiting a loophole which the EFL is yet to close.

“We’ve no complaints about those clubs doing that,” Kinnear says. “Our complaint is that the rules are so porous so as to be pointless. We think the loopholes need to be closed up because the rules aren’t fit for purpose. The permitted loss is an arbitrary figure which can’t be properly enforced.”

There are other ways of sidestepping costs, too. Clubs in the Championship believe one team last season kept a prominent player registered as an academy footballer to avoid his wages contributing to PnS. Yet despite the problems, Kinnear thinks fewer than 50 per cent of clubs want to see PnS revised.

Birmingham’s nine-point penalty came late in the day last season, a matter of weeks before the campaign finished. Now that the EFL has established clear sanctions, Championship boards expect that similar penalties will be enforced at the start of a season, potentially wrecking it before it begins. The maximum deduction of 12 points is deliberately punitive and too severe for clubs to treat with disdain. But all the while, the failure of the EFL to convince the Premier League to automatically impose sanctions on promoted sides tempts owners to go big regardless, in the hope of escaping the EFL’s claws before the governing body can strike.

Kieran Maguire, a specialist in football finance at the University of Liverpool who runs the insightful Price of Football Twitter account, believes few clubs are well served by the system as it is. “You’re damned if you do and damned if you don’t,” Maguire says.

Leeds and Bielsa did not look damned at Bristol City last Sunday, where their football outshone every other performance in the Championship over the course of the season’s opening weekend. The club added Eddie Nketiah to their squad before the transfer deadline, talking Arsenal into loaning them a striker who numerous clubs were crawling over glass to sign. Even Nketiah, a 20-year-old with a tiny amount of senior football behind him, commands a loan fee and a salary which, when all is said and done, will leave precious little change from Leeds’ sale of Roofe to Anderlecht.

“The days of Championship clubs buying six or seven players for substantial fees is gone,” Kinnear says. “That is until the market resets itself or until PnS rules evolve, which I think they have to.”

Birmingham were bitten and the Championship is twice shy. For now, at least.

I think the Leeds situation is thanks in large part to their owner not sticking in the equity but a good article nonetheless. Interesting that Leeds one of the most compliant clubs, want reform.

Edited August 15, 2019 by Mr Popodopolous

[Davefevs]

6 hours ago, Mr Popodopolous said:

Saw an interesting article on The Athletic- on FFP. Phil Hay the author- interesting to see Leeds view on some of the transactions of grounds etc that took place in the summer.

I think the Leeds situation is thanks in large part to their owner not sticking in the equity but a good article nonetheless. Interesting that Leeds one of the most compliant clubs, want reform.

Thanks for posting!

Have you read my DM yet?

[Mr Popodopolous]

7 minutes ago, Davefevs said:

Thanks for posting!

Have you read my DM yet?

Will have a quick look now!

[OwlsonlineAdmin]

Genuine question Mr P,  have you seen Bristol City FCs accounts to Oct 18?

A P&L £120m overdrawn isn't very FFP friendly is it? 

The club has a 60m negative Balance Sheet, by rights you're a massive GC issue.

You can't sell the ground as it is outside the football club assets.... How can you be so pious? 

[chinapig]

7 hours ago, OwlsonlineAdmin said:

Genuine question Mr P,  have you seen Bristol City FCs accounts to Oct 18?

A P&L £120m overdrawn isn't very FFP friendly is it? 

The club has a 60m negative Balance Sheet, by rights you're a massive GC issue.

You can't sell the ground as it is outside the football club assets.... How can you be so pious? 

Mr P will no doubt give a comprehensive answer but you do realise the club was FFP compliant in the period you refer to I assume and therefore had no need to game the system? I would think that is the definition of FFP friendly.

Of course with the finances being bolstered by player sales of something approaching £60m over the last 2 years there isn't any need to play fast and loose with the finances.

Your use of the word overdrawn in relation to the P&L is a bit odd as the P&L is not a credit facility but again there are accounting experts on here who may clarify the point for you.

[WarksRobin]

https://www.thetimes.co.uk/article/efl-chair-debbie-jevans-i-wake-up-thinking-about-bury-and-bolton-we-absolutely-do-care-b0npj6psv

 

[Olé]

 

 

[chinapig]

9 minutes ago, Olé said:

 

 

Thanks for posting. Predictable silence from the EFL. In the wake of the Bolton and Bury situations you would think they would be concerned about more reckless financial management but they have proved themselves incompetent at every step.

And of course the football media cries crocodile tears over Bolton and Bury but shows no interest in other clubs risking their future.

[Mr Popodopolous]

I remember pointing out the differential in ground sale prices months ago. I am glad Kieran Maguire has re-emphasised, published and highlighted the fact.

One possible solutions

Set Madjeski Stadium as a benchmark- it appeared to be the first after all. Net book value was around £20m, sale price about £26.5m. 

By benchmarking in this instance I mean for FFP purposes as a % of the current NBV. Reading's was a (roughly) 32.5% profit. Set that specifically OR set in a 25-35% range- you have what you like on paper but as per related party sponsorship you simply set this bracket.

I'm sure there are others as well but EFL should've done this the moment Reading's transaction occurred.

Edited August 18, 2019 by Mr Popodopolous