The Championship FFP Thread (Merged)

[Mr Popodopolous]

I took a look at a few clubs earlier and it really must be subjective, niche- down to the individual ground.

Struggling to justify these valuations- ie the major ones, talking Aston Villa, Derby and Sheffield Wednesday when set against a variety of clubs who have had reasonably recent valuations.

Walkers Stadium for example actually didn't seem to rise in particular even after reaching the PL, winning it and playing in CL- that Aston Villa impairment is looking increasingly curious given that clubs change division often. Either it was overvalued in the first place, the Impairment was flawed or it's incredibly subjective.

It's debatable as to whether relegation or a significant change in on-field fortunes can be classed as a material change in circs- actually despite my FFP suspicions, I have sympathy with a view that it can but in accounting terms, it's possibly not so clear. 

FWIW, 2 possible comparisons- focusing on the Midlands clubs who have done this mainly.

Stoke- remember 11 seasons in the PL!

At Depreciated Replacement cost in March 2018- £41,600,000- if we include Plants and Machinery it'd be £42,500,000.

Comparison 2.

The aforementioned Leicester one!

In May 2014, £41,463,000 on an existing use basis. Included within it was £4,777,000 of land which would not and will not be Depreciated. This was off the back of a return to the PL and actually a 2nd promotion in 6 seasons.

£81.1m Pride Park, £60m Hillsborough and £56.7m Villa Park- come on??

I know actually that it isn't that simple but it just doesn't really stack up.

Looking a little further back at Leicester again.

In May 2009 after promotion back to the Championship had been confirmed it was valued at £41,463,000 on an existing use basis- yet though it had barely depreciated in 5 years- fair enough- it had barely shot back up either on promotion to PL.

May 2017, interim valuation- which appears to be inclusive of fixtures and fittings- and remember in 9 years they'd gone from relegation to third tier for first time in their history (haha Hollowhead) to promotion back to Championship, promotion back to PL, winning title and playing in CL. £45,808,000- this states that it is inclusive of fixtures and fittings but doesn't seem to have soared in value all that much considering!

Valuation in May 2017 of the ground was of course £45,808,000- net book value stated at £19,106,000.

Some takeaways:

1. Depreciated Replacement Cost appears not to fluctuate wildly over the years.
2. Promotion and relegation don't seem to see wild swings in value.
3. There's not an awful lot of difference between the existing use basis and depreciated replacement cost one, in terms of cash it seems, or % wise.
4. Net book value definitely diverges when set against "real" value.

Still, more questions than answers for the clubs under investigation IMO.

Based on 2014 revaluation at Depreciated Replacement Cost, disregarding Depreciation post 2014 and taking all of the additions at cost- ie £500,000 makes it £500,000 more and factoring in a Revaluation Reserve then £30m or so for Hillsborough seems about right... £32m Hillsborough also seems sensible enough as seen online.

Pride Park and Villa Park appear to be harder to decipher.

Edited November 11, 2019 by Mr Popodopolous

[Mr Popodopolous]

Elland Road sold for £20m in 2017 to owner- but not to Leeds, he brought it back though.

Bramall Lane and training ground total transaction to be £50m- combined for the pair of them. One report says it includes the academy also!

Quote

It has already been ruled that Prince Abdullah will buy McCabe’s shares in the club for £5m. He then has until next summer to purchase various other properties from his former co-owner for £50m. This includes the stadium, training ground and academy.

Quote

 

McCabe intends to appeal Mr Justice Fancourt’s decision that the Saudi prince is entitled to buy McCabe’s 50 per cent share of the Premier League club for £5million, plus fair market value for the club’s assets owned by McCabe.

The price, for the Bramall Lane stadium and Shirecliffe training base amongst others, could be around the £50m mark.

 

Edited November 11, 2019 by Mr Popodopolous

[Mr Popodopolous]

It's not really anything that's new as such but possibly a bit of a new angle.

Already made reference to Fair Value Adjustment, whether this takes place on Acquisition- been researching it periodically.

Should we read anything into the fact that on acquisition for Sevco 5112 Limited, Mel Morris didn't see fit to adjust the Tangible Fixed Assets to fair value- ie Vendors' Book Value was listed as the same as equal to "Fair value to the group"- £0 in adjustments, up or down?

Is this a bit of a red herring @Coppello @martnewts or something that can be done at convenience for a new owner- optional- or is it in fact an indicator that Book Value broadly in line with Fair value?

As we can see, there are no adjustments anywhere- but specifically to Pride Park, notably to Tangible Fixed Assets. August 2015 was when this occurred.

Quote

 

26 Acquisitions and disposals

     Acquisitions                                            Vendors' Book Value £000              Fair value adjustments £000      Fair value to the group £000

     Assets and liabilities acquired

•      Intangible fixed assets                     16,885                                                  -                                                              16,855
•      Tangible fixed assets                        55,601                                                 -                                                               55,601
•      Stocks                                                     -                                                         -                                                                    -
•      Debtors                                                 2,800                                                  -                                                                  2,800
•      Cash at bank                                            353                                                 -                                                                     353
•     Other creditors and provisions         (42,366)                                              -                                                                (42,366)

 

Edited November 13, 2019 by Mr Popodopolous

[Mr Popodopolous]

Reading the Derby forum briefly, this post is somewhat out of kilter. Bolded bits I'll reply to.

Quote

I think at one point he spoke of the inability of a football club to fund the necessary changes needed to use the ground for non-football uses - It was on that first Talksport interview I think

Thought this was permissible under FFP- infrastructure no?

Quote

Essentially if the club were to put money into making significant ground improvements that would count against them in FFP terms - However if he buys the ground then the new company can spend whatever it wants on stadium improvements/changes etc without it being on the books for Derby County FC - It allows him to spend his own money turning the ground into a revenue generator - However, you're correct that revenue wouldn't be fed back into the club... Yet...

As above. It gets deducted from expenditure as it's deemed to be good investment I think.

Quote

I suspect that the idea would be to sell the ground back to the club at a future date at which point the renovations would be complete and Pride Park would generate money for the club - However I wouldn't imagine the club could afford that until we're solidly in the Premier League and getting the TV payments in

The sale price would be very interesting, if all of this work enhances its value significantly!

Payment terms and speed?

I suppose the argument I saw elsewhere on the thread, that it's the Premier events venue in Derby could have a bit of merit as to their uplift- and unlike Hillsborough certainly it has the facilities for concerts etc like a lot of modern and new built grounds- unsure about Villa Park and its facilities for non matchday revenue generation. I still struggle with £81.1m and a profit of nearly £40m though!

Edited November 19, 2019 by Mr Popodopolous

[Vincent Vega]

On 07/11/2019 at 16:06, elhombrecito said:

This thread makes my head hurt 

You're not alone. Interesting stuff though.

[Mr Popodopolous]

On 17/05/2019 at 19:34, View from the Dolman said:

So looking at the Derby County stadium ownership... The freehold of DY342736 was transferred to GELLAW NEWCO 202 LIMITED (registered 19th June 2018) and registered on 30th July 2018. GELLAW NEWCO 202 LIMITED was incorporated with GELLAW NEWCO 201 LIMITED (registered  18th June 2018) holding the only share in the company. GELLAW NEWCO 201 appointed its liquidators 10 days after its incorporation in a members voluntary liquidation on 28th June 2018.

If it looks like a duck, quacks like a duck...

To return to this one, possibly being a bit dense but what's this mean? @29AR mentioned back-to-back and insta-collapse deal.

As in, what tangible difference does it make if GELLAW NEWCO 204 LIMITED now has significant control over it- whereas at time of purchase it was GELLAW NEWCO 201 LIMITED- this of course being the control over the company who purchased Pride Park, ie GELLAW NEWCO 202 LIMITED.

Sheffield Wednesday might have done similar incidentally. Put in less technical terms than you did but anyway..

SHEFFIELD 3 LIMITED purchased Hillsborough on 28th June 2098. Controlling Party was SHEFFIELD 4 LIMITED and this was notified on 21st June 2019. Control of SHEFFIELD 3 LIMITED by SHEFFIELD 4 LIMITED seemingly ceased on 28th June 2019, and there was on the same day a special resolution to wind up SHEFFIELD 4 LIMITED. Liquidators appointed on 28th June 2018 according to the below. Meanwhile, the new owner of SHEFFIELD 3 LIMITED was SHEFFIELD 5 LIMITED, said notification was 28th June 2019.

https://www.thegazette.co.uk/notice/3321692

Interesting/useful summary elsewhere.

Quote

1. On the 20/6/2019 Dejphon Chansiri registers the following companies, with a registered address of Hillsborough, Sheffield 4 Ltd, one £1 share and 1 director, himself, and also controls the company. The company is listed as a “Non Trading Company”. Also he reduced to current accounting period to 31/07/2019
2. 21/06/ 2019 He now registers 2 companies at Hilsborough, Sheffield 2 Ltd and Sheffield 3 Ltd, Sheffield 2 Ltd is identical to Sheffield 4 Ltd, Sheffield 3 Ltd is slightly different, if has 1000 £1 shares rather than 1 and control of the company is Sheffield 4 Ltd not himself personally, as with all the others, it is Non Trading..
3. 24/06/2019 he now forms Sheffield 5 Ltd identical to Sheffield 2 and 4
4. 28/06/2019 He holds a shareholders meeting of Sheffield 4 Ltd and votes to have the company wind up! He appoint joint liquidators, the same company as the Sheffield Wednesday auditors.
5. 08/07/2019 He increase the shares in Sheffield 2,4 and 5 to 1,000 (yes including 4 which is being liquidated) He also changes control of Sheffield 3 from Sheffield 4 to Sheffield 5.
6. 17/07/2019 Sheffield 4 has now it has changed its registered office to the offices of it auditor (but not the Sheffield branch but the one in Cleckheaton)
7. 18/07/2019 The liquidators release a statement saying the company is solvent! The accounts show assets of £1,999 the only liability is the £1,000 of shares, therefore Chansiri gets his £1,000 back, I have got no idea what happens to the £999 since there should be a loss. Also how has a non-trading company made a profit of £999? It is stated that there is no liquidation charges as these are being paid by a third party

 

Edited November 29, 2019 by Mr Popodopolous

[Mr Popodopolous]

https://www.stokesentinel.co.uk/sport/football/transfer-news/stoke-city-financial-fair-play-3596135

Saw this on Kieran Maguire's Twitter- about to have a look.

This line looks interesting...

Quote

“We are doing everything we can to make them as favourable to us as possible.

It's the Stoke CEO Tony Scholes discussing the regulations and the clubs perspective.

I hope the EFL and other clubs take note of this. Hope they're all over it in fact.

Not the article of course, but to be on alert for any dirty tricks by Stoke.

Incidentally, for what it's worth, Stoke fans don't seem altogether impressed- small sample size granted- with the stance by Scholes and the club. Different to Aston Villa, Sheffield Wednesday and to an extent Derby fans at this stage?

Edited December 2, 2019 by Mr Popodopolous

[downendcity]

49 minutes ago, Mr Popodopolous said:

https://www.stokesentinel.co.uk/sport/football/transfer-news/stoke-city-financial-fair-play-3596135

Saw this on Kieran Maguire's Twitter- about to have a look.

This line looks interesting...

It's the Stoke CEO Tony Scholes discussing the regulations and the clubs perspective.

I hope the EFL and other clubs take note of this. Hope they're all over it in fact.

Not the article of course, but to be on alert for any dirty tricks by Stoke.

Incidentally, for what it's worth, Stoke fans don't seem altogether impressed- small sample size granted- with the stance by Scholes and the club. Different to Aston Villa, Sheffield Wednesday and to an extent Derby fans at this stage?

Chief executive Scholes told Radio Stoke today: “We’re fortunate to have owners here who are not just willing and able but extremely keen and enthusiastic and want to do everything they possibly can to get this club back into the Premier League, where we spent 10 good years - or maybe not all 10 were fantastic.

“They will do everything they can but we are constrained by the rules that are in place. We don’t like the rules, we think they’re wrong and they’re ill-conceived. We think they should be changed - but they’re in place.

“We are doing everything we can to make them as favourable to us as possible.

“It’s hard, of course, but all I’ll say is that the owners will do all they can in terms of providing the funds and everyone working at the club will do everything we can within the constraints.”

There are quite few clubs ( including us) that are also fortunate to have owners not just willing and able, but extremely keen and enthusiastic and want to do everything they possibly can to get this club back into the Premier League - or in our case into the premier league for the first time. However these other clubs accept the rules and organise their clubs' affairs in order to stay within the limits imposed, even if they would prefer if those rules were not there.

Why is it so hard from relegated premier league clubs to come to terms with the rules of the championship? Like Villa previously, they see the parachute payments, not as a financial buffer that enables them to make the financial adjustments needed to fit within the reduced income streams the championship provides, thereby fitting within the EFL ffp limits, but as a war chest giving them a huge advantage over most other championship clubs in regaining their premier league status. Unfortunately, like Vila before them, they are realising that championship promotion is a tough ask and are now sweating that not only is promotion moving further away from them as the end of parachute payments gets ever closer, but that relegation is a real threat.

Hopefully their fans are now realising that after Birmingham, and with Wednesday in the firing line and Derby possibly being lined up next, getting around ffp by dodgy dealing will likely end up with the club being punished to a degree, that in Stoke's case, could pose a real threat t their championship status.

[Davefevs]

Chansiri also charged with misconduct.....apologies if this is old news!

https://www.telegraph.co.uk/football/2019/12/02/exclusive-sheffield-wednesday-chairman-could-banned-football/

Dejphon Chansiri, the Sheffield Wednesday owner, is facing further scrutiny after being charged with misconduct by the English Football League.

The Daily Telegraph can reveal that Chansiri, finance director John Redgate and Wednesday’s former chief executive, Katrien Meire, have all been charged and could be banned from football if found guilty by an independent panel.

The charges by the EFL are understood to relate to the controversial £60 million sale of Hillsborough to Chansiri.

Wednesday insist they will “vigorously defend” the sanctions, which could include a heavy points deduction, but Chansiri, the Thai businessman, plus Redgate and Meire are also under the microscope.

The charges the trio face are believed to have been relayed to the club on Nov 14, the same day the EFL announced its decision to charge Wednesday with misconduct.

Redgate stepped down from the club’s board of directors last year but remains the finance director, while Meire, who held a similar role at Charlton Athletic, left Wednesday in February.

Chansiri has been Wednesday’s owner since 2015 and infuriated many rival Championship clubs when he agreed the sale of Hillsborough to help record a pre-tax profit of £2.5 million in the 2017-18 accounts.

Land Registry documents revealed the stadium’s sale appeared to be completed the following year and the EFL subsequently charged the club with misconduct following a lengthy investigation.

It is alleged that Chansiri sold the stadium to avoid breaking the EFL’s new profitability and sustainability rules. Wednesday are thought to be ready to contest the charges.

Birmingham City became the first club to be punished for breaching spending rules when they were docked nine points towards the end of last season.

The new rules dictate that Championship clubs are permitted to lose a maximum of £39 million over three years.

Wednesday declined to comment on the charges. The club are ninth in the table, two points adrift of the play-off positions.

[Mr Popodopolous]

Wow, that's huge! Thanks @Davefevs

Him being charged with misconduct but he (along with Meire and Redgate) could be banned if guilty, am I reading it right- eff me!

I have a feeling that it wouldn't ie this ban option have been at all likely had Shaun Harvey still been running the EFL but I could be way out! Dunno what others think- mind you I think against all sense etc he would have let Steve Dale's Bury have had a crack at starting the season too! He really ran a very loose ship...

Wow though, that's quite the escalation!

[Davefevs]

As an outsider looking in....no way the EFL go down this route if SW aren’t up shit-creek.

Points deduction, embargo, might need fire-sale in window???

Apologies to Owls fans looking at this, it’s you guys that suffer....and although a very different era and circumstances we had our own problems in 1980s.

[bcfc01]

Could be a big points deduction.

Birmingham held their hands up and were quite transparent IIRC (stand to be corrected) and got 9 points in the end for a simple breach of going over the 39m in a three year period.

Sheffield appear to have tried to hide their misdeeds with some "creative" accounting and are now protesting innocence.

Not sure how the deductions work but. if the charges stand, they must be heading into a double figure points deduction to make it a meaningful punishment ?

Luton got a 30 point deduction albeit in different circumstances...

[Kodjias Wrist]

2 minutes ago, bcfc01 said:

Could be a big points deduction.

Birmingham held their hands up and were quite transparent IIRC (stand to be corrected) and got 9 points in the end for a simple breach of going over the 39m in a three year period.

Sheffield appear to have tried to hide their misdeeds with some "creative" accounting and are now protesting innocence.

Not sure how the deductions work but. if the charges stand, they must be heading into a double figure points deduction to make it a meaningful punishment ?

Luton got a 30 point deduction albeit in different circumstances...

Someone posted recently how deductions are calculated. Feel sorry for their fans who just pay their money to watch their football team and behind the scenes all sorts of misdeeds are occurring.

[Davefevs]

4 minutes ago, bcfc01 said:

Could be a big points deduction.

Birmingham held their hands up and were quite transparent IIRC (stand to be corrected) and got 9 points in the end for a simple breach of going over the 39m in a three year period.

Sheffield appear to have tried to hide their misdeeds with some "creative" accounting and are now protesting innocence.

Not sure how the deductions work but. if the charges stand, they must be heading into a double figure points deduction to make it a meaningful punishment ?

Luton got a 30 point deduction albeit in different circumstances...

If they are guilty of not just ffp but also fudging it, I think we can expect to see something in the region of 15-21 points

[Mr Popodopolous]

My early and rough calculations are as follows- using the template estimated by Kieran Maguire and I think Peter Loehmann, and loss limits in the EFL judgement.

Birmingham- 7 points for the overspend. 3 for a deliberate breach and one back for cooperating fairly early, though some wonder about that. Anyway 7 + 3 -1=9.

Sheffield Wednesday- wrong period let's assume that's proven.

12 points for the overspend alone!! Were there 2 charges laid at them or 1? Anyway each could be construed as an aggravated breach- so that could be 3 + 3 again- we're on 18 now! Then the point back, well they abided by a soft embargo in Summer 2018 so I suppose that you could make a case for 1 off, but then again if they contest it strongly now, should they get one back?

Somewhere between 11-18 IMO, quite possibly more! Perhaps 14-18 a better range there.

Edited December 3, 2019 by Mr Popodopolous

[Davefevs]

Whatever happens, it must be sorted by 31st Dec.  Teams in the Championship must know the fate of SW before the Window opens, it could influence a team’s recruitment / trading plans.  

[Mr Popodopolous]

Worth revisiting what Shaun Harvey has said over the last 6-18 months about FFP and owners...

Will highlight what I consider to be a few pertinent aspects, that may help to explain how it reached this point with all of the sloppiness in between!

On QPR, after the settlement/verdict was finally reached- late July 2018!

Quote

EFL Chief Executive, Shaun Harvey said: “The outcome vindicates the approach of the EFL Board in defending the challenge to our Rules.

“In agreeing to the settlement above, the Board was conscious that the financial burden placed on the Club had to be manageable, so as not to put its future in doubt when considering that after this season the Club will no longer benefit from the promotion that was the catalyst for the dispute in the first place.

“QPR remain a valued member of the EFL and a great community asset. We look forward to continuing our productive working relationship with them for many seasons to come and are delighted to bring this long running dispute to a conclusion.”

On Birmingham, 1st August 2018:

Quote

Harvey said: “The club are fully aware of the situation. We are working with them trying to resolve how they are able to register players for the new season. From my perspective we have been clear and we are hoping to help the club through this. Long before 9 August and deadline day I imagine the position will be resolved and the relevant club will know what it can and can’t do.

“The EFL is not about restricting activity. We want clubs to be strong and we want them to be vibrant. Clubs not being able to sign players they would like to sign is not good for the EFL.”

Asked if clubs pay enough notice to the rules, Harvey added: “I certainly think QPR have taken it seriously enough and Leicester and Bournemouth – whatever your view is on the settlements reached – it is money they would much rather have done something else with than pay it to the EFL, so there is a seriousness. The big challenge we have got in the next six months is to communicate really clearly what can and cannot take place by clubs that breach these rules.”

The second paragraph is pretty pivotal IMO- makes me wonder ever more about him and his actions last summer "The EFL is not about restricting activitiy." Reluctance? "We want clubs to be strong and we want them to be vibrant. Clubs not being able to sign players they would like to sign is not good for the EFL". A very, at best, laissez faire approach here!!

I wonder if things could have shifted on the bolded bit of the last paragraph after the TV deal debacle thatr caused issues last November- overseen, surprise surprise on HIS watch! 

This article is pretty interesting.

https://www.bbc.co.uk/sport/football/48412747

Quote

Football needs "to look at how it treats the owners at some of its clubs" as without them, fans "wouldn't have a club", says departing English Football League chief executive Shaun Harvey.

Harvey said costs across the 72 EFL sides were going up but owners were being "roughed [up] and ridiculed in certain quarters".

"Championship losses are getting bigger," he said.

"We have a business model that relies, just about, on owner funding."

Speaking to BBC Radio 5 Live's Sportsweek, he added: "Those owners are either benevolent, looking after their local clubs who they have supported for many years, or are investing to try to achieve the big prize that Aston Villa and Derby are going to play for this time."

I mean, pretty disgraceful but pretty interesting as to where his priorities may have laid from 2016 onwards? Yet on a technical level...may well be right, deficit to shortfall vs income.

These snippets reinforce his perspective.

Quote

"So, we are reliant on owners and football needs to look at how it treats the owners at some of its clubs.

"Fans not happy about the investment that is going into their club. Trust me, without them [the owners], they wouldn't have a club."

Quote

"After six years [in the role], the league does need to have a look at itself and decide how it's going to go forward," said Harvey.

"I think the big challenge is going to be around player wage inflation.

"How do you manage that in such a way that it doesn't take away from the quality of the product that we all want to contribute to?"

@DerbyFan did make reference to the quality of product aspect I believe, at some point.

I am sure there were more and I'll add to these as and when I find them...

Have to wonder the nature of the discussions that took place summer 2018, or 2018/19 regarding these issues, between the EFL/Harvey and clubs...all behind closed doors of course.

This is from his 1st August 2018 quotes too, but curiously not on the BBC article from the time,

Quote

“There is no doubt in the Championship in particular a lot of the clubs survive purely on the basis of owner funding. The vast majority are all making a loss.

“The level of the loss changes. What we have to be really careful about is making sure the owners of the clubs keep funding it.”

So once again, it really, really makes you wonder about that Summer of 2018! 

Edited December 3, 2019 by Mr Popodopolous

[Mr Popodopolous]

It's not City related, it's not even Championship related.

Think the PL is the land of guaranteed profits? Maybe not...

The club maybe a bit of a surprise!

That is the club results- the parent company ones were worse than the club last season- more income but higher running costs too. I assumed they would make a loss tbh.

Edited December 9, 2019 by Mr Popodopolous

[downendcity]

8 minutes ago, Mr Popodopolous said:

It's not City related, it's not even Championship related.

Think the PL is the land of guaranteed profits? Maybe not...

The club maybe a bit of a surprise!

That is the club results- the parent company ones were worse than the club last season- more income but higher running costs too. I assumed they would make a loss tbh.

He thinks their wages to income ratio at 60% is a bit high? Many championship clubs are at or above 100%!

I think Ive just read somewhere ( it might have been on another thread) that Brighton made a loss of £21m last year. If so, that tends to debunk the notion that getting to the premier league sets the club up financial.

[Mr Popodopolous]

19 minutes ago, downendcity said:

He thinks their wages to income ratio at 60% is a bit high? Many championship clubs are at or above 100%!

I think Ive just read somewhere ( it might have been on another thread) that Brighton made a loss of £21m last year. If so, that tends to debunk the notion that getting to the premier league sets the club up financial.

Yeah- don't know how good they have it in that respect...Championship is a mad, mad League financially though!

Agreed- I think we would not make losses tbh but can't be said for all clubs- that TV cash etc can get eaten up very quickly. Now they have abolished STCC, the PL that is, maybe those losses and wages will start to rise even quicker.

Edited December 9, 2019 by Mr Popodopolous

[Drew Peacock]

STCC?

[Mr Popodopolous]

Think it was linked to rises in wage %, an additional layer to the standard FFP loss limits. This isn't quite in line with 2016/17.

http://www.financialfairplay.co.uk/latest-news/premier-league-update-their-ffp-rules

Now no longer.

https://www.fourfourtwo.com/features/new-financial-fair-play-rule-change-will-completely-change-how-next-seasons-premier-league

Think £81m the most recent baseline level, before it was scrapped.

Edited December 9, 2019 by Mr Popodopolous

[Port Said Red]

BBC investigations into Championship finances being discussed on 5Live breakfast right now.

[Mr Popodopolous]

I think Stoke could be the next big fail FFP wise.

Fact their owners or more like their Chief Executive spoke out about it is an indicator.

Bear in mind that they lost £30m or so in their relegation season- ie while they were still in the PL. They usually release accounts quite early, but nothing to date yet, another indicator? Burying bad news?

Edited December 12, 2019 by Mr Popodopolous

[Davefevs]

35 minutes ago, Mr Popodopolous said:

I think Stoke could be the next big fail FFP wise.

Fact their owners or more like their Chief Executive spoke out about it is an indicator.

Bear in mind that they lost £30m or so in their relegation season- ie while they were still in the PL. They usually release accounts quite early, but nothing to date yet, another indicator? Burying bad news?

Normally a relegated club don’t lose money in their relegation season, so have a big buffer when they come down - and that’s without PPs!

So if Stoke lost £30m in 17/18, then they have £31m to play with last season and this.  £35m + £13m + £13m

They’ve really hamstring themselves with that loss during relegation season.

[Mr Popodopolous]

5 minutes ago, Davefevs said:

Normally a relegated club don’t lose money in their relegation season, so have a big buffer when they come down - and that’s without PPs!

So if Stoke lost £30m in 17/18, then they have £31m to play with last season and this.  £35m + £13m + £13m

They’ve really hamstring themselves with that loss during relegation season.

The only caveat is that a lot of that £30m or so loss was writing down/impairment of of player registrations- counts towards FFP of course, but may not be repeated.

Given how they spent last season though, I'm wondering if this season was promotion or bust!

Edited December 12, 2019 by Mr Popodopolous

[Mr Popodopolous]

https://www.skysports.com/football/news/11095/11884799/efl-chairman-rick-parry-opens-door-to-salary-cap-amid-championship-sustainability-concerns

Interesting.

I remember this first being mooted to an extent in the summer but the EFL was under the 'leadership' of Harvey at that time/rudderless- or possibly the latter is less damaging than the former?

This can't just be introduced next season IMO- you'd need to end the current 3 year period for a start, though with the rolling period in a sense you're always in Year 3- it has to be fair and right to clubs such as, but by no means exclusively, us who have sold, held off and shown restraint at varied times in the market- so it has to be phased in over time for that reason IMO.

Edited December 13, 2019 by Mr Popodopolous

[Mr Popodopolous]

Here is a club who could be heading for it.

Stoke's accounts apparently sent to Companies House today. Once they're up, I'll post some of the key figures.

They won't have failed it to June 2019 in that 3 year period but the 3 seasons to June 2020, this could be very interesing.

[Davefevs]

1 minute ago, Mr Popodopolous said:

Here is a club who could be heading for it.

Stoke's accounts apparently sent to Companies House today. Once they're up, I'll post some of the key figures.

They won't have failed it to June 2019 in that 3 year period but the 3 seasons to June 2020, this could be very interesing.

Their projected accounts for 19/20 will be interesting indeed!  Might just scrape in, but be massively hamstrung next season. 

[Davefevs]

@Mr Popodopolous

https://www.telegraph.co.uk/football/2019/12/17/stoke-city-boss-michael-oneill-ready-offload-clubs-big-earners/?WT.mc_id=tmg_share_tw

[Mr Popodopolous]

Thanks @Davefevs will read it a bit later.

28 minutes ago, billywedlock said:

The relegation clauses need to be far more aggressive in terms of wage loss. The reductions are clearly nowhere near severe enough. Even better get rid of parachute payments, and spread amongst all of the EFL teams the same money. Players lose 75% of wages on relegation (just as they expect them increase on promotion). The parachute payments are creating the problem not solving it. 

They're usually about 1/3 to 50% aren't they? In that range anyway, I'm unsure how realistic anything much above that range is.

Nonetheless, the system needs reform and no mistake. The precise course of action, it's harder to say IMO.

[Davefevs]

3 minutes ago, Mr Popodopolous said:

Thanks @Davefevs will read it a bit later.

They're usually about 1/3 to 50% aren't they? In that range anyway, I'm unsure how realistic anything much above that range is.

Nonetheless, the system needs reform and no mistake. The precise course of action, it's harder to say IMO.

@Coppello is the man for this.  I used to think it was 40%, but learned that they often sign two contracts, one for each division.

[Mr Popodopolous]

1 hour ago, Davefevs said:

@Mr Popodopolous

https://www.telegraph.co.uk/football/2019/12/17/stoke-city-boss-michael-oneill-ready-offload-clubs-big-earners/?WT.mc_id=tmg_share_tw

Just read the article and will doubtless read it again.

One thing for sure, with Butland and Allen- and I'd argue that Martins Indi and at times though younger Etebo, well they certainly should be much higher! Squad they've got, must be a terrible culture there.

Appointing Rowett in summer 2018 set a tone I'm think...a manager with a similar ethos to say a Bielsa, or a Jokanovic- or though he did it and is doing it with many less established players, a Wilder.

In short, appointment of a more positive and attack minded manager, who is used to dominant play, that would've raised their level  suspect.

Ironically, Rowett maybe would've been better in January 2018, relegation scrap, more counterattacking then rebuild from there.

[Mr Popodopolous]

Will get onto the parachute debate in full later, but without you're talking a 75-85% reduction in wage bill in one year? Ain't happening, in all reality. IMO anyway.

I'd have to look at figures in more depth but given clubs in Championship earn from TV and solidarity payments the % that PL clubs earn from TV, the 75% figure sounds a bit on the light side!

Edited December 18, 2019 by Mr Popodopolous

[Mr Popodopolous]

As for Stoke.

They lost about £15.4m. However that was inclusive of an £18m or so profit on transfers. Without it their true loss would've been £33m or thereabouts. Would have to look in more depth though. 

Their media revenue well basically TV isn't it, fell by £49m, that's obviously factoring in parachute payments, about 49% fall basically.

Wage bill fell by around £38.1m or about 40%, not bad going. They clearly do have some kind of relegation related wage clauses. Possibly quite reasonable ones at that?

One other interesting note. The Brittannia Stadium was impaired, valuation wise. By about £600-700,000. Makes Aston Villa's size and margin of their impairment in their relegation season look very interesting indeed.

Edited December 18, 2019 by Mr Popodopolous

[Mr Popodopolous]

One more note- and I'm certainly interested in this bit. We've discussed it at length @Davefevs. 

Wonder if the fact Stoke are making plans now is an indicator that the EFL are exploring how best to implement the Projected Accounts with potential for in-season penalties, as was originally meant to be the case but never materialised.

The Telegraph article did say they had discussions with Rick Parry. Maybe he intends to see if it's properly feasible to enforce.

Perhaps him, Jevans plus most importantly the compliant majority of clubs saw Aston Villa going up as they did being the final straw and want to try and ensure that this kind of thing won't happen again. 

God knows what Shaun Harvey was doing in his final year especially, in charge!

[Mr Popodopolous]

Looking at Stoke's accounts, I'm struggling to see where their "allowed" losses are included just yet.

I know FFP vs basic accounting figures are only known by the clubs and the League, but given that a lot of their property/infrastructure is owned or seems to be owned by a company named Stoke City Property Ltd, I wonder how much of their accounting losses can truly be written off for FFP.

Stoke City Holdings might provide some answers but seems it only gives the consolidated accounts this year, even though they're basically the same as Stoke City FC ones. Probably Stoke City FC + Stoke City Property.

Edited December 18, 2019 by Mr Popodopolous

[Coppello]

On 17/12/2019 at 23:32, Davefevs said:

@Coppello is the man for this.  I used to think it was 40%, but learned that they often sign two contracts, one for each division.

Sorry, I've only just responded to this. It's been a busy week and OTIB isn't the best place to be after two successive losses! 

It tends to vary by player/club but 40% is about correct. I haven't seen two contracts signed as it's usually included as a clause within their contract but I've only worked in the Premier League. 

[Mr Popodopolous]

I saw something interesting, when re-reading some pieces by Mike Thornton, will post links later.

One thing that perhaps might have/had been overlooked in FFP...

Quote

1.1.4 Cash Losses means aggregate Adjusted Earnings Before Tax after:

(a) write back of:

(i) amortisation and/or impairment of Players’ registrations; and

(ii) profit or loss on the transfer of Players’ registrations; and

(b) inclusion of net cash flow in respect of transfers of Players’ registrations.

That last bit seems a new one! OTOH, I'm not altogether sure how many clubs it'll benefit- could well tighten the pass/fail margin if anything! Seems a bit odd possibly, to include both ii) and b)?

Unless cash flow is included in the overall headline figures?

Edited December 23, 2019 by Mr Popodopolous

[Mr Popodopolous]

Saw this earlier.

http://dunlopheywood.com/wigan-athletic-0-valuation-office-1/

I wonder how this will impact upon the expected rent for certain sale and leaseback clubs- even if they don't pay it in reality, might it become a factor for FFP purposes?

I also wonder, whether this should lead to some fresh analysis of the Aston Villa £44.8m I think it was, impairment of Villa Park in relegation season- as part of the Investigation into their sale and leaseback at the back end of 2018/19.

Would seem that it was ruled that Relegation was NOT deemed a "Material Change of Circumstances" when it came to determination of rateable value. Precedent?

If the rateable value therefore did not swing by a large %, might that not go for an Impairment- like with Villa Park?

@Davefevs @downendcity @Coppello  you might all find this interesting?

Edited December 23, 2019 by Mr Popodopolous

[Mr Popodopolous]

Couple of notes- Birmingham City and Blackburn Rovers accounts are due- but curiously they run to March, for the full picture it might need the club accounts but Venkys London Limited appears to be the parent/holding/group company.

Doesn't make for pretty reading either way for Blackburn- courtesy of, and credit to Kieran Maguire!

Birmingham, interestingly have not yet released their Accounts. Whether it's delayed like Sheffield Wednesday, or whether it's just a few days late due to the Christmas Period we shall see- a few days isn't a huge difference.

What will be interesting to see though- and they as a club and the Birmingham Finance, Ownership etc guy named Al Majir also seems to think this, but they think FFP isn't and won't be a problem, will be three things:

• a) Whether there is a change to Reporting Period.
• b) Whether their mooted stadium sale appears in their accounts to  30th June 2019.
• c) Whether the sale of Che Adams does.
• d) Whether there are any material and significant differences to their Hong Kong released Birmingham accounts to 30th June 2019!

I hope the EFL are keeping a close eye here. Because I'd suggest that d) Would be a cause for closer scrutiny! That said, Kieran Maguire said a while ago that Hong Kong Accounting Standards don't include RPTs such as e.g. selling St Andrews to Birmingham City Stadium Ltd...

It's also interesting to see that they never, ever miss their HK Listing deadlines. 3 months after for annual accounts, 2 months after for half-year- I'm assuming some of the regulations over there for Accounting are really quite stringent- any ideas @Coppello  or @Davefevs? Certainly if what Maguire said was right about Stadium sale not appearing in HK accounts was right here, then that does sound quite exacting, standards wise. Probably also quite tough in terms of listings for Hong Kong Stock Exchange too- like I've noted, they've never dared miss a deadline for HKSE.

I'd be surprised if Blackburn fail, simply because they failed under the old system. so they know first hand that the consequences of it aren't good- they got a lengthy embargo last time out aqnd that was under the old, softer regime!

Was only 4 years ago they failed under the old regs, same owners- that's the only reason I'm assuming they won't fall foul and will sell big if necessary.

They'll likely sail close to the wind but quite possibly they will need to sell in January...assumed their losses would fall a bit from League One though, not increase!!

Maybe worth testing Blackburn's mettle a bit in January- they clearly have some decent players, some low ball bids for any that may either improve the squad, team or that can be sold on at a profit?

EDIT: Blackburn have a Category One academy apparently. That costs and as with academy etc expenditure,is excluded from FFP- like I say they can't go splashing the cash but I'm unsure that they'll breach....yet.

Also worth noting that Johnson, Holtby and Downing arrived on free transfers- that of course means that if any are sold, pure profit.

Edited December 31, 2019 by Mr Popodopolous

[Mr Popodopolous]

Birmingham though is possibly of more interest right now- not least as they were the first team to fail FFP under the current system!

Worth reiterating what those 2018/19 accounts as submitted in HK looked like...helpfully they were segmented unlike 2017/18, separating the Football Club from the Parent/Holding/Group Company's other activities. It's in HK$ BUT exchange rate would I believe be apt as per 30th June 2019. Pick an average I guess?

As for their neighbours...the PL should be really tight on them! The ground sale is questionable and as such, there should be a big asterix about their January spending

https://www.bbc.co.uk/sport/football/50894893

Saw this on Twitter- @Davefevs @downendcity and @Coppello will surely be interested! Some others too, @29AR @martnewts @chinapig and @Drew Peacock

Quote

Relegation would be a disaster. The financial ramifications of an enormous wage bill back into the Championship and Villa are certain to face scrutiny from the EFL over whether spending under former owner Xia broke their Profitability & Sustainability rules. [john percy] #avfc

Will post a bit more on Birmingham later in the week probably. I don't have such a major issue with them atm given a) They got punished b) They sold Jota, Adams- lost Morrison and Mahoney and seem to be moving towards sustainability of some sort c) There are many more pressing priorities in terms of clubs with FFP questions atm.

 

Edited December 31, 2019 by Mr Popodopolous

[martnewts]

Very interesting @Mr Popodopolous seems villa intend trying to spend to stay up but if that doesn’t work you’ve got to expect severe penalties on relegation surely to the extent of further relegation to league 1 or below. Even if they stay up you have to hope that premier league penalties would be very severe otherwise what’s the point of the rules?

[Mr Popodopolous]

Not City or even Championship related but I see that Chelsea- Chelsea- one of the top clubs in England and CL regulars- lost nearly £100m last season, according to Reports!!

Edited January 2, 2020 by Mr Popodopolous

[Davefevs]

Derby failed to pay their players at the end of Dec.

[Mr Popodopolous]

Assuming it's a one-off, holiday related or linked to Investment that is expected not yet being there.

I mean, last season Reading's wages were late over Easter IIRC but it seems not to have happened again. Sheffield Wednesday in November, there was some story about only 50% of wages appearing in a month...or some % below 100 anyway!

Glitch, or something more serious? Only time will tell.

[Mr Popodopolous]

No sign of Birmingham's accounts yet.

No sign of their mooted ground sale on Land Registry yet, or at least not last time I had a look before Christmas...maybe info unavailable.

Technically I suppose they have 9 months...but it's worth reiterating that they never miss an HK deadline, and listed as PLC at CH tends to mean end of December or carries over to early January. Granted, it could just be from the past and end of March could make sense.

They've had their AGM and confirmed their results in Hong Kong though...the plot thickens? 

Funnily enough, such is our laxity in submissions dates that we could in theory see their half year results for this season before we see the final ones for 2018/19 at CH, possibly...they're due at end of February- 9 months to get accounts done is a laugh!

Then again, guidance seems to on a brief look over there suggests something different in terms of filing etc..but in HK BSH seem not to miss deadlines!

Edited January 3, 2020 by Mr Popodopolous

[Mr Popodopolous]

The EFL really didn't enforce their own rules and regulations correctly, did they- looking again at them!

Quote

2 Profitability and Sustainability

2.1 Rules 2.2 to 2.9 shall apply with effect from Season 2016/17.

2.2 Each Club shall by 1 March in each Season submit to the Executive:

2.2.1 copies of its Annual Accounts for T-1 (and T-2 if these have not previously been submitted to the Executive) together with copies of the directors’ report(s) and auditor’s report(s) on those accounts;

2.2.2 its estimated profit and loss account and balance sheet for T which shall:

(a) be prepared in all material respects in a format similar to the Club’s Annual Accounts; and

(b) be based on the latest information available to the Club and be, to the best of the Club’s knowledge and belief, an accurate estimate as at the time of preparation of future financial performance; and

2.2.3 if Rule 2.5 applies to the Club, the calculation of its aggregated Adjusted Earnings Before Tax for T, T-1 and T-2 in a form approved by the Executive from time to time and which as at the date of these Rules is set out in Appendix 1.

Quote

2.3 The Executive shall determine whether consideration included in the Club’s Earnings Before Tax arising from a Related Party Transaction is recorded in the Club’s Annual Accounts at a Fair Market Value. If it is not, the Executive shall restate it to Fair Market Value.

In particular, 2.3- should they have not got in Independent valuers etc AT THE TIME OF SUBMISSION- if it even appeared in the Projected Accounts that was? Which in most cases, I really doubt they did!

Quote

2.4 The Executive shall not exercise its power set out in Rule 2.3 without first having given the Club  reasonable opportunity to make submissions as to:

2.4.1 whether the said consideration should be restated; and/or

2.4.2 what constitutes its Fair Market Value.

2.5 If the aggregation of a Club’s Earnings Before Tax for T-1 and T-2 results in a loss, any consideration from Related Party Transactions having been adjusted (if appropriate) pursuant to Rule 2.3, then the Club must submit to the Secretary the calculation of its Adjusted Earnings Before Tax for each of T, T-1 and T-2.

2.6 If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss of up to the Lower Loss Threshold (calculated in accordance with Rule 3), then the Executive shall determine whether the Club will, until the end of T+1, be able to fulfil its obligations as set out in Regulations 16.19.8(a), (b) or (c).

2.7 Where the Executive determines, in its reasonable opinion and having considered any information provided to it by the Club, that the Club may not be able to fulfil its obligations as set out in Regulations 16.19.8(a), (b) or (c), the Executive shall have the powers set out in Regulation 16.20.

2.8 If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss that exceeds the Lower Loss Threshold, then the following shall apply:

2.8.1 the Club shall provide, by 31 March in the relevant Season, Future Financial Information to cover the period commencing from its last accounting reference date (as defined in section 391 of the 2006 Act) until the end of T+2 and a calculation of estimated aggregated Adjusted Earnings Before Tax until the end of T+2 based on that Future Financial Information;

2.8.2 the Club shall provide such evidence of Secure Funding as the Executive considers sufficient; and

2.8.3 if the Club is unable to provide evidence of Secure Funding as set out in Rule 2.8.2, the Executive shall have the powers set out in Regulation 16.20.

2.9 If the aggregation of a Club’s Adjusted Earnings Before Tax for T, T-1 and T-2 results in a loss that exceeds the Upper Loss Threshold (calculated in accordance with Rule 3) then:

2.9.1 the Executive may exercise its powers set out in Regulation 16.20;

2.9.2 the Club shall be treated as being in breach of these Rules and accordingly The League shall refer the breach to the Disciplinary Commission in accordance with section 8 of the Regulations.

Secure funding appears a bit of a red herring here.

Essentially this means checking the accounts afresh after adjustment if necessary.

Quote

4 Duty of Disclosure

4.1 The Executive may require a Club to provide such further information as the Executive deems necessary (acting reasonably) for the purposes of enabling the Executive to assess whether a Club has met (as applicable) the Profitability and Sustainability Rules or not.  By way of example, and without limitation, additional information may be requested where:

Quote

4.1.1 any submission is incomplete;

Fair's fair, they did eventually with Sheffield Wednesday!!

Quote

4.1.2 there are insufficient assumptions; or

A good example would be Butland and Gray- assuming this was in Birmingham's Projected Accounts for 2017/18, as in we'll fail BUT Butland and Gray sell on clauses will save us, for this 3 years at least. When that didn't happen, they were in trouble.

Quote

4.1.3 additional evidence is required to support certain assumptions.

Absolutely the case here...what proof is there that the transfer will take place- is there a deal in place, paper trails etc?

Quote

4.2 Any such request shall be made in writing (including by email to the Finance Director or equivalent) and shall be responded to in full within 5 Normal Working Days of any such request being made.

Standard.

Quote

4.3 Without prejudice to the right of The League to refer any breach of rules to the Disciplinary Commission in accordance with section 8 of the Regulations, where any Club is in breach of any requirement of these Rules relating to the provision of information, the Executive may refuse any application by that Club to register any Player or any new contract of an existing Player of that Club.

Shouldn't the soft embargo for Aston Villa that was apparently there in May 2019 have continued until compliance guaranteed? At bare minimum.

Quote

4.4 Each Club shall, at all times and in all matters within the scope of these Rules, behave with the utmost good faith both towards The League and the other Clubs (provided always that only The League shall have the right to bring any action whatsoever for any alleged breach of this requirement).  Without prejudice to the generality of the foregoing, Clubs shall not manage their affairs or submit information which is intended to seek to or take any unfair advantage in relation to the assessment of fulfilment (or non-fulfilment) of the requirements of the Rules.

Well Middlesbrough suing is a bit of a breach, but the bolded bits...*cough* *looks away* *whistle,  snort* etc That's a laugh!

Am interested in the thoughts especially of @Davefevs @downendcity @chinapig and @Coppello

Edited January 4, 2020 by Mr Popodopolous

[Davefevs]

On 03/01/2020 at 11:01, Mr Popodopolous said:

No sign of Birmingham's accounts yet.

No sign of their mooted ground sale on Land Registry yet, or at least not last time I had a look before Christmas...maybe info unavailable.

Technically I suppose they have 9 months...but it's worth reiterating that they never miss an HK deadline, and listed as PLC at CH tends to mean end of December or carries over to early January. Granted, it could just be from the past and end of March could make sense.

They've had their AGM and confirmed their results in Hong Kong though...the plot thickens? 

Funnily enough, such is our laxity in submissions dates that we could in theory see their half year results for this season before we see the final ones for 2018/19 at CH, possibly...they're due at end of February- 9 months to get accounts done is a laugh!

Then again, guidance seems to on a brief look over there suggests something different in terms of filing etc..but in HK BSH seem not to miss deadlines!

Think Brum’s sale of Adams might get them through.

[downendcity]

49 minutes ago, Mr Popodopolous said:

The EFL really didn't enforce their own rules and regulations correctly, did they- looking again at them!

In particular, 2.3- should they have not got in Independent valuers etc AT THE TIME OF SUBMISSION- if it even appeared in the Projected Accounts that was? Which in most cases, I really doubt they did!

Secure funding appears a bit of a red herring here.

Essentially this means checking the accounts afresh after adjustment if necessary.

Fair's fair, they did eventually with Sheffield Wednesday!!

A good example would be Butland and Gray- assuming this was in Birmingham's Projected Accounts for 2017/18, as in we'll fail BUT Butland and Gray sell on clauses will save us, for this 3 years at least. When that didn't happen, they were in trouble.

Absolutely the case here...what proof is there that the transfer will take place- is there a deal in place, paper trails etc?

Standard.

Shouldn't the soft embargo for Aston Villa that was apparently there in May 2019 have continued until compliance guaranteed? At bare minimum.

Well Middlesbrough suing is a bit of a breach, but the bolded bits...*cough* *looks away* *whistle,  snort* etc That's a laugh!

Am interested in the thoughts especially of @Davefevs @downendcity @chinapig and @Coppello

I don't think Middlesborough suing is a bit of  breach. Unless Im misreading, the rules in question relate to club's conduct and actions with regard to the financial rules. Their suing the EFL is not them not behaving in good faith towards the league over their own financial conduct, but taking legal action against the EFL because the EFL failed to take appropriate action against clubs that have, or appear to have, not behaved in good faith towards other clubs and the EFL under those financial rules.

As for your first sentence, then I think we have all thought the EFL have been inept/useless/scared over the stadium sales, but that they were in a difficult position, given the cock up they themselves made when drafting the new ffp rules.

Until now it seems that Derby and Wednesday's defence is that they consulted the EFL with their proposals to "sell" Pride Park and Hillsborough and ,in effect,  are now saying that because the EFL were made aware, they can do nothing about it now.  However, seeing rule 2.3 is a bit of an eye opener, as it means that at the very least, any suspicions the EFL had about fair valuations could and should have been addressed immediately, although I can also see that this would be a potential can of worms, with both sides arguing that their valuations are the correct ones.

More importantly, had the EFL been aware of their own rule 2.3, the surely when clubs approached them to discuss stadium sales. they should have been notified that any sale profit could only be based on a fair valuation,  but that the club's valuation should be referred to, and agreed by the EFL before the profit could then be applied to the clubs' accounts for ffp consideration.

Once again it seems that either the EFL were inept, or that they knew the rule full well, but were not prepared to risk confrontation with "big" clubs, as I suspect the EFL knew full well that the clubs were in need to substantial amounts of profit to avoid ffp sanctions - and a breach of ffp, with the potential penalties available, could present an even more difficult and embarrassing confrontation.

The good news is that rule 2.3 gives the EFL something for which they can go after clubs. That is , of course, providing they have the will to do so. Even if they do take action, it makes a mockery of the new ffp rules, that we understood were meant to make it so that breaches of ffp could be identified and the appropriate penalties be applied during the same season. We are now half way through the following season and the issues still don't seem to be resolved. I bet Mel Morris obtained his professional and independent valuation of Pride Park in the time scale he demanded, and certainly much quicker than 6 months! 

 

 

 

Edited January 4, 2020 by downendcity

[Mr Popodopolous]

24 minutes ago, downendcity said:

I don't think Middlesborough suing is a bit of  breach. Unless Im misreading, the rules in question relate to club's conduct and actions with regard to the financial rules. Their suing the EFL is not them not behaving in good faith towards the league over their own financial conduct, but taking legal action against the EFL because the EFL failed to take appropriate action against clubs that have, or appear to have, not behaved in good faith towards other clubs and the EFL under those financial rules.

As for your first sentence, then I think we have all thought the EFL have been inept/useless/scared over the stadium sales, but that they were in a difficult position, given the cock up they themselves made when drafting the new ffp rules.

Until now it seems that Derby and Wednesday's defence is that they consulted the EFL with their proposals to "sell" Pride Park and Hillsborough and ,in effect,  are now saying that because the EFL were made aware, they can do nothing about it now.  However, seeing rule 2.3 is a bit of an eye opener, as it means that at the very least, any suspicions the EFL had about fair valuations could and should have been addressed immediately, although I can also see that this would be a potential can of worms, with both sides arguing that their valuations are the correct ones.

More importantly, had the EFL been aware of their own rule 2.3, the surely when clubs approached them to discuss stadium sales. they should have been notified that any sale profit could only be based on a fair valuation,  but that the club's valuation should be referred to, and agreed by the EFL before the profit could then be applied to the clubs' accounts for ffp consideration.

Once again it seems that either the EFL were inept, or that they knew the rule full well, but were not prepared to risk confrontation with "big" clubs, as I suspect the EFL knew full well that the clubs were in need to substantial amounts of profit to avoid ffp sanctions - and a breach of ffp, with the potential penalties available, could present an even more difficult and embarrassing confrontation.

The good news is that rule 2.3 gives the EFL something for which they can go after clubs. That is , of course, providing they have the will to do so. Even if they do take action, it makes a mockery of the new ffp rules, that we understood were meant to make it so that breaches of ffp could be identified and the appropriate penalties be applied during the same season. We are now half way through the following season and the issues still don't seem to be resolved. I bet Mel Morris obtained his professional and independent valuation of Pride Park in the time scale he demanded, and certainly much quicker than 6 months! 

 

 

 

in fairness, perhaps I was being pedantic and overcautious. Okay Middlesbrough not a breach but actually trying to get things enforced.

Agreed...Shaun Harvey a big part of the issue IMO.

Agreed...can of worms, but I'd be interested to know if it was in the Projected Accounts.

Yep- spot on. EFL valuation takes precedence. Also feel that the correct valuation method must be ascertained...I'm unconvinced on either score, for example selling for Housing or Commercial Land would differ to DRC or Value in Use IMO.

Yep, agreed- Derby I still think were closest of them to compliance, at least for in-season 2017/18 due to player sales- 2018/19 a different matter of course, but Derby hard to say because more than maybe the others they seemed to be spending on Infrastructure, so it depends but if adjusted their 3 years to 2018/19 could be in q I think.

Yep, makes a mockery as you say...but perhaps they have questions over certain things which could complicate things further but certainly delay- DM will be incoming, a friend found it one day and if they could, hopefully the EFL would. Could be something and nothing, or could be interesting.

I'm sure he got his independent valuation as and when required!

Edited January 5, 2020 by Mr Popodopolous

[Mr Popodopolous]

Listening to one of the Pride of Football podcasts at work- fell out of the loop a bit over Christmas.

Says there is- and this was done before Christmas so it may only have been Pellegrini- but there is/was a PL club who were lookng to sack a manager, but couldn't as they were in discussions with the PL over FFP, or investigations as to whether there was a breach or if they're in breach.

Imagine...imagine the EFL had such Governance last season- and the PL's isn't perfect, but as I'm sure @Coppello would confirm that the PL's is quite significantly higher than the EFL under Harvey.

Edited January 6, 2020 by Mr Popodopolous

[Coppello]

5 hours ago, Mr Popodopolous said:

Listening to one of the Pride of Football podcasts at work- fell out of the loop a bit over Christmas.

Says there is- and this was done before Christmas so it may only have been Pellegrini- but there is/was a PL club who were lookng to sack a manager, but couldn't as they were in discussions with the PL over FFP, or investigations as to whether there was a breach or if they're in breach.

Imagine...imagine the EFL had such Governance last season- and the PL's isn't perfect, but as I'm sure @Coppello would confirm that the PL's is quite significantly higher than the EFL under Harvey.

I'd agree that the Premier League is significantly higher and their governance team is quite strong. The only slight caveat is that each club has a lot of FFP headroom in the Premier League so there hasn't been any breaches. I'd be interested to see what happens if there was a breach but I would imagine the Premier League would conduct their duties appropriately. 

[Mr Popodopolous]

31 minutes ago, Coppello said:

I'd agree that the Premier League is significantly higher and their governance team is quite strong. The only slight caveat is that each club has a lot of FFP headroom in the Premier League so there hasn't been any breaches. I'd be interested to see what happens if there was a breach but I would imagine the Premier League would conduct their duties appropriately. 

Thanks.

Had a funny feeling their Governance would be quite a bit better- think we all had it, but yeah £35m x 3 (unsure if that £35m includes the allowable costs as with others or if it's £35m + allowables), but either way it strikes me as very difficult to fail when we factor in the limit, the TV money, the Revenue Streams- fact that PL to PL transfers seem quite high when there are sales between PL sides.

I think, though I'm no expert, that the only club at risk of breach in the PL might be Aston Villa in terms of a carry over from Championship, aligned...I wonder if e.g. the EFL were not happy with the ground sale and requested a soft embargo this January say, as a precursor to an investigation, whether the PL might enforce. Morally they should I think, but that's merely a personal view.

I also think that had the EFL had a similar standard of Governance to the PL, an agreement to enforce between the two divisions might be watertight and binding...properly harmonised, contractually speaking. I'm assuming it isn't as watertight as it could be and I largely blame Shaun Harvey but I hope I'm wrong!

On an FFP note at this level,Birmingham's accounts are at CH...says available in 5 days so will be interesting to see.

I do note however given I'm looking through it now, that they have Profitability and Sustainability and seemingly the Projected Accounts- T, T-1 and T-2...and the fair value thing for RPTs.

The fact that the Aston Villa issue has not yet quietly gone away and keeps reappearing in the media via reasonably reliable sources- Matt Lawton, Matt Hughes and John Percy- does make me wonder...because between them they are 3 of the foremost journalists for FFP related news, or have been in recent times.

Edited January 6, 2020 by Mr Popodopolous

[Port Said Red]

On 02/01/2020 at 11:53, Mr Popodopolous said:

Not City or even Championship related but I see that Chelsea- Chelsea- one of the top clubs in England and CL regulars- lost nearly £100m last season, according to Reports!!

Well according to one report I read, Tammy wants them to up his wages to match Hudson-Odoi’s 128k a week! That’s 19 year old Callum Hudson-Odoi! If true it’s obscene...

[Mr Popodopolous]

Aston Villa fans some of them on Villatalk seem to believe that it resets on promotion.

I am quite sure that this is NOT the case. They should read E.60.

Quote

E.60. The sum set out in Rule E.59 shall be reduced by £22m for each Season covered by T-1
and T-2 in which the Club was in membership of The Football League.

Looks like potentially harmonised regs to me...shame a soft embargo cannot be enforced this January as part of a holding pattern, to stabilise and prevent further breaches...or can it?

I still can't help but feel that Shaun Harvey wouldn't have cut the best deal on it.

One thing I will say, is that the PL HandBook seems to set it out in a more user friendly and is less lengthy and wordy, possibly unnecessarily wordy, than the EFL site in this area! About FFP (or to give it the most updated name, P&S).

Edited January 6, 2020 by Mr Popodopolous

[Davefevs]

21 minutes ago, Mr Popodopolous said:

Aston Villa fans some of them on Villatalk seem to believe that it resets on promotion.

I am quite sure that this is NOT the case. They should read E.60.

Looks like potentially harmonised regs to me...shame a soft embargo cannot be enforced this January as part of a holding pattern, to stabilise and prevent further breaches...or can it?

I still can't help but feel that Shaun Harvey wouldn't have cut the best deal on it.

One thing I will say, is that the PL HandBook seems to set it out in a more user friendly and is less lengthy and wordy, possibly unnecessarily wordy, than the EFL site in this area! About FFP (or to give it the most updated name, P&S).

Yes, it’s £35m for a Prem season, £13m for a Champ season.  So if they come straight back down it will be £61m (35+13+13) plus the further issue that they only get 2 years PPs. 

[Mr Popodopolous]

2 minutes ago, Davefevs said:

Yes, it’s £35m for a Prem season, £13m for a Champ season.  So if they come straight back down it will be £61m (35+13+13) plus the further issue that they only get 2 years PPs. 

I was thinking more of a points deduction this season for failing in the 3 years to May 2020...wouldn't that be great if Projected Accounts submitted in March, prior 2, problem with the ground valuation and then 10-20 points off- bang- down they do!

That Impairment of 2016 of nearly 50% on relegation- and we all know it's an accounting trick- but in terms of actual justification, set against standards, tests etc, well it's never been properly explained or justified IMO...

Edited January 6, 2020 by Mr Popodopolous

[Davefevs]

1 minute ago, Mr Popodopolous said:

I was thinking more of a points deduction this season for failing in the 3 years to May 2020...wouldn't that be great if Projected Accounts submitted in March, prior 2, problem with the ground valuation and then 10-20 points off- bang- down they do!

(Kevin Keegan voice) - I’d love it

Seriously though, they may have spent £100m, but it will be over several years amortisation, so I think the issues will be next season and beyond, not this one....unfortunately 

Edited January 6, 2020 by Davefevs

[Davefevs]

Their tv income will make it difficult to make a big enough loss....unless as you say the ground valuation is significantly out.

[Mr Popodopolous]

I read on Off The Pitch when I had a free trial that they were forecast to lose money this year...somewhere between £15-20m I believe.

Well, a mix of the TV money and the higher loss limit- if it was £13m x 3 and allowables for newly promoted clubs then it would get very interesting, with or without the ground valuation.

Or if they spend big in January without adequate sales, maybe that would tip them over the edge, regardless of the ground...not the 10-15, maybe 20 pts we all hope for but a deduction that could be the difference in a tight relegation battle with a big influx of new players in the summer and some more in January. 

My other interesting question- and I really hope the PL and EFL are all over this- is given that it was sold to a company that was already within the Group to begin with unlike some of the others, is that could it cancel out at the Group level meaning a net benefit of zero? Howebve

The only caveat is that the owners took direct control of NSWE Stadium Ltd but it was already within the group from 2017- unlike the "companies" that purchased Hillsborough or Pride Park, but I'd argue that can be a debating point between Aston Villa and the PL/EFL at least- in terms of whether it should even count at all.

One of those areas in which even if it's aok accounting wise, might be a serious piss-take out of FFP and therefore something to be pulled up on.

Edited January 6, 2020 by Mr Popodopolous

[Davefevs]

1 hour ago, Mr Popodopolous said:

I read on Off The Pitch when I had a free trial that they were forecast to lose money this year...somewhere between £15-20m I believe.

Well, a mix of the TV money and the higher loss limit- if it was £13m x 3 and allowables for newly promoted clubs then it would get very interesting, with or without the ground valuation.

Or if they spend big in January without adequate sales, maybe that would tip them over the edge, regardless of the ground...not the 10-15, maybe 20 pts we all hope for but a deduction that could be the difference in a tight relegation battle with a big influx of new players in the summer and some more in January. 

My other interesting question- and I really hope the PL and EFL are all over this- is given that it was sold to a company that was already within the Group to begin with unlike some of the others, is that could it cancel out at the Group level meaning a net benefit of zero? Howebve

The only caveat is that the owners took direct control of NSWE Stadium Ltd but it was already within the group from 2017- unlike the "companies" that purchased Hillsborough or Pride Park, but I'd argue that can be a debating point between Aston Villa and the PL/EFL at least- in terms of whether it should even count at all.

One of those areas in which even if it's aok accounting wise, might be a serious piss-take out of FFP and therefore something to be pulled up on.

I read something last week, that their plans to buy themselves out of trouble this window have been met with a realisation that if it fails they are severely shafted, and that plan has been curtailed.

Looks like a re-plan judging by £4m Randolph rumoured today.

[Mr Popodopolous]

4 minutes ago, Davefevs said:

I read something last week, that their plans to buy themselves out of trouble this window have been met with a realisation that if it fails they are severely shafted, and that plan has been curtailed.

Looks like a re-plan judging by £4m Randolph rumoured today.

Ooh, sounds promising!

I read that they weren't necessarily planning to buy in January...that the summers work was due to be for that. I remember reading that Fulham's buying in summer 2018 was meant over 3 seasons, steadily build and gel no doubt after Season 1, maybe some similarities here?

Randolph to West Ham apparently? Or perhaps it's between the two...

Edited January 6, 2020 by Mr Popodopolous

[Davefevs]

Here we go MrP

https://www.telegraph.co.uk/football/2020/01/06/exclusive-birmingham-city-threat-second-points-deduction-breaching/?WT.mc_id=tmg_share_tw

[Mr Popodopolous]

Wow. 

1 hour ago, Davefevs said:

Here we go MrP

https://www.telegraph.co.uk/football/2020/01/06/exclusive-birmingham-city-threat-second-points-deduction-breaching/?WT.mc_id=tmg_share_tw

I remember Dave, first calling the possibility back in early October that they might have failed again. Might and it's still might surely.

Because I refused to ultimately countenance the idea that they would blunder into the same mess in successive seasons..yet the HK results were less than promising!

Loss of £30m+ but was unclear whether it included Adams sale or any sale and leaseback of St Andrews to take it back down to just about level. 

Percy is one of those aforementioned reliable sources...will be interesting to see what their UK accounts say when they appear at CH which should be by end of this week at latest.

[AnAstonVillafan]

14 hours ago, Mr Popodopolous said:

I was thinking more of a points deduction this season for failing in the 3 years to May 2020...wouldn't that be great if Projected Accounts submitted in March, prior 2, problem with the ground valuation and then 10-20 points off- bang- down they do!

That Impairment of 2016 of nearly 50% on relegation- and we all know it's an accounting trick- but in terms of actual justification, set against standards, tests etc, well it's never been properly explained or justified IMO...

What would the points deduction actually be for ?

May 2020's books wont be published until March 2021.

You want us relegated but when ? This season or next ?

20 points is a little harsh.

[Mr Popodopolous]

Will have a proper look later but looks like Birmingham sold the ground for somewhere between £20-25m.

Profit of £17m or so in any case...Now funnily enough, ironically for a badly run club as these appear to be, that actually sounds about right to me IMO. Don't know what others think...but £20-25m for St Andrews, which is 3 miles from the centre of the 2nd city doesn't sound crazy or inflated.

They're due to be paying rent on it too, all listed in the accounts unlike some clubs *cough* Sheffield Wednesday *cough*.About £1.25m per season and some of that might be Coventry City paying rent so it may be around £1m per year x 25...so pretty much spot on in terms of rental yield to years lease etc.

The only question is, why does nothing appear on the Land Registry about it- at least last time I checked there wasn't.

Edited January 7, 2020 by Mr Popodopolous

[Drew Peacock]

1 hour ago, Mr Popodopolous said:

 

The only question is, why does nothing appear on the Land Registry about it- at least last time I checked there wasn't.

Because they are bloody slow.

[Mr Popodopolous]

13 minutes ago, Drew Peacock said:

Because they are bloody slow.

All the other main stadium sale deals appeared within a month or two between sale date and appearance there...pretty sure it was less than 6 months though!

This is at least half a year- yet nothing! Sounds about right though...

Hope the EFL commission an independent valuation and if necessary, adjust accordingly. No free passes!

[Mr Popodopolous]

2 hours ago, AnAstonVillafan said:

What would the points deduction actually be for ?

May 2020's books wont be published until March 2021.

You want us relegated but when ? This season or next ?

20 points is a little harsh.

Am only going by the letter of the rules etc- basing it purely on overspend vs mitigating vs aggravating. 

IF rumoured overspend is true then that's 12?

Increasing losses was an aggravating factor in the Birmingham case that's 3.

Knock off one for complying with soft embargo?

Okay maybe 14 or 15 then.

I'm sure there were other factors pro and anti though...this is off the top of my head though.

There were rumours though that EFL wanted to enforce a points penalty back in May, or maybe the clubs so it's all deeply unclear right now.

Edited January 7, 2020 by Mr Popodopolous