The Championship FFP Thread (Merged)

[WarksRobin]

£10m loss last year despite a £25m profit on player trading (Webster, Pack and Brownhill) and £1.7m from match day income.

Next year looks really tricky if we don’t sell anyone for big money and with the loss of match day revenue.

I guess this explains why contract talks are on hold.

[City1984]

8 minutes ago, WarksRobin said:

 

Looking forward to our OTIB financial branch amigos breaking this down fir us. 
 

looking forward to your thoughts and reports chaps.

[Olé]

Unfortunately the story on the official website links to the wrong accounts (BCH 18/19) so no detail to look at.

Edit - now corrected.

Edited January 20, 2021 by Olé

[JoeAman08]

7 minutes ago, WarksRobin said:

£10m loss last year despite a £25m profit on player trading (Webster, Pack and Brownhill) and £1.7m from match day income.

Next year looks really tricky if we don’t sell anyone for big money and with the loss of match day revenue.

I guess this explains why contract talks are on hold.

I don’t think it is that straightforward on accounts. We will be receiving money for webster and brownhill for the next few years for example. 20m for webster doesn’t go straight onto accounts. It is usually split up for the length of his new contract or some of it. Correct me if I am wrong though @Mr Popodopolous or @Davefevs

[WarksRobin]

3 minutes ago, JoeAman08 said:

I don’t think it is that straightforward on accounts. We will be receiving money for webster and brownhill for the next few years for example. 20m for webster doesn’t go straight onto accounts. It is usually split up for the length of his new contract or some of it. Correct me if I am wrong though @Mr Popodopolous or @Davefevs

Possibly, but I think this is the difference between income and cash positions. Effectively the transfer transaction is booked in one year even though the cash might be received over a period of years.

[Olé]

Net £20m profit on players required every year just to break even. FFS this isn't sustainable without incredible turnover of signings and young players, or Premier League football.

[Davefevs]

1 hour ago, JoeAman08 said:

I don’t think it is that straightforward on accounts. We will be receiving money for webster and brownhill for the next few years for example. 20m for webster doesn’t go straight onto accounts. It is usually split up for the length of his new contract or some of it. Correct me if I am wrong though @Mr Popodopolous or @Davefevs

No, that’s cash flow.  From a pure P&L point of view, their sales are booked in full in these accounts.  Not forgetting in both cases we will have had to pay money to Preston and Ipswich too.

[JoeAman08]

36 minutes ago, Davefevs said:

No, that’s cash flow.  From a pure P&L point of view, their sales are booked in full in these accounts.  Not forgetting in both cases we will have had to pay money to Preston and Ipswich too.

Thanks. How does that work then? It doesn’t seem likely Brighton gave us 20m cash for Webster up front did they? 

[Hxj]

25 minutes ago, JoeAman08 said:

Thanks. How does that work then? It doesn’t seem likely Brighton gave us 20m cash for Webster up front did they? 

The accounts reflect the full value of transfer fees agreed in the year.

Any unpaid fees receivable are shown in Debtors, see Note 16 to the accounts.  Any unpaid fees payable are shown in Creditors see Note 18 to the accounts.   These show that the club is owed £24 million in unpaid fees and owes £17 million in unpaid fees, so a net £7 million in cash is due.

Where the transfer agreement contains terms such as additions on appearances or promotions then the estimated value of these is included in contingent assets or liabilities, so do not effect the current financial performance, see notes 27 and 28.  Amount sdue from sell on clauses won't feature in the accounts until the player is sold on.

Edited January 20, 2021 by Hxj

[JoeAman08]

3 minutes ago, Hxj said:

The accounts reflect the full value of transfer fees agreed in the year.

Any unpaid fees receivable are shown in Debtors, see Note 16 to the accounts.  Any unpaid fees payable are shown in Creditors see Note 18 to the accounts.   These show that the club is owed £24 million in unpaid fees and owes £17 million in unpaid fees, so a net £7 million in cash is due.

Where the transfer agreement contains terms such as additions on appearances or promotions then the estimated value of these is included in contingent assets or liabilities, so do not effect the current financial performance, see notes 27 and 28.  Amount sdue from sell on clauses won't feature in the accounts until the player is sold on.

That is outstanding. Cheers

[Mr Popodopolous]

On 20/01/2021 at 10:29, Olé said:

Net £20m profit on players required every year just to break even. FFS this isn't sustainable without incredible turnover of signings and young players, or Premier League football.

It's the Championship isn't it?

Feels worse than that- our net (forget factoring in FFP allowances and non-cash expenses for a sec)- £10m profit, £10m loss.

Profit on disposal- £38m and £25m- not rounded but that's £31.5m (subject to rounding- maybe more) per season to break even in a two year period!  

I would also suggest that it could be done as:

a) A yoyo club albeit with bigger gates such as Barnsley and Rotherham have been- maybe Luton though they seem solid this year- could also sustain. Think of a bigger version of what Crewe used to be albeit with perhaps a less prolific academy at this time, some Cup runs- good housekeeping.

b) A top half League One- like us in the early-mid 2000's, albeit now with added off field revenue- and the aforementioned Cup run and good academy- this could sustain a club of our size.

Otherwise I totally agree- PL only it would appear. If we want to retain some degree of ambition.

a) and b) Only likely to work if we budget for this and factor in risk (by which I mean yoyoing) accordingly but definitely both possible.

Edited January 24, 2021 by Mr Popodopolous

[Mr Popodopolous]

Interesting snippet on Bournemouth.

It's possible, that as I suspected, the EFL had words on relegation- not willing perhaps to put up with a risk of a repeat of 2015 going up with FFP breached.

https://www.afcb.co.uk/news/supporter-liaison-updates/minutes-board-to-board-meeting-with-cherries-trust/

Thusfar, credit where it is due too- their disposal of players etc has far exceeded incomings, on relegation. Credit to club and maybe even the EFL. Business Plan of some description?

Given their past promotion and the manner in which it was achieved- great football and teamwork but also excessive spending (though not as excessive as various recent culprits/suspects but anyway), would they have actively wanted to have a season such as the below, transfer activity wise! 

https://www.transfermarkt.co.uk/afc-bournemouth/transfers/verein/989

I know the fees aren't precise but it represents very significant cutbacks. Part will be due to relegation, partly Covid- even so it does seem like the EFL have taken a tougher line.

Hefty amortisation falls off as well as profit on disposal, a number of those departing are among- or were- among their higher earners I suspect.

Edited January 24, 2021 by Mr Popodopolous

[Davefevs]

7 hours ago, Mr Popodopolous said:

Interesting snippet on Bournemouth.

It's possible, that as I suspected, the EFL had words on relegation- not willing perhaps to put up with a risk of a repeat of 2015 going up with FFP breached.

https://www.afcb.co.uk/news/supporter-liaison-updates/minutes-board-to-board-meeting-with-cherries-trust/

Thusfar, credit where it is due too- their disposal of players etc has far exceeded incomings, on relegation. Credit to club and maybe even the EFL. Business Plan of some description?

Given their past promotion and the manner in which it was achieved- great football and teamwork but also excessive spending (though not as excessive as various recent culprits/suspects but anyway), would they have actively wanted to have a season such as the below, transfer activity wise! 

https://www.transfermarkt.co.uk/afc-bournemouth/transfers/verein/989

I know the fees aren't precise but it represents very significant cutbacks. Part will be due to relegation, partly Covid- even so it does seem like the EFL have taken a tougher line.

Hefty amortisation falls off as well as profit on disposal, a number of those departing are among- or were- among their higher earners I suspect.

One of my old bosses was brought in as a financial consultant / Director in the dark days at AFCB and said the whole club couldn’t get its head around that they were spending more money than they brought in.

[Mr Popodopolous]

9 hours ago, Davefevs said:

One of my old bosses was brought in as a financial consultant / Director in the dark days at AFCB and said the whole club couldn’t get its head around that they were spending more money than they brought in.

Interesting stuff- was this when they were down the bottom of League Two and Howe saved them? Sounds like it has been a bit of a cultural issue there...

On the other hand, at this moment in time and given their promotion season under Howe, the EFL seem to have imposed some degree of discipline potentially- reading between the lines it does suggest that IMO, for now anyway.

I suspect Reading are a club with a similar mindset to that, under current ownership anyway, maybe not the CEO thinking largely of the owner- and perhaps quite a lot of their fans because when I do read Hobnob Anyone, various posters have seemed in denial..

Stuff like "It's all an overhang, it's the old CEO's fault" "FFP is unfair" "We'll be fine now old CEO gone"- and yes their figures did look better for Renhe Sports Management but solely due to £29m in fixed asset disposal and £3m Aluko loan fee!

Hell, when they were released from a soft embargo probably due to one of those transactions probably due to one or more of the above 2018/19 transactions, they proceeded to sign Joao...and Puscas!  Both players I'd happily have seen here, but could we have sensibly gone for one of them- I was quite keen on Joao in particular in summer 2019. Surely the EFL didn't expect them to make those moves in those circs?

Edited January 24, 2021 by Mr Popodopolous

[Mr Popodopolous]

Later or tomorrow, I'll have a look at Cardiff in a bit more depth and see if not going up could see them in FFP related choppy waters.

[Davefevs]

21 minutes ago, Mr Popodopolous said:

Interesting stuff- was this when they were down the bottom of League Two and Howe saved them? Sounds like it has been a bit of a cultural issue there...

On the other hand, at this moment in time and given their promotion season under Howe, the EFL seem to have imposed some degree of discipline potentially- reading between the lines it does suggest that IMO, for now anyway.

I suspect Reading are a club with a similar mindset to that, under current ownership anyway, maybe not the CEO thinking largely of the owner- and perhaps quite a lot of their fans because when I do read Hobnob Anyone, various posters have seemed in denial..

Stuff like "It's all an overhang, it's the old CEO's fault" "FFP is unfair" "We'll be fine now old CEO gone"- and yes their figures did look better for Renhe Sports Management but solely due to £29m in fixed asset disposal and £3m Aluko loan fee!

Hell, when they were released from a soft embargo probably due to one of those transactions probably due to one or more of the above 2018/19 transactions, they proceeded to sign Joao...and Puscas!  Both players I'd happily have seen here, but could we have sensibly gone for one of them- I was quite keen on Joao in particular in summer 2019. Surely the EFL didn't expect them to make those moves in those circs?

Yes it was.  He became director in 2006.  I worked for him from 2004-2007, he was very senior, but he drank with my immediate boss, so I spent several lunch “hours” hearing bits and pieces. He wasn’t very popular with fans I can tell you.

[Mr Popodopolous]

On 24/01/2021 at 21:18, Davefevs said:

Yes it was.  He became director in 2006.  I worked for him from 2004-2007, he was very senior, but he drank with my immediate boss, so I spent several lunch “hours” hearing bits and pieces. He wasn’t very popular with fans I can tell you.

Bet he had some good stories to tell- not just inside a football club, but a football club financially imploding as it was and in a downward spiral off it!

Yep, those who tell people the spending needs to slow, stop-reverse- surely won't be!

[Mr Popodopolous]

Now to have a look at Cardiff- you might also be interested @Psychopomp continuing start of the discussion on McCarthy thread- thought might stick it here so don't risk derailing.

Norwich is one comparison but they made £59.9m in Profit on Disposal of Player Registrations in the 2 seasons in which they also had Parachute Payments- had a quick look earlier. Another to look at might be Middlesbrough- tried to look earlier but their accounts weren't loading properly.

Norwich

Norwich in the PL onwards period impaired players to the tune of £3,791,000 in PL in 2015/16, and £9,373,000 in 2017/18! Both would count towards FFP losses but again, help moving forward. Also included is provision for Onerous contracts in 2017/18 of £12.2m- probably accelerates costs again- ie pay off now in one hit for unwanted players, that sort of thing.

Wow- £21,243,000 Profit on Disposal of Player Registrations during the PL season- 2015/16!

Middlesbrough

Middlesbrough made about £48.5m with respect to Profit on Disposal of Player Registrations in the 2 seasons ie 2017/18 and 2018/19- additions too with each of course but this gives significant headroom! These are two clubs I would expect, come what may, to meet or to aspire to meet FFP. Like Norwich they had two years of Parachute Payments but their cutbacks were fairly significant.

Impairment of £1,883,000 in 2018/19, and £3,952,000 in 2016/17. Also Profit on Disposal of Player Registrations during PL season of £11.27m!

Cardiff

Cardiff wrote down £11,579,000 in Player Registrations in 2018/19- this of course counts against FFP hence their profit would have been higher that season, but accelerates losses into the PL season and reduces book value, reduces future amortisation costs making profit easier etc.

What's unclear is how the Sala (RIP) fee is accounted for- maybe it isn't yet as it's still a matter of dispute, as yet unresolved.

Cardiff made about £2-3m in Profit on Disposal during the PL- lower wage bill of course, but have added as well as removed amortisation post relegation.

At this early stage, to me, Norwich and Middlesbrough's positions were looking a lot healthier with respect to FFP situation in Year 1 and onwards without Parachute Payments. I know Reid and Zohore sold but if we look at that Transfer Profit on Disposal...

It might yet pose an issue- for 2021/22 will be the first season since 2012/13 that Cardiff have had neither the benefit of PL cash or Parachute Payments, if they're still at this level- and they surely spent big at that time, but FFP was only being put into place, was no decisive factor yet in the Championship for 2012/13!

Edited January 25, 2021 by Mr Popodopolous

[Cidre Monita]

8 hours ago, Mr Popodopolous said:

Now to have a look at Cardiff- you might also be interested @Psychopomp continuing start of the discussion on McCarthy thread- thought might stick it here so don't risk derailing.

Norwich is one comparison but they made £59.9m in Profit on Disposal of Player Registrations in the 2 seasons in which they also had Parachute Payments- had a quick look earlier. Another to look at might be Middlesbrough- tried to look earlier but their accounts weren't loading properly.

Norwich

Norwich in the PL onwards period impaired players to the tune of £3,791,000 in PL in 2015/16, and £9,373,000 in 2017/18! Both would count towards FFP losses but again, help moving forward. Also included is provision for Onerous contracts in 2017/18 of £12.2m- probably accelerates costs again- ie pay off now in one hit for unwanted players, that sort of thing.

Wow- £21,243,000 Profit on Disposal of Player Registrations during the PL season- 2015/16!

Middlesbrough

Middlesbrough made about £48.5m with respect to Profit on Disposal of Player Registrations in the 2 seasons ie 2017/18 and 2018/19- additions too with each of course but this gives significant headroom! These are two clubs I would expect, come what may, to meet or to aspire to meet FFP. Like Norwich they had two years of Parachute Payments but their cutbacks were fairly significant.

Impairment of £1,883,000 in 2018/19, and £3,952,000 in 2016/17. Also Profit on Disposal of Player Registrations during PL season of £11.27m!

Cardiff

Cardiff wrote down £11,579,000 in Player Registrations in 2018/19- this of course counts against FFP hence their profit would have been higher that season, but accelerates losses into the PL season and reduces book value, reduces future amortisation costs making profit easier etc.

What's unclear is how the Sala (RIP) fee is accounted for- maybe it isn't yet as it's still a matter of dispute, as yet unresolved.

Cardiff made about £2-3m in Profit on Disposal during the PL- lower wage bill of course, but have added as well as removed amortisation post relegation.

At this early stage, to me, Norwich and Middlesbrough's positions were looking a lot healthier with respect to FFP situation in Year 1 and onwards without Parachute Payments. I know Reid and Zohore sold but if we look at that Transfer Profit on Disposal...

It might yet pose an issue- for 2021/22 will be the first season since 2012/13 that Cardiff have had neither the benefit of PL cash or Parachute Payments, if they're still at this level- and they surely spent big at that time, but FFP was only being put into place, was no decisive factor yet in the Championship for 2012/13!

The Cardiff year of £2m profit includes the Sala fee from my brief reading of the accounts. Of course getting ti taken off will improve their FFP situation now. Seems to be that they really did keep wages low when going up and have balanced incoming and outging transfers since. Whilst like all it is cash poor right now, I do not see that they are in any meltdown with huge player contracts. Our wage bill is probably higher this year, 

[Mr Popodopolous]

16 hours ago, Psychopomp said:

The Cardiff year of £2m profit includes the Sala fee from my brief reading of the accounts. Of course getting ti taken off will improve their FFP situation now. Seems to be that they really did keep wages low when going up and have balanced incoming and outging transfers since. Whilst like all it is cash poor right now, I do not see that they are in any meltdown with huge player contracts. Our wage bill is probably higher this year, 

Thanks- had a quick look at them but missed this bit- looked online before I returned to this thread and indeed, under "Provisions" there is a total of £19.5m, or something like that- can only be Sala?

It will indeed- I mean they'll be fine, more than fine to this season- but there are unknown factors too- unsure it'd be a wage and cash problem, more an FFP one. The fact that Middlesbrough and Norwich- both of whom were surely aok- made such huge transfer profits is interesting. At best, TV money falls by £55m in Year 1 and maybe a further £10m in Year 2- ie this season.

How would the Provision be treated in FFP terms- I looked on the website and there doesn't seem to be any specific guidance- as in should we take the Sala Provision as included or excluded from Costs, £2.5m Profit (Before Tax) or excluded- the latter would mean £22m Profit (Before Tax).

The second big unknown, which none of us yet know or can know, is how next season will be rolled up- will it be back to the 3 years ie last, this and next season as a block or simply moving on 2017/18, 2018/19, and 2019/20 and 2020/21  as one on a year- now beginning with 2018/19, 2019/20 and 2020/21 as a block and then 2021/22 as the 3rd.

I've read £30m for wage bill on their forum- their accounts will of course be instructive for how they look going into 2021/22 if still at this level.

With respect to the FFP, if it's the rolled up continued that would mean that for Cardiff into 2021/22 would be one upper limit of £35m and one of £13m- assume they spend to the limit, equity wise etc- added up, divided by 4 and x 3! £74m/4 x 3=£52.5m plus allowable costs. If not, it'd be the usual £39m from 2019/20 to 2021/22.

Edited January 27, 2021 by Mr Popodopolous

[Cidre Monita]

13 hours ago, Mr Popodopolous said:

Thanks- had a quick look at them but missed this bit- looked online before I returned to this thread and indeed, under "Provisions" there is a total of £19.5m, or something like that- can only be Sala?

It will indeed- I mean they'll be fine, more than fine to this season- but there are unknown factors too- unsure it'd be a wage and cash problem, more an FFP one. The fact that Middlesbrough and Norwich- both of whom were surely aok- made such huge transfer profits is interesting. At best, TV money falls by £55m in Year 1 and maybe a further £10m in Year 2- ie this season.

How would the Provision be treated in FFP terms- I looked on the website and there doesn't seem to be any specific guidance- as in should we take the Sala Provision as included or excluded from Costs, £2.5m Profit (Before Tax) or excluded- the latter would mean £22m Profit (Before Tax).

The second big unknown, which none of us yet know or can know, is how next season will be rolled up- will it be back to the 3 years ie last, this and next season as a block or simply moving on 2017/18, 2018/19, and 2019/20 and 2020/21  as one on a year- now beginning with 2018/19, 2019/20 and 2020/21 as a block and then 2021/22 as the 3rd.

I've read £30m for wage bill on their forum- their accounts will of course be instructive for how they look going into 2021/22 if still at this level.

With respect to the FFP, if it's the rolled up continued that would mean that for Cardiff into 2021/22 would be one upper limit of £35m and one of £13m- assume they spend to the limit, equity wise etc- added up, divided by 4 and x 3! £74m/4 x 3=£52.5m plus allowable costs. If not, it'd be the usual £39m from 2019/20 to 2021/22.

The Sala fee was included in their transfer outgoings in the accounts. Im not suggesting they are in a great place , their debts are huge and they revalued the ground a couple of years ago to help .... But compared to most promoted teams they have got out lightly, unlike the last time they were promoted. They all only have tv income really, transfers have died off and the 8M gate revenue is zero. The accounts for this current season will show huge losses of 20 to 30 M for the majority of clubs. 

[Mr Popodopolous]

On 27/01/2021 at 13:43, Psychopomp said:

The Sala fee was included in their transfer outgoings in the accounts. Im not suggesting they are in a great place , their debts are huge and they revalued the ground a couple of years ago to help .... But compared to most promoted teams they have got out lightly, unlike the last time they were promoted. They all only have tv income really, transfers have died off and the 8M gate revenue is zero. The accounts for this current season will show huge losses of 20 to 30 M for the majority of clubs. 

Thanks for the response- still a lot of grey areas for them and all clubs.

Ground revaluation, unsure how much this counts towards FFP- the profit on disposal yeah, but revaluiation- only the extent from my last recollection of the rules, only the extent to which there was a Reversal of Impairment recognised would go in the Profit and Loss- that's for 2017/18.

The Sala thing is the real one of interest for me- Kieran Maguire said the liability was under Provisions when I looked back, if it's stuck in there it means it doesn't hit the amortisation but general cost- if it was included under relevant expenditure for FFP then the starting point would be the £2.5m profit- if it wasn't then that would be adjusted out of expenditure as an exceptional legal cost but there appears to be nothing definitive and I've looked a bit!

Their cash losses will be huge like a lot of clubs, Profit and Loss maybe a greyer area.

As for the Stadium Revaluation, my interpretation there is that only the amount as said that counted towards Reversal of Impairment might count here- so though the upward Revaluation was shown as £29,253,000 (Movement on Deferred Tax stated as £2,302,000- hence net revaluation shown £26,951,000)- the number that counts though will have to check if this has changed and was under the old regs, would be £5,487,000- that's what was shown in the 2017/18 Operating Loss breakdown.

Rather helpfully, on a general note- and I welcome the increased transparency- the EFL have put up a template of what clubs submit in March and how it looks. I've posted it before but still good to see- though in this instance, T-2 will be T-3, T-1 will be T-2 and T will represent an add up then average of T and T-1.

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/

Based on Provisions for Liabilities and their Accounting Policy, sounds like it might not be included but again it's unclear. Perhaps it only kicks in, if they lose the Sala case- until then it's an unrealised loss, yet to crystalise or could be. Says £19.5m- maybe it includes Sala and one or two other issues, it doesn't specify what it's for in black and white.

Edited January 29, 2021 by Mr Popodopolous

[Hxj]

The provision should be in the FFP figures as it is in the accounts as a deduction and doesn’t fall within the list of necessary adjustments.

Edited January 29, 2021 by Hxj

[Mr Popodopolous]

2 hours ago, Hxj said:

The provision should be in the FFP figures as it is in the accounts as a deduction and doesn’t fall within the list of necessary adjustments.

Thank you for the clarity- so £2.5m profit inclusive of that, then the FFP allowances in 2018/19 and that's the starting point?

Will be interesting to see Cardiff's overall position, because as I mentioned unlike Middlesbrough and Norwich, the player sale profits have not been so hefty.

[Mr Popodopolous]

Some possible good news on the horizon, hopefully anyway @Davefevs @Hxj @downendcity @chinapig @Coppello

Well overdue this. Gibson and Lansdown maybe can drive change here? Embargo or Points deduction best bet? Interested to know thoughts of @AnotherDerbyFan with respect to this too- I think that Good Governance in these scenarios does require stringent measures.

Maybe Transfer Embargo to begin with, escalating to a points deduction over time. Assume this means publish to Companies House or on website- EFL surely have some kind of idea or they should both be under a rolling Embargo and maybe more- if they don't submit to the EFL then maybe even suspend membership.

Well maybe not the last bit but the EFL or more likely the clubs, need to up the ante with this issue.

Quote

Rivals riled by Owls and Rams 

The EFL are facing calls to introduce sanctions for clubs who file their annual accounts late. Sheffield Wednesday and Derby are yet to publish their accounts for the 2018-19 season, which were due last July, to the irritation of clubs who comply with the regulations. 

The Owls and the Rams have been charged with breaching spending rules over the last few years and rivals are convinced the tardiness of their book-keeping is unlikely to be a coincidence. 

 

Edited January 30, 2021 by Mr Popodopolous

[Cidre Monita]

7 hours ago, Mr Popodopolous said:

Thanks for the response- still a lot of grey areas for them and all clubs.

Ground revaluation, unsure how much this counts towards FFP- the profit on disposal yeah, but revaluiation- only the extent from my last recollection of the rules, only the extent to which there was a Reversal of Impairment recognised would go in the Profit and Loss- that's for 2017/18.

The Sala thing is the real one of interest for me- Kieran Maguire said the liability was under Provisions when I looked back, if it's stuck in there it means it doesn't hit the amortisation but general cost- if it was included under relevant expenditure for FFP then the starting point would be the £2.5m profit- if it wasn't then that would be adjusted out of expenditure as an exceptional legal cost but there appears to be nothing definitive and I've looked a bit!

Their cash losses will be huge like a lot of clubs, Profit and Loss maybe a greyer area.

As for the Stadium Revaluation, my interpretation there is that only the amount as said that counted towards Reversal of Impairment might count here- so though the upward Revaluation was shown as £29,253,000 (Movement on Deferred Tax stated as £2,302,000- hence net revaluation shown £26,951,000)- the number that counts though will have to check if this has changed and was under the old regs, would be £5,487,000- that's what was shown in the 2017/18 Operating Loss breakdown.

Rather helpfully, on a general note- and I welcome the increased transparency- the EFL have put up a template of what clubs submit in March and how it looks. I've posted it before but still good to see- though in this instance, T-2 will be T-3, T-1 will be T-2 and T will represent an add up then average of T and T-1.

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/

Based on Provisions for Liabilities and their Accounting Policy, sounds like it might not be included but again it's unclear. Perhaps it only kicks in, if they lose the Sala case- until then it's an unrealised loss, yet to crystalise or could be. Says £19.5m- maybe it includes Sala and one or two other issues, it doesn't specify what it's for in black and white.

The Sala fe has been accounted for. It is in their accounts. The ground was interesting as it was undervalued, so the new valuation had an impact. Not sure why the Sala fee is in provisions, it is not ,it is in their transfer outlay numbers and in the accounts. It is an opportunity for them if they win win the case or insurance pays out.Overall , they will have a wage bill less than us, and an owner that has similar liabilities. They are far from the worst bunch. 

[Mr Popodopolous]

23 minutes ago, Psychopomp said:

The Sala fe has been accounted for. It is in their accounts. The ground was interesting as it was undervalued, so the new valuation had an impact. Not sure why the Sala fee is in provisions, it is not ,it is in their transfer outlay numbers and in the accounts. It is an opportunity for them if they win win the case or insurance pays out.Overall , they will have a wage bill less than us, and an owner that has similar liabilities. They are far from the worst bunch. 

Revaluation of Stadium- so did the whole of the £29m count then- may have been under old FFP regs, the bit about only counting with respect to the Reversal of Impairment- regardless they would have passed FFP anyway due to £23m promotion bonuses which of course are excluded.

Sala fee. Kieran Maguire seemed to think it was in Provisions- was it maybe in fact wholly amortised in 2018/19? If it was a Provision however, it seems to be quite widely reported in a range of sources.

Provisions for Bad Debt maybe. Can't see them amortising straight line- a fee for a disputed case? There IS a Provisions for £19.5m towards the end of the Cardiff City Holdings but maybe that's something else. Note 21 anyway.

Far from the worst but for example staying down, and then eg Harry Wilson signing on loan again on the package he was mooted to have been- when Parachute Payments down from £30-35m to £0- doubt it. Unsure they won't have to make playing side cutbacks of some sort.

Actually, forget my Insurance question- notice there was £16m of Insurance- still wonder about FFP treatment, recognition etc.

Regardless of Insurance, it's a Cash Issue surely- Amortisation, Impairment or Provisions? Lot of unknowns tbh- Swiss Ramble from a further search suggests that IF they win the case, their 2018/19 Accounts will be boosted by a Reversal of that Provision.

Edited January 30, 2021 by Mr Popodopolous

[Mr Popodopolous]

With respect to a couple of brief predictions and guesstimates.

1. Manga- Was in final year of contract I think, widely reported as sold for £3m. Let's say £3m Profit.
2. Reid- Joined widely reported for £8.5m on a 4 year deal from us, report claims he was sold to Fulham for £10m- a profit of (roughly) £4,867,500
3. Zohore- Sold for £8m, don't know how much he signed for but am going to assume full whack of Profit at £8m- he joined from some related club so can only assume an £8m Profit on Disposal.

That's £15,867,500 Profit on Disposal- with in Reid's case £1.0625m in Amortisation also eliminated in that season and the other 1/4 of his initial fee eliminated in each of the subsequent 2 seasons. Up by about £13m from 2018/19.

Am using the Holdings Accounts for my estimate on this bit.

Wages- DOWN to a NET total figure of £30m (cited on one of their forums) from £53,651,000- but having said that, unlike a lot of clubs they listed the Player Specific Wages in 2018/19- £42,519,000. Therefore unsure which figures to use as my starting point, ie down from £53m or £42m.

Additional Amortisation- ie new additions:

Bacuna joined in January so on paper is up about £345k per season- maybe needs some rounding but that's my starting point.

New players joining in 2019/20:

1. Glatzel, Flint, Pack, Vassell and Vaulks- Combined total of £4.748m, fees divided by 3 year contract.
2. Whyte- £495k. Was on a 4 year deal.

Maybe say £5-5.5m extra Cost of Amortisation, separate to Additions.

A number of the players released in summer 2019 will have saved on Amortisation but not by much from what I can see- could have been Impaired in some or all cases in 2018/19 too. We don't know who was Impaired in 2018/19 though, we can only guess- for all we know Reid might have been which rolls that into Pure Profit if he Impaired in full.

Cardiff made £102m from TV revenue etc in 2018/19.

Parachute Payments last season- they'll revert to Solidarity Payments next season if still at this level, anyway they appeared to have been in terms of total PL cash, £43m- some of that reduced due to Covid, always thought it was 55% of Central Awards but anyway CashFlow aside their 2019/20 accounts will be interesting.

Edited January 30, 2021 by Mr Popodopolous

[Mr Popodopolous]

Interesting figure from Kieran Maguire about the gap in Derby's amortisation using the two methods- I mean it all has to be done in the end, but in those 3 seasons?

Albeit the Profit on Disposal would have to be reconciled to get the full figure. I suspect that it increases as well in these 3 seasons.

Edited January 30, 2021 by Mr Popodopolous

[chinapig]

8 hours ago, Mr Popodopolous said:

Some possible good news on the horizon, hopefully anyway @Davefevs @Hxj @downendcity @chinapig @Coppello

Well overdue this. Gibson and Lansdown maybe can drive change here? Embargo or Points deduction best bet? Interested to know thoughts of @AnotherDerbyFan with respect to this too- I think that Good Governance in these scenarios does require stringent measures.

Maybe Transfer Embargo to begin with, escalating to a points deduction over time. Assume this means publish to Companies House or on website- EFL surely have some kind of idea or they should both be under a rolling Embargo and maybe more- if they don't submit to the EFL then maybe even suspend membership.

Well maybe not the last bit but the EFL or more likely the clubs, need to up the ante with this issue.

 

As usual I will decline to hold my breath waiting for the EFL to do something about this. Given that sanctions for late accounts should have been in place from the outset.

[AnotherDerbyFan]

14 hours ago, Mr Popodopolous said:

Some possible good news on the horizon, hopefully anyway @Davefevs @Hxj @downendcity @chinapig @Coppello

Well overdue this. Gibson and Lansdown maybe can drive change here? Embargo or Points deduction best bet? Interested to know thoughts of @AnotherDerbyFan with respect to this too- I think that Good Governance in these scenarios does require stringent measures.

Maybe Transfer Embargo to begin with, escalating to a points deduction over time. Assume this means publish to Companies House or on website- EFL surely have some kind of idea or they should both be under a rolling Embargo and maybe more- if they don't submit to the EFL then maybe even suspend membership.

Well maybe not the last bit but the EFL or more likely the clubs, need to up the ante with this issue.

 

I think it depends on the circumstances for the delay. If it's a consequence of the EFL's appeals for example...

11 hours ago, Mr Popodopolous said:

Interesting figure from Kieran Maguire about the gap in Derby's amortisation using the two methods- I mean it all has to be done in the end, but in those 3 seasons?

Albeit the Profit on Disposal would have to be reconciled to get the full figure. I suspect that it increases as well in these 3 seasons.

Presumably he's used the very basic amortisation method (over original contract), rather than one of the other accepted methods (taking account of contract extensions). My calculations estimate £30m for the old method (£15m lower than Kieran's guess).

As you point out, profit on players would also increase, notably Ince and Weimann.

[Mr Popodopolous]

Crazy rumours of Reading signing a Uruguay International for 10m.

I thought there was an FFP tightrope- given the EFL blocked a move for Rodrigo Riquelme on loan, this would seem strange.

Loan with option also linked lower down though, but again 1m euros loan fee in this climate and with their underlying losses in 2018/19 accounts. Would the EFL authorise this given they seemed to be under some kind of 'Guidance'??

@chinapig Up to the clubs ultimately I suspect, so won't be holding my breath.

@AnotherDerbyFan I'll address your points later or tomorrow, but I would have thought that's fairly standard in football anyway- when we're talking Straight Line method. Amortise and then adjust for contract extensions- maybe it isn't though?

Edited February 1, 2021 by Mr Popodopolous

[AnotherDerbyFan]

22 minutes ago, Mr Popodopolous said:

 

@AnotherDerbyFan I'll address your points later or tomorrow, but I would have thought that's fairly standard in football anyway- when we're talking Straight Line method. Amortise and then adjust for contract extensions- maybe it isn't though?

I believe there are a few methods in use:

1. All upfront (typically used in non-league I believe)
2. The infamous Derby method - use of residual values
3. Amortise over the original contract
4. Make adjustments if a contract extension has been signed
5. Impairment being an additional part to most club policies

Just from using figures from transfermarkt (plus filling in a couple of blanks), you can see the difference between the methods here:

KM has overstated the figures by about about £2.3m (2016), £2.7m (2017) and £4m (2018) compared with the 'acceptable' methods. My first instinct was he added on agents fees, however the actual figures for those seasons were £0.3m, £2.0m and £2.2m. So it can't be that. Most of our business is done in the summer. The accounts therefore give a good indication of what we spent by looking at the "post balance sheet events" section (which includes EFL levies and agents' fees)

Based on the accounts more accurate upfront figures would be:
2016 - £27.24m
2017 - £17.03m
2018 - £12.76m

Over that 3 year period, transfermarkt is only out by £200k (estimating winter signings at the transfermarkt values).

I made the assumption of summer sales not having an amortisation charge against them for the upcoming year? Even if I've got that wrong, KM is still £6m too high.

[Mr Popodopolous]

6 hours ago, AnotherDerbyFan said:

I believe there are a few methods in use:

1. All upfront (typically used in non-league I believe)
2. The infamous Derby method - use of residual values
3. Amortise over the original contract
4. Make adjustments if a contract extension has been signed
5. Impairment being an additional part to most club policies

Just from using figures from transfermarkt (plus filling in a couple of blanks), you can see the difference between the methods here:

KM has overstated the figures by about about £2.3m (2016), £2.7m (2017) and £4m (2018) compared with the 'acceptable' methods. My first instinct was he added on agents fees, however the actual figures for those seasons were £0.3m, £2.0m and £2.2m. So it can't be that. Most of our business is done in the summer. The accounts therefore give a good indication of what we spent by looking at the "post balance sheet events" section (which includes EFL levies and agents' fees)

Based on the accounts more accurate upfront figures would be:
2016 - £27.24m
2017 - £17.03m
2018 - £12.76m

Over that 3 year period, transfermarkt is only out by £200k (estimating winter signings at the transfermarkt values).

I made the assumption of summer sales not having an amortisation charge against them for the upcoming year? Even if I've got that wrong, KM is still £6m too high.

I will certainly go with yours and look no further- in addition, to work it up to 2023/24 is outstanding!

Only one I might query would be Weimann, simply as it took place after June 2018- or was that in the 2017/18 accounts? Definitely would have bumped up the Ince profit, I expect- being sold after 1 year his RV might well have still been close to the full amount.

Some huge work done on it, very impressive. The difference in Amortisation to look at here I assume is between Derby and Extension?

Edited February 2, 2021 by Mr Popodopolous

[AnotherDerbyFan]

6 hours ago, Mr Popodopolous said:

I will certainly go with yours and look no further- in addition, to work it up to 2023/24 is outstanding!

Only one I might query would be Weimann, simply as it took place after June 2018- or was that in the 2017/18 accounts? Definitely would have bumped up the Ince profit, I expect- being sold after 1 year his RV might well have still been close to the full amount.

Some huge work done on it, very impressive. The difference in Amortisation to look at here I assume is between Derby and Extension?

Based on a quick Google search, Weimann was on the 3rd of July. Based on a couple of our sales (such as Ince) which completed on similar dates, I belive his sale falls into the previous season.

It should be Derby vs Extension but figures won't be massively out if you use original instead.

I should point out, that I think the figures stated in the accounts include add-ons (I certainly hope so!). Total potential add-ons in 17/18 about £13m. I would therefore assume that our amortisation in following years should be lower than estiamte due to not paying out on promotion bonuses and appearance fees? That may explain why the Hearing Decison Document stated amortisation is £25.1m for 19/20 as we had to calculate a 'worst case scenario' - meaning paying out for promotion? It'll still be above £15m either way

[Hxj]

48 minutes ago, AnotherDerbyFan said:

I should point out, that I think the figures stated in the accounts include add-ons (I certainly hope so!). Total potential add-ons in 17/18 about £13m. I would therefore assume that our amortisation in following years should be lower than estiamte due to not paying out on promotion bonuses and appearance fees? That may explain why the Hearing Decison Document stated amortisation is £25.1m for 19/20 as we had to calculate a 'worst case scenario' - meaning paying out for promotion? It'll still be above £15m either way

The original intangible cost figures in the accounts for new signings in the year won't include any add-ons potentially payable, only the original fee.  The figures in Note 20 of the accounts you refer to are not in the intangible cost figures in the accounts presented, they are known costs, but they may not occur in part or in full so are included as 'Contingent Liabilities'.

As to the numbers above the following intangible additions are shown in the accounts (in £ millions), these include the fees and levies, and any add-ons paid out in respect of previous year transactions.

2015/16 - 29.96

2016/17 - 21.15

2017/18 - 15.0

These are the figures which will need to be written off through amortisation, subject to any disposals of those players.  The difference to your figures appears to be significant, and at fisrt glance probably accounts for the difference that you have with Kieran Magurie.

[Davefevs]

 

[NcnsBcfc]

It's like a miniature version of what the Glazer's did at Man Utd, isn't it?

That's obviously the way that the Americans approach all of these leveraged buyouts.

Probably a very clever way of making money, when not actually investing any of your own.

Edited February 2, 2021 by ncnsbcfc

[NcnsBcfc]

9 hours ago, Mr Popodopolous said:

I will certainly go with yours and look no further- in addition, to work it up to 2023/24 is outstanding!

Only one I might query would be Weimann, simply as it took place after June 2018- or was that in the 2017/18 accounts? Definitely would have bumped up the Ince profit, I expect- being sold after 1 year his RV might well have still been close to the full amount.

Some huge work done on it, very impressive. The difference in Amortisation to look at here I assume is between Derby and Extension?

@Mr Popodopolous

I've tried to find other Championship clubs 2019-20 results. 

Only a few clubs seem to have posted them so far.

Are we one of the few clubs that stick to the rule in this regard (posting results on time)?

Difficult to see where we are financially against our peers; when everything is based on 2018-19 results.

As others have said, some still haven't posted 18-19 figures; and there seems to be no comeback from auditors/EFL over that.

At least we've been up front with our position.

[Hxj]

1 hour ago, Davefevs said:

 

So I'm a Guardian journalist and I am bored so I will write a non-story and dress it up as something else.  I can't read and understand what is detailed on Companies House, but I use that as a source to justify my meaningless conclusions.

"That makes it difficult not to conclude that just to pay for ALK to take over, the club is now approximately £90m worse off, with interest to pay"

Or as an alternative the club is utilising it's cash resources by getting a far better rate of return than it was under the old management, so in fact the company is better off.  But that doesn't suit me as a Guardian journalist so I won't explain how that may have happened.

[Mr Popodopolous]

6 hours ago, ncnsbcfc said:

@Mr Popodopolous

I've tried to find other Championship clubs 2019-20 results. 

Only a few clubs seem to have posted them so far.

Are we one of the few clubs that stick to the rule in this regard (posting results on time)?

Difficult to see where we are financially against our peers; when everything is based on 2018-19 results.

As others have said, some still haven't posted 18-19 figures; and there seems to be no comeback from auditors/EFL over that.

At least we've been up front with our position.

We certainly have!

A few clubs have...Norwich, Hull, Birmingham (in Hong Kong consolidated), Wigan (disposed but as per £20m loss in Hong Kong consolidated). With respect to submission, clubs (like all such companies) get 9 months from the end of the Reporting Period- usually May or June, and Government gave all a 3 month extension but many took advantage so 12 months from Reporting Date.

The Football League themselves get results with respect to 2019/20 in advance of the public/Companies House, ball is started to be rolling with the Projected Accounts which are usually pretty accurate then it seems if there is a question mark they check in again but the Process is ongoing and can be revisited within the relevant 3 year period- possibly beyond, I certainly think there are bits about Aston Villa that would merit a second look if and when they return!

Ah yes, Derby and Sheffield Wednesday- with reference to the bolded bit. Haha, their auditors- let's just leave it at that! I can only assume that the Football League have some data for the two clubs in question, but in the case of Sheffield Wednesday I'm not so sure- their company structure is a hard one to unpick, I think clubs who don't submit in the right time frame, should have some kind of automatic transfer embargo, open ended and rolling yet open to review subject to conditions, in its scope.

[AnotherDerbyFan]

14 minutes ago, Mr Popodopolous said:

We certainly have!

A few clubs have...Norwich, Hull, Birmingham (in Hong Kong consolidated), Wigan (disposed but as per £20m loss in Hong Kong consolidated). With respect to submission, clubs (like all such companies) get 9 months from the end of the Reporting Period- usually May or June, and Government gave all a 3 month extension but many took advantage so 12 months from Reporting Date.

The Football League themselves get results with respect to 2019/20 in advance of the public/Companies House, ball is started to be rolling with the Projected Accounts which are usually pretty accurate then it seems if there is a question mark they check in again but the Process is ongoing and can be revisited within the relevant 3 year period- possibly beyond, I certainly think there are bits about Aston Villa that would merit a second look if and when they return!

Ah yes, Derby and Sheffield Wednesday- with reference to the bolded bit. Haha, their auditors- let's just leave it at that! I can only assume that the Football League have some data for the two clubs in question, but in the case of Sheffield Wednesday I'm not so sure- their company structure is a hard one to unpick, I think clubs who don't submit in the right time frame, should have some kind of automatic transfer embargo, open ended and rolling yet open to review subject to conditions, in its scope.

Pearce was asked about the accounts on Radio Derby the other day. He said ours haven’t been filed due to the ongoing EFL P&S case, and depending on the outcome may have to make adjustments. It makes sense, but couldn't we submit the accounts as they are, then make adjustments (if required) in the following accounts?
Still doesn't explain Sheff Weds.

[Mr Popodopolous]

37 minutes ago, AnotherDerbyFan said:

Pearce was asked about the accounts on Radio Derby the other day. He said ours haven’t been filed due to the ongoing EFL P&S case, and depending on the outcome may have to make adjustments. It makes sense, but couldn't we submit the accounts as they are, then make adjustments (if required) in the following accounts?
Still doesn't explain Sheff Weds.

Yeah, I did wonder about that bit- and even if the club and Sevco accounts as a whole cannot be submitted for this reason, how about e.g. any of Club DCFC, Stadia DCFC or DCFC Academy Limited- Sevco 5112, Gellaw Newco 203 and the club might be waiting but why the others have not materialised is a bit of a puzzle- they're quite small companies so wouldn't take a huge amount of time to do and then adjust, if indeed any adjustments required for these.

Sheffield Wednesday is a great mystery- maybe the Instalments plan ie how Hillsborough sale was structured posing an issue. I'm still trying to work out if they have somehow pulled a loophole which sees them come out in summer 2021 for last season and 2018/19- SWFC/Sheffield Wednesday Holdings Limited, is based in Hong Kong. Not a listed company ie on HKSE so whether any accounts are published is unclear.

The situation as I understand it:

1. 2017/18 Accounts- Company in control listed as that HK company.
2. Sheffield 3 Limited purchased Hillsborough for £60m.
3. Sheffield 5 Limited is the controlling company of Sheffield 3 Limited...but wait, there's more.

Part 2.

1. Sheffield 4 Limited was in the first place the controlling company of Sheffield 3 Limited.
2. On 28th June 2019- which was the day the Stadium sale was listed at Land Registry, the day the club accounts were signed too, we had the following message- appearing identically on both Sheffield 2 and Sheffield 4:

Both received for filing on 08/07/2019, as per CH, both had the date or period during which shares are allotted- 28th June 2019- there's that date again! Was as follows:

Quote

Non-cash Consideration

"SHARES ALLOTTED IN CONSIDERATION FOR THE TRANSFER OF THE ENTIRE SHARE CAPITAL OF SWFC HOLDINGS LIMITED".

It was transferred to both though- Sheffield 4 of course was wound up voluntarily.

https://find-and-update.company-information.service.gov.uk/company/12062155

It's all very murky but believe the consolidated results might lie within Sheffield 2 Limited- unclear if that's for 2019/20 onwards. If they do lie within that, then maybe the Hillsborough sale and leaseback might have been a subsidiary to subsidiary sale- cancel out the Profit on Hillsborough? Still some missing pieces of the jigsaw however! None of Sheffield Wednesday FC, Sheffield 2 Limited, Sheffield 3 Limited and Sheffield 5 Limited have yet released accounts- unclear which is and isn't within the group.

Maybe they were consolidated then unconsolidated- like a magic trick, now you see it- now you don't! Which wouldn't fly for P&S purposes if the Stadium is still a material part of operations etc.

Though SWFC Holdings Limited still listed as active over in Hong Kong...  Club website and each of Sheffield 2 and Sheffield 3 just points to Chansiri being in charge but the creation and then sudden winding up of Sheffield 4 Limited...the confirmation statement for 2019 though shows it to be SWFC Holdings Limited and no update for 2020 means no change?

Talking of the Hong Kong company, the club accounts state "Sheffield Wednesday Holdings Limited" whereas the company accounts above state "SWFC Holdings Limited". Could be semantics, but then there doesn't seem to be a second company- can only find for SWFC Holdings Limited" rather than "Sheffield Wednesday Holdings Limited" so far!

Any ideas @Owl Visiting on the structure etc? Seems somewhat sketchy with a mix of all these subsidiaries, one possibly two Hong Kong based companies though I assume it's the same one but worded differently, and how separated out the Sheffield companies are from the overall group- if at all?

Edited February 2, 2021 by Mr Popodopolous

[Owl Visiting]

Interesting stuff, even though most of it goes way over my head. Can't say I really know anything about this type of stuff so can't add anything I'm afraid. 

[Mr Popodopolous]

May as well go back into this. Couple of bits of football finance related stuff at this level.

Firstly- the FFP/P&S system is still in play albeit in its amended form. Matt Hughes in the Daily Mail Ahead of the Game last week says that for Reading and Stoke there could be trouble ahead!

https://www.dailymail.co.uk/sport/football/article-9255691/AHEAD-GAME-Premier-Leagues-sporting-directors-form-WhatsApp-group.html

Found the snippet from the Stoke forum.

You called this quite well @Hxj

Last Summer after or during the Derby stuff you mentioned these two clubs- I thought Reading would be but I'm a bit surprised by Stoke given a) The numbers of loans out and b) Parachute Payments!

The second bit of news is Birmingham- they seem to be well and truly on the right track for FFP now. Selling big- but notably I heard that their wage bill is now £18-19m which is a fall of 50% from 2017/18 and their absurd £37.5m and Amortisation only £1-2m!

Forecast to only have £6.5m losses this season- bear in mind this is a non revenue season due to Covid but also includes the Profit on Bellingham- and on a secondary level, Harding, Spanish striker and midfielder sold to Millwall. Further, as the HK accounts suggested their losses last season were £18m- Credit where it's due! Maybe even to the EFL and their Business Plan!

They said that wages of £18-19m, usual Revenue in a non Covid season about £24m- that's a huge transformation off the pitch if true- now what isn't clear is if that is Playing Budget, or club wages- if it includes employer PAYE tax and pension or if that's before those contributions.

Still though, it's a huge improvement and credit where it is due.

I'd argue the Sheffield Wednesday case was a partial victory, partial loss. The individual charges fell away and the deduction halved for some weird reason but 6 points and doubtless oversight in the market. Shouldn't have been halved though.

Edited February 18, 2021 by Mr Popodopolous

[Hxj]

On 18/02/2021 at 18:39, Mr Popodopolous said:

You called this quite well @Hxj

Last Summer after or during the Derby stuff you mentioned these two clubs- I thought Reading would be but I'm a bit surprised by Stoke given a) The numbers of loans out and b) Parachute Payments!

Thank you @Mr Popodopolous or maybe they just read my post and stole it!

The problem with Stoke is the £50 odd million they spent in 2017/18 on players in their first season back in the Championship.  The 'Something or Bust' sensation is a lesson to all the 'Spend - Spend - Spend' posters on here.  At the end of 2018/19 they had intangible player assets of £80 million with amortisation running at £25 million a year.  How successful have Afobe, Ince, Vokes etc been for Stoke?  The amount that they needed to write off their players for 2019/20 and onwards is more than the remaining value of their parachute payments.

As an aside the charge documents for Birmingham City provided some interesting details on how transfers are funded.

[Mr Popodopolous]

Seems Sheffield Wednesday have published their 2018/19 accounts. @Davefevs @downendcity @Hxj @Lrrr

Had a quick scan of Kieran Maguire's summary! £19m PROFIT, brought about by the Stadium Sale being rolled forward to the following season/year.

Also £6-7m in the form of a confidential payment. Presumably that'd be for Steve Bruce and co to Newcastle.

Chansiri said in one of his may rambling briefings first year rent free so I assume that zero rent for that season.

Not even looked at them properly yet but the big takeaway is Profit through Stadium Sale being rolled forward.

[Mr Popodopolous]

Had a quick look. Basically SWFC Holdings is the controlling party, Sheffield 2 Limited controls that and Chansiri controls that.

What I still can't work out is, and remember the Sheffield Wednesday controlling Party at Companies House and confirmation statement too didn't state this, so I wonder if there is any chance that Sheffield 3 falls under SWFC Holdings which can eliminate on consolidation.

Sheffield 2, Sheffield 3 and Sheffield 5 Accounts- not out yet- maybe would show more.

[Mr Popodopolous]

@BTRFTG @chinapig @CyderInACan might also be interested in their latest financial dealings.

"Accidentally" putting the Stadium sale in the wrong year to begin with...feels like an FRC matter to me, potentially.

That aside, worth noting that the 2017/18 accounts were 14 months so adjusted for that purpose.

https://www.swfc.co.uk/news/2021/march/annual-accounts-published/

Seems like they're fine for FFP as it stands unfortunately but I'm not sure the EFL should accept this so readily given that their deduction was halved despite not getting it done in time- the tariff showed 12 points, let alone escalating losses etc.

 

Edited March 10, 2021 by Mr Popodopolous

[BTRFTG]

9 hours ago, Mr Popodopolous said:

@BTRFTG @chinapig @CyderInACan might also be interested in their latest financial dealings.

"Accidentally" putting the Stadium sale in the wrong year to begin with...feels like an FRC matter to me, potentially.

That aside, worth noting that the 2017/18 accounts were 14 months so adjusted for that purpose.

https://www.swfc.co.uk/news/2021/march/annual-accounts-published/

Seems like they're fine for FFP as it stands unfortunately but I'm not sure the EFL should accept this so readily given that their deduction was halved despite not getting it done in time- the tariff showed 12 points, let alone escalating losses etc.

 

Not remotely surprising as, has been previously identified, the club didn't own the stadium on the claimed selling date.

Haven't bothered to look but in these accounts were they still claiming to gave banked all proceeds upfront cf what FRS requires? That itself is a con given there's no guarantee the monies will ever be paid.

[Mr Popodopolous]

7 hours ago, BTRFTG said:

Not remotely surprising as, has been previously identified, the club didn't own the stadium on the claimed selling date.

Haven't bothered to look but in these accounts were they still claiming to gave banked all proceeds upfront cf what FRS requires? That itself is a con given there's no guarantee the monies will ever be paid.

The correct Accounting Treatment then? I still wonder if the EFL will take a view...

Instalments- £7.5m now and £52.5m or maybe it's £7.5m, £7.5m banked with £45m still to come. Have read elsewhere that it is offsetting of loans already made by Chansiri.

[BTRFTG]

16 hours ago, Mr Popodopolous said:

The correct Accounting Treatment then? I still wonder if the EFL will take a view...

Instalments- £7.5m now and £52.5m or maybe it's £7.5m, £7.5m banked with £45m still to come. Have read elsewhere that it is offsetting of loans already made by Chansiri.

I haven't looked this time but in their original, qualified accounts, I think they claimed receipt of the total value of the stadium sale (sic)  for FFP purposes whilst at the time not having banking a penny. I'm assuming for FFP one isn't allowed to utilise monies that may, or may not, be advanced in future accounting periods? That would make a complete mockery of what's already a farce. Clubs could agree to transfer players with compulsory buy back to resolve any overspend in any reporting period.

[Mr Popodopolous]

Nottingham Forest.

It's complicated as this and last season are averaged and halved. I expect their allowable costs are between £4-5m per season. I'll be fair, they do sell players on a regular basis- though some Academy product with minimal gametime- Appiah- to Almeria for £8m I think it was, is curious.

2017/18 Losses- £5,596,000 HOWEVER included £5m of Loan Write Off which doesn't count towards FFP. I'll assume Marinakis tops them up to the Upper rather than the Lower Loss Limits- so their FFP losses I expect £5,596,000 to £6,596,000 for that season.

2018/19 Losses- A whopping £25,115,000 and that was despite/inclusive of a Profit on Disposal of Player Registrations of £10,558,000.

2019/20 Losses- A smaller £15,947,000- albeit despite/inclusive of the £11,253,000 in Profit Disposal of Player Registrations. Unsure how to account for the Debt Write off as well- £5m again- could be from past owner or current? Let's assume it's excluded.

In summary, they're fine for 3 years to 2019 and 3 years to 2020. Maybe Income loss in 2019/20 attributable to Covid £3m?

If we then look at the picture going into this season ie the Combined average of this and last year as 'T' then...

Say it's £5m in Allowable Costs in a given year. 

T-2, 2017/18- P&S Loss=£5,596,000.

T-1, 2018/19- P&S Loss=£20,115,000.

Means they can lose an average- for P&S- of £13,298,000 over this and last season. In practice that's an Accounting Loss of say £18,298,000.

Last year it was £15,947,000- am assuming that £5m in Allowable Costs but also that the Debt Write Off excluded.

Therefore their P&S Loss for this season maybe £15m? Unsure which Costs specifically are excluded for Covid and this will affect all clubs but a loss of maybe £22m in Accounting terms and they are in breach.

Even if they don't breach this year, assuming that a) The rules don't materially change and b) The roll-up remains, their new starting point will be the £20,115,000 P&S loss in 2018/19. Tricky! Lamouchi sacking will cost as well...

Tbh still need to try and calculate precisely the combined average for this year but it looks like they're not heading towards calmer waters.

Edited March 11, 2021 by Mr Popodopolous

[Mr Popodopolous]

6 hours ago, BTRFTG said:

I haven't looked this time but in their original, qualified accounts, I think they claimed receipt of the total value of the stadium sale (sic)  for FFP purposes whilst at the time not having banking a penny. I'm assuming for FFP one isn't allowed to utilise monies that may, or may not, be advanced in future accounting periods? That would make a complete mockery of what's already a farce. Clubs could agree to transfer players with compulsory buy back to resolve any overspend in any reporting period.

As far as I can tell, it's payable in Instalments- Cash Flow whereas it hits the P&L in one hit.

Interested to know how the Compulsory buyback idea would work? Hits the Balance Sheet in Amortisation, ie Straight Line so I don't see how in that respect- but in theory depending on certain aspects...

I still look at their Corporate Structure and wonder if the Hillsborough sale and leaseback should be adjusted out- IF Sheffield 3 or Sheffield 5 Limited are part of the overall group, it cancels out at a Group level and is adjusted out of the results. Still some investigating for the EFL do do IMO.

[BTRFTG]

22 hours ago, Mr Popodopolous said:

I still look at their Corporate Structure and wonder if the Hillsborough sale and leaseback should be adjusted out-

In theory any stadium sale, if correctly accounted for, should adjust out (if one has correctly reflected the value of the asset and disposed of it at the correct market valuation there is no profit, though we know what game folks make in valuing bespoke assets.)  Not sure what FFP says but swopping assets for income should not be reflected as a measure of financial prudence.

Given FFP exists wholly to keep the status quo at the very top of the tree and has had, demonstrably,  no impact on improving financial prudence, it should be scrapped forthwith.

[WarksRobin]

The plot thickens...

[downendcity]

1 hour ago, WarksRobin said:

The plot thickens...

Derventio Holdings wanted to buy Wayne Rooney’s Derby County but Morris was only prepared to see them Derby County!

[Davefevs]

 

[Mr Popodopolous]

BIG losses there, wow.

That said Middlesbrough and Gibson strike me as one of the more sensibly run clubs in general, in this- the FFP era...

Had a quick skimread of that SwissRamble thread and they made it...

However next season, that £1m FFP Profit disappears from view- to be replaced by that £9m as Starting Point assuming the merger and rollup remains in place, but that swing was in no small part due to the realty of being a former Parachute Club- something that any, maybe all of Cardiff, Stoke and Swansea will discover next season. In fairness big sales in 2018/19 and wage bill was dropped £10m in 2019/20, but might they be hemmed in a bit for a while?

Edited March 19, 2021 by Mr Popodopolous

[Mr Popodopolous]

How much will come of it who knows but it's been definitively nailed down, that the EFL WILL be appealing vs the Derby amortisation charge verdict.

https://the72.co.uk/227856/derby-county-to-vigourously-resist-efl-appeals-as-governing-body-takes-next-step-vs-rams/

@Hxj @Davefevs @downendcity  @AnotherDerbyFan

On 17/03/2021 at 15:47, WarksRobin said:

The plot thickens...

I wonder if these two events might have been linked? That said BZI or whatever their exact name was, have form for non takeovers.

[Hxj]

11 hours ago, Mr Popodopolous said:

BIG losses there, wow.

That said Middlesbrough and Gibson strike me as one of the more sensibly run clubs in general, in this- the FFP era...

It looks as if they have managed the transition well.

The wage bill is £30 million, definitely mid-Championship and £18 million of the loss was depreciation on transfer fees.  The balance of fees to be written off at the end of the 2020 accounting period is only £16 million.

They have headroom to lose £80 odd million to 2021 and still meet FFP.

It just demonstrates why Gibson gets annoyed with all the messing around elsewhere.

Edited March 20, 2021 by Hxj

[Hxj]

7 hours ago, Mr Popodopolous said:

I wonder if these two events might have been linked? 

Why would you buy Deby County for the rumoured £60 million with all the rubbish hanging over their heads still.

[Davefevs]

 

[BLRed]

So @Mr Popodopolous, simplifying all the above which is far beyond my understanding, who out of the clubs in the championship are looking down the barrel of the gun come season end? Also, will any of the clubs gunning for promotion be in trouble should they fail to get promotion? Brentford, Swansea, reading et al.

from my brief reading of this thread, sheff weds and derby potentially could be in trouble financially, Birmingham had issues, now resolved but are staring relegation in the face, I thought I read that reading could also be in trouble financially and could have resolved had they sold their left back instead of losing him on a free.

swansea not long ago we’re having issues. Are they in the more financially and relying on promo to get out of it?

[Mr Popodopolous]

On 20/03/2021 at 08:44, Hxj said:

It looks as if they have managed the transition well.

The wage bill is £30 million, definitely mid-Championship and £18 million of the loss was depreciation on transfer fees.  The balance of fees to be written off at the end of the 2020 accounting period is only £16 million.

They have headroom to lose £80 odd million to 2021 and still meet FFP.

It just demonstrates why Gibson gets annoyed with all the messing around elsewhere.

Agreed- one of the better clubs for sure. Think they'll be fine and definitely agree on Gibson and his annoyance at elsewhere and reasons for it being justified.

On 20/03/2021 at 08:51, Hxj said:

Why would you buy Deby County for the rumoured £60 million with all the rubbish hanging over their heads still.

Concur- though reading on their forum their fans or a lot of them seem so blase about it all. One of them however, one of the (few) sensible financial ones reckons it'll be the academy, free transfers and loan market this coming summer mainly.

10 hours ago, BOSRed said:

So @Mr Popodopolous, simplifying all the above which is far beyond my understanding, who out of the clubs in the championship are looking down the barrel of the gun come season end? Also, will any of the clubs gunning for promotion be in trouble should they fail to get promotion? Brentford, Swansea, reading et al.

from my brief reading of this thread, sheff weds and derby potentially could be in trouble financially, Birmingham had issues, now resolved but are staring relegation in the face, I thought I read that reading could also be in trouble financially and could have resolved had they sold their left back instead of losing him on a free.

swansea not long ago we’re having issues. Are they in the more financially and relying on promo to get out of it?

I'll give it a go!

Brentford should seem aok IMO,  Look at who they sell and for how much- they have started to spend more and up the wage bill but they also sold Griffin Park or the land on which it stood to help fund new ground- that's a legitimate profit as far as I can see, because disposing of a former ground/the land of it seems aok to me, actually getting rid. Long story short I don't see them being in issues.

Reading surely are heading for issues and Richards has now gone to Bayern on a free according to reports- personally I'd like to see them docked points in March some of these clubs as per the original FFP regs, any club over in March should be docked points in April unless they have a binding sale of a player in the summer- ie arranged now but to be sold in summer but still falling within the Accounting Period. Maybe they're walking the line very tightly, also read Stoke are coming close- once Parachute Payments gone they might have issues but not as urgent as Reading. Sheffield Wednesday got docked 12, halved to 6 and then were allowed to move Stadium forward into 2018/19 when it was originally sold, EFL appealing clearance for Derby and will post some figures I saw online for them summarised nicely by someone else heading into 2021/22 almost irrespective of this case- ironically an EFL win on this appeal and a restatement of accounts would help them moving forward but surely push them into breach in prior Accounts.

In terms of Sheffield Wednesday I have to wonder if there aren't still grounds for the EFL here, for example I'd be looking at a) Company Structure and b) The justification for the rolling forward. Ideally they'll go down and be hamstrung a bit more, knowing that if they spend to come back up it'll still carry over in some respects but I hope the EFL are looking at aspects.

Birmingham resolved off it, in serious issues on it- Swansea it's hard to say, they seem to have been selling players tbh and came down at the same time as Stoke but went into cutback mode much quicker it seemed. Their 2019/20 Accounts could be instructive.

In terms of hamstrung- not hard sanctions but restrictions- I wonder about Blackburn and Nottingham Forest to name 2.

[Mr Popodopolous]

Shaun Harvey- he speaks!

https://offthepitch.com/a/interview-former-football-league-ceo-games-impossible-job

Sadly half and maybe more of it behind a paywall but he suggests that keeping 72 clubs in existence was deemed a success- wonder if (justifiably) tighter FFP enforcement might have made more owners throw in the towel jeopardising clubs- some in particular.

Of course I think that's the wrong approach for football, but it might explain a thing or two. Maybe parts of this interview are online- I used to be a subscriber...

Quote

• Shaun Harvey who ran the EFL for six years says the board’s policy was a “rescue culture” with success measured in terms of keeping its 72 clubs alive for the whole season.
• Harvey left the EFL in 2019 amidst heavy criticism about governance and commercial deals. Harvey is saying that no club entered administration until the final days of his reign.
• Yorkshireman has been advising Wrexham’s new owners, Ryan Reynolds and Rob McElhenney, on their takeover and operations.
• Harvey says that salary caps “anomalous” with a competitive industry, but says Wrexham won’t be spending their way into the league.

This might well start to explain a few things...

Edited March 24, 2021 by Mr Popodopolous

[AnotherDerbyFan]

On 20/03/2021 at 01:30, Mr Popodopolous said:

How much will come of it who knows but it's been definitively nailed down, that the EFL WILL be appealing vs the Derby amortisation charge verdict.

https://the72.co.uk/227856/derby-county-to-vigourously-resist-efl-appeals-as-governing-body-takes-next-step-vs-rams/

@Hxj @Davefevs @downendcity  @AnotherDerbyFan

I wonder if these two events might have been linked? That said BZI or whatever their exact name was, have form for non takeovers.

I expect to hear something from next week onwards. I'm still certain we won't get any form of punishment, but we'll see.

Can't see it being linked to be honest. You can only get strung along for so long before enough is enough - 1 year on from when talks started, 4 months on from it going through "imminently", and 3 months on from "sending the money over".

14 hours ago, Mr Popodopolous said:

Agreed- one of the better clubs for sure. Think they'll be fine and definitely agree on Gibson and his annoyance at elsewhere and reasons for it being justified.

Concur- though reading on their forum their fans or a lot of them seem so blase about it all. One of them however, one of the (few) sensible financial ones reckons it'll be the academy, free transfers and loan market this coming summer mainly.

It's hard to see it being anything else without selling the academy graduates already in the team (Buchanan, Bird, Knight, Sibley). Come the summer, we won't have many other players worth anything, in fact, we won't have many players left at all.

Given we posted a £25m P&S loss in 18/19, amortisation jumping from just under £5m in that period to £25.1m in 19/20 (slightly offset by a reduction in wages {c£10m?}), I'm expecting another rabbit to be pulled out of the hat just to get us under the 20/21 limit to be honest. I'm already bracing myself for the backlash from you when those account eventually come out 

Once we reach a conclusion with the EFL hearing, it won't be much of a wait until we get to see the 18/19 and 19/20 accounts which will provide a much clearer picture going forward.

14 hours ago, Mr Popodopolous said:

I'll give it a go!

Brentford should seem aok IMO,  Look at who they sell and for how much- they have started to spend more and up the wage bill but they also sold Griffin Park or the land on which it stood to help fund new ground- that's a legitimate profit as far as I can see, because disposing of a former ground/the land of it seems aok to me, actually getting rid. Long story short I don't see them being in issues.

Reading surely are heading for issues and Richards has now gone to Bayern on a free according to reports- personally I'd like to see them docked points in March some of these clubs as per the original FFP regs, any club over in March should be docked points in April unless they have a binding sale of a player in the summer- ie arranged now but to be sold in summer but still falling within the Accounting Period. Maybe they're walking the line very tightly, also read Stoke are coming close- once Parachute Payments gone they might have issues but not as urgent as Reading. Sheffield Wednesday got docked 12, halved to 6 and then were allowed to move Stadium forward into 2018/19 when it was originally sold, EFL appealing clearance for Derby and will post some figures I saw online for them summarised nicely by someone else heading into 2021/22 almost irrespective of this case- ironically an EFL win on this appeal and a restatement of accounts would help them moving forward but surely push them into breach in prior Accounts.

In terms of Sheffield Wednesday I have to wonder if there aren't still grounds for the EFL here, for example I'd be looking at a) Company Structure and b) The justification for the rolling forward. Ideally they'll go down and be hamstrung a bit more, knowing that if they spend to come back up it'll still carry over in some respects but I hope the EFL are looking at aspects.

Birmingham resolved off it, in serious issues on it- Swansea it's hard to say, they seem to have been selling players tbh and came down at the same time as Stoke but went into cutback mode much quicker it seemed. Their 2019/20 Accounts could be instructive.

In terms of hamstrung- not hard sanctions but restrictions- I wonder about Blackburn and Nottingham Forest to name 2.

For the current 2021 period, my 3 would be Reading, Stoke and Cardiff. Derby would be 4th. I'm amazed Reading have so far escaped punishment. They were very close to the limit in 2019 so I find it hard to believe they are still within limits given their transfers since. Stoke and Cardiff must be pretty close too given their wage bills, bloated squads and parachute payments reducing. I don't see any others being in danger.

For 2022, a lot depends on how well the recently relegated teams have cut their wage bill and dealt with amortisation. Along with Stoke and Cardiff, I think Swansea and Huddersfield may struggle (without promotion). Reading and Derby would also remain on my watch list. Forest will need to cut their wage bill to stay within limits, but shouldn't be too tricky for them to achieve that.

[Lrrr]

Bournemouth were only profitable 1 season in the PL

 

[GrahamC]

9 minutes ago, Lrrr said:

Bournemouth were only profitable 1 season in the PL

 

Absolute myth of a club.

Cheated FFP by a country mile to get into the Prem, if they can’t get back during their parachute payments era they are in big trouble, even with one of Putin’s mates propping them up.

[downendcity]

2 hours ago, Lrrr said:

Bournemouth were only profitable 1 season in the PL

 

 

Ive mentioned before reading an article that detailed that Bolton made a profit in only 1 of their 11 years in the premier league!