The Championship FFP Thread (Merged)

[Mr Popodopolous]

The prior and starting point for SWFC and the parent. The parent includes more in the way of everything because it is June 21st 2019 to July 31st 2020 due to date of formation whereas the club itself runs from August 1st 2019 to July 31st 2020.

Club

This was only a few months into Covid, so no huge impact yet probably- was a £24.084m loss despite and inclusive of a £6.203m profit on disposal of Players/Employees. 12 months, easy to align.

Sheffield 2 Limited

Disregard for FFP purposes the Impairment of Goodwill...but that's still an £17.638m accounting loss incorporating a month and 9 days of the period to 2019 and then the 2019/20 season...this is despite and inclusive of a £15.385m Profit on disposal of players/ex management,. This appears to include the Bruce compensation as it happened in mid July and perhaps another player sold/loan fee. Rhodes? The Impairment of Goodwill is very much a one off but interested to put the other half of this or the club one together once it arises- on the other hand it'll include some other costs from the final month and 9 days of the accounts to/season of 2018/19.

Reason the two don't align is because date of Incorporation for Sheffield 2 Limited was 21st June 2019.

Edited April 28, 2022 by Mr Popodopolous

[Mr Popodopolous]

https://www.swanseacity.com/news/swansea-city-confirm-latest-accounts-1

Swansea lost £4.6m last year. Of course in the third and final year of Parachute Payments. No issues FFP wise to 2021 and none I expect to 2022 either.

Getting the wage bill down nicely, seemingly last season it was only £27.7m!? That's a total, inclusive of all staff- despite Ayew and then a loanee such as Hourihane to name 2 still being on the books.

Quote

The club employed an average of 244 members of staff, including playing staff, backroom staff and part-time matchday staff, during the year at a cost of £27.7m. This compared to 321 staff members at a cost of £40.2m the previous year – a reduction in staff costs of £12.5m.

Operating costs fell- one part of that will be the step down from a Category 1 to a Category 2 academy,

Quite a fall although some of that will be artificial due to lack of matchday staff and furlough I expect.

Overall though some very contrasting losses to Stoke on the face of it, two clubs who came down the same year and were on the same overall Parachute Payment structure- although until we see the full accounts we won't be able to see for sure.

Players such as Woodman, Guehi, Gibbs-White, Hourihane all there on loan- Palmer too.

Ayew in his final season.

Yet a wage bill and yes a bit artificially deflated on the non player side of only £27.7m.

Edited April 29, 2022 by Mr Popodopolous

[Davefevs]

No issues here.

[Mr Popodopolous]

None whatsoever. My only query would be is that looking forward as Parachutes end and Championship cash starts could it be an issue in a year or 2? However I expect they will cut their cloth as they have tended to do for most of the last 20 years,

[Mr Popodopolous]

Just waiting from this League on Sheffield Wednesday and West Brom now.

The latter utilised some kind of Covid extra time so don't have to submit until the end of June publicly at least. Sheffield Wednesday who knows. Should find out tomorrow or within the next few days...but who knows.

[Mr Popodopolous]

Oh yes there is one more who win the award for "Dog ate my accounting homework".

Derby! Nothing since April 2019 in the public domain! Although technically with a few of these it may only be 2019 and 2020 due to application for a Covid extension.

Quote

Derby County FC Limited

1. 2019
2. 2020
3. 2021?

Accounts overdue.

Club DCFC Limited

1. 2019
2. 2020
3. 2021?

Accounts overdue.

Stadia DCFC Limited

1. 2019
2. 2020
3. 2021?

Accounts overdue.

The Derby County FC Academy Limited

1. 2019
2. 2020
3. 2021?

Accounts overdue.

Sevco 5112 Limited

1. 2019
2. 2020
3. 2021?

Accounts overdue.

Gellaw Newco 203 Limited

1. 2019
2. 2020
3. 2021?

Accounts overdue.

That genuinely I dunno what to say! They've literally submitted nothing at all for Club, Parent, New Parent and the 3 subsidiaries in the consolidator for 3 years!!

It should be easy now- they gave indicative figures as the basis for the Agreed Decision/Sanctions. Put 2021 and maybe a year or 2 before onto website and publish them that way if no CH due to administration. If Indicative Figures align to actual accounts- and they should- and they follow the conditions laid out in the Agreed Decision then they could have released them months back.

Edited April 29, 2022 by Mr Popodopolous

[Hxj]

On 28/04/2022 at 14:51, Mr Popodopolous said:

What's your take @Hxj ? It seems not exactly well laid out let's say.

I agree @Mr Popodopolousbut I think that you are overthinking this.  If we take our favourite club Derby County as an example.  There are relegated in May 2022.  They are therefore required to comply with 'Championship FFP' for all periods to 30 June 2022 (or whenever their accounting date is).  So they can be sanctioned under the Championship FFP rules for the periods to June 2022.   Thereafter they fall within the League 1 rules.

Edited April 29, 2022 by Hxj

[Mr Popodopolous]

1 hour ago, Hxj said:

I agree @Mr Popodopolousbut I think that you are overthinking this.  If we take our favourite club Derby County as an example.  There are relegated in May 2022.  They are therefore required to comply with 'Championship FFP' for all periods to 30 June 2022 (or whenever their accounting date is).  So they can be sanctioned under the Championship FFP rules for the periods to June 2022.   Thereafter they fall within the League 1 rules.

Thanks @Hxj that makes sense. Although it does seem to let a relegated side off the hook somewhat...supposing they return straight back up would it be a new 3 year period commencing from 2022/23 or?

Quote

2019/20 and 2020/21- combined average

2021/22- SCMP although as part of a 3 year period...

...2022/23- 3 year assessment.

Bit irked at some of the signings they have been making considering relegation and an undoubted hit to income as a result. It doesn't sit well given the 3 year nature and the fact that the Hillsborough deal moving forward which got the deduction halved drops off the calculations after this season.

Am referring to Sheffield Wednesday here. I listed them elsewhere, have to say it's a pretty big anomaly.

Edited April 29, 2022 by Mr Popodopolous

[Davefevs]

40 minutes ago, Mr Popodopolous said:

Thanks @Hxj that makes sense. Although it does seem to let a relegated side off the hook somewhat...supposing they return straight back up would it be a new 3 year period commencing from 2022/23 or?

Bit irked at some of the signings they have been making considering relegation and an undoubted hit to income as a result. It doesn't sit well given the 3 year nature and the fact that the Hillsborough deal moving forward which got the deduction halved drops off the calculations after this season.

Am referring to Sheffield Wednesday here. I listed them elsewhere, have to say it's a pretty big anomaly.

I thought it worked like this:

club relegated to Lg1 21/22.

22/23 - SCMP rules apply.  Say they get promoted.

23/24 - P&S apply but £13m / 1yr

24/25 - P&S apply, but now 2 years, so £26m

25/26 - P&S apply, finally get to a 3 year / £39m cycle

Personally I don’t think staying within 60% is that easy for most clubs, Derby have in effect had to get their act together, gonna have a low cost squad.  If they go mad, they are gonna make like difficult upon promotion.

[Mr Popodopolous]

25 minutes ago, Davefevs said:

I thought it worked like this:

club relegated to Lg1 21/22.

22/23 - SCMP rules apply.  Say they get promoted.

23/24 - P&S apply but £13m / 1yr

24/25 - P&S apply, but now 2 years, so £26m

25/26 - P&S apply, finally get to a 3 year / £39m cycle

Personally I don’t think staying within 60% is that easy for most clubs, Derby have in effect had to get their act together, gonna have a low cost squad.  If they go mad, they are gonna make like difficult upon promotion.

Could well do although I look at Sheffield Wednesday, their wage levels and like I say...that's an idea though, didn't know that bit about the 1 year rules on return, 2 to £26m and so on.

Their peak income in recent years was £22m. In League One the TV money falls by £5m I believe, or mix of TV and Solidarity anyway- they could quite conceivably be on an Income of <£20m.

Then I look at their transfer activity- I listed bits of it elsewhere but...I know players left as well for sure and maybe I'm underestimating this side of things.

Summer 2021

1. Peacock-Farrell (Loan) Burnley- PL
2. Hunt (Free) Post us- Championship
3. Gibson (Loan) Everton- PL He was at Reading last year, young player though he is who were top 8 Championship.
4. Byers (Free/Undisclosed) Swansea- Championship
5. Wing (Loan) Middlesbrough- Championship (loan ended in Jan 2022)
6. Shodipo (Loan) QPR- Championship
7. Sow (Free) Waaljik- Eredivisie
8. Johnson (Free) Post Middlesbrough- Championhip
9. Gregory (Free/Undisclosed)- Stoke- Championship
10. Berahino (Undisclosed) Zulte Waregem- Belgian First Division A (their top flight)
11. Corbenau (Loanj) Wolves- PL (loan ended in Jan 2022)
12. Kamberi (Loan) St Gallen- Swiss top flight

In Autumn 2021 they added Mendez-Laing on a free.

Winter 2022 window

1. Dean (Loan) Birmingham- Championship
2. Storey (Loan) Preston- Championship
3. John-Jules (Loan) Arsenal- PL

Obviously Wing and Corbeanu left for varied reasons.

Plus retention of- and two of these I should note also renewed/altered terms.

1. Iorfa- also extended/renewed terms.
2. Dunkley
3. Bannan
4. Windass- also extended/renewed terms.
5. Paterson

On a potential income of £15-20m even with transitional rules. Does not sit well at all. Where they are sourcing them from these signings is crazy for a side relegated to the 3rd tier. This is a big hole in the rules if indeed it exists- strikes me as a very top-heavy squad for League 1.

https://en.wikipedia.org/wiki/Sheffield_Wednesday_F.C.#Players

Us on a higher income battling to stay within FFP- and then you see a relegated side different rules yes it seems, able to have this season of transfer activity.

Edited April 30, 2022 by Mr Popodopolous

[Hxj]

8 hours ago, Davefevs said:

I thought it worked like this:

club relegated to Lg1 21/22.

22/23 - SCMP rules apply.  Say they get promoted.

23/24 - P&S apply but £13m / 1yr

24/25 - P&S apply, but now 2 years, so £26m

25/26 - P&S apply, finally get to a 3 year / £39m cycle

The rules don't appear to have a different treatment for clubs promoted from League One.  Therefore my assumption has always been that the same cap applies £39 million over three years.

 

7 hours ago, Mr Popodopolous said:

Us on a higher income battling to stay within FFP- and then you see a relegated side different rules yes it seems, able to have this season of transfer activity.

In 2020 turnover was BCFC £16m SWFC £22m at the club level.

Wages were BCFC £27m SWFC £33m

Player Amortisation BCFC £12m SWFC £6m

Balance of player contracts left BCFC £25m SWFC £4m

I think that at 2020 SWFC were in a better financial position than we were.

 

Edited April 30, 2022 by Hxj

[Davefevs]

Looks like you are right.

So although you can go mad in Lg1 it only hampers you on promotion.

Ipswich’s accounts will be interesting.  What they do this summer will be even more interesting.  Ashton said their net spend last summer was neutral…which is BS.

[Mr Popodopolous]

Thanks both.

The rolling forward of the stadium transaction means no issue to 2021 IMO.

To 2022? Who knows. Think they'd pass a 3 year one however.

Would it therefore be fair to assume that if a club are Championship - League One-Championship that the £39m test applies?

Anything else would give a bizarre incentive for a side to relegate themselves out of an FFP issue.

Reading's Agreed Decision included an adjustment in the event of relegation. 

[Mr Popodopolous]

Small update- still no sign of the accounts.

Swansea's haven't shown in full yet though as I said Friday, can easily extrapolate chunks of it from their press release. Sheffield Wednesday? Neither a press release nor the accounts themselves- let alone appearing at CH...hopefully especially in the case of Sheffield Wednesday if they don't arrive in the next week or so, the appropriate embargo will be applied.

https://www.efl.com/contentassets/b3cd34c726c341ca9636610aa4503172/regulations-season-2021-22-final.pdf

The reason I say the next week even if technically due on Saturday just gone is due to the Bank Holiday weekend. That could stretch it out a bit.

Edited May 2, 2022 by Mr Popodopolous

[Davefevs]

Mr P

[Mr Popodopolous]

12 hours ago, Davefevs said:

Mr P

Thanks Dave. Had a quick look at Kieran's thread and here are the accounts in more detail, not looked at them yet.

https://www.swfc.co.uk/siteassets/pdf-links/may-2022/swfc-accounts--year-ended-31-july-2021.pdf

I've been quite hard on them in the last 3 years but credit where it is due, that's a big wage reduction. Amortisation looks strongly under control too and yeah they are releasing accounts pretty much on time now.

I give criticism where it is due and I shall give a bit of credit. Down to £21m was a snippet I saw- yes good stuff. I think that they and Chansiri not only because of the Imposed Business Plan but in their own right appear to be on the right road now.

Okay I see not quite as big as I thought- wages ie wages before NI etc but still down to £24m once all of that included- credit.

Edited May 3, 2022 by Mr Popodopolous

[phantom]

Not Championship yet, but potentially a side going to have problems

Burnley face 'significant' loan repayment if relegated, accounts show

Burnley would need to pay back "a significant proportion" of a £65m loan at the end of the season if relegated from the Premier League.

The loan was taken out as part of the club's takeover by ALK Capital in December 2020.

The information is contained in the release of the club's latest financial accounts to 31 July 2021.

The club does say in the event of relegation it is "satisfied" it would retain the support of its lenders.

However, the information is bound to spark concern among fans given the delicate position of Burnley in the Premier League table.

Widely condemned as a panic move by chairman Alan Pace, who led the ALK takeover, the decision has so far been vindicated by a run of four matches unbeaten under temporary boss Mike Jackson, including three successive wins.

That has taken Burnley, who have four games remaining, up to 16th in the table, two points clear of Everton, who are third from bottom but have a game in hand.

The financial state of Burnley has been debated since ALK's takeover.

In the latest accounts, it is confirmed that £102m-worth of debt has been taken on through two of its holding companies, £65m to Burnley FC Holdings Ltd and £37m to the Burnley Football and Athletic Company.

On the £65m loan specifically, it is outlined in the accounts that it attracts 8% annual interest. Only interest payments are made until December 2025, when the entire sum due is due to be repaid.

However, relegation brings that repayment date forward significantly, with a further "significant reduction of the loan balance" due in what is described as "a continuing relegation scenario" - if the club failed to return to the top flight.

"The balance can potentially be settled by various means, and the group's reserves are sufficient to enable a significant proportion of the balance to be settled by way of dividends if required," the accounts say.

The club has £50m in reserves - down from £80m in last year's financial results.

Over the year to July 2021, the club's turnover fell from £134m to £115m, which the club said was driven by "the lack of fan attendance" due to Covid restrictions "and the lower placed league finish at 17th".

It mean the club recorded a £3m pre-tax loss.

The accounts also state that following the end of the reporting period, Burnley advanced £10m to a "fellow group company".

 

TAKEN FROM: https://www.bbc.co.uk/sport/football/61317194

[chinapig]

My memory may be failing me but I'm sure I also heard recently, probably from Kieran Maguire or Matt Slater, that if they are relegated the club has to be sold back to the previous owners at a fixed price.

[Mr Popodopolous]

Thanks @phantom

It's capitalism but seems scandalous that an exceptionally well run club- or business- and leverage it with debt to seemingly finance the buyout.

Perhaps still having £50m in reserves would save the day- at least for a year or two but given what % of their revenue is linked to TV they might have to bounce back fairly sharpish. OTOH a quick repayment of a good chunk of it out of Parachute Payments and reserves might stabilise it.

The flipside might be that if they stay up and for a few years then they can start to accelerate a bit- risk and reward but I'm struggling to see a great deal of reward for the club itself currently.

Edited May 4, 2022 by Mr Popodopolous

[Mr Popodopolous]

Had another look at Sheffield Wednesday.

All okay and as I said credit for the wages and amortisation dropping- Chansiri also seemingly stated an ambition of self-sufficiency a year or so ago.

What I would say is that based on a quick calculation, set of calculations their FFP loss once we use estimates plus the EFL's Covid loss allowance for the combined period well it could be anything between £15.5-17m. That's once 2018/19 profit drops off and should/could be a starting point for the 3 year cycle to 2022/23.

Meaning they can lose in FFP and Covid terms a combined aggregate of £22-23.5m across this and next season.

In other words- a while ago costs for Sheffield Wednesday in FFP terms were pegged at £2.5m per season and using this and the £2.5m Covid allowance for this year as a base...assuming the 2 are equal. Assuming too the FFP rules adjoining especially if they bounce straight back up. The £2.5m Covid allowance is applicable to 2021/22 but not to 2022/23- it could be different but the aggregate could be between £28.75-30.25m in the 2 seasons basically is what I am trying to say!

Edited May 4, 2022 by Mr Popodopolous

[Hxj]

As to Burnley, I don't really understand the journalist's comments.

I need to sit down with the accounts for Calderdale (the UK parent), its subsidiary Holdings (the company whose accounts were published), and its subsidiary Football to understand exactly what is going on.

Bearing in mind that Holdings and Football had turnover of £120 million, made a loss of £2.5million and have £50 million cash, not sure I have a huge amount of sympathy!

   

[Mr Popodopolous]

20 hours ago, Hxj said:

As to Burnley, I don't really understand the journalist's comments.

I need to sit down with the accounts for Calderdale (the UK parent), its subsidiary Holdings (the company whose accounts were published), and its subsidiary Football to understand exactly what is going on.

Bearing in mind that Holdings and Football had turnover of £120 million, made a loss of £2.5million and have £50 million cash, not sure I have a huge amount of sympathy!

   

Last bit in particular, when you put it like that...

Guess what I am trying to say is that it feels wrong for a very well run club but not a just very well run club but clubs verbatim, to effectively pay for its own takeover- and be left less well off as a result.

Burnley may be able to absorb it more readily than I thought but I don't really see an upside for them. Perhaps my thinking here is short-termist.

Edited May 5, 2022 by Mr Popodopolous

[WarksRobin]

11 minutes ago, Mr Popodopolous said:

Last bit in particular, when you put it like that...

Guess what I am trying to say is that it feels wrong for a very well run club but not a just very well run club but clubs verbatim, to effectively pay for its own takeover- and be left less well off as a result.

Burnley may be able to absorb it more readily than I thought but I don't really see an upside for them. Perhaps my thinking here is short-termist.

Capitalism at its worst. Put little into the business and take the maximum out.

[Mr Popodopolous]

15 minutes ago, WarksRobin said:

Capitalism at its worst. Put little into the business and take the maximum out.

Agreed.

Am trying to think of the upside if there is one down the track...struggling in this case. Debt to fuel growth maybe? Albeit relegation prior to the repayment looks like it maybe a disaster.

Edited May 5, 2022 by Mr Popodopolous

[WarksRobin]

1 hour ago, Mr Popodopolous said:

Agreed.

Am trying to think of the upside if there is one down the track...struggling in this case. Debt to fuel growth maybe? Albeit relegation prior to the repayment looks like it maybe a disaster.

Using debt for investment works in industries where it creates stable assets. I don’t think it works for on-field investment in sports because the value of playing assets is so intangible. Fine for improving infrastructure but not for buying players.

There should ideally be some sort of limit on debt as a proportion of turnover for football clubs as a health measure, but it would favour the big clubs.

[1960maaan]

Might be a bit of a side note, but a really interesting thread from Andy Holt on Twitter. A great follow BTW.

Carrying on the thread about parachute payments and not defending Mel Morris,
the situation @dcfcofficialneed not have got so bad and toxic I.M.O.
When we played Derby in the cup (we got beat 1-0 when Dan Barlaser was very harshly sent off ) I walked round our…ground among home and away fans and chatting to him. Many fans present that day will remember seeing us. Mel, knowing@ASFCofficialare operating within our means, said this.. ‘This is how football should be Andy, but it’s impossible to get there, it’s broken. 
He went on to describe the purgatory many champ clubs suffer. It opened my eyes.
You see@SkyBetChampclubs lose an average age of £16m per club, per annum, with a very slender hope of ever fixing it. To stop losing £16m, they either completely destroy their club and infrastructure and face a relegation or they get promoted to the @premierleague
Derby had lost £200m and was continuing to lose at a great rate of knots.
@dcfcofficial are a @premierleague club all day, but so are many others in this trap.
The same went for @LaticsOfficial who ended up in admin. I sat on a plane talking to someone on a plane journey discussing this issue. Wigan’s business plan was to lose £10m a year for the next 5 years, I can’t remember the year, but it was maybe 2018. I bought him a drink and said I’ll pay because ‘your need is greater than mine’
Not long after the club was transferred to the second chap (the one before Talal Al Hamed who has done a great job btw) The deal lasted weeks before Wigan ended up in admin.
The point of saying this is this, continued big losses lead to disaster , unless you’re owned by someone with an oil well or someone with Putin’s I’ll gotten dough to blow.
The other side of the coin is @ASFCofficial
We try to be sustainable, but we have no training ground, we have a very low budget, we’re at the back of the queue for players , we have very few staff, working out of portacabins, we had no water, not enough electricity, awful toilet facilities, laughable changing rooms that Roy Hodgson would let his players change in, no roof on the away end, everything falling to bits. But, we have a management team that is second to none, we have staff that are second to none, working all hours to make our new hospitality set up a success on top of their day jobs. We have each other’s backs, our manager isn’t looking over his shoulder all the time, our CEO isn’t.
I won’t throw hard earned dough down footballs money pit.. I will continually invest in facilities at a steady, manageable pace, topping up player sale income to complete the next piece of our jigsaw. I will commit the time and effort to finish what we’re doing It’s a boring 10 year plan.

More and more owners are waking up. My mate @DMAC102 went up to @SkyBetChamp with @theposh It will have killed him to accept that running the club sensibly meant chances of remaining in champ were low.. ..he’s a winner. 
@OfficialRUFC sit on the boundary, going up and down taking dough, getting parachute payments, Tony does a tremendous job there. Norwich, Fulham, up and down, win one season lose the next.
Football is BROKEN. A man on a galloping horse can see this. We need change and the only hope is @tracey_crouch fan led review.

Prem never distributes any cash without getting something in return. That’s where B teams, whole game solution and rest of ideas start. What can we give them. Like an abused child, thinking that smiling longingly will stop the abuse. Anyhow, you get where I’m coming from

Good morning BTW.

[Mr Popodopolous]

Interesting line that I saw elsewhere, the Reading issue may still be a live one pertaining to this season.

https://www.peterboroughtoday.co.uk/sport/football/peterborough-united/why-there-is-still-a-bit-of-hope-peterborough-united-can-avoid-relegation-this-season-3684927

@Davefevs @Hxj @Sheltons Army

Sheltons Army first mentioned this over Easter weekend IIRC on another thread. Will post the link to the Agreed Decision from last November later.

Presumably McCann is alluding to the suspended minus 6 that was attached. If they are found in breach but it is applied to NEXT season, could we see a repeat of the Wycombe v Derby saga?

Should add that for an in-season breach or overspend if Projections arrive at the start of March and prior 2 actuals then mid April seems sensible, the EFL have improved a fair bit but still work to do.

[Mr Popodopolous]

Here is the Agreed Decision as promised. Posted it a few times in the last 6 months on here but anyway.

https://www.efl.com/contentassets/065e21d5596b42e7a882322d3a203509/efl-v-reading-fc---agreed-decision-approved-for-publication.pdf

FWIW I doubt there will be an added -6 THIS season, perhaps they've even complied and will do so who knows but though points deductions should take place the following season, it is worth noting that Macclesfield saw suspended deductions activated in August 2020 after an EFL appeal- this is separate and different of course from the Sheffield Wednesday and Derby deductions, can be applied later and more flexibility over the timing based on the Macclesfield case.

Although I don't see how they could have breached this season if the EFL were approving transfers etc- and if they didn't submit required info in the required timeframe then that alone was worth an automatic -6 so unsure what will come of this tbh.

[old_eastender]

Hi Mr P,

With Leeds looking quite possible relegation candidates, I thought I'd read somewhere that Leeds would have breached FFP if they didn't get promoted, but that would have gone away when they did. If they do come down, could the EFL be after them?

 

[Mr Popodopolous]

On 12/05/2022 at 13:31, old_eastender said:

Hi Mr P,

With Leeds looking quite possible relegation candidates, I thought I'd read somewhere that Leeds would have breached FFP if they didn't get promoted, but that would have gone away when they did. If they do come down, could the EFL be after them?

 

Hi old eastender

I've taken a look at Leeds...I'd say not. Kieran Maguire and SwissRamble think they were right on/near the limit in the year of promotion but not over. The other thing to consider is that it was compliacated by Covid- benefitted all clubs, in the sense that there was no standalone test for 2019/20 or 2020/21...combined average of 2019/20 + 2020/21/2=the profit loss.

In the case of Leeds it was reported that a) Their promotion bonuses were £23m, these are excluded from FFP/P&S, b) Their FFP allowables- ie the usual- widely considered to be £5m per season...then you have an added layer of slight differentiation by the fact that they extended their 2019/20 accounts to 13 months, and as such the rebate to the PL was included in these accounts and not the 2020/21 as it shoudl have been...assume for cash flow purposes.

SwissRamble did a breakdown last year and may have done an updated one...taking these factors in I thought they were right up against £39m- indeed had they stayed down Phillips would have had to be sold, Bielsa and his staff- surely replaced by much cheaper alternatives to name but two measures.

Indeed, they weren't the only ones who were close- for had Fulham stayed down in 2019/20, it was reported that they would have walked into a soft embargo- and I can certainly believe that looking at their numbers.

Back to Leeds, think they were right on, walking along the line but just, just the right side.

Edited May 18, 2022 by Mr Popodopolous

[old_eastender]

16 hours ago, Mr Popodopolous said:

Hi old eastender

I've taken a look at Leeds...I'd say not. Kieran Maguire and SwissRamble think they were right on/near the limit in the year of promotion but not over. The other thing to consider is that it was compliacated by Covid- benefitted all clubs, in the sense that there was no standalone test for 2019/20 or 2020/21...combined average of 2019/20 + 2020/21/2=the profit loss.

In the case of Leeds it was reported that a) Their promotion bonuses were £23m, these are excluded from FFP/P&S, b) Their FFP allowables- ie the usual- widely considered to be £5m per season...then you have an added layer of slight differentiation by the fact that they extended their 2019/20 accounts to 13 months, and as such the rebate to the PL was included in these accounts and not the 2020/21 as it shoudl have been...assume for cash flow purposes.

SwissRamble did a breakdown last year and may have done an updated one...taking these factors in I thought they were right up against £39m- indeed had they stayed down Phillips would have had to be sold, Bielsa and his staff- surely replaced by much cheaper alternatives to name but two measures.

Indeed, they weren't the only ones who were close- for had Fulham stayed down in 2019/20, it was reported that they would have walked into a soft embargo- and I can certainly believe that looking at their numbers.

Back to Leeds, think they were right on, walking along the line but just, just the right side.

Cheers!

[Davefevs]

https://www.bbc.co.uk/sport/football/61520318
 

Mr P - suggests that Reading are still under control of contract offers by EFL.  Hoilett, Swift and Morrison likely to be the high earners, unlike Rinomhota, Laurent etc.

[Mr Popodopolous]

On 20/05/2022 at 10:39, Davefevs said:

https://www.bbc.co.uk/sport/football/61520318
 

Mr P - suggests that Reading are still under control of contract offers by EFL.  Hoilett, Swift and Morrison likely to be the high earners, unlike Rinomhota, Laurent etc.

Thanks Dave- finally got around to having a look at this thread. Swift gone that's one...good to see the Business Plan is still in play and tbh unlike a certain club in the East Midlands, Reading appear to have accepted things with relative good grace- Sheffield Wednesday got there in the end in that respect.

Rinohmota and Laurent, Yiadom could go either way- IMO anyway, Reading can probably offer them £x but I expect other clubs will be interested and can offer them y...but clearly not an A-lister free agent like Swift, Leeds were interested in him in January reportedly- surprised they didn't do back in for him given he's available on a free. He's attacking but also central- useful tactically for a CM 3, which I think they could do with. As well as his all round ability.

Laurent it was reported in the winter IIRC that Reading couldn't renew his contract, unsure if that's still the case. £16m the cap, but they might have figures covering both individuals and the squad as a whole so it's complex.

Edited May 27, 2022 by Mr Popodopolous

[chinapig]

46 minutes ago, Mr Popodopolous said:

Leeds were interested in him in January reportedly- surprised they didn't do back in for him given he's available on a free

Down to the change of manager I assume as they have now signed Aaronson from Salzburg.

[Port Said Red]

Not strictly FFP related but I saw this Private Eye piece about Bournemouth and thought it might be of interest.

Edited May 28, 2022 by Port Said Red

[chinapig]

30 minutes ago, Port Said Red said:

Not strictly FFP related but I saw this Private Eye piece about Bournemouth and thought it might be of interest.

Ah, the days when any shady character could buy UK citizenship. Next step the House of Lords?

[Mr Popodopolous]

Bit of a knock on effect for Reading from Pisa's loss- you'll be interested in this one Dave,.

5m obligation for Pisa to buy Puscas the event they went up- he was on loan there.

They lost. He's one of their higher earners along with Liam Moore...£16m wage bill and probably keeping P&S/FFP losses to £13m or less- challenging summer ahead!

Remember too that the suspended 6 point deduction if activated does not mitigate or reduce the effect of further sanctions for the specifics of a breach should it arise.

Edited May 30, 2022 by Mr Popodopolous

[Davefevs]

8 minutes ago, Mr Popodopolous said:

Bit of a knock on effect for Reading from Pisa's loss- you'll be interested in this one Dave,.

5m obligation for Pisa to buy Puscas the event they went up- he was on loan there.

They lost. He's one of their higher earners along with Liam Moore...£16m wage bill and probably keeping P&S/FFP losses to £13m or less- challenging summer ahead!

Remember too that the suspended 6 point deduction if activated does not mitigate or reduce the effect of further sanctions for the specifics of a breach should it arise.

I saw that he was playing, but had forgotten about the transfer obligation.  Makes you wonder if we had a promotion clause for Nagy…which we won’t get,

[GrahamC]

12 hours ago, Davefevs said:

I saw that he was playing, but had forgotten about the transfer obligation.  Makes you wonder if we had a promotion clause for Nagy…which we won’t get,

My hunch is that even if we did, it was small beer. 

Probably in the region of £500k at most (I appreciate every little helps), Serie A is nothing like the league it was in its 80s heyday,  a small club like Salernitana (with Djuric) stayed up & they almost went bankrupt during the season.

[Mr Popodopolous]

Small FFP update- divisional.

Although I'm unsure how it is a change from the current system- had Everton been relegated though I think they would have been in serious trouble- but Independent Panels/IDCs already do decide FFP sanctions or lack of (Agreed Decisions aside).

 

[Mr Popodopolous]

Done a bit of research and a little more detail on it- @Davefevs @chinapig @Hxj @ExiledAjax @downendcity and anyone else I've forgotten who is quite interested.

This is fairly interesting. Feels like somewhat of an ongoing tightening considering the amendments in mid February presumably haven't been thrown out.

https://www.carlisleunited.co.uk/news/2022/june/efl-clubs-vote-in-assessment-of-club-finances/

Certain amount of legalese in the below and will more than happily leave it to others to unpick. Sounds though unless I am getting this significantly wrong, that it would be the CRFU who would charge or not?

Quote

At today’s Extraordinary General Meeting, EFL clubs formally ratified the new Club Financial Reporting Panel (CRFP) and Club Financial Reporting Unit (CFRU).

9 June 2022

Club Financial Reporting Unit

The purpose of the CFRU is to oversee the League’s Regulations in relation to Club Financial Records, HMRC Reporting and the Financial Fair Play (FFP) Regulations (P&S in the Championship and SCMP in Leagues One and Two).

The CRFU will be the primary point of contact with Clubs and their Officials and will have delegated authority from favour for independent decision making and the Board.

This gives the CRFU the right to exercise the League’s existing powers to compel the provision of information and documents as it works to review Clubs’ submissions under the Financial Regulations.

Club Financial Reporting Panel

The CRFP will be an independently appointed expert panel, comprising of members with appropriate accountancy, legal and football expertise.

The Panel will make determinations based on the information provided to the CFRU and by the relevant Club(s).

In the event that either the CRFU or the Club consider that the CFRP has made an incorrect decision, a right of appeal to a League Arbitration Panel is available.

John Potterill-Tilney, Director of the Independent Club Financial Reporting Unit, said: “The formal introduction of the CFRU and the CFRP will bring additional consistency and independence to decision making in respect of matters relating to the Financial Regulations. 

“The CFRP is an important component in that its presence removes conflict of the EFL as a representative body but also as a sanctioning authority – adding a further layer of independence.”

 

Edited June 10, 2022 by Mr Popodopolous

[bcfc01]

Not really FFP and I can't see it mentioned anywhere else, but it looks like the EFL are giving Derby a pretty strong warning regarding the lack of take over progress.

https://www.bristolpost.co.uk/sport/football/football-news/efl-derby-county-bristol-rovers-7198023?utm_source=taboola&utm_medium=display&utm_campaign=exchange

[chinapig]

43 minutes ago, bcfc01 said:

Not really FFP and I can't see it mentioned anywhere else, but it looks like the EFL are giving Derby a pretty strong warning regarding the lack of take over progress.

https://www.bristolpost.co.uk/sport/football/football-news/efl-derby-county-bristol-rovers-7198023?utm_source=taboola&utm_medium=display&utm_campaign=exchange

In fact it's very much FFP related and covered in some detail by us nerds in the Derby deserve relegation thread.

[Davefevs]

 

[chinapig]

16 minutes ago, Davefevs said:

 

Crikey, no messing around with piddling points deductions. That's how to do it. Chapeau!

Mind you, are Bordeaux fans blaming a conspiracy by the EFL?

[Mr Popodopolous]

Impressive...although some action vs PSG would be more welcome.

Talking of state funded clubs, I see La Liga have made intervention vs Getafe- Almeria who have an owner with Saudi ties. Basically adjusted down the sponsorship to 'Fair Value' and it means Almeria's possible expenditure has been reduced accordingly- in La Liga clubs have to submit their spending plans and work with La Liga pre season, can prevent players from being registered etc.  It seems to have been Almeria- will still try to find the story.

Edit- it was and seems to be Almeria.

https://onefootball.com/en/news/almeria-punished-by-la-liga-for-psg-style-sponsorship-deals-34805216

Edited June 17, 2022 by Mr Popodopolous

[Mr Popodopolous]

Burnley wise- crisis appears to be averted or problem kicked down the road. Just the £15m to repay this time, dunno the details but that gives them some breathing space at least relative to expectation.

[Mr Popodopolous]

Stoke City- I have been looking forward to this one, Swiss Ramble!

A lot has been covered on here already but here we go.

 

[Mr Popodopolous]

Have amended some of my Stoke numbers based on Swiss Ramble's allowances and one or two other bits.

Still working on some for 2021/22 and remember this is Stoke's Covid numbers as estimated by them, not the EFL's £5m, £5m and £2.5m.

Saw a rather big claim that their wage bill was  down to £27m but unsure if this was before tax, NI etc, inclusive of non playing staff and so on.

Edited June 20, 2022 by Mr Popodopolous

[Merrick's Marvels]

1 hour ago, Mr Popodopolous said:

Stoke City- I have been looking forward to this one, Swiss Ramble!

A lot has been covered on here already but here we go.

 

What's the short version - is the news good, bad or indifferent for them? 

[Mr Popodopolous]

8 minutes ago, Merrick's Marvels said:

What's the short version - is the news good, bad or indifferent for them? 

I wish I could give a quick and easy answer but...

It's hard to say. More challenging moving forward says Swiss Ramble- and a reason it is hard to say is that their Covid claimed losses and add-backs are massively at odds with what clubs voted on...the headroom from 2021 onwards was shrinking though so questions certainly.

Clubs voted on £5m in 2019/20, £5m in 2020/21 and £2.5m last season.

Stoke have put in £30m in Player Impairment alone in 2019/20 and £11m in addbacks from lost transfer revenue or mix of profit and savings- the other £15m looks reasonable but how can one club be allowed to do that?? The Impairment in particular is doubly helpful because not only is it a big addition and therefore writeoff in the year itself, but it removes costs from future seasons.

Edited June 20, 2022 by Mr Popodopolous

[Davefevs]

Mr P….thought you might like this.  Mention of T-1 and projections, albeit Premier League.

 

[Hxj]

mmmm - Richarlison: Everton forward set for Tottenham Hotspur move after clubs agree deal - BBC Sport

[Mr Popodopolous]

On 30/06/2022 at 08:12, Davefevs said:

Mr P….thought you might like this.  Mention of T-1 and projections, albeit Premier League.

 

Thanks Dave- sold on the day itself...would have thought the combined Covid season would be T-1 then and T-2 going into next season. Burnley and Leeds dropped their cases btw it would seem- Kieran Maguire reckons that the profit on Richarlison via the Esk was £32m IIRC. I am assuming that the Richarlison profit got them over the line although their £170m in Covid losses is a total joke.

[Mr Popodopolous]

On 30/06/2022 at 12:50, billywedlock said:

If owners pay the bills , I have no issue . But with superficial FFP that allows others to receive millions in parachute payments the system is ridiculous  . It is financial unfair play and a nonsense . The Coates family would match any parachute  payment , and why are they not allowed to . The lawyers are asking the question I am sure. 

That may well be true- and is a perfectly valid regulatory position to hold, although Stoke are in no position to preach on one level...

1. £30m in Covid "Impairment" in 2019/20 alone.
2. £11m in Player Sale add-backs for 2020/21- indeed this bit could set a precedent as we are arguing this exact thing that as a result of Covid we can add-back lost player sale profits...no indication that the EFL have approved this method yet btw.
3. Parachute Payments are the big factor here- but cannot have one rule for Stoke and one for the other 23- if we get penalised I trust Mr. Lansdown will be pointing the finger at Stoke, indeed he should already be onto the EFL I would say. As should other clubs- the £30m Impairment feels a nonsense, simply insist on it straight line for FFP purposes and let the chips fall where they may. As for hypothetical Player Sale add-backs, you either approve some or none.

Oh and £32m Profit on the stadium and training ground combined- I have questions about the info for the stadium deal on the Land Registry vs claimed date in the accounts, see also Sheffield Wednesday and Hillsborough- similarities albeit different. Somewhat important as the EFL regulation in q not only excludes profit on fixed assets effective from the 2021/22 season but the accounting reference period covering that season. Devil and detail.

I should add, this £30m and £11m in particular is in the context of the EFL's club voted limit on a £5m Covid allowance for 2019/20, the same for 2020/21 and £2.5m for the season just gone.

My favoured FFP related solution to Stoke's manouvres would be:

1. If player transfer add-back profits not permitted, add the £11m back to the losses or remove them from the deductions- adding £11m in 2 seasons to the Covid period, thereby an average of £5.5m.
2. As for the £30m in Impairment, we can a) Add back the £30m to Covid losses and account for it there and then- £15m it would be averaged, or spread it over the term of contract for each player impaired, up until expiry or disposal- no small job the latter. If that puts them in breach of FFP then charge them or offer a settlement.

Edited July 1, 2022 by Mr Popodopolous

[Mr Popodopolous]

Two snippets.

1. West Brom's accounts ie the Group accounts should be out today or tomorrow- some movement at CH. Reported a £0.1m profit in 2020/21 but without seeing the full accounts it's hard to say- £55.5m their Upper Loss Limit to 2021/22 and to 2022/23.
2. Stoke- okay it's what I read on their forum but apparently made a £2m profit last season!? Possible I suppose but given the stadium and training ground sale saw a one off gain of £32m or so and Parachute Payments fomally ended in 2021/22 for them- ie 2020/21 was the final season of Parachute Payments- then it'd be some going. Yes Collins went for £12m IIRC and as an academy product is pure profit but that's a net swing of <£20m in gains/profit on disposal.

Edited July 6, 2022 by Mr Popodopolous

[ExiledAjax]

Just on the WBA loan to their owner's other company. POF Podcast saying that the owner is going to repay that £5m loan by taking a matching dividend from WBA. So essentially he's borrowed money from WBA, and is then going to repay it using money that WBA is going to pay to him. If so that's absolutely appalling, regardless of legality. From my knowledge of EFL Rules (built up during discussions around Derby) there's likely not anything that can be done to stop him.

The two deals will essentially be separate, and I believe will go through a Channel Islands company as well - essentially the dividend gets declared up the company chain until it arrives at Mr Lei's account. Either way, and however it's papered, it's an atrocious way to treat a football club.

I can't stress enough how angry I'll be if when he gets away with this.

[Davefevs]

3 hours ago, ExiledAjax said:

Just on the WBA loan to their owner's other company. POF Podcast saying that the owner is going to repay that £5m loan by taking a matching dividend from WBA. So essentially he's borrowed money from WBA, and is then going to repay it using money that WBA is going to pay to him. If so that's absolutely appalling, regardless of legality. From my knowledge of EFL Rules (built up during discussions around Derby) there's likely not anything that can be done to stop him.

The two deals will essentially be separate, and I believe will go through a Channel Islands company as well - essentially the dividend gets declared up the company chain until it arrives at Mr Lei's account. Either way, and however it's papered, it's an atrocious way to treat a football club.

I can't stress enough how angry I'll be if when he gets away with this.

Saw this and thought of you.

@Albuquirky

[ExiledAjax]

22 minutes ago, Davefevs said:

Saw this and thought of you.

@Albuquirky

Yeh, from my memory of English dividends this is correct. FYI, we the uninitiated will only have access to old accounts, whereas the determination of whether there are distributable reserves will be done at the point the dividend is declared, so it is very hard for anyone outside of WBA to guess whether they do have £5m knocking around for a dividend.

POF were suggesting that Lei (or whatever company structure he owns WBA through) is not the sole shareholder. I don't have the time to dig into this one so am operating on titbits and foggy memories, but this absolutely stinks of an abuse of power by a terrible owner. I hope there are some educated WBA fans who can get together and properly call this out because at face value it's ******* disgusting.

Edited July 7, 2022 by ExiledAjax

[Port Said Red]

Not FFP as such, but of interest to @Mr Popodopolous, @Hxjand @Davefevs. Among others 

Dodgy goings on at the Cobblers.

From Private Eye

 

[chinapig]

28 minutes ago, Port Said Red said:

Not FFP as such, but of interest to @Mr Popodopolous, @Hxjand @Davefevs. Among others 

Dodgy goings on at the Cobblers.

From Private Eye

 

Corruption in football and the Conservative Party? Surely not?

Were any of the companies mentioned awarded a PPE contract?

[Mr Popodopolous]

The new EFL regulations are out for 2022/23! I've had a quick look but in particular at the FFP/P&S ones...some changes and amendments for sure, codified now after reports in recent months.

@Davefevs @chinapig @downendcity @Hxj @Port Said Red @CyderInACan

@ExiledAjax @Coppello

Feel free to tag others I may have forgotten!

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

Seems there is a lot more detail in respect of RPTs- although they call it APTs!

Quote

 1.1.7  Associated Party means:

  (a)  a Person who has Control of the Club or would be deemed to be interested in the Club in accordance with Regulation 105.2;

  (b)  any Associate of any Person(s) who has Control of the Club or would be deemed to be interested in the Club in accordance with Regulation 105.2; and

  (c)  any Person of which any Person(s) who has Control of the Club or would be deemed to be interested in the Club in accordance Regulation 105.2:

   (i)  is a director; and/or

   (ii)  either directly or indirectly holds shares; and/or

   (iii)  is able to influence the financial, commercial or business affairs or management or administration of that company, and

  (d)  any Person of which any Associate of any Person(s) who has Control of the Club or would be deemed to be interested in the Club:

   (i)  is a director; and/or

   (ii)  either directly or indirectly holds shares; and/or

   (iii)  is able to exercise any influence or control; and

  (e)  any Person which is a Group Undertaking, Parent Undertaking, Subsidiary Undertaking or Associated Undertaking of any Person referred to in paragraphs 1.1.7(c) and 1.1.7(d) above;

  (f)  any Person who is an Associate, shareholder, director, employee or is able to influence the financial, commercial or business affairs or the management or administration of any Person referred to in 1.1.7(c), 1.1.7(d) and 1.1.7(e) and any Associate of any such shareholder, director or employee;

  (g)  any Person who is an employee or partner or Associate of any Person referred to at paragraph 1.1.7(f) of this definition;

  (h)  any Person who has an agreement with any Person listed referred to in paragraphs 1.1.7(a)-(g) in relation to the exercise of their voting power in the Club or the holding or disposal of their interests in the Club;

  (i)  a Person who holds and/or has possession of the beneficial interest in, and/ or the ability to exercise the voting rights applicable to, shares or other securities in the Club (whether directly, indirectly, by means of holding such interests in one or more other person) or by contract or otherwise including without limitation by way of any Concert Party) which confer in aggregate on the holder(s) thereof 5 per cent or more of the total voting rights exercisable at general meetings of the Club;

  (j)  any Person who holds a loan interest or other debt or security interest of any kind in the Club or an entity in the same group of companies as the Club, with the exception of any such interest held:

   (i)  as part of regulated banking services provided by a Financial Institution;

   (ii)  in the form of bonds, notes or other securities held by professional investors; or

   (iii)  pursuant to a debenture providing the holder with access to tickets to events at the Club’s stadium;

  (k)  where a government, public or state funded body has Control of a Club, any Person who that government, public or state funded body also has Control of.

  When considering where a Person is an Associated Party, The League will direct its attention to the substance of the relationship and not merely the legal form.

 1.1.8  Associated Party Transaction means any transaction, whether directly or indirectly, between a Club and an Associated Party. In considering whether a transaction is an Associated Party Transaction, The League will direct its attention to the substance of the transaction and not merely the legal form.

Guidance

If the accounting standards applied by the Club do not require the Club to disclose Associated Party Transactions within the notes to the Annual Accounts, the transactions should be detailed in a separate schedule and submitted to The League.

More meat on the bones in respect of Covid Costs too! Some look hard to reconcile with the below.

Quote

 1.1.11  COVID-19 Costs means lost revenues and/or exceptional costs incurred by a Club that are directly attributable to the COVID-19 pandemic and that are identified and calculated in accordance with such guidance as issued by The League.

 Claims of COVID-19 Costs of up to:

  (a)  £5,000,000 in Season 2019/20;

  (b)  £5,000,000 in Season 2020/21; and

  (c)  £2,500,000 in Season 2021/22,

  shall be accepted by the League based on Club submissions alone . For any claim for COVID-19 Costs which in aggregate has an impact of more than £7,500,000 on the Club’s P&S Calculation (acknowledging the combination and averaging of Season 2019/20 and Season 2020/21) The League shall assess whether in order to be excluded from the calculation of Adjusted Earnings Before Tax, any part or all of the claim needs to be separately disclosed:

  (d)  by way of notes to the Annual Accounts; or

  (e)  by way of supplementary information which has been identified and calculated in accordance with such guidance as issued by The League and reconciles to the Annual Accounts or agreed upon procedures and which has been subject to independent audit.

Guidance

The express intention of this amendment is to introduce allowances of up to £5m in Seasons 2019/20 and 2020/21 with retrospective and/or retroactive effect in respect of results submitted in those Seasons and for any other reporting periods to which those Seasons relate.

Where a Club has claimed Covid-19 Costs which in aggregate are in excess of the £12.5m limit (averaged out to £7.5m for the purposes of the P&S calculation) The League will require a full breakdown of all Covid-19 Costs for review.

In the scenario where one single addback is material to the £12.5m limit a Club may apply to the EFL for only this element of the addback to be subject to the independent audit, providing that the remainder are otherwise in accordance with the issued COVID-19 Costs guidance and within the relevant amounts above.

Please note for P&S submissions in Season 2023/24, the COVID-19 Costs addback for Seasons 2019/20 and 2020/21 will no longer be relevant. Therefore only the COVID-19 Costs for Season 2021/22 will be included in the P&S Calculation and will be capped at £2.5m.

Intrigued by the concept of introducing those allowances with retrospective and retroactive effect...to what extent is it up to the League to accept Covid-19 Costs?

Quote

 1.1.16  Player Registration Schedule means a: table (in such a format which shall be agreed by The League with each Club from time to time) which provides such information which is required to be disclosed in accordance with Annex 2 of this Appendix 5.

Reinforces straight line amortisation- how for example might it affect Stoke and the £30m Impairment! Not a problem with the Impairment but trying to class it as a Covid-19 Cost.

Quote

2.9  Where The League determines, in its reasonable opinion and having considered the Future Financial Information provided by the Club in accordance with Rule 2.7, that the Club is forecasting to breach the Upper Loss Threshold in T+1 and/or T+2 then The League shall have the powers set out in Regulation 16.20.

Guidance

In the event that a Club, based on the information provided by the Club to The League, is forecasting to exceed the Upper Loss Threshold in T+1 and/or T+2, The League will consider whether it is necessary to require the Club to operate in accordance with the terms of a business plan (to include, by way of example, requirements relating to player acquisitions, disposals, reduction in player costs (i.e. wages) and, where the Club thinks it is achievable, uplifts in revenue) in order to bring the Club back into compliance with Upper Loss Threshold for T+1 and/or T+2.

The League recognises that T+2 is so far in the future it would be difficult for Clubs and The League to accurately forecast for the purpose of P&S and the potential exercise of these powers needs to be considered in that context.

General Approach

The purpose of this Rule is to give Clubs and The League the opportunity to work together to develop the terms of a business plan which will include remedial measures to allow the Club to bring itself back into compliance with these Rules.

The following paragraphs detail The League’s general approach in respect of forecasted breaches in T+1 and/or T+2.

Forecasting Breaches in T+1

Where a Club is forecasting a non-material breach only occurring in T+2, The League’s general approach will usually be to request further information in order to gain comfort that the Club has the necessary plans in place to work towards compliance. The League, generally, in these circumstances will not seek to utilise the more restrictive powers afforded to it unless a change in circumstances deems this necessary. The League will then reassess the Club’s position in T+1 based on the updated results posted as part of the usual March submission process.

If a Club is forecasting a material breach occurring in T+2, The League’s general approach would be to require the Club to provide a significantly more detailed plan than would be the case if the forecasted breach was not material. The League would likely treat such instances in the similar manner it would for a forecasted breach in T+1. Again, The League will then reassess the Club’s position in T+1 based on the updated results posted as part of the usual March submission process.

Clubs will note that this guidance sets out The League’s general approach and that The League will need to determine each set circumstances based on the merits whilst also ensuring that all Clubs are treated consistently. This may lead to The League diverging from its general approach where it is appropriate to do so and nothing in this guidance will affect The League’s right to do so.

This is a real game-changer- we touched upon it in February, but Forecasting of future breaches and the EFL getting involved ahead of time. I still maintain it gives the League more scope for an instant deduction if required.

Quote

2.10  If the P&S Calculation results in a loss that exceeds the Upper Loss Threshold (calculated in accordance with Rule 3) then:

 2.10.1  the Club shall be subject to a Player registration embargo such that The League shall have the right to refuse any application made by that Club to register any Player or any new contract of an existing Player with that Club; and

 2.10.2  the League may exercise its powers set out in Regulation 16.20; and

 2.10.3 the Club shall be treated as being in breach of these Rules and accordingly The League shall refer the breach to the CFRP in accordance with Appendix 6 of the Regulations.

CRFP gets its first proper mention, and the automatic embargo for a projected breach in March now set in stone.

Pulled out some of the key changes- maybe some I've missed but I feel these are quite important.

Edited July 22, 2022 by Mr Popodopolous

[Mr Popodopolous]

Interested as well to note, having had another look again the distinction between material and non-material breaches in terms of future forecasting...how big is a material breach in this context do we think?

[Davefevs]

Thanks @Mr Popodopolousfir putting in the effort, will read fully myself in time.

For me, the biggie was the bit re Covid:

 

As I suggested (although no means was I certain), the £7.5m was the club not having to evidence, and anything over this has to be evidenced and covered in accounts.  The retrospective / retroactive bit is good to see.  Clubs like Forest added notes to their 20/21 accounts re 21/22 “losses”, whereas we put nothing.  They were covering their arses, but I worried that as we hadn’t put anything, might be have missed the boat.  The new rules allow us to submit in our reporting alone, not having to put into accounts per se.

So, now, more than ever I’m confident Richard Gould will have agreed with the EFL what we are “excluding” for Covid and it will be more than the £7.5m…and we will therefore be inside FFP / P&S for this period (ending 22/23).  As you know our position strengthens from 23/24 onwards, so we are in a safe place as far as I’m concerned.

IKm sure other clubs like Stoke will be “fudge” through more exclusions than us, and there will be some clubs who’ve put through less than us.  They really were extraordinary times, but I’d also blame clubs like us for allowing us to get into a situation where Covid completely screwed our financial planning.

Guess my FFP Covid exclusion estimates aren’t really worth the cells in excel they are now typed into…but I will keep them going until 21/22 drops out…I’m a patient man

1 hour ago, Mr Popodopolous said:

Interested as well to note, having had another look again the distinction between material and non-material breaches in terms of future forecasting...how big is a material breach in this context do we think?

Yes, definitely something to look into and get our heads around.

[pl00peh91]

Made a last minute decision to come to this, realised I’d missed the deadline for ticket sales and decided to buy a ticket in the home end. I guess I just miss live football too much! COYR

[Mr Popodopolous]

15 hours ago, Davefevs said:

Thanks @Mr Popodopolousfir putting in the effort, will read fully myself in time.

For me, the biggie was the bit re Covid:

 

As I suggested (although no means was I certain), the £7.5m was the club not having to evidence, and anything over this has to be evidenced and covered in accounts.  The retrospective / retroactive bit is good to see.  Clubs like Forest added notes to their 20/21 accounts re 21/22 “losses”, whereas we put nothing.  They were covering their arses, but I worried that as we hadn’t put anything, might be have missed the boat.  The new rules allow us to submit in our reporting alone, not having to put into accounts per se.

So, now, more than ever I’m confident Richard Gould will have agreed with the EFL what we are “excluding” for Covid and it will be more than the £7.5m…and we will therefore be inside FFP / P&S for this period (ending 22/23).  As you know our position strengthens from 23/24 onwards, so we are in a safe place as far as I’m concerned.

IKm sure other clubs like Stoke will be “fudge” through more exclusions than us, and there will be some clubs who’ve put through less than us.  They really were extraordinary times, but I’d also blame clubs like us for allowing us to get into a situation where Covid completely screwed our financial planning.

Guess my FFP Covid exclusion estimates aren’t really worth the cells in excel they are now typed into…but I will keep them going until 21/22 drops out…I’m a patient man

Yes, definitely something to look into and get our heads around.

Cheers Dave- look forward to your analysis too.

Yes- agree on Covid being a big thing. That's a better way of looking at it than me- could it also apply to claims deemed excessive- e.g. Stoke? ie Retrospectively/retroactively pushing back against £30m in Covid Impairment e.g. I don't quite buy still the idea of Covid Impairment or transfer add-backs for P&S purposes. That is good though, in our reporting- indeed a Telegraph article in March/April suggested that all clubs had put in revised numbers to the EFL.

Agreed.

My quick and easy revised Covid estimates then would be quite simply- the hit in revenue in the two seasons and £2.5m last season...question is would this be net of cost savings ie putting on games or...? Likely would leave us right close to the £39m to 2022/23 but not exceeding, maybe a bit lower- or maybe just I dunno £1-1.5m over something like that but nothing that can't be easily resolved.

It is.

FWIW my view and only my view on the correct categories:

• Gate Receipts
• Season ticket lost revenue/cost of refund
• Matchday revenue
• Matchday hospitality losses
• Corporate Revenue- ie all non matchday revenue on the footprint of the stadium.
• Costs associated with Covid-19 Protocols- ie testing, PPE, hand sanitiser and so on. Goes for the training ground and other facilities a club use as well as the ground and matchday itself.
• Losses or rebates in TV Revenue- especially applicable to PL or Parachute clubs.
• Cost or foregone savings associated with non utilisation of furlough scheme- some clubs did this, especially in 2019/20.

Sure there are some I have missed but that covers a range of issues I'd say.

Still have a serious problem with hypothetical player loss add-backs or indeed seeking to write off £30m in Player Impairment as a Covid Cost- that latter one sticks out like a sore thumb!

Edited July 23, 2022 by Mr Popodopolous

[Swede]

Here's a question for people in the know or would care to comment; I believe Stoke have some FFP issues to deal with. Its no secret that they've been trying to offload Afobe and his wages whilst under contract. So managing to do another deal with Millwall I guess to take his wages off the books only to go out and sign Dwight Gale presumably on bigger wages. How is that at all possible????

[Hxj]

On 22/07/2022 at 19:58, Mr Popodopolous said:

The new EFL regulations are out for 2022/23!

Thanks @Mr Popodopolous lots of significant changes and lots of more subtle ones.  I do get the impression that the changes are all in the right direction particularly with the new internal oversight and dispute panel.

As regards the 'material' and 'immaterial' issue my view is that an overspend resulting in a 1-3 point deduction is immaterial in the context of the FFP deductions.

[WarksRobin]

8 hours ago, Swede said:

Here's a question for people in the know or would care to comment; I believe Stoke have some FFP issues to deal with. Its no secret that they've been trying to offload Afobe and his wages whilst under contract. So managing to do another deal with Millwall I guess to take his wages off the books only to go out and sign Dwight Gale presumably on bigger wages. How is that at all possible????

Stoke just signed Gayle and O’Shea so can’t be struggling too much with FFP

[Port Said Red]

49 minutes ago, WarksRobin said:

Stoke just signed Gayle and O’Shea so can’t be struggling too much with FFP

Well they "think" they aren't but from memory their claims for COVID comp are way out of kilter with the figures in that EFL document. They might be one of the first in front of the dispute panel.