£10m FFP Bill

[Ghost of Clough]

Been thinking about this a bit. We have something like 21 players who will be on 'starting 11' wages. 6 of these for example are CMs. Ideally we want to reduce the 6 down to 4 (maybe even 3). But, there's a strong chance selling Johnson or Butterfield (even if someone would take them) would hurt us in terms of FFP. Hudd is our strongest mid so we don't want to lose him and who is likely to risk buying Thorne? I cant see anything other than Bryson and Ledley leaving this summer. If we're lucky, someone will loan Butterfield. Anya and Blackman could be others who we're stuck with for the same reasons.

As such, I think our outgoings will BE heavily reliant on who we can 'afford' to get rid of rather than want to get rid of / don't want to get rid of.  In my opinion...

Highly likely to leave: Olsson, Bryson, Ledley, Vydra, Martin.

Less likely to leave: Pearce, Carson, Forsyth, Keogh, Huddlestone.

 

I wouldn’t be too surprised if we started the season with something similar to this: Carson, Wisdom, Keogh, Davies, Pearce, Forsyth, Anya, Huddlestone, Johnson, Thorne, Butterfield, Weimann, Lawrence, Blackman, Nugent Jerome.

Players like Bennett, Thomas, Lowe, Hanson, Elsnik etc plugging the gaps.

[Carnero]

@Ghost of Clough seems about right but people keep forgetting that Olsson is out for 9 months so going nowhere!

[Ghost of Clough]

Oops.. completely forgot about that ?

[RadioactiveWaste]

6 minutes ago, Carnero said:

@Ghost of Clough seems about right but people keep forgetting that Olsson is out for 9 months so going nowhere!

DCFC are delighted to announce the brand new moor farm glue and adhesive factory. It is believed to produce adhesive from animal products. A number of DCFC squad players are believed to be scheduled to visit for "re-education"

[Carnero]

1 minute ago, RadioactiveWaste said:

DCFC are delighted to announce the brand new moor farm glue and adhesive factory. It is believed to produce adhesive from animal products. A number of DCFC squad players are believed to be scheduled to visit for "re-education"

Alternatively if we threaten to stick him on co-comms alongside Jack Woodward for the season he might miraculously recover?

[ramblur]

On ‎23‎/‎05‎/‎2018 at 17:11, ramblur said:

 

I see the topic of Butters, Bradders and Nick has cropped up. In 14/15 ( the last year before new arrangements came in) the yearly amortization was £3.320m ,n ad the total net book value of players' regs was £7.39m - this implies that under the old method values wouldn't have been amortised down to zero for over 2 years.

The 15/16 figure was £3.370 m, a rise of £50k, but you can't fall into the trap of thinking that this just related to new 15/16 business, as some of the 14/15 stuff may have fallen out. Let's just say, looking at an extreme position, that total residual values of £7.39m were allocated to the 14/15 'members' b/fwd, thus meaning that the whole £3.32m falls out, and that the whole of the £3.37m relates to new 15/16 business. Shackell must account for over £1m of that (you have to add agents' costs. + League levy to fee), so you've only less than £2.37m left for the rest . If you wanted this to eventually bring the Butters/ Bradders residual values down to zero, this would imply all in fees for the pair of 4x £2.37m = £9.5m, which wasn't the case (even without agents' fees and levy). Don' t forget this scenario is an extreme situation ,which makes the assumption outlined earlier, and also implies no amortization for any regs other than Butters, Bradders and Shacks.

I maintain we have a potential problem over Nick, Bradders and Butters, and would agree with @Spanish .

Couldn't understand why the £7.394m figure was so high.......then I remembered that this was the year I was searching for a mysterious amount of c£2.3m (from memory) forming part of the 'Agents' fees+ League Levy' column. Relatively recent events might well explain this. The £7.394m comprises £4.369m of players' Regs +£3.025m for agents/levy ( this 2nd figure is very high in comparison to fees, but if you take the £2.3m out, it doesn't look so bad). I assume the £4.369m would relate mainly to GT,JR and RK. Unfortunately, this probably adversely affects my best case scenario, which probably bumps up the residual values originally allocated to Butters and Bradders.

On a more optimistic note, I've had a fresh look at this year.If you look at 16/17, stripping out transfer profits would give a £24m loss on normal income and expenditure, which after deducting FFP exemptions of c£6m would have implied an FFP loss of £18m ( as opposed to the actual loss of c£2m, because of transfer profits). I always use the underlying position on normal income and expenditure as a starting point for the following year.

In 17/18 we probably made transfer profits of somewhere around £2m (CS/JR). We now have the revelation of £1.8m compo, and we also have play off income which didn't arise in 16/17, though I doubt it would be that much (£0.5m might even be optimistic). On the other side of the equation, I'd expect amortization to have risen by £1m+, resulting from the signing of 3 older players ( not particularly a bad thing,as book values would at least be reduced). I'd expect overall income (excluding play offs) to have risen, but impossible to estimate a figure. On the wages front, I find it impossible to call, but I doubt it's a particularly significant amount in either direction.

All in all, we may now be closer to the average annual allowance of £13m, which would be good news for the 17/18, 18/19,19/20 cycle. I'm not the slightest bit worried about the 15/16 ,16/17, 17/18 or 16/17, 17/18, 18/19 cycles because of the £9m result posted in 15/16 and the c£2m in 16/17. My only concern is that we don't go too far over £13m in either 17/18 or 18/19 because of the effect this would have on the 19/20 budget ( staying within £13m in both 17/18 and 18/19 would be preferable, but I think there's a lot of work to be done there).

[ramblur]

I've had another look at this suggested £10m fine, and the only way I could see any truth in it would be if the EFL had objected to our exceptional income of £3m in 14/15 and £12m in 15/16. Both of these years had 'stand alone' annual allowances; the retrospective 3 year cycles didn't start until 16/17. If these were disallowed, we'd have gone c£2.5m (from memory) over in 14/15, and £8m in 15/16. This gives a total of £10.5m. I find it hard to believe for the following reasons:-

1) The EFL have had these results a long time - why haven't we heard anything by now?

2) In QPR's case, the ruling made a specific reference to the cancellation/ waiver of related party debt not being allowed for FFP purposes in respect of any exceptional income being generated. In 14/15, our cancellation/waiver/gain arose from an unrelated party (Co-Op Bank), whilst in 15/16, NAP became unrelated upon sale of the whole of their controlling interest in the club. The loan that was assigned to them (and subsequently waived) was assigned to what became an external interest (just like the Bank). Now if the EFL had reservations about how this was 'engineered', then that's a different matter, but I repeat that it's now a bit late in the day anyway.

Does anyone have a link to this change in fines from just promoted clubs to any club? (Preferably an EFL link, as I don't particularly trust journos/bloggers). 

[Spanish]

11 minutes ago, ramblur said:

I've had another look at this suggested £10m fine, and the only way I could see any truth in it would be if the EFL had objected to our exceptional income of £3m in 14/15 and £12m in 15/16. Both of these years had 'stand alone' annual allowances; the retrospective 3 year cycles didn't start until 16/17. If these were disallowed, we'd have gone c£2.5m (from memory) over in 14/15, and £8m in 15/16. This gives a total of £10.5m. I find it hard to believe for the following reasons:-

1) The EFL have had these results a long time - why haven't we heard anything by now?

2) In QPR's case, the ruling made a specific reference to the cancellation/ waiver of related party debt not being allowed for FFP purposes in respect of any exceptional income being generated. In 14/15, our cancellation/waiver/gain arose from an unrelated party (Co-Op Bank), whilst in 15/16, NAP became unrelated upon sale of the whole of their controlling interest in the club. The loan that was assigned to them (and subsequently waived) was assigned to what became an external interest (just like the Bank). Now if the EFL had reservations about how this was 'engineered', then that's a different matter, but I repeat that it's now a bit late in the day anyway.

Does anyone have a link to this change in fines from just promoted clubs to any club? (Preferably an EFL link, as I don't particularly trust journos/bloggers). 

for what its worth

8               Clubs Promoted Out of the Championship

8.1          If a Championship Club is promoted to the Premier League (a Promoted Championship Club) the Promoted Championship Club shall, notwithstanding promotion, remain bound by these Rules following promotion as if it were still a Championship Club, until such time as it has complied with all of its obligations in respect of the Reporting Period covering its last Season as a Championship Club.  Until such time as the Promoted Championship Club has so complied, each of these Rules shall be deemed to apply to that Promoted Championship Club (other than Rule 6).

8.2          By way of example, a Championship Club promoted in May 2014 shall by 1st December 2014 submit its Fair Play Information in accordance with Rule 3 notwithstanding the fact that it is no longer a member of The League.

8.3          Failure to comply with Rule 8.1 will result in that Promoted Championship Club not being entitled to share in the Distribution (if any) (as defined in Rule 10.4).  Further, the Annual Accounts next filed for that Promoted Championship Club shall be utilised by The League for determining whether the Promoted Championship Club has fulfilled the Fair Play Requirement or not (“Accounts Based Assessment”).  The Accounts Based Assessment shall (absent manifest error) be final and binding for the purposes of calculating the Fine (if any) payable in accordance with Rule 10.

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

 

[Spanish]

also when you read how the fines are calculated a £10m fine equates to mega bucks

10.2       By way of example, if a Defaulting Club had exceeded the Fair Play Requirement by £300,000 then that Defaulting Club would be fined:

10.2.1   1% of the first £100,000 (i.e. £1,000); and

10.2.2   20% of the next £200,000 (i.e. £40,000),

giving a total Fine of £41,000

It is so ludicrous to me that I can't be bothered to work it out

[duncanjwitham]

12 minutes ago, Spanish said:

also when you read how the fines are calculated a £10m fine equates to mega bucks

10.2       By way of example, if a Defaulting Club had exceeded the Fair Play Requirement by £300,000 then that Defaulting Club would be fined:

10.2.1   1% of the first £100,000 (i.e. £1,000); and

10.2.2   20% of the next £200,000 (i.e. £40,000),

giving a total Fine of £41,000

It is so ludicrous to me that I can't be bothered to work it out

I don't think it was ever going to be an actual fine, and the Mail report itself refers to an 'FFP bill'. If it ever existed, it was much more likely to be a "we have to raise £10m by June to meet the FFP restrictions" type of issue.

[ramblur]

30 minutes ago, Spanish said:

also when you read how the fines are calculated a £10m fine equates to mega bucks

10.2       By way of example, if a Defaulting Club had exceeded the Fair Play Requirement by £300,000 then that Defaulting Club would be fined:

10.2.1   1% of the first £100,000 (i.e. £1,000); and

10.2.2   20% of the next £200,000 (i.e. £40,000),

giving a total Fine of £41,000

It is so ludicrous to me that I can't be bothered to work it out

Thanks- I'd agree that there's absolutely no way you could get anywhere near a £10m fine based on excesses of c£2.5m and £8m, so I think the suggestion's total rubbish.

Those rules do seem to be out of date though. There's no reference to the new 3 year cycles, and it appears that clubs now have to produce current year projections  in the last year of the cycle. I did also note that our accounts were signed off in February, which means that the December 1st deadlines for actuals has changed. It now looks like current year projections + previous year's actual both submitted in March. 

I did notice that the appendix on youth development costs states that any exemption claimed must be only related to youth development. Facilities shared with the Academy ( such as canteen) are presumably excluded. Doesn't matter in respect of infrastructure ( which presumably includes pitches), because such expenses (via depreciation) are excluded elsewhere anyway, under infrastructure depreciation (including PP).

[Spanish]

4 minutes ago, ramblur said:

Thanks- I'd agree that there's absolutely no way you could get anywhere near a £10m fine based on excesses of c£2.5m and £8m, so I think the suggestion's total rubbish.

Those rules do seem to be out of date though. There's no reference to the new 3 year cycles, and it appears that clubs now have to produce current year projections  in the last year of the cycle. I did also note that our accounts were signed off in February, which means that the December 1st deadlines for actuals has changed. It now looks like current year projections + previous year's actual both submitted in March. 

I have read that the intention was to impose penalties before the formal end of the season in order to penalise teams before they got promotion, sounds fanciful

[ilkleyram]

4 minutes ago, ramblur said:

Thanks- I'd agree that there's absolutely no way you could get anywhere near a £10m fine based on excesses of c£2.5m and £8m, so I think the suggestion's total rubbish.

Those rules do seem to be out of date though. There's no reference to the new 3 year cycles, and it appears that clubs now have to produce current year projections  in the last year of the cycle. I did also note that our accounts were signed off in February, which means that the December 1st deadlines for actuals has changed. It now looks like current year projections + previous year's actual both submitted in March. 

Ramblur - this is the link to the FFP rules currently on the EFL website (appendix 5/Governance): 

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

 

 

 

 

[Spanish]

2.2.2      any Championship Club has a financial year ending other than during the period May, June or July, then that Championship Club must prepare Additional Accounts (as defined in Rule 2.3).

2.3          The 12 Month Accounts and the Additional Accounts (as applicable) must be an additional set of full accounts (in the same manner and with the same degree of verified detail as if the Championship Club was obliged to lodge those additional accounts at Companies House) reviewed by the Championship Club’s auditor for a 12 month period ending during May, June or July so as to provide The League with a set of accounts aligned to the Reporting Period as defined in Rule 1.4.

[ramblur]

2 minutes ago, Spanish said:

I have read that the intention was to impose penalties before the formal end of the season in order to penalise teams before they got promotion, sounds fanciful

Think you'll find this relates to the possible sanction of points deductions, which might prevent a team getting promoted. Fun and games in the Courts if that ever happened.

[Spanish]

5 minutes ago, ilkleyram said:

Ramblur - this is the link to the FFP rules currently on the EFL website (appendix 5/Governance): 

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

 

 

 

 

they look the ones I quoted?

[ramblur]

4 minutes ago, ilkleyram said:

Ramblur - this is the link to the FFP rules currently on the EFL website (appendix 5/Governance): 

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

 

 

 

 

Thanks- I've already got a headache from looking at the last lot, but I'll have a look tonight.

[ramblur]

1 minute ago, Spanish said:

they look the ones I quoted?

Saves me some grief -very glad you saw that.

[ilkleyram]

1 hour ago, Spanish said:

they look the ones I quoted?

I think they are, Spanish

[RoyMac5]

19 minutes ago, ilkleyram said:

I think they are Spanish

Well, that'll be what's giving ramblur a head-ache then! ?