Tribunal Update

[Archied]

6 minutes ago, europia said:

Obviously MM has done a lot for the club. I wasn't suggesting otherwise and no doubt he is clear in his mind that he has done the right things. Trying to to gain promotion to the PL is an expensive business and if you are unfortunate and fail after several attempts, investing heavily along the way, it seems that a run in with the EFL is quite likely. The club no doubt employs highly paid financial experts and one would assume that part of that role is risk management.

Not all supporters follow the club line on every issue, and not doing so doesn't make them disloyal......but hey, everyone is entitled to an opinion (or are they ??)

Personally I wouldn’t call you disloyal, just unrealistic 

[hintonsboots]

94 not out, I’m now predicting page 98 will provide an answer.

[europia]

5 minutes ago, G STAR RAM said:

In what way does £10m losses equate to satisfactory operational running costs?

Let's not forget also at this time £1m was considered big outlay on transfers.

Crowd numbers were dropping.

I'd be interested to know what alternative route you would have taken to MM to make is competitive in this division.

The £10m pa losses (your figure, I'm not disputing), was prior to MM taking ownership, I believe you were suggesting. One would assume that after carrying out due diligence prior to concluding the deal, Mr Morris would have a financial plan in place to address the unsustainable annual losses. 

In terms of what alternative strategy could have been pursued to try to gain promotion, it's difficult without knowing the true financial state of the club at the time. Obviously hiring and firing managers at an alarming rate, would be one to avoid as it's costly. Not only in terms of severance settlements, but also costly players bought in by previous managers, and subsequently becoming surplus to requirements.

[europia]

6 minutes ago, Archied said:

Personally I wouldn’t call you disloyal, just unrealistic 

Thanks for that. 

I don't use social media as extensively as some, but on one or two forums, I have come across a general suggestion 'attack the post, not the poster' which I think is actually quite a sensible policy. 

[G STAR RAM]

1 minute ago, europia said:

The £10m pa losses (your figure, I'm not disputing), was prior to MM taking ownership, I believe you were suggesting. One would assume that after carrying out due diligence prior to concluding the deal, Mr Morris would have a financial plan in place to address the unsustainable annual losses. 

In terms of what alternative strategy could have been pursued to try to gain promotion, it's difficult without knowing the true financial state of the club at the time. Obviously hiring and firing managers at an alarming rate, would be one to avoid as it's costly. Not only in terms of severance settlements, but also costly players bought in by previous managers, and subsequently becoming surplus to requirements.

There are only 3 ways of addressing unsustainable losses at this level.

1 - Vastly increase your income. 

2 - Vastly reduce your wage bill.

3 - Sell off assets at a profit.

Number 1 has extremely few options and we have pretty much maxed out on what we can achieve without a new tv deal.

Number 2 affects the quality of players you can attract, although I would suggest we have overpaid in the past.

Number 3 means getting rid of your better players, or other assets ie your ground.

I'd be interested to know over the last 10 years how many teams have had 'sustainable losses' and remained as competitive as we have been.

 

[Ghost of Clough]

6 minutes ago, europia said:

The £10m pa losses (your figure, I'm not disputing), was prior to MM taking ownership, I believe you were suggesting. One would assume that after carrying out due diligence prior to concluding the deal, Mr Morris would have a financial plan in place to address the unsustainable annual losses. 

In terms of what alternative strategy could have been pursued to try to gain promotion, it's difficult without knowing the true financial state of the club at the time. Obviously hiring and firing managers at an alarming rate, would be one to avoid as it's costly. Not only in terms of severance settlements, but also costly players bought in by previous managers, and subsequently becoming surplus to requirements.

Probably relating to increasing club revenue. £20m the season prior to him buying into the club. It passed the £29m mark for the 17/18 season (£45% increase) and most likely has continued to increase every season since. 

[GenBr]

34 minutes ago, hintonsboots said:

94 not out, I’m now predicting page 98 will provide an answer.

We're on rookie numbers atm. We need to start posting more if we want to catch up with Wednesdays 600 pages!

[Gritstone Ram]

1 hour ago, G STAR RAM said:

In what way does £10m losses equate to satisfactory operational running costs?

Let's not forget also at this time £1m was considered big outlay on transfers.

Crowd numbers were dropping.

I'd be interested to know what alternative route you would have taken to MM to make is competitive in this division.

I’d have signed some better players than the over priced average players we paid for.

[Gritty]

55 minutes ago, G STAR RAM said:

There are only 3 ways of addressing unsustainable losses at this level.

1 - Vastly increase your income. 

2 - Vastly reduce your wage bill.

3 - Sell off assets at a profit.

Number 1 has extremely few options and we have pretty much maxed out on what we can achieve without a new tv deal.

Number 2 affects the quality of players you can attract, although I would suggest we have overpaid in the past.

Number 3 means getting rid of your better players, or other assets ie your ground.

I'd be interested to know over the last 10 years how many teams have had 'sustainable losses' and remained as competitive as we have been.

 

Not many.  Brentford though?

[BramcoteRam84]

I think the wages have been far too high for the players we’ve had but that’s what happens when you sign 28 year old proven championship players from lower prem teams! Wages of the players here already also rose.

However, when we look back because of the crazy way FFP works we’re still paying for that first summer Mel took over in 15/16. We had one season where we really went at it, every other season we at least sold assets to try and cover transfers. What we’ve spent has still been a drop in the ocean to the likes of Fulham West Brom Villa Boro Cardiff and others we’ve had to compete with. I don’t think we’ve really been irresponsible we are certainly trying to be more sustainable now with the focus on the academy which will drive wages down.

Rather than prevent irresponsible spending and another Portsmouth scenario FFP is being used now by clubs as a weapon to try and do other clubs over! It’s a joke, especially when situations like Wigan are allowed to happen by a fit and proper owners test that isn’t fit for purpose.

EFL needs to grow a backbone.

[G STAR RAM]

9 minutes ago, Gritty said:

Not many.  Brentford though?

Wasnt this year the first time they have finished in the top 6?

They have been well run but a need to sell their best players to remain sustainable is probably what has stopped them from getting promoted.

Bought themselves a new stadium though, so as a long term plan its definitely working.

[G STAR RAM]

31 minutes ago, Van Gritters said:

I’d have signed some better players than the over priced average players we paid for.

Easy in hindsight isnt it?

What above average players were available for the same money that we were spending that:-

(a) were available

(b) were being recommended on here

Also, I very much doubt MM has much input into who we are signing.

[RandomAccessMemory]

I'm confused by the scenarios mentioned in Annex 1.

Can anyone explain why 'Scenario 2' and the last bullet point of 'Scenario 3' are different? Is a "new corporate entity" different to a "Newco"? Why would it be captured within 'Scenario 1' and not 'Scenario 2' providing the "new corporate entity" is separate from the Football Club Group?

Is it another mistake? The date on the same page is obviously one as it was not 30 May 2020, according to paragraph 30, it was 2018.

If it is a mistake I wonder whether it is just in the document or whether it was in the original email.

Or am I missing something important?

Quote

Scenario 1 - Club sells the stadium to a Company within the Football Club Group (e.g. to SWFC Holdings Limited)

• The Executive would propose that the Club’s stadium is a material aspect of the football operations. Thus, if the stadium was simply sold to a Group Company within the Football Club structure, the Executive would want the purchasing company to be included within the consolidated results for the purposes of P&S in accordance with Rule 1.1.9 (referenced below).
• The profit on the sale of the stadium would therefore be adjusted out of the results on consolidation.
• If the exclusion of the profit resulted in the Club submitting a P&S result in excess of the Upper Threshold, it would be treated as being in breach of the P&S Rules in accordance with Rule 2.9 and the League would refer the breach to a Disciplinary Commission in accordance with Section 8 of the Regulations.

Scenario 2 – Club sells the stadium to a Company outside of the Football Group but still owned by the Club’s owner.

• The transaction would be deemed as a Related Party Transaction in accordance with the P&S Rules and the onus would be on the Club to support the Fair Market Value of the transaction. The simplest way to do this would be through an independent external valuation of the fixed asset.
• Depending on the structure of the group or the other assets/operations of the purchasing company, the Club might still be caught by Rule 1.1.9 of the P&S Rules. Such a circumstance would be if the ‘Newco’ on purchasing the stadium carried out the match day and non-match day catering and hospitality operations. The purchasing company would be consolidated for the purposes of the P&S Rules resulting in the profit on the sale of the stadium being adjusted out of the results.
• If the purchasing Company is deemed to be a separate operation to the Club Group and the fixed asset can be proven to have been purchased at Fair Market Value, the profit on the sale of the fixed asset would be included in the Club’s P&S Calculation.

Scenario 3 - Club sells the stadium to the Owner as an Individual

• The assumption within this scenario is that the Stadium is purchased by Mr Chansiri as an individual not as a corporate entity.
• The Owner, is at the top of the Football Club Group, however, as he is not a corporate entity the transaction would not be caught by Rule 1.1.9 of the P&S Rules with reference to Section 1161 of the Companies Act (in references below).
• The transaction would be deemed as a Related Party Transaction in accordance with the P&S Rules and the onus would be on the Club to support the Fair Market Value of the transaction. The simplest way to do this would be through an independent external valuation of the fixed asset.
• If the value of the sale is proven to be at Fair Market Value, the profit would be allowable for the purposes of the P&S Rules.
• Dependent on the level of profit generated, the Club would fulfil the P&S requirement and the current embargo would be lifted.
• Please note, if the Owner purchases the stadium through a new corporate entity rather than as an individual, it would be captured within Scenario 1.

Scenario 4 - Club sells the stadium to a 3rd party not connected to the Owner or the Club

• If the purchasing entity is deemed not to be a Related Party in accordance with the P&S Rules (reference below) to either the Owner or the Football Club, then the transaction will be deemed as a sale of the stadium to a third party.
• The profit on the sale of the fixed asset would be accounted for in the Club’s 2017/18 financial year end.
• Dependent on the level of profit generated, the Club would fulfil the P&S requirement and the current embargo would be lifted.

Scenario 5 - The Stadium is sold after the Club’s new financial year end (30th June 2018) to any party

• The sale of the stadium would be accounted for post year end.
• The Club’s results for the 2017/18 financial period would not include the profit on the sale of the stadium.
• If the exclusion of the profit resulted in the Club submitting a P&S result in excess of the Upper Threshold, it would be treated as being in breach of the P&S Rules in accordance with Rule 2.9 and the League would refer the breach to the Disciplinary Commission in accordance with Section 8 of the Regulations.

 

[RamNut]

47 minutes ago, G STAR RAM said:

Easy in hindsight isnt it?

What above average players were available for the same money that we were spending that:-

(a) were available

(b) were being recommended on here

Also, I very much doubt MM has much input into who we are signing.

Barry bannan £1m

[Van der MoodHoover]

5 hours ago, RandomAccessMemory said:

I'm confused by the scenarios mentioned in Annex 1.

Can anyone explain why 'Scenario 2' and the last bullet point of 'Scenario 3' are different? Is a "new corporate entity" different to a "Newco"? Why would it be captured within 'Scenario 1' and not 'Scenario 2' providing the "new corporate entity" is separate from the Football Club Group?

Is it another mistake? The date on the same page is obviously one as it was not 30 May 2020, according to paragraph 30, it was 2018.

If it is a mistake I wonder whether it is just in the document or whether it was in the original email.

Or am I missing something important?

 

It looks clumsy, but as I read it....in Scenario 2, the "Newco" was not new at all, but already existed for some already proved non-football reason. The example being used seems to be for catering.

Scenario 3 seems to suggest that IF you set up a company ONLY for the purpose of owning the stadium, then the EFL will deem that new entity to be within the "football club group" regardless of the actual corporate structure. 

[Will Hughes Hair]

6 hours ago, RandomAccessMemory said:

I'm confused by the scenarios mentioned in Annex 1.

Can anyone explain why 'Scenario 2' and the last bullet point of 'Scenario 3' are different? Is a "new corporate entity" different to a "Newco"? Why would it be captured within 'Scenario 1' and not 'Scenario 2' providing the "new corporate entity" is separate from the Football Club Group?

Is it another mistake? The date on the same page is obviously one as it was not 30 May 2020, according to paragraph 30, it was 2018.

If it is a mistake I wonder whether it is just in the document or whether it was in the original email.

Or am I missing something important?

 

I think you're right and it is a mistake, otherwise the advice from the EFL's Financial Controller would be self-contradicting.

[Archied]

7 hours ago, europia said:

Thanks for that. 

I don't use social media as extensively as some, but on one or two forums, I have come across a general suggestion 'attack the post, not the poster' which I think is actually quite a sensible policy. 

The post was not an attack and was in reply YOUR stated opinion not you , you brought up the disloyal stuff so just to clear things up I think your stated opinion is unrealistic given the pretty much impossible balancing act of owning a club like Derby in the championship,

on the managers thing I do wonder how much if any Derby are out of pocket when you put the pay offs of managers against the compo received for poached managers , yet again the impossible nature of running clubs appears , manager turns out to be wrong for whatever reason and it costs to get rid , manager does ok and they are off somewhere else for more money and poss step up ? Hard to win?

 

[Archied]

6 hours ago, Gritty said:

Not many.  Brentford though?

Let’s wait and see how / if Brentford sustain challenging for promotion season on season if they don’t go up ,,, first time in premplay offs for them this season?

they won’t be seen as little old Brentford anymore with the surprise factor by other teams a bit like when Derby suddenly sprung themselves on the division under Mac 1 , all got a bit tougher after that with teams just setting up to stop us playing

[Will Hughes Hair]

It's amazing that the EFL could accuse Chansiri and Meire of hiding behind a poor grasp of English while simultaneously providing confusing advice to them.  The arrogance of that is astonishing and probably says quite a lot about the EFL's 'corporate culture'.

[chadlad]

10 hours ago, Van der MoodHoover said:

thats no doubt an important issue of governance. How do the EFL come into being?

I'm used to financial services  where regulatory bodies are established by statute.

...and still don’t seem to be accountable to anyone ?