Do we start afresh now with P&S / FFP?

[daveyboy66]

2 hours ago, alanharper said:

 

If it's permitted we're still likely to be breaking the £39M 3 year FFP threshold.

 

2018  -£20.8m

2019  + £2.5m

2020  probably at least  -£25m 

 

 

The years above are the years of the released accounts, not the actual years that the accounts relate to. 

And yet the Prem teams come down with £45M next season as a reward for failure...fucktheFFP threshold

 

[prowl]

1 hour ago, pazowl55 said:

It does go on three year rolling, but are you sure that if we are punished for FFP over a 3 year period then it doesn't reset that 3 year rolling period as I am sure I read that it did.

It doesn't reset anything. You still need to comply with the £39m loss rule. With the ground included in the right year I think we will be under the limit but not by enough to make splashing the cash possible.

 

This past season we were short some of the players who we didn't renew last close season, we got money for Bruce and Joao. After this season we will have lost wages from Fletcher, Hutch, FF and the rest. Things must be coming back to normal now. But we might need to keep the wallet reasonable closely guarded for another season.

 

A season of rebuilding with new players and with the sole aim of avoiding relegation is what we should expect. The season after we can maybe kick on.

[Guest timrud]

If we lost an average of 25m a year over the 3 year period (-75) and add back in the stadium profit (+38), we can only afford to lose 27m in the next year.

 

So, what would happen in the following situation?

 

Average losses are 50m per year. You get to the end of year 3 at -150 and get a 12 point deduction. Would the next season you have to show a 61m profit, or face another 12 points? i.e. you would be in a never ending repeating cycle of 12 point deductions?

 

If this is the case, then the stadium sale has avoided us being in that situation.

[Guest]

3 minutes ago, timrud said:

If we lost an average of 25m a year over the 3 year period (-75) and add back in the stadium profit (+38), we can only afford to lose 27m in the next year.

 

So, what would happen in the following situation?

 

Average losses are 50m per year. You get to the end of year 3 at -150 and get a 12 point deduction. Would the next season you have to show a 61m profit, or face another 12 points? i.e. you would be in a never ending repeating cycle of 12 point deductions?

 

If this is the case, then the stadium sale has avoided us being in that situation.

 

The minus 12 is not an automatic penalty for breaching, as I said previously, the pattern of the losses is taken into account and as the info in the link @theowlsman provided on the previous page, the EFL step in and take a course of action prior to 3 years of the pattern of losses dictates the need for this - evidence of future business plans, soft embargo etc. 

If you lose that much over 3 years then the first punishment is likely to be severe. If the future accounts show a trend of addressing those losses properly then the club will still get punished if they are over the 3-year rolling permitted losses but it is likely to be of a reduced nature.

 

[mogbad]

5 minutes ago, timrud said:

If we lost an average of 25m a year over the 3 year period (-75) and add back in the stadium profit (+38), we can only afford to lose 27m in the next year.

 

So, what would happen in the following situation?

 

Average losses are 50m per year. You get to the end of year 3 at -150 and get a 12 point deduction. Would the next season you have to show a 61m profit, or face another 12 points? i.e. you would be in a never ending repeating cycle of 12 point deductions?

 

If this is the case, then the stadium sale has avoided us being in that situation.

 

Once you've fallen foul of P&S you'll be in constant dialogue & monitoring of your financial situation with the EFL. I think if you can demonstrate that you are working with the EFL & taking steps to bring your finances in line the EFL will look leniently on you over the next couple of years.

[prowl]

1 hour ago, Plonk said:

If the 18-19 includes the ground sale that means we lost £58million that year ??????

No we made a profit from the ground sale of about £36M because it was shown in the accounts for £24m (those figures might be slightly out). So it we made a profit of 2.5M in the year we tried to include the sale in we can assume the actual loss was £33.5M

[pazowl55]

1 hour ago, billyblack said:

Its not spending, its £39 million loss. Big difference

So it's even less money being splashed about then.

[pazowl55]

52 minutes ago, prowl said:

It doesn't reset anything. You still need to comply with the £39m loss rule. With the ground included in the right year I think we will be under the limit but not by enough to make splashing the cash possible.

 

This past season we were short some of the players who we didn't renew last close season, we got money for Bruce and Joao. After this season we will have lost wages from Fletcher, Hutch, FF and the rest. Things must be coming back to normal now. But we might need to keep the wallet reasonable closely guarded for another season.

 

A season of rebuilding with new players and with the sole aim of avoiding relegation is what we should expect. The season after we can maybe kick on.

I am not sure it doesn't reset. Seems to me like they could quite easily punish you three times for one bad year that way. 

[Owl Be Back]

I think there's a very real possibility that we could get hit by FFP again and that could potentially mean we start the coming season with the 12 point penalty plus a transfer embargo. This needs clarifying ASAP and the club need to announce to the supporter where we stand unlike last time when it was kept secret.

[SiJ]

Wouldn't some sort of cap on wagebills be a lot more straightforward? 

 

Make sure the cap allows teams to be competitive, but ensure teams are punished severely if they go well over.

 

I suspect we wont see it implemented because teams in the Prem would kick off. 

[No 2 is r nilsson]

3 hours ago, alanharper said:

 

If it's permitted we're still likely to be breaking the £39M 3 year FFP threshold.

 

2018  -£20.8m

2019  + £2.5m

2020  probably at least  -£25m 

 

 

The years above are the years of the released accounts, not the actual years that the accounts relate to. 

What’s the basis for the probably -£25m figure? Neither Jos nor Bruce spent a lot. Surely this isn’t just wages.  Do these relate to y/e 17, 18 and 19.  I’m assuming ‘20 is ignored due to Covid. If so we probably have some room to spend over the summer. 

[Steve Down South]

5 hours ago, Royal_D said:

When do salaries at football clubs not exceed gate receipts ? 

You are right, I should have worded my point better.  I think we need to start with a self imposed wage cap to bring wage bill down to below level of total revenues.  If that means we initially struggle to compete then so be it - we’ve been rubbish for large parts of my lifetime anyway, and I would prefer to see the club run on a responsible basis.

[stanningtonowl]

5 hours ago, dykwim said:

Can we buy the ground back for £1 and then sell it back to Chansiri for another £60m?

 

Asking for a friend. 

And lump it in the 2025 accounts?

[AC-12]

According to this Birmingham’s reset when they’d been found guilty 
 

https://www.bbc.co.uk/sounds/play/p08mh1bb

[wellbeaten-the-owl]

4 minutes ago, AC-12 said:

According to this Birmingham’s reset when they’d been found guilty 
 

https://www.bbc.co.uk/sounds/play/p08mh1bb

I though I had read last year that Birmingham's had reset after the verdict, I think the issue they had this year was by not sticking to a plan they had with EFL in Jan 19 before the verdict

[ChapSmurf]

7 hours ago, alanharper said:

It goes on a rolling 3 year period, so we still need to keep below an average of £13m losses per year. The next accounts which are due out imminently will show a bigger loss than that. 

 

I don't know if the ground sale is permissible at all now or if last year's slight profit with it included still counts.

 

 

 

Not quite, although in our case it will be hard to do it any other way than attempting to keep below that limit.

 

What you are quoting there is Test 3 under Profitability and Sustainability Tests of FFP. It's a little more complex than that.

 

Test 1 is the last two accounts filed with Companies House. If these show any loss, Test 1 is failed and the club then enter Test 2, which is the three season rolling average, lower threshold losses.

 

If the 3 season loss is greater than £15M, Test 2 is failed. The club then need to prove to the EFL that it has enough cash to pay all their creditors, wages and transfer fees due over the next year. If a club fail to convince the EFL, it can impose sanctions, including a transfer embargo. The club are then under Test 3.

 

Test 3 is the upper threshold of £39M. Break that, and tougher sanctions will be imposed including a points deduction and a possible embargo if you fail to convince the EFL you club is sustainable.

 

This is the simplified version of FFP under the P&S rules.

 

So ideally, we need to post a profit. Failing that, keep the last three seasons under £15M losses. If we can't, we are under Test 3 and we need to cut back heavily.

Edited August 1, 2020 by ChapSmurf

[Mr. Tom]

I understand that the rolling three-year accounts cannot exceed a deficit of -£39m, so an average of -£13m a season for any three consecutive seasons.

 

What I'm still struggling to get my head around is this:

• the recent verdict from EFL says we're guilty of P&S breach for the period 2015-2018 (and presumably we're bang to rights on that) - ok, fair enough
• that means they're telling us the stadium sale in 2019 CANNOT be used to cover shortfall in our accounts for the 2018 season *as part of the three years 2015-2018*, which is what DC tried to do - ok, again, fair enough
• BUT, if all arrears/profits are considered as part of the three-year period in which they took place, then a stadium sale in 2019 *is by definition* also considered part of 2016, 2017, 2018, 2020, 2021 AND 2022 accounts at some stage.
• In other words, it both is and isn't allowed as part of 2018, depending where you start counting from. (Great system if so! )

Is that right, or am I missing something really fundamental with the three-year rule here? Feels like I must be.

 

If not, am I right in thinking that 2015-18 is literally the ONLY three-year period they could realistically 'get us' on (assuming, of course, we can now stay below £39m net losses over any three-year period, INCLUDING the 2019 ground sale) between now and 2022...?

 

Jesus wept, could they have come up with a worse system for this!?

 

 

 

Edited August 1, 2020 by Mr. Tom

[briggowl]

8 hours ago, pazowl55 said:

It does go on three year rolling, but are you sure that if we are punished for FFP over a 3 year period then it doesn't reset that 3 year rolling period as I am sure I read that it did.

 

No it doesn't reset, I read up on this a few months ago and the only re-setting seems to be for relegated clubs, hence going down wouldn't necessarily have been the worst option for us. I mean it's not a great option either but starting on minus 12 and looking like being punished for further breeches is almost unbearable, while counting our losses now with relegation? I dunno, its all messed up!! 

Edited August 1, 2020 by briggowl

[briggowl]

5 minutes ago, briggowl said:

 

No it doesn't reset, I read up on this a few months ago and the only re-setting seems to be for relegated clubs, hence going down wouldn't necessarily have been the worst option for us. I mean it's not a great option either but starting on minus 12 and looking like being punished for further breeches is almost unbearable, while counting our losses now with relegation? I dunno, its all messed up!! 

 

Although I've just read the Birmingham thing so perhaps I've dreamt this up!!! haha......Its no laughing matter!!!!!!!

[pazowl55]

52 minutes ago, briggowl said:

 

Although I've just read the Birmingham thing so perhaps I've dreamt this up!!! haha......Its no laughing matter!!!!!!!

what did that say. 

 

Just seen it reset.  Thought it might. unfair to be punished 3 times for the same crime

 

Edited August 1, 2020 by pazowl55