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

[The Wall]

7 hours ago, prowl said:

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.

 

That's the logical thing to do. We're not going up from a minus 12 start, so might as well get another 'lean' year on the books to gear up for a promotion push.

Problem is that a year is a long time in football, especially if you're charging £45 a ticket.

Also, the difference between mid table and relegation is very small, so there's a chance that you go too far with the cost cutting and finish up in League 1

[Rogers]

Football is like a gambling addiction; where the odds are stacked heavily against you! 
 

But let’s spend, spend, spend, and see where it gets us, Premier league or bust Mkii 

 

either another points deduction in 3 years or promotion 

[prowl]

13 minutes ago, The Wall said:

 

That's the logical thing to do. We're not going up from a minus 12 start, so might as well get another 'lean' year on the books to gear up for a promotion push.

Problem is that a year is a long time in football, especially if you're charging £45 a ticket.

Also, the difference between mid table and relegation is very small, so there's a chance that you go too far with the cost cutting and finish up in League 1

It's going to be a really stange transfer window this time around. I don't know what to expect. There will be a lot of players looking for clubs, I doubt we will have crowds back in stadia until next spring at the earliest so in theory there will be less money for clubs to spend. Will that have a knock on effect on wages, it should. Will it affect transfer fee's? I haven't a clue. 

 

The lower leagues might never start next season, how will that affect things. Those clubs might be desperate for money just to keep things ticking over. Will they sell their best players just to get the wages off the books?

 

I think the best Championship players and good ones coming down from the premiership will do ok but after that I just don't know. It will be interesting to watch how it pans out.

[bobdylan]

1 hour ago, pazowl55 said:

 unfair to be punished 3 times for the same crime

 

 

A bit like Forestieri?

[catdog1121]

Rumour has it we made a massive profit this season...  Apparently the cardboard cutouts couldn't get enough tasty pies...

[shandypants]

12 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. 

Proper lol’d at that. 

[shandypants]

12 hours ago, Dizzys Dad said:

Do we start the new season with a clean slate financially, or do the previous 2 seasons merge with next season to make the 3 year target again at the end of next season?

We’ll never get out of this if we don’t get a fresh start.

My guess is that we will not be punished again but will have to make and stick to some sort of agreement with the EFL that shows we are taking action to bring down the spend.  I think that’s what Birmingham had to do (but didn’t). 

[Sheff74]

12 hours ago, TrickyTrev said:

We sold the stadium when you were allowed to do so.

 

If the EFL aren’t going to allow it being included in one set of accounts, then surely it has to be added the following year.

 

Logic would suggest so, but I am not sure it is that simple. 

 

At the end of the day the IDC made a decision that the stadium sale could not be counted towards P&S in our 17/18 accounts, but does that now mean that they have to recognise the transaction for the next set of accounts, or that we can even move it into 18/19?  Considering that our signed off and audited 17/18 accounts will still show the transaction as occurring in that year.

 

The IDC won't have the authority to make accountants and auditors re jig accounts from one year into another, as their role is purely to rule on the P&S breach, and not to enforce the correction of accounting anomalies.  I know it sounds crazy, because surely 60m can't just disappear into thin air?

 

Perhaps an expert in the field could enlighten us all?

 

 

 

[slinger208b]

12 hours ago, @owlstalk said:

 

If the ground sale is permitted and we can start splashing the cash I fully expect other clubs to lose their minds and go all lawsuity OR just do the same that we did

 

Reyt mess

 

I thought it was about the accounts and their submission, not whether the stadium sale was permissable...

[slinger208b]

12 hours ago, Dizzys Dad said:

Do we start the new season with a clean slate financially

 

I very much doubt it as that would allow a calculated risk of "resetting" the finances against sanctions...

[billyblack]

17 hours ago, pazowl55 said:

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

No

[kobayashi]

7 hours ago, Sheff74 said:

  I know it sounds crazy, because surely 60m can't just disappear into thin air?

 

What it if were conjured from fresh air in the first place?  A £60m deal agreed in July 2017 and yet 12 months later not 1p of cash had been exchanged either to buy the property or for the subsequent rental for use of the property, although on the positives the purchasing company has a total share capital of £1000 to put towards funding a £60,000,000 transaction, so that’s a start.

If your wife agreed to pay you £1m for cutting the lawn would that make you a millionaire?  It’s agreed in writing so can’t just disappear into thin air can it? Trying buying a Porsche with your new found wealth.

[Guest Mcguigan]

14 hours ago, ChapSmurf said:

 

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.

Good post.

 

This article gives a good outline of how it works.

https://www.mikethornton.xyz/new-ffp-tests/

 

 

[djorkaeff]

They should just cap expenditure at 40m per year.

Anything above revenue is personally guaranteed by the owner but not the club. 

 

parachute payments to be removed. 

 

[striker]

8 hours ago, shandypants said:

My guess is that we will not be punished again but will have to make and stick to some sort of agreement with the EFL that shows we are taking action to bring down the spend.  I think that’s what Birmingham had to do (but didn’t). 

We've done that, sold Joao for good money and released just about every senior high earning player whose contract has expired in the last 2 years. Also been extremely frugal in our recruitment.

 

Not much else we could have done!

[jonesy87shef]

Not sure if mentioned but it would be ridiculous if ffp limits weren’t increased due to the current covid situation.

 

Most clubs in the lower leagues depend on season ticket revenue especially, POTG and the rest of the match day experience. Merchandise sales will be down also.

 

I don’t think the EFL are fit for purpose and have always hated ffp (before we had money), but surely something has to change.

[ChapSmurf]

1 hour ago, Mcguigan said:

Good post.

 

This article gives a good outline of how it works.

https://www.mikethornton.xyz/new-ffp-tests/

 

 

 

Good spot. It seems my understanding wasn't too far off.

 

There is one thing I would love somone to clear up. It used to be the case that a club being relegated from the PL was also allowed season losses of £35M, for each season they were in the PL. This, I believe, is in conjunction with parachute payments. This was, in the words of the EFL, to "allow for transition". However, I don't know if this allowance was just pre-P&S rules, or is still part of the FFP rulings. Does anyone know or can clear this up?

 

To me it seems absolutely ridiculous that a relegated PL team gets both parachute payments, and an additional higher threshold loss. Parachute payments alone create an extremely unlevel playing field. With addtional losses allowed, it takes it to another level completely, assuming you have a rich Chairman or a club willing and able to reinvest to gain promotion again.

[jonnyowl]

I read online that you can only be charged once in a 3 year period, that includes the season that you have been charged with.

 

So we were charged for the season 17-18, so we can't be charged for any three year period that includes that season

[ChapSmurf]

5 minutes ago, ChapSmurf said:

 

Good spot. It seems my understanding wasn't too far off.

 

There is one thing I would love somone to clear up. It used to be the case that a club being relegated from the PL was also allowed season losses of £35M, for each season they were in the PL. This, I believe, is in conjunction with parachute payments. This was, in the words of the EFL, to "allow for transition". However, I don't know if this allowance was just pre-P&S rules, or is still part of the FFP rulings. Does anyone know or can clear this up?

 

To me it seems absolutely ridiculous that a relegated PL team gets both parachute payments, and an additional higher threshold loss. Parachute payments alone create an extremely unlevel playing field. With addtional losses allowed, it takes it to another level completely, assuming you have a rich Chairman or a club willing and able to reinvest to gain promotion again.

 

I've actually found the answer - and I was correct.

 

The limit of £39m maximum loss (under Test 3) is for clubs who have only been in the Championship.

 

This is calculated as £13m per EFL season. For clubs relegated from EPL their limit is £35m for each season spent in EPL plus £13m for each season in EFL.

 

So, this means that Bournemouth (I am quoting them for a reason (Ake)) will receive and be allowed to spend, next season

• £40M in parachute payments
• £40M in transfer fee for Ake, minus any fees due to previous club and amortisation of player value
• up to £35M in additional losses

This will give them a war-chest next season of up to £115M. £115M!

 

How the absolute **** is that giving any other team the possibility of competing against them on transfers and wages?

 

How is this right? Why is this being allowed?

 

Please someone tell me I have got this wrong?

 

 

 

 

[Nut]

Wouldn't the £35m be the figure they would be allowed to have lost in EPL rather than an amount they can spend?  Presumably if they've spent more than £35m that would be be deducted from what they can spend. Also, the £40m transfer fee would be paid in stages so they wouldn't be able to spend it all in one year.