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

[Nut]

The pigs were in for Jermaine Defoe on loan a couple of years ago. He was on 110k a week and Bournemouth wanted half his wages paying so they didn't bother. Theyre going to be in a real mess if they don't bounce straight back. Tiny crowds and a rich owner who can't spend his money plus a massive wage bill. 

[Quist]

10 hours ago, Sheff74 said:

 

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?

 

 

 

It all makes no sense. Rmemeber EFL originally approved this set of accounts and then made some allegations which allowed themto revisit accounts. Unfortunately all of those allegations were false (as per IDC). The EFL wrongly interpreted accounts that is not Wednesday fault.

[Modfather100]

22 minutes ago, ChapSmurf said:

 

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?

 

 

 

 

 

It's wrong.

 

The 35 million is only for the seasons in the Prem - not for season's in the EFL. Next season they would be at the 15 million level.

 

I think there is a lot of mis llaced anger on here at parachute payments. It certainly isn't the case that all relegated teams go straight back up - indeed lots really struggle, and honestly the financial gap between earnings and wages in the top division compared with the championship means parachute payments and the allowing of greater losses in a totally different market is actually only fair. 

 

If you had it where the three relegated teams were always in the top 6 of the division the following year and never in financial peril fair enough, but that is blatently not the case so I don't think we can say parachute payments are unfair - the evidence doesn't back this up.

 

The real crime is the difference in income streams between the Prem and Championship... given Championship attendances are significantly higher than a lot of leagues in Europe. That is where football is broken and it is all about greed ofvtge top top clubs that dont actually need the extra money. 

 

As for us, as mentioned our issue wasnt that we gambled, its that we gambled on players with no resale value ir we didnt sell the likes of FF or Rhodes, even at a loss, when they still had some equity from their past performances. We have been managed and recruited terribly. Hopefully the signing of this youngster is a sign of things to come.

[Modfather100]

2 hours ago, Mcguigan said:

Good post.

 

This article gives a good outline of how it works.

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

 

 

 

This bit:

 

"These accounts are adjusted to remove any costs due to “allowed spending” such as depreciation of stadium costs, cost of community football, cost of women’s football, cost of youth football, etc."

 

Wicked. Get Rhodes, Reach and Westwood playing for the lasses and jobs a good un.

 

Jordan might even bag one or two in that league.

[agentwalker]

can't we just do what Newcastle have done? Get DC to make up fake takeover bids with 'Deposits' required. Then pull out at the last min, for-fitting the deposit. Newcastly have just banked a cool £17 mill this way

Edited August 2, 2020 by agentwalker

[ChapSmurf]

9 minutes ago, Modfather100 said:

 

It's wrong.

 

The 35 million is only for the seasons in the Prem - not for season's in the EFL. Next season they would be at the 15 million level.

 

I think there is a lot of mis llaced anger on here at parachute payments. It certainly isn't the case that all relegated teams go straight back up - indeed lots really struggle, and honestly the financial gap between earnings and wages in the top division compared with the championship means parachute payments and the allowing of greater losses in a totally different market is actually only fair. 

 

If you had it where the three relegated teams were always in the top 6 of the division the following year and never in financial peril fair enough, but that is blatently not the case so I don't think we can say parachute payments are unfair - the evidence doesn't back this up.

 

The real crime is the difference in income streams between the Prem and Championship... given Championship attendances are significantly higher than a lot of leagues in Europe. That is where football is broken and it is all about greed ofvtge top top clubs that dont actually need the extra money. 

 

As for us, as mentioned our issue wasnt that we gambled, its that we gambled on players with no resale value ir we didnt sell the likes of FF or Rhodes, even at a loss, when they still had some equity from their past performances. We have been managed and recruited terribly. Hopefully the signing of this youngster is a sign of things to come.

 

Ah. So the PL operate under exactly the same FFP rules? I didn't know that. For some reason I thought they had their own, hence the confusion on losses. I was thinking it meant that for every season a relegated club had been in the PL....£35M losses.

 

I hear what you are saying about parachute payments, and you are correct in that relegated teams, on average, don't do so well in their first season. However, in my mind, the payments are still wrong. It means the clubs in question can retain their higher paid players and whilst it's up to them to adjust and perform at a lower level, the chances of that happening should be higher. WBA are a classic example, as where Newcastle a few years ago. It's not just about players and their wages either. These payments allow the clubs to become stronger off the field, which will eventually pay back dividends on field.

[ruusowl]

48 minutes ago, ChapSmurf said:

 

Ah. So the PL operate under exactly the same FFP rules? I didn't know that. For some reason I thought they had their own, hence the confusion on losses. I was thinking it meant that for every season a relegated club had been in the PL....£35M losses.

 

I hear what you are saying about parachute payments, and you are correct in that relegated teams, on average, don't do so well in their first season. However, in my mind, the payments are still wrong. It means the clubs in question can retain their higher paid players and whilst it's up to them to adjust and perform at a lower level, the chances of that happening should be higher. WBA are a classic example, as where Newcastle a few years ago. It's not just about players and their wages either. These payments allow the clubs to become stronger off the field, which will eventually pay back dividends on field.

 

Exactly this.

 

And they actually use it as an official reason as to why they won't look at scrapping parachute payments.

 

Some clubs are good at managing finances, some clubs are good at spaffing their cash up the wall, can't be judging how fair these payments are by looking at the outcome on the pitch.

Edited August 2, 2020 by ruusowl

[Sheff74]

2 hours ago, Quist said:

It all makes no sense. Rmemeber EFL originally approved this set of accounts and then made some allegations which allowed themto revisit accounts. Unfortunately all of those allegations were false (as per IDC). The EFL wrongly interpreted accounts that is not Wednesday fault.

 

If Wednesday weren't at fault in all this we would not be facing a 12 point deduction.

[Quist]

1 hour ago, Sheff74 said:

 

If Wednesday weren't at fault in all this we would not be facing a 12 point deduction.

Yes that is correct but Wednesday were cleared of misleading and concealing information so what did they do wrong EFL had all evidence available to them and sad ok. We signed players.

 

This only blew up after Middlesboro kicked up a fuss and new EFL management were in place.

 

[Lincs Owl]

On 01/08/2020 at 11:36, Plonk said:

If the 18-19 includes the ground sale we should show a20-30 million profit. Even alllwing for heavy losses in 17-18 we should surely be heading into calmer waters particularly if next season is free from ffp due to covid?

 

No.   The club only posted a £2.58m profit even after selling the ground!

 

https://www.yorkshirepost.co.uk/sport/football/sheffield-wednesday/latest-owls-news/sheffield-wednesday-accounts-reveal-ps258m-pre-tax-profit-and-ps381m-profit-hillsborough-sale-latest-figures-1753107

[Westfield Owl]

7 hours ago, striker said:

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!

 

How many players have we actually sold in the last 4 years?

 

Jack Hunt and Lucas Joao.  Any more?

 

This is the problem.  We hardly ever sell anyone.  So our incoming finances are usually poor.

 

And just 12 months ago, we gave Westwood a new contract (reported to be on big wages) and we turned down offers from Norwich City to get Rhodes off the wage bill.  I wouldn’t describe that as frugal business.

 

How can you say that there’s not much else we could have done?

 

DC has hardly learned a thing IMO.

[Essix Blue]

6 hours ago, ChapSmurf said:

 

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?

 

 

 

 

Bet they don’t spend it. I’ve got a feeling their owner (and maybe Watford) will pocket all the dosh and both teams will struggle to go back up

[ChapSmurf]

2 hours ago, Essix Blue said:

Bet they don’t spend it. I’ve got a feeling their owner (and maybe Watford) will pocket all the dosh and both teams will struggle to go back up

 

I actually was wrong. A team in the PL can lose £35M per season. Once relegated, the higher/upper threshold of Test 3 is £39M over 3 seasons.

 

I guess it depends what you mean by "spend it". Teams just relegated will have higher outgoings so technically they are spending it. However it's their own fault of course for not negotiating reductions in salaries in line with lower revenue streams. Why they should be helped out is beyond me. They should be made to get their own finances in order like everyone else.

 

A club should be run like any other business. Look at what the income streams are and forcast that over the period you are offering a contract for. If you are a club skirting with relegation, base your contracts on what you can afford based on the lower income plus one season of the higher income. If the player is being greedy, jack them off for someone else. But of course they won't and bend over backwards to get the player they are chasing. If that's the approach, they should be made to suffer the consequences of their own stupidity.

[Daz]

On 01/08/2020 at 06:05, briggowl said:

 

We need Rhodes and Westwood off the wage bill. I don't know what they earn but if rumours are believed they make up 4/5 good championship player wages 

 

Given the FFP situation, and if Norwich were supposedly keen to take Rhodes off us on a free transfer a year ago, it raises a serious question as to why we didn’t agree to that as it would have saved us circa 40k a week. Instead we’ve continued to be responsible for his wages while getting so little for the outlay and a continuing cost as part of ongoing FFP. 

[areNOTwhatTHEYseem]

8 minutes ago, Daz said:

Given the FFP situation, and if Norwich were supposedly keen to take Rhodes off us on a free transfer a year ago, it raises a serious question as to why we didn’t agree to that as it would have saved us circa 40k a week. Instead we’ve continued to be responsible for his wages while getting so little for the outlay and a continuing cost as part of ongoing FFP. 

 

Letting Rhodes leave for nothing last summer would have pushed us further into P&S trouble, as the remaining amortised amount of the fee we paid for him would then have appeared in full on the accounts.

[Daz]

That’s a good point, but the amortization hit would have had to be a bigger hit than say 2m in wages, bonuses and employer taxes plus there’s no guarantee we can offload him now so he may continue to be an FFP burden for a further year. All told, that could easily add up to 6m and I’m not sure remaining amortization would be that high. Just have to hope the club considered all these things in making a decision. 

[Guest Grandad]

Saw this on another post and it sums it up perfectly. Can't remember who posted it but it's the best summary I've seen

 

P&S is a 3 year rolling process and our 12 point deduction is due to ground sale not being allowed in year end July 2018, so lost over £35m that year + £20.7m and £9.7m in previous 2 years.

Allowance is £39m over rolling 3 years. There is no reset, it’s a rolling 3 years, so it’s now £20.7m, £35.4m and year end 2019 less the ground sale profit of £38m. 
Basically, if we’ve lost more than £20.8m to July 2019, we breach again and are liable for another points deduction. July 2019 accounts are due to be published anytime now ......

 

 

EDIT: It was @IanSwfc1867... 

 

Great post Ian. Thank you

Edited August 2, 2020 by Grandad

[Essix Blue]

9 minutes ago, Grandad said:

Saw this on another post and it sums it up perfectly. Can't remember who posted it but it's the best summary I've seen

 

P&S is a 3 year rolling process and our 12 point deduction is due to ground sale not being allowed in year end July 2018, so lost over £35m that year + £20.7m and £9.7m in previous 2 years.

Allowance is £39m over rolling 3 years. There is no reset, it’s a rolling 3 years, so it’s now £20.7m, £35.4m and year end 2019 less the ground sale profit of £38m. 
Basically, if we’ve lost more than £20.8m to July 2019, we breach again and are liable for another points deduction. July 2019 accounts are due to be published anytime now ......

 

 

EDIT: It was @IanSwfc1867... 

 

Great post Ian. Thank you

My guess is it’s gonna be tight......

[AC-12]

According to “football finance expert” Kieran Maguire, it does get reset if you’ve been charged with breaking the limit. He said Birmingham’s was

[airborne_rat_of_s6]

On 01/08/2020 at 12:51, Harrysgame said:

Part of me thinks it is becoming like a closed shop for promotion unless you take the risk of splashing the cash or you have parachute payments. Okay there is the odd exception. Think might as well go for it.

Kind of agree with the sentiment-would love to see us stick a middle finger up to the EFL, particularly given the severity of the deduction. Don’t the EFL have to sanction signings? If so, sure they would stop us going for it.