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

[the golden bullen]

28 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

Not actually correct though. The £20.7m is now gone it would be; £35.4m + 2018/19 accounts + 2019/20 projection.

 

 

[Harrysgame]

23 minutes ago, airborne_rat_of_s6 said:

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.

Not sure. Does make you wonder why anyone would buy a champ club if you can't invest to get promoted. Think it is the EFL who will kill the game. As for parry, don't remember Liverpool keeping their cash in the bank seemed to spend spend spend.

It's ok to have these ideals but only if it is truly equal Inc PL clubs who are relegated.

Sick of this p and s crap, just want clubs to get back to football and buying and selling who they want.

[brian joicey]

1 hour 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

But Birmingham’s DID get re-set tho 

[RUMBELOWS91]

On 01/08/2020 at 11:08, 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. 

Included in 19/20 will be the sale of Joao and the Bruce compo.

 

Prior to 19/20 we released;-

 

Dave Jones

Gary Hooper

Almen Abdi

Marco Matias

George Boyd

Daniel Pudil

 

We have done very little in terms of incomings in that period.

 

I wouid have thought 19/20 would have been healthier than 17/18 on the back of that, not worse.

[Dick_Turpin]

25 minutes ago, RUMBELOWS91 said:

Included in 19/20 will be the sale of Joao and the Bruce compo.

 

Prior to 19/20 we released;-

 

Dave Jones

Gary Hooper

Almen Abdi

Marco Matias

George Boyd

Daniel Pudil

 

We have done very little in terms of incomings in that period.

 

I wouid have thought 19/20 would have been healthier than 17/18 on the back of that, not worse.

 

Given the profit from 17/18  - the ground sale appears to be allowed.So for the purposes of the last 3 years we can leave it there for the calculations. So with a c£3m profit that would mean we could lose up to £42m in 18/19 and 19/20 and be OK. In practice it's even more given the costs of the academy etc that we can deduct from the losses. With the sales of Hunt and Joao to be included and the pruning of the wage bill surely we'll be OK to avoid the Test three restrictions outlined here:-

 

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

 

We might though still fail Test Two  - which has a £15m loss threshold over 3 years

 

Clubs who fail Test 2 must provide extra information to the EFL about their plans for the next two seasons. The clubs must convince the EFL that they:

• have enough cash to pay all their creditors, wages and transfer fees due over the next two years
• have the cash to play all their games
• will be able to fulfill all their obligations under EFL rules
• stay within FFP limits for the next two seasons

 

If a club can convince the EFL that all is well (by providing proof of secure funding along with predicted trading within FFP rules) it can continue next season without EFL interference but those who cannot do so then become subject to EFL restrictions.

 

If they cannot convince the EFL that they can trade within the rules, then the EFL can impose the following sanctions:

 

• require the club to agree a budget with the EFL and force the club to keep to it. The budget to show that the club has the ability to pay all transfer fees, compensation fees, loan fees and any other payments relating to transfers, wages and agents fees (this is soft sanctions)
• require the club to continue to provide financial information (including proof of secure funding) for as long as is necessary
• the EFL can refuse to register any new player or register a new contract of an existing player without proof the club can afford it (this is a soft embargo)

 

This Secure Funding requirement replaces the equity injection that owners used to have to do under the old rules.  It does NOT require owners to “make good” the FFP losses or even the losses filed at Companies House. It does require owners to “make good” any “CASH LOSSES” over a FIVE year period – yes, FIVE years, not three years. Cash Losses are the real cash losses incurred by the club and do not have the accountancy adjustments, such as depreciation & forward commitments, etc., included.

 

Sounds like it's time for those "friends" who were going to stop us having this sort of bother to come forward just to make sure. 

[Tollertonowl]

The current problem is the players fee/ obscene wages/ short contracts and the fact that the EFL aren't aligned with the premiership in terms of rules...

 

A club spends big (£Millions) on a player, then the big wages, then he gets injured or doesn't perform, then cost is huge and the club just can't recover this cost because it's 2-3yrs generally before they move for free...

 

In reality we should now be able to buy ourselves a place in the premiership, but we can't because of these rules so maybe it's relegation next year...

 

The issue for other clubs is that they can't find buyers if they can't spend any money because of the rules... Maybe the EFL should start to impose maximum wages instead of penalising Clubs...

[Guest Grandad]

8 hours ago, the golden bullen said:

Not actually correct though. The £20.7m is now gone it would be; £35.4m + 2018/19 accounts + 2019/20 projection.

 

No that's not correct

[the golden bullen]

1 hour ago, Grandad said:

 

No that's not correct

2018/19 P&S submission has already been submitted to the EFL. See their November 19 statement, so if your waiting for the accounts it must be because you’re thinking of the 19/20 submissions.

 

Correct.

[Essix Blue]

1 hour ago, the golden bullen said:

2018/19 P&S submission has already been submitted to the EFL. See their November 19 statement, so if your waiting for the accounts it must be because you’re thinking of the 19/20 submissions.

 

Correct.

The new 3 year rolling period that will include the 18/19 accounts due now, would be 16/17, 17/18 and 18/19. So the £20.7m loss from 16/17 would be included. 

[Modfather100]

22 hours ago, ruusowl said:

 

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.

 

Well how else do you judge their fairness?

 

If you don't have parachute payments for teams coming down from the league above where income streams are crazy then you will have a situation whereby teams will either not spend any money when they go up (ala Norwich) and end up relegated thus not being able to bridge the gap to those more established or teams will come down and end up going into adminstration al.ost immediately.

 

The fault is in the system that allows such a financial discrepency between the two leagues. The fact that all relegated clubs aren't just getting promoted everyseason along with the fact that they aren't all going bust shows that the parachute payments are kind of doing their job.

 

What shoukd happen is that wealth shoukd be distributed more evenly over all clubs but it doesn't happen. 

 

The fact that one or often two clubs that don't get parachute payments get promoted shows you don't need them. And also means it is in those clubs interests (along with us) for Parachute payments to continue. 

 

If you get rid of them and we do go up and then get relegated, we'd be done without them. So say all the others. That is why there is not a big fuss kicked up over them.

[alanharper]

11 hours ago, RUMBELOWS91 said:

Included in 19/20 will be the sale of Joao and the Bruce compo.

 

Prior to 19/20 we released;-

 

Dave Jones

Gary Hooper

Almen Abdi

Marco Matias

George Boyd

Daniel Pudil

 

We have done very little in terms of incomings in that period.

 

I wouid have thought 19/20 would have been healthier than 17/18 on the back of that, not worse.

 

The new accounts will cover the financial year up to summer 2019 so a year of paying those wages will still be included and Joao's transfer won't be. That's why there's no way there can be a significant reduction in what would have been a loss of around £35m without the ground sale included, the vast majority of the loss is because of the ridiculous wage bill that Chansiri accumulated. We sold Hunt and released Loovens and Wallace and had Rhodes out on loan at Norwich but that's not making much of a dent in a £35m deficit. 

 

Next year will be better, with the wages cuts you mention above but will still include the big earners like Fletcher and FF, it'll take at least another couple of years for the accounts to start to show less eye-watering losses. 

[Roscoe P. Coltrane]

What a shambles.

[the golden bullen]

1 hour ago, Essix Blue said:

The new 3 year rolling period that will include the 18/19 accounts due now, would be 16/17, 17/18 and 18/19. So the £20.7m loss from 16/17 would be included. 

 

Agreed, however my point was that we have already submitted the numbers to EFL for 18/19 P&S based on a projection of the 18/19 year. The actual accounts will now only affect our submission for 19/20 P&S submission. Therefore the excitement of the release of the accounts means nothing really for 18/19 apart from letting people guess what our submission was for adjustments from very limited disclosures.

 

As the EFL have said they are reviewing our submission for 18/19 but the release of the accounts will have no impact on our submission for that year and if we have breached, the EFL will already know this. Unless we totally fudged our projection and then i do take it all back.

[WC1Owl]

The EFL needs to tell the clubs how P&S will be amended for the COVID seasons when there's no or very reduced match day income, or planning becomes impossible. Not holding my breath, though.

[Nero]

On 02/08/2020 at 10:15, 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?

 

 

 

 

I posted virtually the same numbers when Huddersfield were relegated so there is hope.

[sMacLean]

Spendageddon can return. HMS wee the league sets sail again!

[owls-swfc]

12 minutes ago, sMacLean said:

 HMS wee the league sets sail again!

In reverse to begin with.... 

[WalthamOwl]

 I will be very surprised if DC hasn’t messed up the accounts that are due in. 

[alanharper]

9 minutes ago, owls-swfc said:

In reverse to begin with.... 

 

It just needs a bit of a clean first

 

[ChapSmurf]

35 minutes ago, Nero said:

I posted virtually the same numbers when Huddersfield were relegated so there is hope.

 

Fortunately I was slightly wrong. It's potentially £93M, not £115M, but even so. As someone else mentioned, newly relegated teams don't tend to do that well, but it's not the point. The money is still there and it's just creating an even wider gap in my opinion.

 

Out of the three to come down, I feel Norwich will fair the best. I can see Watford struggling and Bournemouth maybe play-offs at best.