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Financial Fair Play rule change leads to chaos as EFL clubs try to prove Covid-19 has cut squad values

 

 

The EFL has relaxed its FFP rules to help clubs deal with the pandemic but calculating impact on market value of players is proving particularly tricky

 

The Football League has relaxed its Financial Fair Play (FFP) rules, joining the Premier League in helping clubs deal with the pandemic’s impact, but regulation changes are causing confusion for clubs across the English game trying to prove losses incurred directly by Covid-19.

 

The EFL’s regulations have been updated to include a clause permitting its clubs – in the Championship, League One and League Two – to exclude “Covid-19 costs” for the 2019-20 and 2020-21 seasons from their reported expenditure.

 

Appendix five of the regulations now includes factoring in “lost revenues and/or exceptional costs incurred by a club that are directly attributable to the Covid-19 pandemic and that are identified and calculated in accordance with such guidance as issued by the board”.

 

Alongside spending on women’s football, youth and community development, clubs can deduct costs from pre-tax earnings in their financial reports for costs relating to the coronavirus, such as making their training ground and stadium Covid-secure.

 

This must be subjected to an independent audit and helps to ensure their spending is compliant with FFP restrictions. More detailed guidance has also been sent to all clubs.

Yet where it has become particularly uncertain is clubs attempting to prove potential loss of future earnings due to the pandemic decreasing the value of their playing squad.

If assets – as players are considered – have decreased in value, it can also be a deducted factor to ensure compliance with FFP

 

Most clubs accept that the market value of players has dropped since the pandemic devastated finances in football worldwide, but are struggling to quantify that. They could, for example, demonstrate a player’s decrease in value if they received a £10million offer in January that reduced to £5m in the most recent transfer window, but cases like this are rare. Even then, a drop in form could be a cause.

 

Clubs are, therefore, unable to prove sufficiently that their entire playing squad is worth less than pre-Covid times, or by how much, and many are unclear how to proceed. They want the leagues to take a pragmatic approach to recognise the unusual times and be assured that they will not be docked points as a consequence.

 

Debate is continuing as to how best to deal with the issue, with most clubs simply wanting a fair and level playing field. The rules are open to interpretation currently and any decision is at the behest of the EFL, making it difficult for clubs to plan adequately for the future. Many clubs in the lower divisions have or still face going out of business but even at the wealthier end of the pyramid clubs are incurring catastrophic losses.

 

Everton announced an astonishing loss of £139.9m for the 2019-20 financial year, £67.3m a result of Covid-19.

But the Premier League’s largely untethered expenditure on transfers in the summer window – Chelsea spent over £200m, Manchester City £120m, Liverpool £70m – that went down badly with the Government when top-flight clubs still complained of financial uncertainty, also makes it harder to argue that player valuations should be considered to have decreased.

 

The Premier League agreed a £250m bailout of EFL clubs at the start of December, after months of wrangling and negotiation, with £50m going to clubs in League One and League Two and £200m made available to Championship clubs in interest-free loans.

Premier League chief executive Richard Masters said at the time: “The Premier League is a huge a supporter of the football pyramid and is well aware of the important role clubs play in their communities. Our commitment is that no EFL club need go out of business due to Covid-19.

 

“All football clubs continue to suffer significant financial losses as a result of the pandemic, but Premier League shareholders today unanimously agreed to provide additional funding and support for EFL clubs in real financial distress.”

 

 

EFL chairman Rick Parry said: “Our over-arching aim throughout this process has been to ensure that all EFL clubs survive the financial impact of the pandemic.”

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12 minutes ago, ANDY said:

Financial Fair Play rule change leads to chaos as EFL clubs try to prove Covid-19 has cut squad values

 

 

The EFL has relaxed its FFP rules to help clubs deal with the pandemic but calculating impact on market value of players is proving particularly tricky

 

The Football League has relaxed its Financial Fair Play (FFP) rules, joining the Premier League in helping clubs deal with the pandemic’s impact, but regulation changes are causing confusion for clubs across the English game trying to prove losses incurred directly by Covid-19.

 

The EFL’s regulations have been updated to include a clause permitting its clubs – in the Championship, League One and League Two – to exclude “Covid-19 costs” for the 2019-20 and 2020-21 seasons from their reported expenditure.

 

Appendix five of the regulations now includes factoring in “lost revenues and/or exceptional costs incurred by a club that are directly attributable to the Covid-19 pandemic and that are identified and calculated in accordance with such guidance as issued by the board”.

 

Alongside spending on women’s football, youth and community development, clubs can deduct costs from pre-tax earnings in their financial reports for costs relating to the coronavirus, such as making their training ground and stadium Covid-secure.

 

This must be subjected to an independent audit and helps to ensure their spending is compliant with FFP restrictions. More detailed guidance has also been sent to all clubs.

Yet where it has become particularly uncertain is clubs attempting to prove potential loss of future earnings due to the pandemic decreasing the value of their playing squad.

If assets – as players are considered – have decreased in value, it can also be a deducted factor to ensure compliance with FFP

 

Most clubs accept that the market value of players has dropped since the pandemic devastated finances in football worldwide, but are struggling to quantify that. They could, for example, demonstrate a player’s decrease in value if they received a £10million offer in January that reduced to £5m in the most recent transfer window, but cases like this are rare. Even then, a drop in form could be a cause.

 

Clubs are, therefore, unable to prove sufficiently that their entire playing squad is worth less than pre-Covid times, or by how much, and many are unclear how to proceed. They want the leagues to take a pragmatic approach to recognise the unusual times and be assured that they will not be docked points as a consequence.

 

Debate is continuing as to how best to deal with the issue, with most clubs simply wanting a fair and level playing field. The rules are open to interpretation currently and any decision is at the behest of the EFL, making it difficult for clubs to plan adequately for the future. Many clubs in the lower divisions have or still face going out of business but even at the wealthier end of the pyramid clubs are incurring catastrophic losses.

 

Everton announced an astonishing loss of £139.9m for the 2019-20 financial year, £67.3m a result of Covid-19.

But the Premier League’s largely untethered expenditure on transfers in the summer window – Chelsea spent over £200m, Manchester City £120m, Liverpool £70m – that went down badly with the Government when top-flight clubs still complained of financial uncertainty, also makes it harder to argue that player valuations should be considered to have decreased.

 

The Premier League agreed a £250m bailout of EFL clubs at the start of December, after months of wrangling and negotiation, with £50m going to clubs in League One and League Two and £200m made available to Championship clubs in interest-free loans.

Premier League chief executive Richard Masters said at the time: “The Premier League is a huge a supporter of the football pyramid and is well aware of the important role clubs play in their communities. Our commitment is that no EFL club need go out of business due to Covid-19.

 

“All football clubs continue to suffer significant financial losses as a result of the pandemic, but Premier League shareholders today unanimously agreed to provide additional funding and support for EFL clubs in real financial distress.”

 

 

EFL chairman Rick Parry said: “Our over-arching aim throughout this process has been to ensure that all EFL clubs survive the financial impact of the pandemic.”

That decision as been on the cards for a month or so, that also means TP will get the green light !!   UTO 

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2 minutes ago, kevtheowl said:

That decision as been on the cards for a month or so, that also means TP will get the green light !!   UTO 

sadly not.

 

Our cashflow problems still exist.

 

Either Mr Chansiri cannot or will not get funds into SWFC from abroad.

 

Do issues exist transferring money from a Thai bank account to a British one?   


You think you are having a bad day?   Look what this ship captain did!

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58 minutes ago, Chriss said:

Westwood was easily worth £100m last year. 

 

Forge those documents Chansiri.

 

"why would I want to forge documents that show a reduced valuation?"

 

:Chansiri:

  • Haha 1
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52 minutes ago, Salmonbones said:

sadly not.

 

Our cashflow problems still exist.

 

Either Mr Chansiri cannot or will not get funds into SWFC from abroad.

 

Do issues exist transferring money from a Thai bank account to a British one?   

 

Only if you dont want to shift it.

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51 minutes ago, Salmonbones said:

sadly not.

 

Our cashflow problems still exist.

 

Either Mr Chansiri cannot or will not get funds into SWFC from abroad.

 

Do issues exist transferring money from a Thai bank account to a British one?   

Do you really think that Mr Chansiri has only one bank account !!    UTO 

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1 hour ago, ANDY said:

Financial Fair Play rule change leads to chaos as EFL clubs try to prove Covid-19 has cut squad values

 

 

The EFL has relaxed its FFP rules to help clubs deal with the pandemic but calculating impact on market value of players is proving particularly tricky

 

The Football League has relaxed its Financial Fair Play (FFP) rules, joining the Premier League in helping clubs deal with the pandemic’s impact, but regulation changes are causing confusion for clubs across the English game trying to prove losses incurred directly by Covid-19.

 

The EFL’s regulations have been updated to include a clause permitting its clubs – in the Championship, League One and League Two – to exclude “Covid-19 costs” for the 2019-20 and 2020-21 seasons from their reported expenditure.

 

Appendix five of the regulations now includes factoring in “lost revenues and/or exceptional costs incurred by a club that are directly attributable to the Covid-19 pandemic and that are identified and calculated in accordance with such guidance as issued by the board”.

 

Alongside spending on women’s football, youth and community development, clubs can deduct costs from pre-tax earnings in their financial reports for costs relating to the coronavirus, such as making their training ground and stadium Covid-secure.

 

This must be subjected to an independent audit and helps to ensure their spending is compliant with FFP restrictions. More detailed guidance has also been sent to all clubs.

Yet where it has become particularly uncertain is clubs attempting to prove potential loss of future earnings due to the pandemic decreasing the value of their playing squad.

If assets – as players are considered – have decreased in value, it can also be a deducted factor to ensure compliance with FFP

 

Most clubs accept that the market value of players has dropped since the pandemic devastated finances in football worldwide, but are struggling to quantify that. They could, for example, demonstrate a player’s decrease in value if they received a £10million offer in January that reduced to £5m in the most recent transfer window, but cases like this are rare. Even then, a drop in form could be a cause.

 

Clubs are, therefore, unable to prove sufficiently that their entire playing squad is worth less than pre-Covid times, or by how much, and many are unclear how to proceed. They want the leagues to take a pragmatic approach to recognise the unusual times and be assured that they will not be docked points as a consequence.

 

Debate is continuing as to how best to deal with the issue, with most clubs simply wanting a fair and level playing field. The rules are open to interpretation currently and any decision is at the behest of the EFL, making it difficult for clubs to plan adequately for the future. Many clubs in the lower divisions have or still face going out of business but even at the wealthier end of the pyramid clubs are incurring catastrophic losses.

 

Everton announced an astonishing loss of £139.9m for the 2019-20 financial year, £67.3m a result of Covid-19.

But the Premier League’s largely untethered expenditure on transfers in the summer window – Chelsea spent over £200m, Manchester City £120m, Liverpool £70m – that went down badly with the Government when top-flight clubs still complained of financial uncertainty, also makes it harder to argue that player valuations should be considered to have decreased.

 

The Premier League agreed a £250m bailout of EFL clubs at the start of December, after months of wrangling and negotiation, with £50m going to clubs in League One and League Two and £200m made available to Championship clubs in interest-free loans.

Premier League chief executive Richard Masters said at the time: “The Premier League is a huge a supporter of the football pyramid and is well aware of the important role clubs play in their communities. Our commitment is that no EFL club need go out of business due to Covid-19.

 

“All football clubs continue to suffer significant financial losses as a result of the pandemic, but Premier League shareholders today unanimously agreed to provide additional funding and support for EFL clubs in real financial distress.”

 

 

EFL chairman Rick Parry said: “Our over-arching aim throughout this process has been to ensure that all EFL clubs survive the financial impact of the pandemic.”

Can we backdate the purchase of Abdi and Rhodes to this? 🤔

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1 hour ago, Salmonbones said:

sadly not.

 

Our cashflow problems still exist.

 

Either Mr Chansiri cannot or will not get funds into SWFC from abroad.

 

Do issues exist transferring money from a Thai bank account to a British one?   

I doubt you can transfer money from an empty bank account no matter the jurisdiction 

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1 hour ago, Salmonbones said:

sadly not.

 

Our cashflow problems still exist.

 

Either Mr Chansiri cannot or will not get funds into SWFC from abroad.

 

Do issues exist transferring money from a Thai bank account to a British one?   

No difficulties if you have money in the Thai bank account.

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