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Post by lordb on Apr 7, 2022 16:10:57 GMT
Better than expected. Club allowed to lose £61million in FFP accounts for 2017/18 to 2020/21 (with 19/20 and 20/21 added and counted as one year due to Covid). Club lost £30m, £15m, £70m and now £5m in the 4 seasons. That adds up to losses of £83m, (30+15 + {70+5}/2). From this we have to deduct non-FFP costs such as non-player wages, academy, training ground etc, probably gets us to £71m of losses - which breaks the rules. The answer on FFP therefore depends on what is allowed for the exceptional costs of Covid. The club claims Covid costs of £38m in 2019/20 and £19m in 2020/21, if we take these out (have to divide by 2), losses over the period are are well within the rules. EFL rules suggest maximum Covid deduction is £5m, but this makes no sense as Stoke lost £8m each Covid season even if we don't allow for the reduction in player values (£30m and £11m of the £39m and £19m losses), this was mainly loss of revenue and it seems hard to see how the EFL could choose not to allow this, especially as the EFL decision on the amounts was only made relatively recently. Realise this is a bit convoluted but in simple terms: - if all the Covid costs are allowed, the club is in the clear - if the £8m is allowed, it will be close but I suspect close enough to avoid punishment - if £5m is allowed, then the club would breach the rules but punishment would be at the low end of the scale The other positive is the value of players on the books is now only £10m, most of this is likely to be written off in the 2021/22 accounts so the club will start the 2022/23 season with the strongest possible financial position in terms of spending on wages and transfers. so if it's the best case scenario we could be in a position to spend a few pennies this summer?
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Post by chiswickpotter on Apr 7, 2022 16:17:47 GMT
Better than expected. Club allowed to lose £61million in FFP accounts for 2017/18 to 2020/21 (with 19/20 and 20/21 added and counted as one year due to Covid). Club lost £30m, £15m, £70m and now £5m in the 4 seasons. That adds up to losses of £83m, (30+15 + {70+5}/2). From this we have to deduct non-FFP costs such as non-player wages, academy, training ground etc, probably gets us to £71m of losses - which breaks the rules. The answer on FFP therefore depends on what is allowed for the exceptional costs of Covid. The club claims Covid costs of £38m in 2019/20 and £19m in 2020/21, if we take these out (have to divide by 2), losses over the period are are well within the rules. EFL rules suggest maximum Covid deduction is £5m, but this makes no sense as Stoke lost £8m each Covid season even if we don't allow for the reduction in player values (£30m and £11m of the £39m and £19m losses), this was mainly loss of revenue and it seems hard to see how the EFL could choose not to allow this, especially as the EFL decision on the amounts was only made relatively recently. Realise this is a bit convoluted but in simple terms: - if all the Covid costs are allowed, the club is in the clear - if the £8m is allowed, it will be close but I suspect close enough to avoid punishment - if £5m is allowed, then the club would breach the rules but punishment would be at the low end of the scale The other positive is the value of players on the books is now only £10m, most of this is likely to be written off in the 2021/22 accounts so the club will start the 2022/23 season with the strongest possible financial position in terms of spending on wages and transfers. so if it's the best case scenario we could be in a position to spend a few pennies this summer? If our turnover is £20 to £25 million and the owners are willing to take the allowed £13 million loss we could spend the total on wages and transfer fees, the fees are divided by contract length so a £10m fee costs £2.5m a season
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Post by FullerMagic on Apr 7, 2022 16:20:25 GMT
Wonder what our wage bill will settle down at once the last few big earners are gone? that's last seasons figures given the summer 2021 purge that must have come down considerably Yeah, maybe Bauer, McClean, Vokes, Shawcross, Mikel, Indi, Gregory, Batth gone since the accounting period? www.stokesentinel.co.uk/sport/football/transfer-news/stoke-city-accounts-ffp-breaking-6918921The accounts make reference to ‘onerous contracts’ or the big earners who have left as free agents, such as Kevin Wimmer – with another seven of those, including Moritz Bauer, James McClean and Sam Vokes, were in 2021/22, after these accounts. And then Ince (25?), Allen (45?) Smith (20?), Fletcher (12?), Chester (10?) to come this year? Potentially only Afobe, Etebo and Clucas (although now on a reduced deal) left of the high-earners - and hopefully the first 2 of those (all three in an ideal world) will go over the summer, one way or another So it'll be interesting to see what next season's wage bill settles down at
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Post by Deleted on Apr 8, 2022 0:00:37 GMT
Better than expected. Club allowed to lose £61million in FFP accounts for 2017/18 to 2020/21 (with 19/20 and 20/21 added and counted as one year due to Covid). Club lost £30m, £15m, £70m and now £5m in the 4 seasons. That adds up to losses of £83m, (30+15 + {70+5}/2). From this we have to deduct non-FFP costs such as non-player wages, academy, training ground etc, probably gets us to £71m of losses - which breaks the rules. The answer on FFP therefore depends on what is allowed for the exceptional costs of Covid. The club claims Covid costs of £38m in 2019/20 and £19m in 2020/21, if we take these out (have to divide by 2), losses over the period are are well within the rules. EFL rules suggest maximum Covid deduction is £5m, but this makes no sense as Stoke lost £8m each Covid season even if we don't allow for the reduction in player values (£30m and £11m of the £39m and £19m losses), this was mainly loss of revenue and it seems hard to see how the EFL could choose not to allow this, especially as the EFL decision on the amounts was only made relatively recently. Realise this is a bit convoluted but in simple terms: - if all the Covid costs are allowed, the club is in the clear - if the £8m is allowed, it will be close but I suspect close enough to avoid punishment - if £5m is allowed, then the club would breach the rules but punishment would be at the low end of the scale The other positive is the value of players on the books is now only £10m, most of this is likely to be written off in the 2021/22 accounts so the club will start the 2022/23 season with the strongest possible financial position in terms of spending on wages and transfers. so if it's the best case scenario we could be in a position to spend a few pennies this summer? Have no idea how it works, are we now free to do that ? Does anyone actually know? Could we say go out and buy a few decent players as also one or 2 more should be off the wage bill I think
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Post by bristolcityinpeace on Apr 8, 2022 0:50:53 GMT
Yes could the landlord defer payment? I would be pretty unhappy if I was another club and we could do that to be honest They could but payment and expense would be different so we would still have to book the cost even if we never paid it, don't know how it affects naming rights etc either - it could be that is excluded anyway as spending on facilities is I believe so could be the same for rent, I'm sure BIP will be along soon to clear it up for us No reason rental costs shouldn't count towards P&S- you can't book a large profit on disposal and it remain cost free thereafter- not just you, any club. Kieran Maguire intimated a while back well before this transaction that in the event of a peppercorn or daft rent, the EFL would push back and seek out a Fair Rent for P&S purposes and substitute it in- this was in 2019 when Hillsborough appeared to show no rent after SWFC sold it. Whether it's paper or real I am not bothered but it is definitely an Operating Expense and not listed among the excludable items. In a sense it doesn't matter if the rent is cash or not- not to me anyway or if it's loaned and paid back and a money-go-round, so long as it's there for P&S purposes included within the costs then paper or real I couldn't care less. Through Profit and Loss not Loans or similar- rent as an Operating Expense and included within the Profit and Loss, the FFP calcs then whatever form beyond that doesn't concern me at all.
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Post by bristolcityinpeace on Apr 8, 2022 1:09:02 GMT
Looks like cash was transferred for stadium purchase so the bristol ffp fan wasted his £3 looking at the land registry, hope he hasnt posted the letter to the efl yet be a shame if his strange obsession with Stoke cost him another 80p or whatever Cash Transfer or TR1 form? I'd say it's a debatable area. £3 Land Registry can be slower to update in any event...The EFL certainly did not look kindly when SWFC's transaction date that was claimed differed significantly to that of the Land Registry although Stoke seem to have a fair few more ducks in a row than Chansiri did. Anyway never mind me looking at it, I am quite sure my club are analysing other clubs accounts- it was intimated in the Telegraph in Feb that between 5 and 7 clubs other than ourselves may have P&S issues over this and next season and it referenced Jon Lansdown in this context- they wouldn't know that without a pretty rigorous analysis. Quite right too might I add- I praise clubs who don't take clubs FFP submissions at face value. SL is partially retired so he can spend hours on it being an accountant by trade since the early 1980s...nothing personal to Stoke but quite right if we are looking at accounts to assess the position.
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Post by bristolcityinpeace on Apr 8, 2022 1:50:27 GMT
Better than expected. Club allowed to lose £61million in FFP accounts for 2017/18 to 2020/21 (with 19/20 and 20/21 added and counted as one year due to Covid). Club lost £30m, £15m, £70m and now £5m in the 4 seasons. That adds up to losses of £83m, (30+15 + {70+5}/2). From this we have to deduct non-FFP costs such as non-player wages, academy, training ground etc, probably gets us to £71m of losses - which breaks the rules. The answer on FFP therefore depends on what is allowed for the exceptional costs of Covid. The club claims Covid costs of £38m in 2019/20 and £19m in 2020/21, if we take these out (have to divide by 2), losses over the period are are well within the rules. EFL rules suggest maximum Covid deduction is £5m, but this makes no sense as Stoke lost £8m each Covid season even if we don't allow for the reduction in player values (£30m and £11m of the £39m and £19m losses), this was mainly loss of revenue and it seems hard to see how the EFL could choose not to allow this, especially as the EFL decision on the amounts was only made relatively recently.
Realise this is a bit convoluted but in simple terms: - if all the Covid costs are allowed, the club is in the clear - if the £8m is allowed, it will be close but I suspect close enough to avoid punishment - if £5m is allowed, then the club would breach the rules but punishment would be at the low end of the scale The other positive is the value of players on the books is now only £10m, most of this is likely to be written off in the 2021/22 accounts so the club will start the 2022/23 season with the strongest possible financial position in terms of spending on wages and transfers. As an outsider largely agree with this analysis, although I would think the allowable losses might be higher? ie the usual allowances, Cat.1 academy...I make Stoke's P&S allowances in the £7-8m bracket per season but apologies if I have misinterpreted your bit on allowances, SwissRamble also has it at £7m per year. One bit I would respectfully also query are the bolded bits... Loss of Revenue- Yes I agree. The £11m in lost player transfer/disposal revenue and savings? No. That's a newly added item- and the £30m in Impairment, well that along with the first bit should be a vote for EFL clubs. The will of the majority should prevail there, and I can't see other clubs letting Stoke off the hook with a massive write-off just because they want one. My club are claiming lost transfer profits due to Covid but if they can't have it, neither can Stoke or anyone else. £30m Impairment is trickier of course but it's rectifiable within P&S regs- simply reamortise it straight line for P&S purposes depending on the player involved it'd be up to a) End of contract or b) Time of disposal. Or add it back to the claimed losses for the year. Unsure that holds water- my club eg I expect lost £15-20m through Covid but I am calculating that based on the £5m x 2, a lot of clubs probably legitimately lost more than £5m x 2 via Covid but EFL rules are EFL rules, what makes Stoke, my club or any other an exception? Derby claimed £20m in Covid revenue hit- believable in some ways but rules are rules no? The other way of looking at your bolded bit is that a club or clubs have claimed x but now the EFL have a basis to assess equally and fairly for all- £5m, £5m and £2.5m respectively across the last two seasons before now and then the last one for this season. I don't see why other clubs would allow the EFL to let Stoke and Stoke alone ignore this just because they think they are entitled to do so. PS, if you read the DCFC and SWFC cases there was a significant divergence between EFL and club interpretation- in the case of Derby and perhaps Sheffield Wednesday the club claimed (or purported to claim) that the EFL signed off the accounts and acceptance of a number or method in the here and now amounted to a final determination. It did not, so unless the EFL have somehow given Stoke full and binding ever lasting carte blanche then there is nothing at all to stop them revisiting when they've had proper time to assess- same goes for any club. Both used the term "unlawful" in their response to the charges. Both used defences of "Estoppel" in their cases vs the EFL- neither were successful although to nail Derby took longer. As you might have gathered, due process when it comes to FFP issues- I don't much care for it. Means justify the ends for me, the positive outcome is justified by the methods- I am sure that the Professional Standing Embargo was devised in Summer 2021 with Derby in mind but it got the job done as the club were crippled by it probably. I am not sure that rule existed prior to Summer 2021. Is there a bit I am missing too, thought the 3rd loss "£30m, £15m, £70m and now £5m- amounted to £88m in the 3rd year.
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Post by hyaduck on Apr 8, 2022 4:02:38 GMT
Better than expected. Club allowed to lose £61million in FFP accounts for 2017/18 to 2020/21 (with 19/20 and 20/21 added and counted as one year due to Covid). Club lost £30m, £15m, £70m and now £5m in the 4 seasons. That adds up to losses of £83m, (30+15 + {70+5}/2). From this we have to deduct non-FFP costs such as non-player wages, academy, training ground etc, probably gets us to £71m of losses - which breaks the rules. The answer on FFP therefore depends on what is allowed for the exceptional costs of Covid. The club claims Covid costs of £38m in 2019/20 and £19m in 2020/21, if we take these out (have to divide by 2), losses over the period are are well within the rules. EFL rules suggest maximum Covid deduction is £5m, but this makes no sense as Stoke lost £8m each Covid season even if we don't allow for the reduction in player values (£30m and £11m of the £39m and £19m losses), this was mainly loss of revenue and it seems hard to see how the EFL could choose not to allow this, especially as the EFL decision on the amounts was only made relatively recently. Realise this is a bit convoluted but in simple terms: - if all the Covid costs are allowed, the club is in the clear - if the £8m is allowed, it will be close but I suspect close enough to avoid punishment - if £5m is allowed, then the club would breach the rules but punishment would be at the low end of the scale The other positive is the value of players on the books is now only £10m, most of this is likely to be written off in the 2021/22 accounts so the club will start the 2022/23 season with the strongest possible financial position in terms of spending on wages and transfers. so if it's the best case scenario we could be in a position to spend a few pennies this summer? If so and it’s a BIG IF, would you trust O’Neill in another window because I wouldn’t!!!!!!
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Post by lordb on Apr 8, 2022 7:20:35 GMT
so if it's the best case scenario we could be in a position to spend a few pennies this summer? If so and it’s a BIG IF, would you trust O’Neill in another window because I wouldn’t!!!!!! Not the thread for that Whoever the manager is be handy if they can spend, maybe not at Waitrose but at least at Asda rather than knock offs from the market
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Post by theonlooker on Apr 8, 2022 8:36:16 GMT
If so and it’s a BIG IF, would you trust O’Neill in another window because I wouldn’t!!!!!! Not the thread for that Whoever the manager is be handy if they can spend, maybe not at Waitrose but at least at Asda rather than knock offs from the market We haven't been buying knock offs from the market though have we? We've been buying decent players for this level. The issue has been the high transient nature of the dressing room for the last few years (even by Championship standards), having to remove big players and high earners when and where we can - virtually removing any kind of stability and continuity in there. I think that's been the biggest and most immeasurable issue for the last few seasons.
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Post by lordb on Apr 8, 2022 9:43:29 GMT
Not the thread for that Whoever the manager is be handy if they can spend, maybe not at Waitrose but at least at Asda rather than knock offs from the market We haven't been buying knock offs from the market though have we? We've been buying decent players for this level. The issue has been the high transient nature of the dressing room for the last few years (even by Championship standards), having to remove big players and high earners when and where we can - virtually removing any kind of stability and continuity in there. I think that's been the biggest and most immeasurable issue for the last few seasons. understand all that none the less the last few windows we have shopped in the bargain basement Still surprises me how many people seem to think spending £2m or so on a striker(noting that strikers tend to cost more than other players) at Championship level is big money, it simply isn't & hasn't been for a long time. that's been demonstrated by how easy it was to move Surridge on, if he hadn't have been cheap & on low wages we would have been stuck with him - not a bad thing in itself - however at some point we are going to have to trust a new manager with a reasonable budget, not talking Rowett largess here but if we could spend £10m on 3 players (or attract good free transfers like Baker) potentially that could be the difference between continued failure & achieving success Obviously simply spending money is not the answer on it's own you need good coaching, tactics, culture, fitness e.t.c, e.t.c. & of course we've seen managers waste money over the last god knows how long I actually think O'Neill's transfer record is fine (not amazing but fine) it's his failure to get the best out of players is the issue now & moving forward. If we are looking for a new manager then it will help if we can offer a semblance of an ambitious budget to attract a good one
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Post by theonlooker on Apr 8, 2022 10:04:24 GMT
We haven't been buying knock offs from the market though have we? We've been buying decent players for this level. The issue has been the high transient nature of the dressing room for the last few years (even by Championship standards), having to remove big players and high earners when and where we can - virtually removing any kind of stability and continuity in there. I think that's been the biggest and most immeasurable issue for the last few seasons. understand all that none the less the last few windows we have shopped in the bargain basement Still surprises me how many people seem to think spending £2m or so on a striker(noting that strikers tend to cost more than other players) at Championship level is big money, it simply isn't & hasn't been for a long time. that's been demonstrated by how easy it was to move Surridge on, if he hadn't have been cheap & on low wages we would have been stuck with him - not a bad thing in itself - however at some point we are going to have to trust a new manager with a reasonable budget, not talking Rowett largess here but if we could spend £10m on 3 players (or attract good free transfers like Baker) potentially that could be the difference between continued failure & achieving success Obviously simply spending money is not the answer on it's own you need good coaching, tactics, culture, fitness e.t.c, e.t.c. & of course we've seen managers waste money over the last god knows how long I actually think O'Neill's transfer record is fine (not amazing but fine) it's his failure to get the best out of players is the issue now & moving forward. If we are looking for a new manager then it will help if we can offer a semblance of an ambitious budget to attract a good one 2M on Surridge and Brown is actually in the top 10-15 transfers in the division post COVID. It is actually a decent amount of money, where previously I agree it was a small amount. Where I think we've had issues is having to throw everything together whilst trying to desperately get rid of players for FFP reasons. I can't imagine that would create a very good atmosphere at the club, and I dare say that has forced us to look for a certain profile of player to try and protect our position from a negative perspective during the cutting back period, whilst taking pot shots at bringing in players who might build us. Where we might have some joy going forwards is being able to financially afford a slightly different profile of player, so that there isn't the huge disparity between trying to pair talented young players with decent ageing pros, and now we also don't have the large number of big players having to be moved on at pace at the same time. Having never worked in football I can only imagine that there is a stark difference on the mood of a club in moving players on quickly for financial reasons and moving players on at the end of their contracts after doing a decent job. But that's just guesswork...
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Post by followyoudown on Apr 8, 2022 11:26:35 GMT
They could but payment and expense would be different so we would still have to book the cost even if we never paid it, don't know how it affects naming rights etc either - it could be that is excluded anyway as spending on facilities is I believe so could be the same for rent, I'm sure BIP will be along soon to clear it up for us No reason rental costs shouldn't count towards P&S- you can't book a large profit on disposal and it remain cost free thereafter- not just you, any club. Kieran Maguire intimated a while back well before this transaction that in the event of a peppercorn or daft rent, the EFL would push back and seek out a Fair Rent for P&S purposes and substitute it in- this was in 2019 when Hillsborough appeared to show no rent after SWFC sold it. Whether it's paper or real I am not bothered but it is definitely an Operating Expense and not listed among the excludable items. In a sense it doesn't matter if the rent is cash or not- not to me anyway or if it's loaned and paid back and a money-go-round, so long as it's there for P&S purposes included within the costs then paper or real I couldn't care less. Through Profit and Loss not Loans or similar- rent as an Operating Expense and included within the Profit and Loss, the FFP calcs then whatever form beyond that doesn't concern me at all. I thought spending on facilities was excluded for ffp wasn't sure if that included stadiums be surprised if it didn't otherwise it makes it difficult for any club to upgrade facilities nevermind build a complete new ground like Brentford, booking a profit on disposal of a ground in no different than booking a profit on a sale of a player really aim of FFP is to make sure you only spend money you have within the limits of the rules. I agree on the rent as I said its booked as expense regardless of whether or if its paid.
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Post by LH_SCFC on Apr 8, 2022 14:16:45 GMT
Stoke City Football Club Limited financial statements now available at Companies House. Our favourite director Ant Scholes had a big pay reduction to £662k for FY2021. What a lad.
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Post by prestwichpotter on Apr 8, 2022 14:46:10 GMT
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Post by chiswickpotter on Apr 8, 2022 15:03:40 GMT
Better than expected. Club allowed to lose £61million in FFP accounts for 2017/18 to 2020/21 (with 19/20 and 20/21 added and counted as one year due to Covid). Club lost £30m, £15m, £70m and now £5m in the 4 seasons. That adds up to losses of £83m, (30+15 + {70+5}/2). From this we have to deduct non-FFP costs such as non-player wages, academy, training ground etc, probably gets us to £71m of losses - which breaks the rules. The answer on FFP therefore depends on what is allowed for the exceptional costs of Covid. The club claims Covid costs of £38m in 2019/20 and £19m in 2020/21, if we take these out (have to divide by 2), losses over the period are are well within the rules. EFL rules suggest maximum Covid deduction is £5m, but this makes no sense as Stoke lost £8m each Covid season even if we don't allow for the reduction in player values (£30m and £11m of the £39m and £19m losses), this was mainly loss of revenue and it seems hard to see how the EFL could choose not to allow this, especially as the EFL decision on the amounts was only made relatively recently.
Realise this is a bit convoluted but in simple terms: - if all the Covid costs are allowed, the club is in the clear - if the £8m is allowed, it will be close but I suspect close enough to avoid punishment - if £5m is allowed, then the club would breach the rules but punishment would be at the low end of the scale The other positive is the value of players on the books is now only £10m, most of this is likely to be written off in the 2021/22 accounts so the club will start the 2022/23 season with the strongest possible financial position in terms of spending on wages and transfers. As an outsider largely agree with this analysis, although I would think the allowable losses might be higher? ie the usual allowances, Cat.1 academy...I make Stoke's P&S allowances in the £7-8m bracket per season but apologies if I have misinterpreted your bit on allowances, SwissRamble also has it at £7m per year. One bit I would respectfully also query are the bolded bits... Loss of Revenue- Yes I agree. The £11m in lost player transfer/disposal revenue and savings? No. That's a newly added item- and the £30m in Impairment, well that along with the first bit should be a vote for EFL clubs. The will of the majority should prevail there, and I can't see other clubs letting Stoke off the hook with a massive write-off just because they want one. My club are claiming lost transfer profits due to Covid but if they can't have it, neither can Stoke or anyone else. £30m Impairment is trickier of course but it's rectifiable within P&S regs- simply reamortise it straight line for P&S purposes depending on the player involved it'd be up to a) End of contract or b) Time of disposal. Or add it back to the claimed losses for the year. Unsure that holds water- my club eg I expect lost £15-20m through Covid but I am calculating that based on the £5m x 2, a lot of clubs probably legitimately lost more than £5m x 2 via Covid but EFL rules are EFL rules, what makes Stoke, my club or any other an exception? Derby claimed £20m in Covid revenue hit- believable in some ways but rules are rules no? The other way of looking at your bolded bit is that a club or clubs have claimed x but now the EFL have a basis to assess equally and fairly for all- £5m, £5m and £2.5m respectively across the last two seasons before now and then the last one for this season. I don't see why other clubs would allow the EFL to let Stoke and Stoke alone ignore this just because they think they are entitled to do so. PS, if you read the DCFC and SWFC cases there was a significant divergence between EFL and club interpretation- in the case of Derby and perhaps Sheffield Wednesday the club claimed (or purported to claim) that the EFL signed off the accounts and acceptance of a number or method in the here and now amounted to a final determination. It did not, so unless the EFL have somehow given Stoke full and binding ever lasting carte blanche then there is nothing at all to stop them revisiting when they've had proper time to assess- same goes for any club. Both used the term "unlawful" in their response to the charges. Both used defences of "Estoppel" in their cases vs the EFL- neither were successful although to nail Derby took longer. As you might have gathered, due process when it comes to FFP issues- I don't much care for it. Means justify the ends for me, the positive outcome is justified by the methods- I am sure that the Professional Standing Embargo was devised in Summer 2021 with Derby in mind but it got the job done as the club were crippled by it probably. I am not sure that rule existed prior to Summer 2021. Is there a bit I am missing too, thought the 3rd loss "£30m, £15m, £70m and now £5m- amounted to £88m in the 3rd year. Not sure why it is £88m, the £70m and £5m have to be averaged. £30 +15 + £38 = £83m. The EFL decision on £5m was made recently but previously the EFL had stated Covid losses in the accounts would be allowed without suggesting a limit. Not clear which interpretation holds but good chance of a successful challenge I would argue as the costs had been in urged before the decision and the revenue and it is hard to see how with this backdrop the revenue and furlough items won’t be allowed. The fall in player values is much more open to challenge but again hard to imagine the impact is zero. Assuming the stadium deal is accepted and given what I know of the club’s approach to its accounting, I believe it will be. (One of the reasons the PL hired Tony Scholes was because they believed Stoke City to be so well run), Stoke will be fine with the £5m limit if the excluded costs are close to £6million a season. 2021/22 won’t be an issue as the club has cleaned up its balance sheet and sold Nathan Collins so all the signs are we will have money to spend next season.
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Post by FullerMagic on Apr 8, 2022 15:36:47 GMT
www.telegraph.co.uk/football/2022/04/08/cost-controls-wild-west-championship-finally-sight/English football is on track to announce its most radical overhaul of financial fair play rules this summer in a bid to finally curb "Wild West" overspending in the Championship.
The £39 million threshold for club losses over three years in the second tier is going to be replaced by cost controls similar to Uefa's new plan to keep expenditure within 70 per cent of revenue.
Talks are ongoing between the Premier League and English Football League, with both awaiting the Government's verdict on the Tracey Crouch review of regulation before making pledges.
EFL chiefs, however, appear more optimistic than ever that reform to the profit and sustainability system will also include major changes to the parachute payment system.
Rick Parry, chairman of the EFL, told Telegraph Sport: "We're totally committed to both - better regulation, but provided it goes hand in hand with a rethink on distribution."
Fulham and Bournemouth are the latest clubs poised to bounce back to the Premier League on the back of a current distribution system that puts them at a significant advantage to their rivals. The current model leaves the likes of Bristol City and Cardiff City racking up losses of £2m-plus a month merely to remain competitive in the division.
The urgent need for financial reform beneath the Premier League plays a key part in Crouch's backing of an independent regulator. Parry says the Government, in deciding on how to back a fairer model, must keep clubs' community involvement in mind. The Ashton Gate club has recently been a key partner for the league's "Week of Action" underlining their efforts to support community causes. The Telegraph was invited to watch Richard Gould, the chief executive, address students on a degree course that the club run in sports business and entrepreneurship.
Parry applauded the local efforts of clubs, as he added: "We say that is not just a footballing argument to change the model - it's a levelling up argument for Government. What the Week of Action reinforces is just how important all of our clubs are within their communities."
In January, City chief Gould had openly expressed fears of being forced into a points deduction next year as the transfer market collapse had made it impossible to offset losses. However, with Middlesbrough and Stoke also expected to face severe scrutiny without P&S reform, all clubs in the second tier have now handed over revised numbers to the EFL on the cost of the pandemic. In City's case, the figure is understood to be about £30m.
Parry hinted the EFL will now follow a similar path to those set by Uefa, who first introduced FFP in Europe in 2010. For those now in elite competitions, club’s total expenditure on transfers, wages and agent fees cannot exceed 70 per cent of its revenue. "We will be therefore refining in conjunction with the Premier League our own profit and sustainability rules, which don't work in the Championship because clearly clubs are neither profitable nor sustainable," Parry added.
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Post by neddy on Apr 8, 2022 15:51:30 GMT
Can’t be good for us can it? Won’t be able to spend to buy?
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Post by FullerMagic on Apr 8, 2022 15:59:20 GMT
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Post by bayernoatcake on Apr 8, 2022 15:59:34 GMT
Can’t be good for us can it? Won’t be able to spend to buy? Yeah it's an absolute shit show for Champo clubs isn't it? It just doesn't seem to fit with what's going on now at this level.
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Post by sportsman on Apr 8, 2022 16:10:04 GMT
Why the hell can't all efl clubs and and load of prem clubs stand up to FFP or refuse to play until something is done to stop the big 6 keeping all other clubs in their little box away from them.
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Post by Olgrligm on Apr 8, 2022 16:14:41 GMT
It seems completely mad that the rules are set up in a way that effectively makes it so that well-intentioned, local owners can't invest in their hometown club. Look at the people being hammered: the Coates family, Steve Gibson, even Mel Morris.
If the worry is unsustainable spending, then debts written off by owners should surely negate any penalty? If we spend way too much but bet365 just cancel the debt, where's the problem?
The whole FFP system needs binning. People don't say that enough.
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Post by chuckrocky on Apr 8, 2022 16:16:18 GMT
It’s just another step to make the yawning chasm between the Premier League and the Championship even bigger isn’t it?
The only way Championship clubs will be able to spend money now will be to sell their better players.
We’re already at the point where you can almost guarantee that two of three promoted clubs from the Championship will come straight back down again. This new rule will only make it even harder for promoted clubs to compete.
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Post by J-Roar on Apr 8, 2022 16:39:08 GMT
It’s just another step to make the yawning chasm between the Premier League and the Championship even bigger isn’t it? The only way Championship clubs will be able to spend money now will be to sell their better players. We’re already at the point where you can almost guarantee that two of three promoted clubs from the Championship will come straight back down again. This new rule will only make it even harder for promoted clubs to compete. Effectively a 25ish club premier league.
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Post by theonlooker on Apr 8, 2022 16:48:15 GMT
So, is this the Rick Parry who used to work for Liverpool?
Excuse me if I'm a bit suspicious as to what the real intentions are here...
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Post by lordb on Apr 8, 2022 16:58:08 GMT
So, is this the Rick Parry who used to work for Liverpool? Excuse me if I'm a bit suspicious as to what the real intentions are here... It is him
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Post by leesandfordstoupe on Apr 8, 2022 21:25:32 GMT
It seems completely mad that the rules are set up in a way that effectively makes it so that well-intentioned, local owners can't invest in their hometown club. Look at the people being hammered: the Coates family, Steve Gibson, even Mel Morris. If the worry is unsustainable spending, then debts written off by owners should surely negate any penalty? If we spend way too much but bet365 just cancel the debt, where's the problem? The whole FFP system needs binning. People don't say that enough. I'd say you're not far off right. They'd have to be made to guarantee all contracts awarded over and.above a certain level for their entire duration otherwise them pulling the plug could still render a club unsustainable.
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Post by bristolcityinpeace on Apr 8, 2022 21:31:07 GMT
No reason rental costs shouldn't count towards P&S- you can't book a large profit on disposal and it remain cost free thereafter- not just you, any club. Kieran Maguire intimated a while back well before this transaction that in the event of a peppercorn or daft rent, the EFL would push back and seek out a Fair Rent for P&S purposes and substitute it in- this was in 2019 when Hillsborough appeared to show no rent after SWFC sold it. Whether it's paper or real I am not bothered but it is definitely an Operating Expense and not listed among the excludable items. In a sense it doesn't matter if the rent is cash or not- not to me anyway or if it's loaned and paid back and a money-go-round, so long as it's there for P&S purposes included within the costs then paper or real I couldn't care less. Through Profit and Loss not Loans or similar- rent as an Operating Expense and included within the Profit and Loss, the FFP calcs then whatever form beyond that doesn't concern me at all. I thought spending on facilities was excluded for ffp wasn't sure if that included stadiums be surprised if it didn't otherwise it makes it difficult for any club to upgrade facilities nevermind build a complete new ground like Brentford, booking a profit on disposal of a ground in no different than booking a profit on a sale of a player really aim of FFP is to make sure you only spend money you have within the limits of the rules. I agree on the rent as I said its booked as expense regardless of whether or if its paid. Yes agreed- it is. Although often (but not always) expenditure on facilities would be under Tangible Fixed Assets ad the section of that marked additions- and it would start to depreciate when it hits the balance sheet, is completed whatever criteria. The depreciation is what would go through Profit and Loss, not the initial expenditure- it might also be found in cash flow under Purchase of Tangible Fixed Assets. Everton did it slightly differently with their ground, was included in the Profit and Loss account but it would or should be excluded in any event. Rent for a sale and leaseback certainly I wouldn't put into that category. Agreed. Booked as expense and I'd say counting towards FFP but whether any cash changes hands is up to the individuals involved.
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Post by bristolcityinpeace on Apr 8, 2022 21:39:06 GMT
As an outsider largely agree with this analysis, although I would think the allowable losses might be higher? ie the usual allowances, Cat.1 academy...I make Stoke's P&S allowances in the £7-8m bracket per season but apologies if I have misinterpreted your bit on allowances, SwissRamble also has it at £7m per year. One bit I would respectfully also query are the bolded bits... Loss of Revenue- Yes I agree. The £11m in lost player transfer/disposal revenue and savings? No. That's a newly added item- and the £30m in Impairment, well that along with the first bit should be a vote for EFL clubs. The will of the majority should prevail there, and I can't see other clubs letting Stoke off the hook with a massive write-off just because they want one. My club are claiming lost transfer profits due to Covid but if they can't have it, neither can Stoke or anyone else. £30m Impairment is trickier of course but it's rectifiable within P&S regs- simply reamortise it straight line for P&S purposes depending on the player involved it'd be up to a) End of contract or b) Time of disposal. Or add it back to the claimed losses for the year. Unsure that holds water- my club eg I expect lost £15-20m through Covid but I am calculating that based on the £5m x 2, a lot of clubs probably legitimately lost more than £5m x 2 via Covid but EFL rules are EFL rules, what makes Stoke, my club or any other an exception? Derby claimed £20m in Covid revenue hit- believable in some ways but rules are rules no? The other way of looking at your bolded bit is that a club or clubs have claimed x but now the EFL have a basis to assess equally and fairly for all- £5m, £5m and £2.5m respectively across the last two seasons before now and then the last one for this season. I don't see why other clubs would allow the EFL to let Stoke and Stoke alone ignore this just because they think they are entitled to do so. PS, if you read the DCFC and SWFC cases there was a significant divergence between EFL and club interpretation- in the case of Derby and perhaps Sheffield Wednesday the club claimed (or purported to claim) that the EFL signed off the accounts and acceptance of a number or method in the here and now amounted to a final determination. It did not, so unless the EFL have somehow given Stoke full and binding ever lasting carte blanche then there is nothing at all to stop them revisiting when they've had proper time to assess- same goes for any club. Both used the term "unlawful" in their response to the charges. Both used defences of "Estoppel" in their cases vs the EFL- neither were successful although to nail Derby took longer. As you might have gathered, due process when it comes to FFP issues- I don't much care for it. Means justify the ends for me, the positive outcome is justified by the methods- I am sure that the Professional Standing Embargo was devised in Summer 2021 with Derby in mind but it got the job done as the club were crippled by it probably. I am not sure that rule existed prior to Summer 2021. Is there a bit I am missing too, thought the 3rd loss "£30m, £15m, £70m and now £5m- amounted to £88m in the 3rd year. Not sure why it is £88m, the £70m and £5m have to be averaged. £30 +15 + £38 = £83m. The EFL decision on £5m was made recently but previously the EFL had stated Covid losses in the accounts would be allowed without suggesting a limit. Not clear which interpretation holds but good chance of a successful challenge I would argue as the costs had been in urged before the decision and the revenue and it is hard to see how with this backdrop the revenue and furlough items won’t be allowed. The fall in player values is much more open to challenge but again hard to imagine the impact is zero. Assuming the stadium deal is accepted and given what I know of the club’s approach to its accounting, I believe it will be. (One of the reasons the PL hired Tony Scholes was because they believed Stoke City to be so well run), Stoke will be fine with the £5m limit if the excluded costs are close to £6million a season. 2021/22 won’t be an issue as the club has cleaned up its balance sheet and sold Nathan Collins so all the signs are we will have money to spend next season. You're right of course. I forgot to average all told! Challenge if you want, I'd suggest that the EFL should charge Stoke based on the February agreed numbers if it is required and then an embargo will follow because teams charged with breaching FFP automatically fall under an embargo and that can last many months. The accounts would not be agreed and without agreed accounts the EFL don't have to accept the numbers do they? Again I point out Estoppel. Estoppel does not bind or tie the hands of the EFL now on past numbers- the DCFC and SWFC cases certainly proved this point and upheld their right to revisit down the line. Well for FFP purposes, they can simply exclude the excess that clubs put in. Charge the clubs and embargo those who defy I reckon for the duration of the case(s). Money to spend? Debatable- Parachute Payments gone, that's a big hit to income, rent as a cost even if not a cash cost will be added, and the EFL have the right to impose pre-emptive business plans on clubs forecast to hit trouble now. Voted in by clubs in. The profit on disposal is also a big one off gain and the loss limit falls from £55.5m to 2021 to £39m thereafter. What you are advocating is special pleading- I am more moderate than some, saw a Reading fan who said that the Coates family have been taking the piss for years. A Barnsley fan online said no better owner wise than the Russian or Saudi owners owing to gambling addiction issues in society. I wouldn't go that far but I think Stoke are certainly acting similarly to Mel Morris.
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Post by Olgrligm on Apr 8, 2022 21:56:20 GMT
I saw a Reading fan who said that the Coates family have been taking the piss for years...I wouldn't go that far but I think Stoke are certainly acting similarly to Mel Morris. I don't see how anybody can write that without acknowledging what a disaster FFP is for anybody except rules pedants. Look at who is being demonised: the Coates family, Mel Morris, Steve Gibson. All local, well meaning owners whose only interest is the success of their club and who have shown their willingness to meaningfully support the club's spending time and time again by debt write offs etc. You're putting them up there with some blood soaked dictator who buys a football as part of a sportswashing project. It's completely back to front. It's PL2 by the back door. It needs to end.
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