Financial Fair Play / Profit & Sustainability - New APT Rules Approved by Premier League

[brummie]

29 minutes ago, mighty__mag said:

 

Rumours suggesting you may possibly have to sell an asset like Ramsey?

 

It won't be for this financial year, as it closes before the window opens.

 

It's basically the same situation you allegedly have - balancing things finely, pushing it as far as you can without exceeding it.

 

The accounts just published show the three year running losses - before deductions - as 37m (20-21), 0 (21-22) and 119m (22-23)

 

This year the 37 drops off, so we're basically at 119m minus deductions plus this year's loss as the cumulative total. 

 

We've already binned 40m of home grown in this year, and we didn't spend hugely over last summer in any case, so I'd expect this one to be a lower loss (also as it will include more prize money and tv cash plus the UEFA stuff - 12m plus tv money share if we were to win it, 6m on our progress so far).

 

I really don't know what will transpire, but I think we are currently prob in a better place than you are, because we've got plenty of high value assets on the squad, many of whom are 'pure profit' as they've been here so long - Luiz, Konsa, Watkins (I think), McGinn, and Kamara and Tielemans who were free transfers, plus Ramsey. I wouldn't want to sell any, but I suspect we will - just to create some wriggle room (NB in the next financial year, ie next season). 

 

[Mag3.14]

1 minute ago, brummie said:

 

It won't be for this financial year, as it closes before the window opens.

 

It's basically the same situation you allegedly have - balancing things finely, pushing it as far as you can without exceeding it.

 

The accounts just published show the three year running losses - before deductions - as 37m (20-21), 0 (21-22) and 119m (22-23)

 

This year the 37 drops off, so we're basically at 119m minus deductions plus this year's loss as the cumulative total. 

 

We've already binned 40m of home grown in this year, and we didn't spend hugely over last summer in any case, so I'd expect this one to be a lower loss (also as it will include more prize money and tv cash plus the UEFA stuff - 12m plus tv money share if we were to win it, 6m on our progress so far).

 

I really don't know what will transpire, but I think we are currently prob in a better place than you are, because we've got plenty of high value assets on the squad, many of whom are 'pure profit' as they've been here so long - Luiz, Konsa, Watkins (I think), McGinn, and Kamara and Tielemans who were free transfers, plus Ramsey. I wouldn't want to sell any, but I suspect we will - just to create some wriggle room (NB in the next financial year, ie next season). 

 

Doesn't the FFP reporting window not close for the current season (23/24) on 30/06/24? England transfer window supposedly opens on June 14th, so that's a two week "grace" period to get players out - if not the likes of Chelsea may be stung for this year 

[mighty__mag]

29 minutes ago, brummie said:

 

It won't be for this financial year, as it closes before the window opens.

 

It's basically the same situation you allegedly have - balancing things finely, pushing it as far as you can without exceeding it.

 

The accounts just published show the three year running losses - before deductions - as 37m (20-21), 0 (21-22) and 119m (22-23)

 

This year the 37 drops off, so we're basically at 119m minus deductions plus this year's loss as the cumulative total. 

 

We've already binned 40m of home grown in this year, and we didn't spend hugely over last summer in any case, so I'd expect this one to be a lower loss (also as it will include more prize money and tv cash plus the UEFA stuff - 12m plus tv money share if we were to win it, 6m on our progress so far).

 

I really don't know what will transpire, but I think we are currently prob in a better place than you are, because we've got plenty of high value assets on the squad, many of whom are 'pure profit' as they've been here so long - Luiz, Konsa, Watkins (I think), McGinn, and Kamara and Tielemans who were free transfers, plus Ramsey. I wouldn't want to sell any, but I suspect we will - just to create some wriggle room (NB in the next financial year, ie next season). 

 

 

Didn't know McGinn was free, kamara has been a good free, definitely see a good return when he's sold on. I do think at some point you'll sell a big name, you'll likely have to just to keep improving and staying within the constraints, I believe we'll be in that boat at some point, like you alluded to.

[TheInfiniteOdyssey]

Very basic opinion I guess, but with the glass ceiling facing non-elite clubs being so obvious, I’m finding football far more tedious than I did before all FFP regulations got brought in.

 

Rather it reverted to a crazy free-for-all at this point.

[Gaztoon]

1 minute ago, TheInfiniteOdyssey said:

Very basic opinion I guess, but with the glass ceiling facing non-elite clubs being so obvious, I’m finding football far more tedious than I did before all FFP regulations got brought in.

 

Rather it reverted to a crazy free-for-all at this point.

 

Not got long last IMO.

[timeEd32]

42 minutes ago, brummie said:

 

It won't be for this financial year, as it closes before the window opens.

 

It's basically the same situation you allegedly have - balancing things finely, pushing it as far as you can without exceeding it.

 

The accounts just published show the three year running losses - before deductions - as 37m (20-21), 0 (21-22) and 119m (22-23)

 

This year the 37 drops off, so we're basically at 119m minus deductions plus this year's loss as the cumulative total. 

 

We've already binned 40m of home grown in this year, and we didn't spend hugely over last summer in any case, so I'd expect this one to be a lower loss (also as it will include more prize money and tv cash plus the UEFA stuff - 12m plus tv money share if we were to win it, 6m on our progress so far).

 

I really don't know what will transpire, but I think we are currently prob in a better place than you are, because we've got plenty of high value assets on the squad, many of whom are 'pure profit' as they've been here so long - Luiz, Konsa, Watkins (I think), McGinn, and Kamara and Tielemans who were free transfers, plus Ramsey. I wouldn't want to sell any, but I suspect we will - just to create some wriggle room (NB in the next financial year, ie next season). 

 

 

The situations are pretty similar, but I don't think I'd want to trade financial places with you. We don't have all the details yet, but....

• 2022/23 accounts have Villa with both higher wages and amortisation costs on £33m less in revenue. NUFC's wages for this time period will also include CL bonus money (though I assume Villa's have a European bonus). 
• For 2023/24 NUFC adds the Sela shirt sponsor plus CL revenue, as well as the sale of Maxi. NUFC revenue will exceed £300m for the first time ever. Villa also has a new record shirt sponsor deal, player sales, plus ECL money and higher PL merit. I'd expect Villa's wages to rise in this season's accounts more than Newcastle's, while revenue continues to lag behind.
• 2024/25 we both add Adidas. For NUFC this should largely offset the loss of CL revenue. Remains to be seen if we'll have European money; Villa will most likely have CL money. Maybe revenue roughly equals out by this point (not counting player sales, which is hard to predict), though I expect both sides to have made progress on the commercial front by then. We'll see who does it better.

But, importantly, Newcastle is currently in the midst of the season that needs to produce a profit to keep the three period within the rules. This means in each of the next two seasons there will be large deficits rolling off. Villa, on the other hand, now have to keep things balanced with a loss of over £100m remaining in play until the end of 2024/25. For UEFA's cost control ratio (wages + amortisation / revenue) and whatever version comes to the PL, both clubs have work to do but NUFC is in a better starting position on all inputs.

 

I'm not really looking at player sales because neither team is in a position to sell their best players without adding tremendous risk. Watkins, Luiz, Bruno could all bring in big money, but replacing them could be difficult. Both have fringe players that may or may not be able to be moved on if every club is worried about spending. Ramsey is a nice wild card for you, though the constant injuries aren't helping. It wouldn't be for as much, but Newcastle could sell Longstaff or Anderson if necessary.

[54]

 

[timeEd32]

Of course they use Anthony Gordon as the image for the article. That's clearly the most relevant example of a club using inflated sponsorships.

 

Quote

The Premier League’s changes include:
 

⬤ the “burden of proof” is now on the club to demonstrate that a deal is of fair market value;

⬤ each club submitting an associated party transaction (APT) shall procure “a declaration by a director (or equivalent) of the relevant associated party by way of confirmation that they consider the [deal] to be at fair market value”;

⬤ new breaches of the rules include “failure by a club to use all reasonable care to ensure that an APT is at fair market value” and “failure by a club to use all reasonable care to ensure it does not arrange or facilitate a transaction between a player, manager or senior official of that club and a third party that is not at fair market value”; and

⬤ the Premier League can demand evidence that a club has “effective procedures and processes (being clear, practical, accessible, and effectively implemented and enforced)” in place for ensuring an APT is at fair market value and “evidence of such procedures and processes being followed”.

[Keegans Export]

11 minutes ago, timeEd32 said:

Of course they use Anthony Gordon as the image for the article. That's clearly the most relevant example of a club using inflated sponsorships.

 

Is any of that substantially different to the current regulations? Looks like they're just tightening up the protocols for the existing rules, which makes sense seeing as they were brought in with such urgency...

[timeEd32]

My impression is this is a much more rigorous set of requirements with the onus on the club to prove it's ok as opposed to the PL (or whomever) needing to prove it's not ok. 

[The Prophet]

Just now, timeEd32 said:

My impression is this is a much more rigorous set of requirements with the onus on the club to prove it's ok as opposed to the PL (or whomever) needing to prove it's not ok. 

 

It's much more in-line with what you'd expect of a regulator, but it still looks very murky in parts.

[BennyBlanco]

Forcing clubs to take in less revenue to make them more sustainable. Ya couldn’t fuckin make it up. Not even trying to hide it. Legal challenge now please and lay bare all that spicy spicy evidence that never saw the light of day in the CAT case.

[The Prophet]

14 minutes ago, BennyBlanco said:

Forcing clubs to take in less revenue to make them more sustainable. Ya couldn’t fuckin make it up. Not even trying to hide it. Legal challenge now please and lay bare all that spicy spicy evidence that never saw the light of day in the CAT case.

 

Out of interest how are they forcing clubs to take in less revenue?

[brummie]

1 hour ago, timeEd32 said:

 

 

But, importantly, Newcastle is currently in the midst of the season that needs to produce a profit to keep the three period within the rules. This means in each of the next two seasons there will be large deficits rolling off. Villa, on the other hand, now have to keep things balanced with a loss of over £100m remaining in play until the end of 2024/25. For UEFA's cost control ratio (wages + amortisation / revenue) and whatever version comes to the PL, both clubs have work to do but NUFC is in a better starting position on all inputs.

 

However, it is worth noting, that although the 119 is going to be there for a couple of years, the other year which remains was a break even.

 

I'd also be extremely sceptical about you turning a profit this year, something which we'll see soon enough i guess (don't know when your accounting date is)?

[timeEd32]

Just now, brummie said:

 

However, it is worth noting, that although the 119 is going to be there for a couple of years, the other year which remains was a break even.

 

I'd also be extremely sceptical about you turning a profit this year, something which we'll see soon enough i guess (don't know when your accounting date is)?

 

2023/24 accounts won't be out until next Jan. or later, but we have to. The year dropping off (the blended Covid season) had a £13m profit. The others are roughly a £60m loss and a £58m loss. This current season will need to be profitable to balance the three year period and then starting next season the £60m loss will drop off.

[Keegans Export]

13 minutes ago, timeEd32 said:

 

2023/24 accounts won't be out until next Jan. or later, but we have to. The year dropping off (the blended Covid season) had a £13m profit. The others are roughly a £60m loss and a £58m loss. This current season will need to be profitable to balance the three year period and then starting next season the £60m loss will drop off.

Is that the published accounts or the FFP figures?

[timeEd32]

8 minutes ago, Keegans Export said:

Is that the published accounts or the FFP figures?

 

FFP figures (estimates from Swiss Ramble). The actual losses were £73m each time.

[pubteam]

Surely it would make sense for the ambitious clubs to band together and bring a joint legal challenge to FFP. Maybe everyone is waiting for man city to take them on if they are found guilty of the charges brought against them.

[ikri]

1 hour ago, pubteam said:

Surely it would make sense for the ambitious clubs to band together and bring a joint legal challenge to FFP. Maybe everyone is waiting for man city to take them on if they are found guilty of the charges brought against them.

 

I don't think it'll be the top teams that will challenge FFP in the courts.  It'll be Everton or Forest.

 

If either team is on the verge of relegation because they've received a points deduction for breaching FFP rules, the best option they will have will be to challenge the very idea of FFP.  No FFP, no FFP breach.  No FFP breach, no points deduction.  No points deduction, no relegation.  It'll be that simple.

[timeEd32]

Definitely possible. I do find it hard to believe that a club is just going to accept a relegation if a points deduction is the difference. But there's also so little time between seasons that I don't know how anything gets done about it.

[FloydianMag]

12 minutes ago, ikri said:

 

I don't think it'll be the top teams that will challenge FFP in the courts.  It'll be Everton or Forest.

 

If either team is on the verge of relegation because they've received a points deduction for breaching FFP rules, the best option they will have will be to challenge the very idea of FFP.  No FFP, no FFP breach.  No FFP breach, no points deduction.  No points deduction, no relegation.  It'll be that simple.

City? Challenge, win no charges?

[Ben]

 

[Mattoon]

Surely FMV should be deemed by the one thing that a business would be interested in, exposure? 

[r0cafella]

Quote

The Premier League’s handbook was updated on March 4 to reflect the new guidance regarding such transactions and the possible penalties that clubs could face.

In previous iterations of the league’s handbook, there was no such reference to possible sanctions. Instead, it was stated that, if the Premier League found an associated party transaction to not be fair market value, it would tell the club what the fair market value is and either prevent them from doing a deal if it was yet to be signed, or that the club should take the necessary steps to undo it if it had already gone through.

From a business point of view this is legitimately unhinged, a private entity telling another private entity what deals it can do and what value it can place upon them as well as telling them to unwind them is absolutely wild and beyond the pale. 
 

Does any other industry get away with such a bizarre behaviour?

[FloydianMag]

33 minutes ago, r0cafella said:

From a business point of view this is legitimately unhinged, a private entity telling another private entity what deals it can do and what value it can place upon them as well as telling them to unwind them is absolutely wild and beyond the pale. 
 

Does any other industry get away with such a bizarre behaviour?

Governing bodies, PL, UEFA’, and FIFA are involving themselves in clubs commercial activities and on every level that is wrong and should be challenged. As you say there is no other sector would this be tolerated.

 

FFP restricts investment from owners and FMV restricts clubs from increasing revenue streams unless a governing body agrees it’s fair, what the fuck!!