Financial Fair Play / Profit & Sustainability

[Wolfcastle]

1 hour ago, Colos Short and Curlies said:

Coutinho will fall off the wage bill for this year but you'd imagine Diaby Tielemans and Torres are on a decent wedge

 

Amortisation will also increase by around £20m from the summer activity and they won't see a massive drop off from prior year signings until 2024/2025 (€19m spent in 18/19, over €100m spent every year since then).

 

Before you take off any allowable expenses they had a profit of £336,000 last year and a loss of £37,000,000 the year before. There is some amazing dark arts going on in their FFP calcs to avoid a breach after these accounts, I'd love to get my teeth into them and if they don't breach then we need to have a good hard look at how they've done it.

 

And if Everton can get done 2 years in a row they'd have to come up with a profit of £15m this year to not get done again

The beautiful game.

 

 

 

Edited March 4 by Wolfcastle

[timeEd32]

1 hour ago, brummie said:

Invested a ton building a new inner city academy, covid losses plus of the three seasons, one of which we didn’t lose anything at all, and the other 37

or so. 
 

We will be well within the PSR limits but what these sort of manoeuvres show is how much of a ridiculous balancing act all this shit is. 
 

It will be hard to strengthen in the summer without also selling though. But then again we spent 8m on a young right back and 10m on Rodgers in January so it can’t be that tight. 

The other thing with all this is it just makes me more convinced we’ll be getting a new ground. 

This was my main takeaway. Assuming the club hasn’t been totally reckless I’m guessing the ‘’must tear down” type headlines are overblown. CL revenue plus Adidas will obviously help. But it seems there will be little room for major additions without some sales.

[brummie]

It will be interesting, though, to see the continuing significant reduction of spending by PL clubs as a result of all this, and how long it takes however many people to find their gravy train shut down before they start back-pedalling on all this.

[FLUMPO235]

1 hour ago, brummie said:

It will be interesting, though, to see the continuing significant reduction of spending by PL clubs as a result of all this, and how long it takes however many people to find their gravy train shut down before they start back-pedalling on all this.

Well January deadline day was a total flop for broadcasters. If Lewis Hamilton hadn’t moved cars or whatever it was, the transfer shows would have had to talk about, well god knows what.

 

its not exactly exciting if the PL stops being the biggest and best. That will start to bite somewhere. A lot of the international market views might start to dip first. 
 

if the PL starts to lose viewers it’s not just football fans who lose out. The PL plays its part in Britain’s ‘soft power’ across the world. 
 

I wouldn’t underestimate the tax revenue the PL brings either. I know we all think the money footballers are paid is obscene. BUT I understand that the salary of footballers is strictly monitored by the FA/PL and must go through PAYE. The amount of tax footballers and the PL is paying is massive for UK PLC. 
 

say the Saudis had been allowed to spend whatever they like. They could have by now amassed 22 players all on £8,000,000 a year. 
 

That 3,586,203 a year in tax and £164,000 NI.

 

x22 = £79,000,000 a year tax. That a fair amount of doctors or nurses by anyones metric (if kept in the NE, I know it’s not). All of that money would also be coming directly from Saudi banks and not from the existing UK economy. 
 

the amount of money Man City and Chelsea have spent (or washed) though the UK will not be insignificant. 
 

even without those 2, a hell of a lot of money will come in from international tv sales, tourism and the soft power projection benefit. 
 

obviously im Not suggesting ffp needs to be scrapped to pay for nurses. It’s just one extreme example . 

but if the PL as a product starts to suffer, there are a hell of a lot of people going to lose out. 

no one likes losing money and the money men run football. 

 

[Keegans Export]

7 hours ago, Colos Short and Curlies said:

i haven’t gone through your accounts to see, but wouldn’t most of the costs in setting up an academy by capital costs and therefore not included in the losses?

 

yes you’d have the payroll costs for the academy staff but nothing for the buildings and facilities. Fees for buying young players would also be written off for FFP, can’t think of much else

They wouldn't be included in the PSR/FFP losses but they would be included in the published accounts, which is where the £119.6m loss comes from.

[Colos Short and Curlies]

23 minutes ago, Keegans Export said:

They wouldn't be included in the PSR/FFP losses but they would be included in the published accounts, which is where the £119.6m loss comes from.

they wouldn’t be in the loss if they are capital costs though.

 

any money spent on putting a building up, laying new pitches, gym equipment etc etc would sit on the balance sheet and be depreciated in the same way player registrations are.

 

it would only be staff costs, running costs and then the cost of any youth player purchases that would sit in the loss

[Terraloon]

On 26/02/2024 at 07:15, black_n_white said:

Agree there should be some restriction, the rules at the minute effectively mean it’s very unlikely any team can compete long term with the current big 6. There is something very wrong with that.

I will put out there from the off ( this being my first post ) that I am a Chelsea supporter.

 

I won’t be talking at all about on pitch matters and any posts I make will be mainly around Finance/ FFP. It’s a debate and issue far wider than just one club.

 

Its been said by my wife I have far too much time but being a pensioner and disabled I tend to read a lot and a lot of my reading over the last few years has been around  around finances that’s sad because I love football and in the day I read about players the grounds and so on I really didn’t give a flying **** about a clubs owners their bank balance it was all about what happened on the pitch.

 

Going back before the time when Adam was a lad most clubs spent far more than they earned. Owners or rich fans put vast sums into clubs cash flow. No one blinked and as you would expect trophies followed.
Anyone remember the Moore’s families or maybe lower down the food chain the Cobbolds? at Ipswich .None of the clubs that benefited from that model were complaining or advocating regulation in that era 
 

We , Chelsea, came upon Abromavich and he took the model of benefactor/ investor to a new level. It would be churlish to argue that he didn’t change the landscape but the riches flowing into the PL clearly presented opportunity for profit something that as yet hasn’t happened but the influx of US owners and the UEFA changes to FFP and the proposed PSR version will in my view create a perfect storm where we will see vast sums flowing out of football into US speculators pockets. They aren’t in football for sports washing, the love of the club or football they are in it for profit and sadly their day is getting ever closer.
 

Of course there should be some sort of regulation but that shouldn’t be around owners putting money if converted into equity  in to a club it should be about debt. Its debt is the devil in football not input of money into football and after all we were told that FFp was necessary to stop another Portsmouth. 
 

It’s worth looking at clubs that owe their owners vast sums. If you remember we owed RA vast sums, well there was a complex set up whereby CFC Ltd was debt free there was significant debt owed to Abromavich by the holding company debt that had accumulated all the while within FFP relies. Madness but it was soft loans and didn’t attract interest something that with the increased cost of borrowing will hurt clubs that don’t have theses soft loans but debt based on commercial rates even if those interest charges aren’t paid in cash terms  but just add to the debt mountain.

 

Brighton is we are told a model of financial management yet they owe £300+ million to Tony Bloom. Arsenal we were told were a model of financial of how to manage money yet under the 100% ownership of Kronke they have gone from being cash rich to a situation where they have made losses 5 years on the bounce and have gone debt neutral  to a place where they owe their owners hundreds of millions which aren’t soft loans they all come at a cost.

 

Everton tried to join the group that aspired for UEFa football on a regular basis but their owner spent far too much without increasing revenue streams.

They, Everton,  tried some tweaks from USM but quite simply the owner albeit being very rich and an accountant hasn’t managed things well and yes Everton were charged with being £19.5 million over the upper £105 million limit but their losses over the 4 years ( 19/20+2021 averaged ) were well over double the allowable sum and despite getting a huge amount of allowances for COVID and indeed being given a significant dispensation when it came to sums that in accounting terms couldn’t be capitalised they were . allowed to reduce the gap and that was despite Everton telling the PL that they would be compliant.

 

Everton going forward are trying to build a stadium but unless they clear the non stadium debt which seems to be ever increasing and is interest bearing they are going to be in the mire for a while. Everton turnover circa £180 million pa. One of their supporters is estimating that currently their total debt is attracting £3.6 million a month or £43 million pa.

 

When it comes to Forest we will have to wait and see in terms of their PS excess we do know that Everton’s losses were more than £40 million in 22/23 so worse than 21/22 but they have already had 2 of the 3 years looked at so mitigating factors?

 

There is absolutely no way that you as a club should be looking over your shoulder when it comes to sums that your owners could cover in a blink of an eye. Clubs and yes we were in that number who pulled up the drawbridge should be ashamed of themselves. The soon to be tweaks won’t change anything indeed many of the clubs that will be restricted to 90, 80 or 70% of income is squad costs ( wages+ amortisation + agent a fees ) are already way in excess of the upper number.

 

Now to us , Chelsea. I have absolutely no idea how we haven’t been charged with FFP breaches. The PS submissions would tell the story but we never get to see them.
 

I like many can read a set of accounts and based on them and what we know there almost certainly is one incoming. 
 

That said the new owners have already thrown a couple of” levers” such as huge player impairment which may or may not all be allowed as COVID expenses, the extended period of amortisation and when it comes to potential charges when it comes to the things the owners have self reported then maybe not a PSR charge but in all likelihood an FA charge which in itself could lead to a points deduction.
The one thing I can’t get my head around is the fact that Bohley and his partners don’t have a clue when it comes to on field matters but they are all over regulation and perhaps they were naive when it  came to such matters but without seeing the P&S submissions and indeed the agreements made with both the FA and the PL when the sale was forced perhaps they know something the wider football community don’t. It’s the only explanation I can come to as to why we haven’t already been charged with matters we self reported.

 

Lastly city. Ok they have PSR charges included in the 115 but they aren’t around the extent of losses those charges are more to do with fair value and related parties. They have blocked the PL at every stage so if found guilty there will be little to no mitigation. The PL have an absolute mountain to climb when it comes to the charges around equity but based on what I have read the charges around third party payments to ex managers and indeed image rights and other payments to players I think that there is almost certainly a proven charge or ten in these areas.

 

 

 

 

 

 

 

 

[r0cafella]

4 minutes ago, Terraloon said:

I will put out there from the off ( this being my first post ) that I am a Chelsea supporter.

 

I won’t be talking at all about on pitch matters and any posts I make will be mainly around Finance/ FFP. It’s a debate and issue far wider than just one club.

 

Its been said by my wife I have far too much time but being a pensioner and disabled I tend to read a lot and a lot of my reading over the last few years has been around  around finances that’s sad because I love football and in the day I read about players the grounds and so on I really didn’t give a flying **** about a clubs owners their bank balance it was all about what happened on the pitch.

 

Going back before the time when Adam was a lad most clubs spent far more than they earned. Owners or rich fans put vast sums into clubs cash flow. No one blinked and as you would expect trophies followed.
Anyone remember the Moore’s families or maybe lower down the food chain the Cobbolds? at Ipswich .None of the clubs that benefited from that model were complaining or advocating regulation in that era 
 

We , Chelsea, came upon Abromavich and he took the model of benefactor/ investor to a new level. It would be churlish to argue that he didn’t change the landscape but the riches flowing into the PL clearly presented opportunity for profit something that as yet hasn’t happened but the influx of US owners and the UEFA changes to FFP and the proposed PSR version will in my view create a perfect storm where we will see vast sums flowing out of football into US speculators pockets. They aren’t in football for sports washing, the love of the club or football they are in it for profit and sadly their day is getting ever closer.
 

Of course there should be some sort of regulation but that shouldn’t be around owners putting money if converted into equity  in to a club it should be about debt. Its debt is the devil in football not input of money into football and after all we were told that FFp was necessary to stop another Portsmouth. 
 

It’s worth looking at clubs that owe their owners vast sums. If you remember we owed RA vast sums, well there was a complex set up whereby CFC Ltd was debt free there was significant debt owed to Abromavich by the holding company debt that had accumulated all the while within FFP relies. Madness but it was soft loans and didn’t attract interest something that with the increased cost of borrowing will hurt clubs that don’t have theses soft loans but debt based on commercial rates even if those interest charges aren’t paid in cash terms  but just add to the debt mountain.

 

Brighton is we are told a model of financial management yet they owe £300+ million to Tony Bloom. Arsenal we were told were a model of financial of how to manage money yet under the 100% ownership of Kronke they have gone from being cash rich to a situation where they have made losses 5 years on the bounce and have gone debt neutral  to a place where they owe their owners hundreds of millions which aren’t soft loans they all come at a cost.

 

Everton tried to join the group that aspired for UEFa football on a regular basis but their owner spent far too much without increasing revenue streams.

They, Everton,  tried some tweaks from USM but quite simply the owner albeit being very rich and an accountant hasn’t managed things well and yes Everton were charged with being £19.5 million over the upper £105 million limit but their losses over the 4 years ( 19/20+2021 averaged ) were well over double the allowable sum and despite getting a huge amount of allowances for COVID and indeed being given a significant dispensation when it came to sums that in accounting terms couldn’t be capitalised they were . allowed to reduce the gap and that was despite Everton telling the PL that they would be compliant.

 

Everton going forward are trying to build a stadium but unless they clear the non stadium debt which seems to be ever increasing and is interest bearing they are going to be in the mire for a while. Everton turnover circa £180 million pa. One of their supporters is estimating that currently their total debt is attracting £3.6 million a month or £43 million pa.

 

When it comes to Forest we will have to wait and see in terms of their PS excess we do know that Everton’s losses were more than £40 million in 22/23 so worse than 21/22 but they have already had 2 of the 3 years looked at so mitigating factors?

 

There is absolutely no way that you as a club should be looking over your shoulder when it comes to sums that your owners could cover in a blink of an eye. Clubs and yes we were in that number who pulled up the drawbridge should be ashamed of themselves. The soon to be tweaks won’t change anything indeed many of the clubs that will be restricted to 90, 80 or 70% of income is squad costs ( wages+ amortisation + agent a fees ) are already way in excess of the upper number.

 

Now to us , Chelsea. I have absolutely no idea how we haven’t been charged with FFP breaches. The PS submissions would tell the story but we never get to see them.
 

I like many can read a set of accounts and based on them and what we know there almost certainly is one incoming. 
 

That said the new owners have already thrown a couple of” levers” such as huge player impairment which may or may not all be allowed as COVID expenses, the extended period of amortisation and when it comes to potential charges when it comes to the things the owners have self reported then maybe not a PSR charge but in all likelihood an FA charge which in itself could lead to a points deduction.
The one thing I can’t get my head around is the fact that Bohley and his partners don’t have a clue when it comes to on field matters but they are all over regulation and perhaps they were naive when it  came to such matters but without seeing the P&S submissions and indeed the agreements made with both the FA and the PL when the sale was forced perhaps they know something the wider football community don’t. It’s the only explanation I can come to as to why we haven’t already been charged with matters we self reported.

 

Lastly city. Ok they have PSR charges included in the 115 but they aren’t around the extent of losses those charges are more to do with fair value and related parties. They have blocked the PL at every stage so if found guilty there will be little to no mitigation. The PL have an absolute mountain to climb when it comes to the charges around equity but based on what I have read the charges around third party payments to ex managers and indeed image rights and other payments to players I think that there is almost certainly a proven charge or ten in these areas.

 

 

 

 

 

 

 

 

Welcome to the forum and nice opening post. 

[Stifler]

37 minutes ago, Terraloon said:

Anyone remember the Moore’s families or maybe lower down the food chain the Cobbolds? at Ipswich. None of the clubs that benefited from that model were complaining or advocating regulation in that era 

There is an argument to be had that the Moore’s families did more damage to British society than other football club owner, and the irony is totally lost on the fans of both Liverpool, and Everton fans.

[pubteam]

At least there seems to be a growing discontent among the other teams in the league apart from the privileged few. They now realise that FFP was simply put in place to protect the elite. It was supposed to protect clubs but in fact it's damaging them. 

[mighty__mag]

What might this mean 🤔 

[manorpark]

28 minutes ago, mighty__mag said:

What might this mean 🤔 

 

I suppose it depends what happened in the other two years of the three that are covered by FFP?

[The Prophet]

 

[The Prophet]

It's nuts this sort of stuff gets coverage these days.

 

"Club ambitiously spends it's capital."

 

FFP has a lot to answer for.

[gbandit]

Does seem very much like Villa have sailed too close to the wind here. Don’t really blame them, they just want to compete but it’s hard to see this not collapsing soon 

[pubteam]

15 minutes ago, The Prophet said:

It's nuts this sort of stuff gets coverage these days.

 

"Club ambitiously spends it's capital."

 

FFP has a lot to answer for.

It's all bollocks, what fan gives a shit about what your profit margin is, success on field in the only thing people are interested.

[SteV]

33 minutes ago, The Prophet said:

 

Pretty good effort by Arsenal to have acquired the team they have with a wages to turnover ratio of 51%.

 

Aye, they’ve got massively bigger turnover than the likes of ourselves and Villa, but they still seem to have managed things very well.

 

*that’s 22/23 like, so won’t include Rice, who I imagine is one of, if not the, top earner. And Havertz. Although they shipped out Xhaka and Pepe, who were both probably on a reasonable whack.

 

 

Edited March 5 by SteV

[nufcnick]

50 minutes ago, manorpark said:

 

I suppose it depends what happened in the other two years of the three that are covered by FFP?

 

20/21 £37.3m loss

21/22 £0.4m profit

22/23 £119.6m loss

Total £156.5m loss

£51.5m over the £105m threshold.

dont think that will account for allowed deductibles though 
 

[brummie]

30 minutes ago, gbandit said:

Does seem very much like Villa have sailed too close to the wind here. Don’t really blame them, they just want to compete but it’s hard to see this not collapsing soon 

 

Not really, current three year period is >105m, yes, but with the deductibles, we are apparently ok. Our challenge is this current season, where the 3 year losses will be 37m, 120m and whatever this year is.

 

Lots of armchair accountancy wizards on Twitter missing the point here and looking at the figure just released for last year.

 

Yes, the Grealish year falls off now, but to counter that, this season we've already sold 40m plus of homegrown talent, all of which we can claim in this financial year. We also moved Danny Ings on, so that is also off the books as well.

 

The thing with FFP is also, I guess, have a potential route out if the worst comes to the worst - I'd rather not have to sell, but then again, I'd rather not be Everton and looking at that squad of shite and wondering where on earth the money is.

 

FWIW, I think your problem is that you've not really got into the business of growing and selling players to create extra room - you need to do that, it's not the answer to everything but it's vital for creating at least a bit of space (see Chelsea, as discussed earlier, they've made a fortune doing this in recent years, and yeah, it'll probably, hopefully cripple them at some point because they can't assume they'll always be able to do that).

[brummie]

Actually my last post is wrong, the 0.3m profit year was the year before this set of accounts, so it's the 37m loss year that falls off the FFP three year total.

[nufcnick]

2 minutes ago, brummie said:

 

Not really, current three year period is >105m, yes, but with the deductibles, we are apparently ok. Our challenge is this current season, where the 3 year losses will be 37m, 120m and whatever this year is.

 

Lots of armchair accountancy wizards on Twitter missing the point here and looking at the figure just released for last year.

 

Yes, the Grealish year falls off now, but to counter that, this season we've already sold 40m plus of homegrown talent, all of which we can claim in this financial year. We also moved Danny Ings on, so that is also off the books as well.

 

The thing with FFP is also, I guess, have a potential route out if the worst comes to the worst - I'd rather not have to sell, but then again, I'd rather not be Everton and looking at that squad of shite and wondering where on earth the money is.

 

FWIW, I think your problem is that you've not really got into the business of growing and selling players to create extra room - you need to do that, it's not the answer to everything but it's vital for creating at least a bit of space (see Chelsea, as discussed earlier, they've made a fortune doing this in recent years, and yeah, it'll probably, hopefully cripple them at some point because they can't assume they'll always be able to do that).

If the reports are true they have to sell £100m of homegrown talent by the 31st June, or there massively in the shit, lot of people saying that’s why spurs pulled the plug on Conor Gallagher for £60m in January as they think they will get him for under £40m in June. They don’t have much left to sell after him though to balance the books until 25/26

[Interpolic]

1 hour ago, The Prophet said:

 

 

[timeEd32]

23 minutes ago, SteV said:

Pretty good effort by Arsenal to have acquired the team they have with a wages to turnover ratio of 51%.

 

Aye, they’ve got massively bigger turnover than the likes of ourselves and Villa, but they still seem to have managed things very well.

 

*that’s 22/23 like, so won’t include Rice, who I imagine is one of, if not the, top earner. And Havertz. Although they shipped out Xhaka and Pepe, who were both probably on a reasonable whack.

 

 

 

 

They did do a great job of resetting, but should see a pretty significant increase again in the 23/24 books with Rice, Havertz and Timber, plus a huge new contract for Saka and also new deals for Odegaard, Saliba and Martinelli.

 

Despite their relatively reasonable wages, they've lost money five years in a row and Kroenke has been adding debt. Their revenue has fallen to the bottom of the 'big 6,' but consecutive CL qualifications will help significantly. They've fallen way behind the others on commercial income, which I found surprising.

[Colos Short and Curlies]

43 minutes ago, brummie said:

Actually my last post is wrong, the 0.3m profit year was the year before this set of accounts, so it's the 37m loss year that falls off the FFP three year total.

 

If I get the time I'd like ot have a good read through the accounts, they of course don't tell the whole story but unless there are any real exceptional costs I don't see how you bring the £119m down to the £37m that falls off in a single year so the 3 year loss will increase  and it could be a white knuckle ride for FFP fans for this season.

 

We do come back to the same point of this being nuts.

[mighty__mag]

1 hour ago, brummie said:

 

Not really, current three year period is >105m, yes, but with the deductibles, we are apparently ok. Our challenge is this current season, where the 3 year losses will be 37m, 120m and whatever this year is.

 

Lots of armchair accountancy wizards on Twitter missing the point here and looking at the figure just released for last year.

 

Yes, the Grealish year falls off now, but to counter that, this season we've already sold 40m plus of homegrown talent, all of which we can claim in this financial year. We also moved Danny Ings on, so that is also off the books as well.

 

The thing with FFP is also, I guess, have a potential route out if the worst comes to the worst - I'd rather not have to sell, but then again, I'd rather not be Everton and looking at that squad of shite and wondering where on earth the money is.

 

FWIW, I think your problem is that you've not really got into the business of growing and selling players to create extra room - you need to do that, it's not the answer to everything but it's vital for creating at least a bit of space (see Chelsea, as discussed earlier, they've made a fortune doing this in recent years, and yeah, it'll probably, hopefully cripple them at some point because they can't assume they'll always be able to do that).

 

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