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Post by rickyqpr on Apr 18, 2019 17:17:17 GMT
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Post by rickyqpr on May 25, 2019 11:30:15 GMT
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Post by hitmanrangers on May 25, 2019 12:49:56 GMT
On Derby, I had thought there was something in the rules that ignored transactions with related entities, which I am sure selling to Derby Chairman (directly or via a company he is related too) and then leasing back, would be a related transaction? However, it is not clear how much "profit" would have been made from selling the ground (it cost them a lot to build, some depreciation to date but woudl still have a high value on their books), as the ongoing rent payments (they must charge rent for it to be a fair transaction) would only increase their future costs. Any how, the rules are rubbish and financially as a club we have to live like we did in the 1990s.
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Post by Roller on May 25, 2019 14:26:24 GMT
On Derby, I had thought there was something in the rules that ignored transactions with related entities, which I am sure selling to Derby Chairman (directly or via a company he is related too) and then leasing back, would be a related transaction? However, it is not clear how much "profit" would have been made from selling the ground (it cost them a lot to build, some depreciation to date but woudl still have a high value on their books), as the ongoing rent payments (they must charge rent for it to be a fair transaction) would only increase their future costs. Any how, the rules are rubbish and financially as a club we have to live like we did in the 1990s. I think that the related parties clause only refers to ensuring that any transactions are at a fair value, so as long as the selling price was realistic there is no issue. I am surprised that it is allowed though considering that infrastructure development costs are excluded from FFP. With reference back to the op, the following statement is wrong: "Are we going to be the only club to accept a huge penalty and face years of austerity as a consequence?" We are not facing austerity as a consequence of accepting a huge penalty, anything to do with our FFP fine is excluded from future FFP calculations. The reason that we are living under tight budgets now is to ensure we stay within our current limits.
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Post by hitmanrangers on May 25, 2019 16:46:31 GMT
If its allowed then I am surprised other clubs aren't doing. If Derby get promoted on Monday, expect to see them buy the ground back for the same price they paid, but with deferred cash payments so it doesn't impact their player buying in the Summer.
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Post by Roller on May 25, 2019 20:38:41 GMT
It would appear that the FFP regulations actual encourage this.
h) Excess proceeds on disposal of tangible fixed assets The profit on disposal of tangible fixed assets (including, but not limited to, a club’s stadium and training facilities) in a reporting period must be excluded from the break-even result with the following two exceptions:
i) If a tangible fixed asset other than a stadium or training facilities is not being replaced, then the profit on disposal recognised in the income statement can be taken into account as a relevant income up to:
the difference between the proceeds on disposal and the historical cost of the asset which was recognised as a tangible fixed asset in the financial statements of the reporting entity;
ii) If a club demonstrates that it is replacing a sold fixed asset, then the profit on disposal recognised in the income statement can be taken into account as a relevant income up to:
the difference between the proceeds on disposal and the full cost of the replacement asset which is recognised, or to be recognised, as a tangible fixed asset in the financial statements of the reporting entity;
the difference between the proceeds on disposal and the present value of 50 years’ minimum lease payments in respect of the replacement asset to be used by the club under a lease/rental arrangement.
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Post by hitmanrangers on May 26, 2019 7:45:37 GMT
Thanks Roller, looking at Derby's accounts they sold for £81m all cash received and seems they are paying about £1m per year rent so that means the allowable profit is a healthy £31M and they would be taken into account over the 3 year testing period so they can rack up some pretty large losses over the next 2 years and still be within the rules.
We could consider the same!!
Interesting that they spent £18m on signings last season too so those premier loan fees must be hefty
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Post by hitmanrangers on May 26, 2019 7:47:56 GMT
It's in fact more than £31m because you have to discount the £50m lease payments. Probably more like £40m+ allowable profit
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Post by Roller on May 26, 2019 8:23:37 GMT
It's in fact more than £31m because you have to discount the £50m lease payments. Probably more like £40m+ allowable profit You're almost spot on, their accounts state that selling and leasing back Pride Park Stadium created a gain of £39.9m which helped them to show an overall profit of £14.6m as opposed to their loss in 2016/17 of £7.9m.
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Post by rickyqpr on Sept 6, 2019 12:26:23 GMT
VILLA CONFIDENT OVER FFP
Aston Villa are understood to be confident they have not broken any Financial Fair Play rules as the Premier League look into the sale and lease back of Villa Park.
Despite conducting the transaction while in the Championship, along with Derby, Reading and Sheffield Wednesday, the Premier League will look at whether Villa are in breach of any FFP rules.
And, like those that have been initiated by the EFL on Pride Park, Hillsborough and the Madejski Stadium, that review could include an independent valuation of the stadium in Aston.
Villa are said to have sought and received approval from the EFL before selling Villa Park to another of their owners’ companies – reportedly for a price of £56.7m – and then leasing it back.
And the Midlands club are understood to be content to open all their accounts to the Premier League when they make their FFP assessments.
On Thursday, Derby defended the £80m sale of Pride Park after the EFL commissioned an independent valuation of the ground, following concerns from other second-tier clubs that it was overvalued.
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Post by rickyqpr on Nov 14, 2019 22:42:54 GMT
www.sportinglife.com/football/news/owls-hit-with-efl-charge/174064Sheffield Wednesday charged: EFL charge Owls with financial breach for sale of Hillsborough 18:25 · November 14, 2019 · 1 min read Sheffield Wednesday have been charged with breaching EFL rules around financial fair play over the sale of Hillsborough. The EFL opened an investigation into the Championship club's profitability and sustainability (P&S) submission for 2017-18 earlier this year and has now issued "a number of charges" in relation to that investigation. "The EFL has reviewed a large number of documents obtained from the club as part of this process and concluded there is sufficient evidence to justify issuing charges of misconduct," a statement from the league read. "The charges are in respect of a number of allegations regarding the process of how and when the stadium was sold and the inclusion of the profits in the 2017-18 accounts." The EFL said the charges would now be considered by an independent disciplinary commission, with sanctions possibly including a points penalty. The club's 2018-19 P&S submission remains under review, the league said. Wednesday said in a statement: "Sheffield Wednesday note the statement issued by the EFL and the charges contained within. "These charges will be vigorously defended and the club will be making no further comment at this time."
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Post by rickyqpr on Nov 15, 2019 15:48:04 GMT
From what I have read, it would appear that the difference between the Wednesday deal and the others (Derby, Villa etc.) is that Wednesday claimed the benefit of the sale in the accounts even though the deal was not completed in the relevant period and also that the payments were to be made in installments anyway....all allegedly! Under the new rules, selling your ground to your owners is 'acceptable', although quite why baffles me. If the owner gets into financial trouble in his or her own right, then the club could lose the ground. Likewise if the owner falls out of love with football or the club, he can sell it on. The long term lease would need to be honored, but that still does not seem to be ideal. The leases would need to be long and airtight, but I do not see how the provision to do this is in the fans interest and that is what FFP is supposed to be there for. So if it is all about 'timing' and 'accounting treatment' in the Wednesday case, it takes it much closer to our own breaches.
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Post by rickyqpr on Nov 15, 2019 20:10:32 GMT
More detail on Sheffield Wednesday.............. Sheffield Wednesday EFL misconduct charge: what does it mean, will they get a points deduction and how long will it all take? Sheffield Wednesday have been charged by the EFL for misconduct around the submission of their accounts for the 2017/18 season, for questions marks over the circumstances surrounding the sale of Hillsborough stadium for £60m. By Alex Miller Friday, 15th November 2019, 10:28 am The charge comes with no direct precedent, leaving questions over the likely outcome of the charge, not to mention the severity of any sanctions to be imposed by the EFL if Wednesday are found to be guilty. The world of football finance is a murky and complicated world to most, but not to Kieran Maguire, a finance and accounting expert from the University of Liverpool known to be one of the country’s leading lights in football finance analysis. We asked him what he thought of the shock twist in the Sheffield Wednesday financial saga and what punishments could be imposed on the club in the event of a guilty ruling. What, in a nutshell, happened back in the summer? KM: Sheffield Wednesday were likely to be in breach of Financial Fair Play (FFP) regulations, which limit losses of Football League clubs to £39m over three years. To address that, Dejphon Chansiri sold Hillsborough Stadium to another company that he owned for £60m. That generated a huge profit, which could then be offset against the losses, meaning Wednesday were then compliant with FFP. So what’s the problem? KM: First of all, the timing of the transaction is an issue. Sheffield Wednesday’s accounts were originally for the year ending the 31st of May 2018, then they extended their accounting year to the 31st of July 2018 and then they didn’t publish their accounts on time. These are always little red flags when doing analysis work on football finance. Hillsborough stadium was bought for around £60m - to be paid in instalments over the next seven years Then you get into the Land Registry. The transaction didn’t go through the Land Registry books until July 2019, 12 months after Wednesday’s accounting year. There could be legitimate reasons for that – the Land Registry can be slow – but it would be highly unusual for it to be that slow. This all raised a concern over the true date of the transaction. OK, what else? KM: The second issue is the terms of the transaction. In normal circumstances – it’s the same as with a house – you don’t get the property until you pay for it. What we’ve seen though with Sheffield Wednesday is that although they sold the property to Mr Chansiri’s other company, no money changed hands and Sheffield Wednesday have in their accounts a debt of £60m owing from this other company. That debt is repayable in seven instalments of £7.5m over an eight-year period. That is very unusual for a property transaction. You’ve got to ask – is this a genuine sale of a property, or has it been undertaken purely to improve Wednesday’s accounts for the purpose of FFP? And there’s also the issue of the valuation of Hillsborough, which was bought for £60m? KM: Mr Chansiri is effectively selling Hillsborough to himself and if he is selling the property for the purposes of falling in line with FFP, he might be willing to produce a very generous price for Hillsborough. Reading sold the Madejski for £27m, substantially less than Hillsborough. It is smaller, but it is more modern and it is in Berkshire, where land prices there are significantly higher I would expect. West Ham’s owners sold Upton Park for £40m, and that’s in London. Aston Villa sold Villa Park for £56m, broadly in line with Hillsborough, and Derby blew everybody out of the water with £80m for Pride Park, which has left a few people scratching their heads. The final question is; has Hillsborough been sold for a market price, or has Hillsborough been sold for a price to sidestep Financial Fair Play? As you said, similar stadium sale controversies took place at Derby County and Aston Villa. Why have they come after Sheffield Wednesday? KM: The fact is that we don’t know what is going to happen with Derby and Aston Villa. The fact that the EFL have not said anything regarding to any other clubs being investigated could suggest that both investigations are still a work in progress. The main difference in the cases of both Villa and Derby is that the cash was paid during the year and there was no backdating. The question marks over the validity of their valuations is still open to question. So – if found guilty – what sanctions are likely to be imposed on Sheffield Wednesday? KM: Realistically there are four grades of sanction. There’s the ‘telling off’ of a club, but I don’t think that would appear to be compatible given what we saw happen to Birmingham City last season (Birmingham were slapped with a nine-point deduction for a £48m loss). Next would be something to do with a transfer embargo or squad sizes and the third range of sanction would be a points deduction. I stripped out the property sale and re-worked the losses made by Wednesday and looking at the tarriff that the EFL announced, that would suggest that they would probably be heading for a 12-point penalty on the basis of the losses they’ve made. Potentially there could be a further points deduction for what are called ‘aggravating factors’ and those are, in theory limitless, but they could be brought if the EFL feel that there was a deliberate attempt to manipulate the financial statements to ensure compliance with FFP. But we’re in the middle of a busy Championship season. How long is all this going to take? KM: The only thing we’ve really got to go on is what happened with Birmingham City last season, who originally flagged that there was an issue in July and it took until April before a final decision was made. A lot of that was down to legal prevarications, demands for additional documentation and so on. The EFL will want to get this sorted as soon as possible. There will be implications on the January transfer window, there implications for other clubs who are trying to get into a play-off place that would be tempted to spend more if Wednesday are taken out of the picture. The logic would be for this to be sorted out before the transfer window takes place, but financial justice in football, as we saw with Queens Park Rangers, that took three or four years. It can be very slow, but really it would have to happen before the end of this season. www.thestar.co.uk/sport/football/sheffield-wednesday/latest-owls-news/sheffield-wednesday-efl-misconduct-charge-what-does-it-mean-will-they-get-points-deduction-and-how-long-will-it-all-take-1019834
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Post by rickyqpr on Nov 17, 2019 14:39:59 GMT
That explains why FFP is not FFP ! Yep!
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Post by rickyqpr on Jan 7, 2020 15:00:29 GMT
www.bbc.co.uk/sport/football/51013181Birmingham City could face points deduction after EFL charge Birmingham are currently 18th in the Championship, six points clear of the relegation zone Birmingham City could be facing a second points deduction in two seasons after being charged with breaching financial rules by the EFL. The Championship side said the charge relates to a breach of a business plan imposed by the league last season. Blues were deducted nine points in March 2019 for breaking profitability and sustainability rules. "The club denies the charge and we await the outcome of ongoing disciplinary proceedings," City said. Blues, who have lost five out of their last seven games under Pep Clotet, are currently 18th in the Championship. They finished 17th last season, 12 points clear of the relegation zone, having only survived relegation on the final day in the previous two seasons. They sold last season's top scorer Che Adams to Southampton for a reported £15m on 1 July, but then bought Croatia midfielder Ivan Sunjic for an estimated £6.3m - one of eight summer window signings. Analysis BBC WM 95.6's Birmingham City commentator Richard Wilford "This new charge appears to stem from the club's reluctance to sell off key assets during the transfer window in January 2019. As part of the ongoing EFL business plan, the league wanted City to accept offers for top scorer Che Adams, among others. "The club held firm, believing that they would receive more substantial bids for the striker in the summer. This proved to be the case as Adams ultimately moved to Southampton for a significantly higher fee. "It is also worth recalling that Birmingham were, at the time, operating under a restriction on making new signings. So had Adams or his fellow striker Isaac Vassell been sold mid-season, there would have been no scope whatsoever for bringing in replacements. And it was not until March that the club had the nine-point penalty handed down for their admitted breach of Profit and Sustainability regulations. "As a result the club is contesting the new charge."
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Post by Ashdown_Ranger on Jan 7, 2020 18:36:03 GMT
Interesting to read on the BBC site that:
That kind of suggests that 'donations' from Abramovich somehow counts in Chelsea's balance sheet...
Is that right? Or are rules different in the Premier League?
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Post by rickyqpr on Jan 16, 2020 18:40:33 GMT
Derby County: Championship club charged for breach of spending rules www.bbc.co.uk/sport/football/51142719Derby sold Pride Park to owner Mel Morris and then leased the stadium back Derby County have been charged by the English Football League for a breach of spending rules and now face a possible points deduction. The charge relates to losses in the three years up to June 2018, despite the club posting a pre-tax profit of £14.6m in 2017-18 after Pride Park was sold to owner Mel Morris for £80m. Spending rules allow Championship clubs to lose £39m over a three-year period. Derby have now been referred to an Independent Disciplinary Commission. It will hear from both the Rams and the EFL, although a date has not been announced. In March 2019, Birmingham City were deducted nine points by the EFL for a similar charge of breaching profitability and sustainability rules. The Rams are 17th in the Championship and 10 points above the relegation zone. Between 1 July, 2017 and 30 June, 2018, Derby recorded a pre-tax profit for the first time in 10 years and in the three years under review by the EFL, the club saw combined pre-tax losses of just over £8m. While that appears well below the £39m of allowable losses set out in league rules, the sale of their Pride Park home has come under scrutiny. The Rams have leased back the ground, which was said to have been independently valued at £80m despite it being on the club's books as an asset worth £41m, from a company owned by Morris. Just months after the stadium arrangement was announced in April, the club signed England all-time record goal scorer Wayne Rooney on a player-coach deal. The deal for the former Manchester United and Everton forward came after the club made Poland midfielder Krystian Bielik their record signing, bringing him in on a five-year deal from Arsenal in August. By selling the ground to Morris, the Rams set a trend which has been followed by Sheffield Wednesday, Aston Villa, Reading and Birmingham City. Wednesday were charged with misconduct in December for the sale of Hillsborough, which helped them record a profit of £2.5m in 2017-18.
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Post by terryb on Jan 17, 2020 10:09:15 GMT
I don't know, but maybe the EFL were awaiting the 2019 accounts to see how Derby were dealing with the sale of the ground & whether that infringed FFP.
With Wednesday & Derby now charged, I would think that they have found reasons for the sale of the ground to their owners to be against the rules. I would expect this to run for as long a time as our case did & teh law will need to be tested.
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Post by Ashdown_Ranger on Jan 17, 2020 15:40:23 GMT
We got well and truly clobbered 75 - under the old FFP criteria.
The new rules do seem to be very much more lenient - no-one is ever going to be fined as much as we were.
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Post by rickyqpr on Jan 17, 2020 18:00:15 GMT
The EFL are now at a real cross roads regarding FFP. The gap between the Prem and the Championship is gigantic and ever growing. Promoted clubs spend a fortune (Villa) and still struggle to compete. FFP in the Prem is almost irrelevant now - just look at the Chelsea and Man.City financing. EFL FFP is restricting the opportunities for owners to invest in preparation for promotion. So Championship teams are increasingly 'betting the shop' spending the money anyway and / or looking for loopholes so as to bend the rules. As Ashdown says, we were punished under the old rules. Having been found guilty at every appeal stage, it could be said that we got off lightly. But where I think our situation remains 'unfair' is that our owners paid off the loans and the club was not at risk. The option to sell the land to the owners was not an option back in our day in court. FFP is supposed to be there to protect clubs from unscrupulous owners - that was never the issue for QPR though. Meanwhile, numerous clubs continuously change ownership at tremendous risk with very little governance from the EFL. The EFL has resided over debacles at Bury, Bolton, Macclesfield, Blackpool & Sunderland It will be interesting to see how the current clubs under scrutiny (Sheff.Wed. Derby, Birmingham - Villa next year) are assessed and on what legal premise. Clubs are able (now) to sell the stadium /assets to raise funds. The over valuing of the assets, on the face of it, does not appear to be a rule breaker. In the meantime, the same clubs concerned appear to be actively looking to spend more money this transfer window - obviously not worried about any sanctions. If our accounting treatment of converting loans to equity ran for years, the legitimacy of over-valuing assets could also run for an eternity. I have little faith in the EFL getting anything right, but they obviously think they have grounds to go after these clubs though. But to me, it looks more like bending of the rules than breaking them. The rules are poorly drafted - not the clubs fault. The owners concerned were not trying to put the clubs at risk, just invest more money - just like our owners were. But the EFL having brought the actions, will lose all credibility if they cannot uphold their position. My guess is that the stadium sales cases will get sorted with fines and a change to the rules involving independent valuations for future asset disposals. The case for Birmingham is different. The logic of the EFL forcing a club to sell their assets in a fire sale seems crazy and very unfair. However, it seems Birmingham agreed to it though. They have evidence of the unfairness of the ruling by demonstrating the additional money they received for Che Adams by waiting 6 months. But how it all plays out sees The EFL's credibility hanging by a thread. Their grip on FFP is likely to be unsustainable.
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Post by rickyqpr on Jan 18, 2020 8:50:46 GMT
Derby County say the English Football League's decision to charge them with a breach of spending rules is 'unlawful'. The club were charged by the EFL on Thursday in relation to losses made in the three years up to June of 2018 and face a possible points deduction. The losses were recorded despite the club posting a pre-tax profit of £14.6m in 2017-18 after Pride Park was sold to Rams owner Mel Morris for £80m. A Derby statement said they would "vigorously contest the charges". The statement, issued more than 24 hours after the EFL's charge, continued: "While the club accepts the EFL's Financial Fair Play/profitability and sustainability regulations are complex and open to interpretation, it is critical when such matters have been discussed and reviewed in detail, that written approval from the EFL is the only basis on which a club can be assured it has complied. "These charges by the EFL Executive bring this fundamental aspect of governance into question. The EFL now claims it made a mistake and seeks to punish the club that relied on the EFL's approval. Such conduct is neither lawful nor fair." Following the decision to charge the Rams, the matter will be referred to an Independent Disciplinary Commission. If found guilty, the maximum potential deduction is 21 points - 12 for the actual breach, plus a further nine if it was to be regarded as an aggravated offence - and there would also be a financial penalty. Derby are currently 17th in the Championship, 10 points above the relegation zone. 'Club's actions in good faith' Between 1 July, 2017 and 30 June, 2018, Derby recorded a pre-tax profit for the first time in 10 years, but in the three years under review by the EFL, saw combined pre-tax losses of just over £8m. That figure appears well below the £39m of allowable losses set out in the league's rules, but the sale of their Pride Park home has come under scrutiny. The Rams have leased back the ground, said to have been independently valued at £80m despite it being on the club's books as an asset worth £41m, from a company owned by Morris. They claim the stadium was valued by professional valuers and the matter was discussed "extensively" with the EFL Executive who asked for a price adjustment which the club accepted, but ultimately "agreed top all the arrangements" surrounding the sale. "The EFL can choose to correct what they now see as an error in their decisions. However, it cannot punish the club for its own errors. The club shall therefore vigorously contest the charges and the EFL's legal right to bring them," Derby's statement added. By selling the ground to Morris, the Rams set a trend which has been followed by Sheffield Wednesday, Aston Villa, Reading and Birmingham City. Wednesday were charged with misconduct in December over the sale of Hillsborough, which helped them record a profit of £2.5m in 2017-18 - and they also claim the EFL were "acting unlawfully" by brigning the charge against them. Derby also revealed the EFL charge for making excessive losses also relates to its accounting policy relating to the amortisation of players - which is effectively how the club calculates costs of its squad. The way in which the club calculates the value of players as intangible assets was changed in the three-year period of Profitability and Sustainability under review. "With regard to the club's player amortisation policy, this has been a long-term accounting policy and was again reported transparently to the EFL Executive as part of the club's submissions and these were again approved and signed off in writing," their statement said. "Had the EFL not given the green light in writing in respect of both charges, the club would have reacted accordingly. The club cannot re-trace the steps of the actions it legitimately took in good faith as a result of EFL approval of both matters. "https://www.bbc.co.uk/sport/football/51152166
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Post by rickyqpr on Jan 24, 2020 14:18:04 GMT
Villa & Derby according to the Mail......... www.dailymail.co.uk/sport/football/article-7917941/Premier-League-probe-Aston-Villas-56million-stadium-sale.htmlPremier League probe Aston Villa's £56million stadium sale after ground was purchased by a company controlled by the club's owners The sale of Villa Park is still yet to be authorised by the Premier League It was sold in May 2019 in a contentious deal in order to comply with EFL rules However, Aston Villa could face a points deduction if they are found guilty By MATT HUGHES FOR THE DAILY MAIL PUBLISHED: 22:30, 22 January 2020 | UPDATED: 23:50, 22 January 2020 Aston Villa's sale of their ground to a company controlled by the club's owners has yet to be signed off by the Premier League, raising the prospect that they could follow Derby and Sheffield Wednesday in being charged as a result of the controversial accounting practice. Sportsmail has learned that the Premier League are still seeking independent valuations for Villa Park, which was sold for £56.7million last May to NSWE Stadium Limited — a contentious deal which, if approved, should enable them to comply with the EFL's profit and sustainability (P&S) rules. Villa were in the Championship for the three-year accounting period in question between 2016 and 2019, but the matter was passed on to the Premier League after they were promoted last May. Aston Villa could face a points deduction if they are found guilty by the Premier League www.dailymail.co.uk/sport/sportsnews/article-7909171/Derby-face-Charity-Commisson-probe-sponsor-32Reds-cash-Community-Trust-programme.htmlDerby County face Charity Commisson probe over sponsor 32Red's cash for their Community Trust programme Charity Commission investigating Derby County over charity links with sponsor Online casino 32Red funds the Community Trust's mental health programme Commission feel accepting this may mean the club are legitimising gambling By MATT HUGHES FOR THE DAILY MAIL PUBLISHED: 22:34, 20 January 2020 | UPDATED: 08:46, 21 January 2020 Derby County are being investigated by the Charity Commission over links between the club’s community programme and main sponsor 32Red. Sportsmail has learned that the government regulator have contacted the club about funding the Derby County Community Trust mental health projects receive from 32Red, the online casino whose long-term sponsorship deal helps to pay captain Wayne Rooney’s £90,000-a-week wages. The Charity Commission are concerned that by accepting £100,000 in funding from 32Red to meet the annual running costs of the Team Talk programme — which provides weekly drop-in sessions to men suffering from ‘mild mental health problems’ — Derby are legitimising gambling and risk exposing vulnerable people to betting. Derby County are being probed over cash given by sponsor 23Red to their Community Trust
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Post by Lonegunmen on Jan 24, 2020 15:52:02 GMT
Cheers for the information Ricky.
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Post by Lonegunmen on Jan 24, 2020 15:59:05 GMT
Did we ever pay the fine?
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Post by harr on Jan 24, 2020 16:14:56 GMT
Did we ever pay the fine? The fine part About 1.7 Million for 10 years Andy or something like that. By the time it’s been paid we will be grey haired( if we have any left ) and seeing how much our pensions are worth
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Post by harr on Feb 5, 2020 23:53:45 GMT
Anyone get the Telegraph ? would like to give it a read...
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Post by surreychad on Feb 6, 2020 10:50:51 GMT
any chance you can post the full article on here? They are asking for registration and to be honest I just cant be arsed to subscribe to another website.
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Post by Ashdown_Ranger on Feb 6, 2020 11:24:13 GMT
...they are asking for registration... ...and PAYMENT!!!
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Post by rickyqpr on Feb 7, 2020 12:11:00 GMT
The article below relates to the 2017/18 season. The 2018/2019 accounts should be available in the next few weeks. It will be interesting to see similar analysis. But it provides context for where we are in this mess. It also highlights the risks others have taken. Bolton's results have been excluded. There are three graphs that can be read on the link that did not copy over. I think several teams are just finding ways around the controls - our debt to equity transfer was punished - unfairly in my view given what others appear to be getting away with. But what does the EFL do if even more clubs sidestep or ignore the rules? financialfootballnews.com/ championship-2018-finances-wages/Championship 2018 Finances – Wages 2018 was another unpredictable season in the Championship with Wolves’ mega spending seeing them clinch promotion and the title. However, Cardiff were the surprise package, sealing the other automatic promotion spot while Fulham won the play-offs. At the bottom of the table it was misery for Sunderland who were condemned to back-to-back relegations alongside Barnsley and Burton to League One.
However, this article is about finances, and more specifically wages and which clubs are teetering on financial ruin (most of them) and which clubs are being financially sensible (hardly any). The 2017/18 season saw record levels of wages as the year on year growth in player salaries continued due to lure of the riches of the Premier League which saw financially gambling at large by owners. Wages increased from an already high £693m to £748m, an 8% increase and the equivalent of an extra £1.1m a week in wages. This is even more outstanding in context, Championship clubs’ combined revenue was only £701m, meaning clubs as a whole were losing money after just paying wages, not taking into account all other expenses a club faces, showing the huge financial issues clubs are facing in trying to compete.
The average wage bill of a Championship club is £34m (or £654k a week), ranging from £10m to £73m, showing the vast difference financially between many of the clubs, partly due to those clubs relegated. This average increases to £54m across the top 6, showcasing that high wages do in fact correlate to some degree to position, although it is worth noting that at the bottom, the average falls to £28m (excl. Bolton), which isn’t far below the average of the whole league, showing that wages do not really decide much outside those at the top in terms of final league position. Please note that Bolton are yet to release their finances due to their ongoing financial troubles while Sheffield Wednesday have so far yet to file their accounts which are long overdue.
The Big Spenders The big wage spender was Aston Villa in 2018, with their much publicised near financial destruction caused largely by spending a huge £73m on wages, this was partly helped by bringing in £69m (due to parachute payments). Outside of this, Fulham (£54m), Norwich (£54m) and Wolves (£51m) all spent in excess of £50m on wages as Fulham and Wolves successfully secured promotion by big spending, although it is worth noting that these wages include significant promotion bonuses which wouldn’t have been payable without promotion.
Norwich’s wages were surprisingly high (after failing to reduce wages further following relegation two years ago) as they unsuccessfully gunned for a return to the Premier League, although they did manage it in 2019. Modest Means The less fortunate of the Championship teams this year were Burton (£10m), Barnsley (£11m), Millwall (£13m), Preston (£15m), Brentford (£17m), Ipswich (£19m) and Sheffield United (£19m) who all spent less than £20m on wages. Unsurprisingly, Sheffield United and Millwall are near the bottom having both been promoted from League One the previous season and top half finishes for both far exceeded their modest budgets.
Barnsley and Burton were unsurprisingly relegated with their meagre budgets, doing well to survive in the prior season, with wages way below the average in the Championship. Brentford, Preston and Ipswich all massively exceeded expectations on their budgets by securing top half finishes with Preston missing out on the play-offs by 2 points to a Derby County side who spent over triple their wages (£47m). Best of the Rest Everyone else is somewhere in between this gulf and we are going to have a look at a few of the more notable wage bills. The relegated Premier League clubs all had relatively high wages but were not right at the top as Middlesbrough (£49m), Sunderland (£47m) and Hull (£31m) all successfully cut their wages following relegation to try and get their finances in order. Cardiff’s wage bill was relatively high at £48m, although promotion was secured making the expense more than worth the risk. Birmingham (£38m), Reading (£35m) and QPR (£31m) all flirted with financial disaster with high wages that massively exceed their lowly revenues and league positions and will need to be addressed going forward to avoid further financial issues and Financial Fair Play penalties.
Leeds continue their resurgence with surprisingly modest wages considering the talk around the club, spending a respectable £31m, although this is likely to be considerably higher under Bielsa in 2019. Wage growth
There was a mixture of growth and declines in wages with 16 out of the 22 teams analysed experiencing some level of wage growth. Sheffield United were the big movers with wages nearly doubling from £10m to £19m (90%) on the back of promotion. Despite this huge jump, the increase still left them near the bottom of the wage bills in the Championship as a £173k a week extra in wages is a lot less of an increase than many of the clubs.
Wolves unsurprisingly saw a huge increase in wages due to the special relationship they now have with Jorge Mendes under their new ownership and new star players. Wages increased from £28m to £51m (80%), a huge extra £433k a week in wages as they plotted their promotion. Birmingham (71%) and Cardiff (67%) both showed renewed levels of ambition that saw wages increase by £304k and £373k a week and experienced very different experiences from their new high-earners.
Leeds began their new era with an increase in wages of 52% to £41m, an extra £206k a week in wages. Aston Villa increased their wages by 19% and £223k a week despite their unravelling finances with the board unable to see the issues (or recklessly gamble) until it was nearly too late. On the other end of the scale, Hull saw wages drop by 49% to £31m following relegation, saving a huge £581k a week in wages as they looked to get their affairs in orders. It was a similar picture for Sunderland who dropped wages by 43% to £47m, saving £691k a week in the process, a figure that will need to reduce once again in League One.
Middlesbrough cut wages by a quarter (25%) on the back of relegation, saving a more modest £312k a week as they looked to keep some players and gain promotion straight back to the Premier League, being unsuccessful with that to date. Financial Instability
The wage to revenue ratio measures financial sustainability and prudence. If the ratio exceeds 100%, a club is spending more on wages than the revenue they bring in, which means the club is loss making before taking into all other costs they face, a situation that will lead to financial ruin in the long run. The higher the ratio, the less profitable a club can be and the less sustainable they are. A club’s wage/turnover ratio should be around 60%, with one higher than 90% largely unsustainable and one lower than 40% a poor use of resources and essentially ‘too safe’. Figures in excess of 100% are financially reckless and will be expensive for the owners as they have to fund large losses (unless players are sold). The average in the Championship was a suicidal 115% in 2018, ranging from 56% to over 200%. The lowest by a distance was Hull at 56% after successfully cutting wages following relegation and benefitted from parachute payments, although these will fall next season and this ratio will rise. Sunderland (74%), Barnsley (76%), Leeds (77%), Burton (78%) and Middlesbrough (79%) all had ratios below 80% which is just about okay for financial sustainability. These ratios were all from clubs who were either relegated or promoted to the Championship, a usual trend. Birmingham increased wages by 71% and this led to a wage/revenue ratio of 202%, meaning they are spending more than double their revenue on wages, hardly a good idea! This is likely to bring on various Financial Fair Play issues (as seen by their point deduction) as well as a burning hole in their owners’ pockets. Other clubs at huge financial risk at their current wage and revenue levels are Reading (197%), Derby (161%), Brentford (135%), Nottingham Forest (122%) and Preston (113%) who are all putting themselves at risk of prolonged heavy losses and Financial Fair Play penalties. Wolves (192%), Cardiff (148%) and Fulham (142%) all have high ratios that are skewed due to heavy promotion bonuses, although it is likely to still have been in excess of 100% without them, showing they were also playing with financial fire, however were more successful with their gamble. All in all, Championship clubs are risking their financial future more than ever in an attempt to reach the Premier League promised land where riches await. However, as always only three clubs can reach their goals each year, leaving 10 to 15 teams disappointed and at significant financial risk. It will be interesting to see how the EFL reacts to these increased financial gambles and the clubs who continue to side step Financial Fair Play sanctions by playing the rules.
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Post by rickyqpr on Feb 7, 2020 13:30:05 GMT
Anyone get the Telegraph ? would like to give it a read... You can view the article for for without taking out a subscription. Not a lot in it though: Profitability & Sustainability (FFP) causing battles off the pitch as some clubs bend the rules - others want punished. Clubs all reducing their wage bill - Nahki was the highest EFL transfer in the window at £4m. Second highest transfer was £800k Only 25 permanent transfers in the window. Of the 3 clubs facing sanctions speculation as follows: Birmingham - max of 3 pts deducted Derby will fight the charge with all they can muster Sheff. Wednesday could face 21 point deduction. There is an EFL meeting later this month when it will be debated and it is likely that the rules will be changed again for 2020/21.
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