Financial Fair Play investigation

[Blue peter]

Because our losses were so high

Sorry I know I get that, but clearly that was not a viable option in my opinion

 

[catcherintherye]

I think you are missing the point. The rules say the accounts need to be submitted by a certain date in March. The club is compliant once they submit the accounts. Then, over time, the accounts can be looked at in detail. Just look at the Man City charges, they relate to every year since 2009, so there were 13 sets of accounts submitted to the FA and it is only now that they have scrutinised them and they are saying that they are non-compliant. The accounts Everton or any other club submitted over the last number of years does not mean the club has had their accounts approved as correct. There is a lot of work required to audit and approve accounts. I have no idea how many staff they have and what their budget is to allocate resources to examine the accounts submitted but I am guessing a lot of the staff were busy over the last few years investigating 13 years of Man City accounts and building their case against them.

Well hold on, the latest set of accounts were looked at in about 2 weeks. I'm not sure why if it can be done in 2-3 weeks, it should take years.

Manchester City is a unique case, as they didnt comply, and have dragged the process on. Neither of those things are relevant here.

Its always worth saying, the PL have stated that the clubs accounts have been accepted.

As a final aside, I dont think it's a realistic solution at all, for a regulator to never make a decision whether accounts are passed or not. Businesses cant plan or prepare unless they are given feedback in some reasonable time frame.

We live in innocent until guilty. If you submit accounts, and no problems are highlighted, those accounts have effectively been passed. This is how the world works.

 

[catcherintherye]

We will not get a points deduction this year. The PL are up to their necks in all of this and the legal challenges and ramifications would take years even if proven. The PL are covering their backs but many other clubs, Chelsea anyone, will not be happy for this to go forward either…..

Any potential deduction will be next year. It would be almost certain to be appealed.

 

[Bebeto]

The Esk saying the likelihood is a points deduction if charged. A points deduction but maybe less than the 9 that Portsmouth got for going into administration.

I think the only thing we could maybe survive is a 5 point deduction - 10 points will sink us.

I am not so sure that a point deduction is inevitable. Going back to what the top clubs tried to do with the European super league a while back and the lack of punishment for it with the exception of telling off and a low fine tells me that it will be much of the same. The premier league wants to protect the cash cow they have created, and we are part of it, more so than the like of brentford, brighton,etc..

 

[catcherintherye]

Don't all sports favour the stronger athlete or team? Isn't that what seeding is for? You don't get the number 1 seed playing the number 2 seed in Wimbledon, they are in different halves of the draw and can only meet in the final. But FFP and P&S are there to stop club owners from putting the club's viability at risk. That is why the clubs voted to implement FFP.

Has it doing this though? How has it helped us at all with this board or Shareholder? They have done nothing.

 

[PhilM]

There are clear ways to smash through the glass ceiling though. Spending on Stadiums and academies is exempt from FFP. Brighton would be a good example of a club that has spent on their Stadium and invested heavily in young talent. They are now competing for the top 6 and are in the semi-final of the FA Cup.

My worry would be how much debt we would be in without P&S and FFP. Imagine how much more money this board could have pissed away if they didn't have to attempt to comply with the P&S rules. Imagine how high our wage bill would be if we were free to spend what we wanted.

Our problem is not a lack of finance it is the fact that those people running the club haven't got a clue how to spend what we have.

Oh, I agree with the final part, but the first part less so. You use Brighton as an example, which I think is both a positive and a negative.

On the face of it, they have created a fine setup that focuses on stability, reliability and developing youth. This is, at the moment, reaping rewards for them.

But, how far can it go? I would say they have had limited success, and it is yet to be proven if it is sustainable where they can compete for the top honours.

Winning the FA Cup would be brilliant - I'd love us to win it - yet we need to be mindful that the real rewards are a top four place and sustained European football.

To achieve that is very difficult, and even more difficult to sustain it over a period of time, and without that cash the top echelons will always be able to prosper.

I know it was different times, but just look at all the years when we were the 'best of the rest'. At the time, suitable investment could have put us in the window.

Now, it would need sustained investment while constricted by the P&L rules (gate receipts, TV rights, sponsorship deals and shirt sales), which they aren't.

Look at Leicester as an example - PL Champions to now being constrained by financial rules, while the likes of Chelsea, United, City, RS and Arsenal prosper.

The glass ceiling is and will continue to be a barrier for most clubs winning the top honours and pushing those in the protected bubble out of it.

The Esk saying the likelihood is a points deduction if charged. A points deduction but maybe less than the 9 that Portsmouth got for going into administration.

I think the only thing we could maybe survive is a 5 point deduction - 10 points will sink us.

A fine it is then.

 

[Yarrgh]

Oblivion is ours

They're just waiting for Mata and Witsel to pass their medicals so we can have a triple announcement.

 

[catcherintherye]

It is highly unlikely a club will submit accounts that auditors have identified discrepancies in, if they do they are pleading guilty at the time of submission. Also, the auditor is employed by and paid by the club, they will take the club's advice as to their accounting practices and their interpretation of said. Auditors will accept Everton's allocation of Covid losses even if they disagree with them as long as the interpretation is stated in the accounts. Other than blatant fraudulent accounting, the problem for clubs, and not just Everton, most clubs that get charged with FFP is when the FA disagrees with the interpretations made. This disagreement will always take place after the accounts have been submitted and accepted

An auditor are a professional, independent body. There's no way they would be able to sign off accounts they felt were fraudulent and wrong. That's their job/business.

 

[gazzaa2]

West Ham had to pay Sheff Utd something like £35mill after they got relegated from the tevez and mascherano mess

And how much has the TV money gone up since then?

 

[catcherintherye]

There are clear ways to smash through the glass ceiling though. Spending on Stadiums and academies is exempt from FFP. Brighton would be a good example of a club that has spent on their Stadium and invested heavily in young talent. They are now competing for the top 6 and are in the semi-final of the FA Cup.

My worry would be how much debt we would be in without P&S and FFP. Imagine how much more money this board could have pissed away if they didn't have to attempt to comply with the P&S rules. Imagine how high our wage bill would be if we were free to spend what we wanted.

Our problem is not a lack of finance it is the fact that those people running the club haven't got a clue how to spend what we have.

I mean are they really competing? They are doing fine, but will never be able to get further because they will not be able to pay the wages to keep their players.

Are fundamental problem is lack of finance. Our wages bill is hindered of millions a year less than the top teams. It's a huge structure disadvantage.

As for the final point, I dont think P&S doesnt do anything. It hasnt protected us. We have been allowed to get into a very poor financial situation, despite many of us warning of it. The rules are far too complex to be effective. Football should adopt a simple model like most other sports. 250m wage spend allowed across a squad. None of this 3-4 year cycles based on P&L accounting nonsense which is beset with problems.

 

[Tommy Chong]

Having audited a PL winning team (admittedly a long time ago) and spent the last 20 odd years having pretty high profile accounts that I am involved in producing pored over by auditors, believe me when I say if they disagree with your accounting treatment, they report it. Or they tell you outright that it’s a reportable item and thus you change your treatment. There is no agree to disagree. They win the argument. You can choose your auditors but they are no “help” at all regardless of the fact that they will claim they are there to help strengthen your processes and controls. It’s the company’s responsibility to produce accurate accounts. You are paying for them to test and scrutinise the accounts and rubber stamp them for the benefit of those who may read/interpret the accounts purely because you have to. Any guidance or advice consultancy is outside the scope of the audit, would be separately chargeable, and often you may choose a different firm altogether.

Obviously your auditors will be available for guidance on accounting treatment, but you don’t say “we want to bend these rules to the max so as to mislead the governing body of the sport/industry we are part of…what’s the best way of doing that?”

Audit firms do consultancy of course. But the statutory audit is not consultancy. It’s pretty much a war, you versus them. It’s not really I’m jesting, they are just doing a job you are obliged to have them do, but it feels that way.

Two words: Arthur Andersen. Remember them? They produced fraudulent signed off Finacial Statements for Enron by intentionally overlooking a lot of reportable irregularities.
The scandal came out and it ruined their reputation as a reliable audrting firm.
I don’t they ever recovered from it.

It’s not worth the risk.

 

[coollino]

Any potential deduction will be next year. It would be almost certain to be appealed.

There will not be a points deduction due to our where we are in the league, the amount of rightful challenges will go on for years

If we finished 9th each year for the last few years, a 5 point deduction would be easy

 

[ForeverBlue92]

I mean are they really competing? They are doing fine, but will never be able to get further because they will not be able to pay the wages to keep their players.

Are fundamental problem is lack of finance. Our wages bill is hindered of millions a year less than the top teams. It's a huge structure disadvantage.

As for the final point, I dont think P&S doesnt do anything. It hasnt protected us. We have been allowed to get into a very poor financial situation, despite many of us warning of it. The rules are far too complex to be effective. Football should adopt a simple model like most other sports. 250m wage spend allowed across a squad. None of this 3-4 year cycles based on P&L accounting nonsense which is beset with problems.

Brighton are the latest hipster club we should be trying to copy but I guarantee in 3-5 years time they'll be either midtable or in a relegation battle just like Leicester, WHU, Wolves, Everton who were in the top 7-8 for a few seasons.

The reality is the leagues/UEFA are terrified of making the game fair as they know the big 6 + Real, Barca, Juve, Bayern etc will be off to the ESL and the money goes with them.

 

[catcherintherye]

Having audited a PL winning team (admittedly a long time ago) and spent the last 20 odd years having pretty high profile accounts that I am involved in producing pored over by auditors, believe me when I say if they disagree with your accounting treatment, they report it. Or they tell you outright that it’s a reportable item and thus you change your treatment. There is no agree to disagree. They win the argument. You can choose your auditors but they are no “help” at all regardless of the fact that they will claim they are there to help strengthen your processes and controls. It’s the company’s responsibility to produce accurate accounts. You are paying for them to test and scrutinise the accounts and rubber stamp them for the benefit of those who may read/interpret the accounts purely because you have to. Any guidance or advice consultancy is outside the scope of the audit, would be separately chargeable, and often you may choose a different firm altogether.

Obviously your auditors will be available for guidance on accounting treatment, but you don’t say “we want to bend these rules to the max so as to mislead the governing body of the sport/industry we are part of…what’s the best way of doing that?”

Audit firms do consultancy of course. But the statutory audit is not consultancy. It’s pretty much a war, you versus them. It’s not really I’m jesting, they are just doing a job you are obliged to have them do, but it feels that way.

This is ir entirely. Its nonsense to suggest accounts that arent charged, are in some sort of purgatory. If they are not highlighted, they are accepted.

One point to say someone doesnt know what they are talking about, is if they say it takes years to audit an income statement. Its completely nonsense. An income statement can be analysed in a few days, and most Accountancy firms would do so.

It just shows that lad doesnt have a clue what hes talking about. No regulator can wait years to audit an account. It would be the height of ineptitude to suggest as much.

You are right, if theres a problem, it gets reported.

 

[catcherintherye]

Brighton are the latest hipster club we should be trying to copy but I guarantee in 3-5 years time they'll be either midtable or in a relegation battle just like Leicester, WHU, Wolves, Everton who were in the top 7-8 for a few seasons.

The reality is the leagues/UEFA are terrified of making the game fair as they know the big 6 + Real, Barca, Juve, Bayern etc will be off to the ESL and the money goes with them.

Brighton will hit the glass ceiling. They cannot afford a top 4 squad.