Financial Fair Play investigation

[Lude]

It is now perfectly clear why there were no signings in the last transfer window.
I'm afraid BMD will open in the championship.

Very scary idea that.

 

[Big Sams Undies]

Are we the baddies?

No, just the thick ones who get caught doing something that everyone else is doing

 

[Drico]

I mean we were spending 2million in a transfer window and still posting loses of 140million or something stupid.

What were we doing with money? Setting fire to it?

Yes, that's another phrase for paying Alex Iwobi.

 

[JLW]

Cant wait to put the excel files away and get the ball back out again

 

[Mashtray]

Don't read all his stuff these days but just for interest sake did the esk ever ring this alarm?

 

[matty1878]

Just on waiting on my good buds @matty1878 and @davek to start their daily posts in here before I get the popcorn out.

lol

 

[Villa_Fan]

As the problem seems to be in the 2021/22 financial year, it could be an issue as to how much of the Richarlison transfer fee was paid on 30th June to be included in the accounts for that year. Essentially how much was paid upfront and was it enough to keep the club in line with FFP requirements.

I would assume that the Richy money is accrued which basically means that 100% of the sale is recognised on the date of the sale and not when payment is received. Spurs and EFC may have agreed 4 payments of 10m a year but from an accounting perspective that is 40m revenue on the date of sale

 

[good times bad times]

I would assume that the Richy money is accrued which basically means that 100% of the sale is recognised on the date of the sale and not when payment is received. Spurs and EFC may have agreed 4 payments of 10m a year but from an accounting perspective that is 40m revenue on the date of sale

That's interesting because it would mean that the likes of Chelsea would have to include all their massive spending this year in one accounting year even though the payments are spread over 8 years. Makes you wonder how they can get around FFP unless they are expecting a huge income from their commercial streams.

 

[Damo_1878]

This is from a report related to the City case:

Taylor Heath adds: “Rule W.45 says the burden is on the Premier League to prove the complaint and ‘the standard of proof shall be on a balance of probabilities.’ “Once that happens, it’s set out in the regulations that you can go to arbitration, which is in rule X. If you have arbitration, you can’t go to court. There are limited grounds to appeal arbitration under the arbitration act - normally if something is amiss with those proceedings.

“It won’t end up in CAS like the UEFA proceedings unless City basically say they’re not engaging in this process and if the Premier League does anything we’ll take them there. That would then see CAS decide if they have the jurisdiction to adhere to such a complaint. There’s no path in the Premier League rules that lead there."

“What the rules then set out is the ability to hold an appeal, which allows a party to appeal to a further hearing which will effectively be a similar panel to the first. It’ll be a newly constituted panel that would hear the appeal.

Arbitration is essentially going to court. I'm getting tired of telling you @davek to read the rulebook

It says that arbitration will be handled in the courts of England and Wales under English law.

CAS does not have competency. The rulebook clearly states what the jurisdiction is and CAS have no ability to do anything.

It would be like a United States of America court trying to rule on the matter.

It would be contrary to English law, and the High Court (of England and Wales) could block them

The Jurisdiction of the Premier League is ENTIRELY in England and Wales. The rules in the rulebook, which are essentially a private contract between member clubs and directors : actually prohibit any other jurisdiction involvement.

Any attempt to take it to another jurisdiction could lead to the club doing so (or its directors) being immediately expelled from the Premier League.

 

[Mr Popodopolous]

Oh I agree from the general accounts point of view.

I was thinking specifically from a P&S point of view. Especially in relation to how we ended up with the £170m Covid losses that we used to offset going over the £105m loss limit.

It was more curious than that, Everton argued £170m potentially rising to £220m.

As I said before too, allocating Impairment and Provision for Onerous Contracts of some £50-55m as part of the £82m also odd...

That's interesting because it would mean that the likes of Chelsea would have to include all their massive spending this year in one accounting year even though the payments are spread over 8 years. Makes you wonder how they can get around FFP unless they are expecting a huge income from their commercial streams.

Instalments, amortisation and cash flow are all something else.

 

[Bradleyk17]

That's interesting because it would mean that the likes of Chelsea would have to include all their massive spending this year in one accounting year even though the payments are spread over 8 years. Makes you wonder how they can get around FFP unless they are expecting a huge income from their commercial streams.

buying a player is treated like purchasing an asset and amortised over the lifetime of the players contract. So the more years on the contract the lower the annual amortisation.

 

[Damo_1878]

This is from a report related to the City case:

Taylor Heath adds: “Rule W.45 says the burden is on the Premier League to prove the complaint and ‘the standard of proof shall be on a balance of probabilities.’ “Once that happens, it’s set out in the regulations that you can go to arbitration, which is in rule X. If you have arbitration, you can’t go to court. There are limited grounds to appeal arbitration under the arbitration act - normally if something is amiss with those proceedings.

“It won’t end up in CAS like the UEFA proceedings unless City basically say they’re not engaging in this process and if the Premier League does anything we’ll take them there. That would then see CAS decide if they have the jurisdiction to adhere to such a complaint. There’s no path in the Premier League rules that lead there."

“What the rules then set out is the ability to hold an appeal, which allows a party to appeal to a further hearing which will effectively be a similar panel to the first. It’ll be a newly constituted panel that would hear the appeal.

If Man City do not engage in their case, then the Premier League rules say that they could ultimately face expulsion from the Premier League.

Same applies to any club.

These rules were agreed by member clubs.

Also, the UK Government is intent on implementing an 'Independent Regulator' backed up by statute (law). The government has also said in the same law it has the intent on preventing any future breakaway ESL leagues involving English/Welsh clubs. There is cross party support for it, and it is going to happen. The Premier League know it is going to happen too (as stated today in Parliament).

Anyone thinking that the clubs will treat this all with contempt are as deluded as Bill Kenwright and Denise Barrett-Baxendale are.

 

[AndyC]

Don't read all his stuff these days but just for interest sake did the esk ever ring this alarm?

Yes, numerous times in articles and podcasts.

Catch up with everything here - https://theesk.org

 

[Rob17896]

As the problem seems to be in the 2021/22 financial year, it could be an issue as to how much of the Richarlison transfer fee was paid on 30th June to be included in the accounts for that year. Essentially how much was paid upfront and was it enough to keep the club in line with FFP requirements.

Invoice date matters not payment date. Invoice is P&L and payment is cashflow.

 

[Mr Popodopolous]

Birmingham City and Sheff United had similar targets to reach as part of their punishment. It was only when Birmingham continued to break the rules and failed to meet the agreed objectives that they received their points deduction.

Sheffield United are you sure? I remember a Sheffield Wednesday case.

Birmingham was two fold. You might be thinking of the 2nd charge relating to 2018-19. Birmingham wise it went something along these lines:

1) March 2018- Projected Accounts for the season go in along with everyone else. It showed an overspend of at least £7m to 2018 but Birmingham assured the League that it would be put right by the end of June. Sell on clauses for Butland and Gray seemed to he their plan.

2) Sometime, it might have been May 2018 a soft embargo was imposed. Soft embargo is to hold the cost side in place while giving the side every opportunity to meet their obligations.

3) Birmingham instead decided to bid for players- Bialkowski and Grabban two notables in total defiance of the advice. They also pushed through with the Pedersen signing.

4) June 30th came and went which saw some updated figures emerge. Unsurprisingly they had failed FFP and a hard embargo was imposed. A full one in other words. The League also declined to register Pedersen.

5) Eventually it was eased to the extent thst Pedersen and up to 5 loanees within wage limits and unable to pay any fees were permitted. This was under the Business Plan and on that day they were also referred to an IDC.

Had Birmingham turned down the Business Plan I don't know what would have happened. Open ended full Embargo plus charges for overspending perhaps.

6) The alleged breach of the Business Plan came when they were ordered to raise £9m maybe in January 2019. They turned down bids for Che Adams which would have rectified this issue. £12m was one.

7) Irrespective by mid March 2019 the Panel was convened and Birmingham argued for a 6 point deduction, the League argued got more. The breakdown went like this:

A) £8-10m breach bracket- 7 points
B) Escalating losses- 3 points
C) Cooperating in more general terms- 1 point given back.

The secondary charges came the following year. In relation to FFP they sold the stadium and complied that way then sold Adams in 2019-20 but the League were dissatisfied.

A full embargo is a good negotiating tool.