FFP

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Re: FFP

Postby johnh » 11 Aug 2019, 20:05

Davycc wrote:I know I'm naive but I can only really concentrate on the football


You also keep repeating yourself. :lol:
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Re: FFP

Postby ilkley62 » 11 Aug 2019, 22:44

EastYorkie wrote:
johnh wrote:I start off by admitting that I know absolutely nothing about Leeds United financial position. However, there have been quotes coming out of Leeds United about FFP and talking about financial losses and the risks of points deductions etc., We haven't spent much (compared to some Championship clubs) on transfers in, though we have done fairly well on transfers out. Looking at the results from the games yesterday, I calculated the average crowd attendances for the Championship games. We had over 35k at Elland Road. The next highest was 28k. The average for the other eleven teams was 20k. (The lowest was 10,673 at Hull). There is no way that we should have concerns about FFP let alone be reporting losses. If clubs with significantly less support than ourselves can manage, what is going on?


John, I recommend anyone to have a look at the clubs accounts and compare them over the years. Its an eye opener tbh even if accounting stuff is as dull as ditch water.

From the last set of accounts we have available, average attendances were running at 31,500, this is when Christiansen was here. Just basing it on 23 league games then the average revenue was just £16 per seat. Gate receipts at £11m made up just 28% of the total clubs revenue.

Total salaries of everyone employed by the club was £31m before we even start totting up other costs. I suspect that the players take up 75% of that and means that ticket sales don't even cover the wages of the players.

In other words attendences are not the main issue when looking at how much money the club loses and therefore the risks it runs with FFP.

The main issue that drives FFP concerns for all clubs is the cost of players - buying them, disposing of them and paying their salaries - and then the cost of the coach and his many staff, who don't come cheap either. The club has to squeeze every last penny it can out of its supporter base through all its other revenue streams to get anywhere near breaking even. In fact its still not doing well enough.

Its also fair to say, that the Championship clubs are not really getting a fair deal from the likes of Sky and really need more TV money in order to afford the quality of players they need in order to compete.

The single biggest predictor of how well a club will do over the season is the wage bill of the players. Its quite obvious that the best players will cost the most and are most likely to perform the best. Thus the clubs with the largest wage bill tend to do better, which is where Radz has been taking the club last season and into this. This is in complete contrast to the first year where he was trying to do 'cheap' and bring in a lot of lower cost players.

It appears he has completely changed his strategy on players and coaching staff. The penny must have dropped with him in the summer of 2018 and it appears with the clear out of players this year he has put that first year well and truly behind him, bar a few players that still have to be moved on.

I read something the other day that suggests the loss for last financial year would be around £16m and would have been even higher for this year - in other words right at the limit of FFP as Kinnear has said.

At least half of the other clubs in the Championship will have lower salaries than Leeds but they realistically have no chance of promotion and probably their strategy is just to not get relegated and not get stung by FFP. They will sell players accordingly to acheive this.


Thanks for that EY
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Re: FFP

Postby isrodger » 12 Aug 2019, 06:42

Nic wrote:
isrodger wrote:In fairness there are 2 figures in terms of complying with FFP. One which literally requires the club to break even and one which permits the owner to contribute £39m over 3 years towards losses. It has become apparent that Radz is no longer prepared to put in an owners contribution, which has us at disadvantage to the likes of Derby.

Out of the Kinnear notes one figure flabbergasted me yesterday ... since Radz has taken over salaries have increased in excess of 150% ! I hope and prey this includes loan fees. Regardless the cost side of the business appears to have been allowed to get out of control ... hence the wholesale cull this summer.
Getting investment like the 39ers last year probably meant Radz wasn't putting in more money. We also don't know if GFH take a share of any money he did put in. Some of the wages will have gone up for improved contracts to keep players, especially last season when we looked like going up.


From memory Cellino got GFH managed to get GFHs deferred consideration (debt) reduced to £16 or £11m this didn’t incur any interest and was payable at £1m per annum. I’m not sure wether this debt crystallised at the point when change of ownership occurred and was paid off or wether it’s still on the balance sheet. Irrespective it has no bearing on FFP but would impact on cash flow.
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Re: FFP

Postby Nic » 12 Aug 2019, 08:07

isrodger wrote:
Nic wrote:
isrodger wrote:In fairness there are 2 figures in terms of complying with FFP. One which literally requires the club to break even and one which permits the owner to contribute £39m over 3 years towards losses. It has become apparent that Radz is no longer prepared to put in an owners contribution, which has us at disadvantage to the likes of Derby.

Out of the Kinnear notes one figure flabbergasted me yesterday ... since Radz has taken over salaries have increased in excess of 150% ! I hope and prey this includes loan fees. Regardless the cost side of the business appears to have been allowed to get out of control ... hence the wholesale cull this summer.
Getting investment like the 39ers last year probably meant Radz wasn't putting in more money. We also don't know if GFH take a share of any money he did put in. Some of the wages will have gone up for improved contracts to keep players, especially last season when we looked like going up.


From memory Cellino got GFH managed to get GFHs deferred consideration (debt) reduced to £16 or £11m this didn’t incur any interest and was payable at £1m per annum. I’m not sure wether this debt crystallised at the point when change of ownership occurred and was paid off or wether it’s still on the balance sheet. Irrespective it has no bearing on FFP but would impact on cash flow.
Thanks, that clears up that then.

We do have a lot of players on the books that are not first team players - the question is are they likely to be. I know we bought players to sell on at a potential profit, but has that view now changed. There is still expected a few more exists as the international transfer window doesn't finish until the end of the month.

The increase in salaries is surely not including loan players - well depends how recent figures you've seen. Such as https://www.leeds-live.co.uk/sport/leed ... s-16077686 discuss the 2017-18 figures than mention the wage bill has gone from £20M to £30M with playing staff going from 42 to 58. So partly because we brought in a few new first teamers, but also a lot of sell on assets.

Since we are talking FFP one line from that page is
Leeds’ profit and loss accounts shows a £36.8million loss across the years, but the club makes explicit, “The club once again adhered to the EFL’s profit and sustainability requirements.”

Looks like we are actually close to the £39M max!
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Re: FFP

Postby isrodger » 12 Aug 2019, 08:15

Nic wrote:
isrodger wrote:
Nic wrote:
isrodger wrote:In fairness there are 2 figures in terms of complying with FFP. One which literally requires the club to break even and one which permits the owner to contribute £39m over 3 years towards losses. It has become apparent that Radz is no longer prepared to put in an owners contribution, which has us at disadvantage to the likes of Derby.

Out of the Kinnear notes one figure flabbergasted me yesterday ... since Radz has taken over salaries have increased in excess of 150% ! I hope and prey this includes loan fees. Regardless the cost side of the business appears to have been allowed to get out of control ... hence the wholesale cull this summer.
Getting investment like the 39ers last year probably meant Radz wasn't putting in more money. We also don't know if GFH take a share of any money he did put in. Some of the wages will have gone up for improved contracts to keep players, especially last season when we looked like going up.


From memory Cellino got GFH managed to get GFHs deferred consideration (debt) reduced to £16 or £11m this didn’t incur any interest and was payable at £1m per annum. I’m not sure wether this debt crystallised at the point when change of ownership occurred and was paid off or wether it’s still on the balance sheet. Irrespective it has no bearing on FFP but would impact on cash flow.
Thanks, that clears up that then.

We do have a lot of players on the books that are not first team players - the question is are they likely to be. I know we bought players to sell on at a potential profit, but has that view now changed. There is still expected a few more exists as the international transfer window doesn't finish until the end of the month.

The increase in salaries is surely not including loan players - well depends how recent figures you've seen. Such as https://www.leeds-live.co.uk/sport/leed ... s-16077686 discuss the 2017-18 figures than mention the wage bill has gone from £20M to £30M with playing staff going from 42 to 58. So partly because we brought in a few new first teamers, but also a lot of sell on assets.

Since we are talking FFP one line from that page is
Leeds’ profit and loss accounts shows a £36.8million loss across the years, but the club makes explicit, “The club once again adhered to the EFL’s profit and sustainability requirements.”

Looks like we are actually close to the £39M max!

Those are 17/18 accounts
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Re: FFP

Postby SCOTTISH LEEDS » 05 Sep 2019, 07:25

EFL launch inquiry into Derby's Pride Park purchase after Leeds and Middlesbrough complaints

The English Football League have reportedly launched an investigation into Derby County’s purchase of Pride Park.

The Rams revealed that owner Mel Morris had bought the ground from the club in their most recent accounts as they looked to avoid breaking Financial Fair Play regulations.

FFP rules state that clubs must not exceed a loss of £39m over a three-year period and with Derby toeing the line, Morris stepped in to ensure the club posted a profit on their yearly accounts.

This same accusation has been made towards Sheffield Wednesday and Reading over the summer as they look to avoid FFP punishment.

However, whilst the trio of clubs may have thought their concerns were over, with no rules being broken, The Times have revealed that may not be the case.

The report explains that the EFL have launched private, independent stadium valuations on Derby, Wednesday and Reading.

In the case of the Rams, the plot thickens as The Times says that Morris used a separate company to buy the ground for £80m, with a deal to lease it back to the club.

However, the club was listed one of the club’s list of valuable assets at the time, but at a price of £41m, just over half the sum Morris paid.

It ensured Derby reported a pre-tax profit of £14.6 million on their accounts, ending any fears over a potential sanction for exceeding spending limits.

Championship rivals have accused Derby of breaching FFP with Leeds United owner Andrea Radrizzani arguing that Derby should have faced sanctions.

“We should revisit the rules,” said Radrizzani at the Financial Times Business of Football Summit.

“We were judged as a cheating club when we sent a scout to watch [Derby] training, so they should take a similar view on what I would say is greater cheating by these clubs.

“For me if it’s cheating to send a scout in a public street, what should be the punishment of selling the stadium to a sister company to increase income of the clubs?”

Following the EFL’s decision to dock Birmingham City 9 points last season for breaching the FFP rules, Championship clubs will be looking closely at the outcome of this investigation.
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Re: FFP

Postby NottinghamWhite » 05 Sep 2019, 08:10

Now what about Sheffield Wednesdays sponsors including the taxi firm with no cars and the drinks company that has produced 0ml of pop ?
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Re: FFP

Postby ChilwellWhite » 05 Sep 2019, 09:27

Nothing will happen to Derby at best a slap of the wrists.
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Re: FFP

Postby Leonickroberts » 05 Sep 2019, 10:01

It's a pretty damning indictment of the EFL's legal team and rules that this is where we've got to. They're so poorly defined that clubs are able to find all sorts of clever ways of getting round them.

Personally I've got no beef with Derby, Reading or others for taking advantage of these poorly written laws - if we had done it ourselves, we'd all be pointing out that no laws have technically been broken, just like we did with spygate. What does rankle me is that these terribly written rules are making clubs behave like children, telling on each other when they think it'll give them a competitive advantage.

Wolves and Villa broke FFP laws last year; clubs were right to report them, and the EFL's lack of punishment for them was pathetic. Similarly, Birmingham deserved to be docked points. Until the rules themselves are actually legally watertight, complaining about clubs like Derby acting within the law won't help us competitively and just makes the League and all it's members look foolish. The only positive I can see coming from this is that the EFL are even more aware of what a terrible job they've done with FFP.
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Re: FFP

Postby PhoenixUnited » 05 Sep 2019, 15:07

ChilwellWhite wrote:Nothing will happen to Derby at best a slap of the wrists.

Yep that's about the limit of it and I doubt there will be any slap on the wrists either. There will be a lot of pretend chuntering and a promise to tighten everything up so as it can't happen again. Big Deal! :roll:
No worries! Let's just play with what we have got.

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